Too soon to review BEE – analysts

Manuel told Britain\'s Financial Times the legislation, passed four years ago, was being abused. Colin Reddy, director of research company BusinessMap Foundation, said he was surprised Manuel had aired such views to the media. Reddy said it was big corporations that had control of how empowerment was implemented and redesigning the black empowerment policy would not achieve much. He said Manuel’s statement was actually questioning the degree of control policy makers had in a free market system, according to Business Day. ‘In a capitalist environment, it is unavoidable to have a concentration of ownership in the hands of a few individuals who have money,’ said Reddy. Empowerment rating agency EmpowerDex said Manuel’s comments were mainly related to the ownership and management portion of the empowerment scorecard. These two elements had traditionally been referred to as narrow-based empowerment and they benefited the fewest black people, it said. ‘We believe that there is no need to review the policies yet as the codes were gazetted only this year, and only through implementation by the companies will we know what works and what doesn’t. The codes themselves cater for this as the Trade and Industry Minister can review them on an ongoing basis. To say they do not work at this time would be a bit premature,’ EmpowerDex said. Independent analyst Siyabonga Mahlangu said there might be flaws in the implementation of BEE, but these would be corrected along the way. Stephan van der Walt, analyst at financial systems company Bravura, said the abuse of the BEE system was partly due to pressure on firms to comply. Full Business Day report

Manuel’s office has downplayed his comments, claiming they were taken out of context. His spokesperson, Thoraya Pandy, said that although the Financial Times had not misquoted Manuel, she believed the newspaper had taken his remarks out of context. ‘The interview was very broad. ‘He was asked about BEE and if he thought it was working. Then he just remarked that the government might need to review the BEE policy from time to time, as it does with all its policies.’ Pandy said the newspaper was not misquoting Manuel, ‘but this is from an interview that lasted for an hour, and BEE was just about five minutes of that interview’. The DA supported Manuel’s call for a review. It said the failure of BEE to effect real broad-based empowerment had much to do with its narrow race focus, cronyism and nepotism that spilt over from the government into the private sector. Full report in The Star

Too much emphasis had been placed on wealth creation at the expense of expanding the boardroom base, according to Ibrahim Fakir, a researcher with the Johannesburg-based Centre for Policy Studies. ‘Little has changed. There are still extremely low levels of black participation in the mainstream economy,’ he is quoted as saying in a report on the FIN24 site. ‘Insufficient measures have been taken to significantly increase and expand black participation. And where proper measures have been in place, they have served to benefit a tiny elite rather than the general populous.’ Full report on the FIN24 site Transcript of Financial Times interview with Trevor Manuel