‘Regression’ in 2012 BBBEE trends

The latest KPMG BBBEE survey could be interpreted as indicating some regression, some might say resistance, in South Africa’s economic transformation trends.

The survey, reflecting BBBEE trends of 2012, was released yesterday and showed an average decline in BBBEE scores amongst respondents of the survey when compared to 2011 scores.

Such a conclusion could bolster stakeholders, like the Black Management Forum (BMF) and the Black Business Council (BBC) who have been calling for a tougher BBBEE regime. It could also vindicate the department of trade and industry which has been preparing to tighten up the BBBEE codes of good practice.

KPMG said the survey overall scores for 2012 indicate that there was a decrease of 2.98 points in the overall BEE scores. “The respondents averaged at 63.94, compared to an average of 66.92 in the previous year. As a result, the average score reflects a Level Five contributor compared to Level Four in 2011”.

KPMG added that “A year-on-year analysis reveals that a decrease in the average score was led by marginal decreases in average scores of ownership (0.66), preferential procurement (1.20), management control (0.7) and enterprise development (0.73) elements”.

The report said employment equity saw a slight increase from an average of 7.09 in the 2011 survey to 7.18 in the 2012 survey.

“Although overall there is a decrease in the average BEE rating level, only preferential procurement has decreased by a margin of more than 1 point”.

KPMG also said respondents were finding employment equity as the toughest element of BBBEE followed by ownership and management control.  “In previous surveys, respondents were asked questions to identify the elements they considered to be priority. In the 2012 Survey we sought to find out which elements organisations find challenging to implement”.

“In the 2011 Survey, respondents indicated that employment equity is the most prioritised element. In the 2012 Survey, 23 percent of respondents rated employment equity as the most challenging element to implement”.

KPMG said “With a skills shortage in the country, it is not surprising that employment equity is still seen as challenging, and this is evident in it being the lowest scoring element when compared to other elements”.

It added that 15% of respondents indicated that skills development was a challenging element to implement. This was followed by preferential procurement, at 10%.

“Although most companies scored highly on the enterprise development element, eight percent of respondents indicated that this element is challenging to execute.

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