In a COVID world, B-BBEE is an economic comorbidity

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Let’s assume you are on a calorie-restricted diet for the sake of your health. Then you get sick, your body needs more nutrition. If you stay on diet you will get sicker. Like most diets, the B-BBEE regulations are well-intentioned and they should be supported. But if you stay on diet when you’re sick you will get sicker.

Ever since I returned to South Africa in 2003, I have been dealing with a panel-beater let’s call him Ngobe. In 2019, Ngobe was approached by some people from the insurance company who had Enterprise development funds to spend. They found him fancy new premises with room for his business to grow. They even paid the deposit on the 5-year lease that he signed. Then COVID struck! Profits fell. Enterprise development funding dried up and they wouldn’t take his calls. Ngobe still runs a panel-beating business but it cost him his life savings to get out of the five-year lease.

This is a true story.

You might have experienced something similar from the other side. Your business might have fallen in value wiping out the Equity free of debt held by your empowerment partners; just like what happened to MTN and City Lodge.

You might be discounted an empowerment level for something over which you had absolutely no control. You might have kept your staff on during lockdown increasing your leviable amount and requiring you to fund bursaries to meet your skills development obligations but Universities were closed.

Perhaps you lost preferential procurement points because only rent and interest charges continued during lockdown. And if you lose points you lose business. If you lose business your suppliers lose business, and so on.

The constrictions imposed on the economy by B-BBEE regulations, during the shock of COVID may reasonably be called economic comorbidity. Many companies would survive one or the other; but not both. If you find yourself in a position where you need points, speak to us, maybe we can help you.

And, if like me you’d like to help Ngobe, give me a call and I’ll put you in touch with him.