New ICT sector codes to prompt new era for BEE
17 February 2017
In the State of the Nation address, President Jacob Zuma highlighted that radical economic transformation remains at the core of South Africa’s economic strategy and the new BEE ICT sector codes, effective from November 2016, reflect this.
Soria Hay of independent investment bank and advisory firm Bravura says that the impact is certainly being felt as major IT and telecommunications companies respond to the business imperative to meet the new targets. These new target set by the ICT sector codes require a BEE ownership target of 30%, with at least 10% to be held by Black Women.
“While implementation of the sector codes remains voluntary, business implications are clear for non-compliance,” says Hay. “For example, a 30% black-ownership minimum was listed as a requirement by industry regulator ICASA in a planned auction of the broadband spectrum so vital to telecommunications companies last year. Whilst the auction was blocked, for now, by the Communications Minister, the regulator’s message around compliance is clear. There is however still a disconnect between ICASA ownership targets and the ICT sector codes with requirements essentially in flux.”
New broad-based and women-owned specifications within the black ownership requirement are driving telecommunications companies such as Vodacom and MTN Group to pursue further black empowerment ownership options with the primary objective of broad-based inclusivity.