The B-BBEE programme was initiated in South Africa to promote an equal-opportunity economy, create an economic adjustment, and enhance black people participation in this economy. This legislation was required, similarly to the Employment Equity Act, to address past apartheid policies.
The main objective…the inclusion of black people, namely Africans, Indians and Coloured individuals, who are South African citizens, in the South African economy, thus targeting previously disadvantaged people especially black women, the youth, people living in rural communities and individuals living with disabilities.
When B-BBEE was first implemented in 2007, no rationale was provided as to how the programme was designed to work. Companies were provided with a set of guidelines to follow and that was it.
When you break down the Code of Good Practice, one can see that it is not just a set of guidelines for the giving away of money, but rather a set of guidelines that when implemented correctly can provide a sustainable flow of individuals being developed and enhanced to better their lives, and the flow of money back into the economy.
Individuals will typically spend their money earned in the area where they live, but if a business is purchasing services and products from smaller businesses across South Africa, these smaller businesses are able to grow, employ more people and then they too spend their money earned within their areas. What results is a flow of money being earned by those employed, into the economy to grow other smaller businesses, who then employ more people, who spend their money in the areas where they live, thus again growing smaller business to employ more people, and so the cycle continues.