A heated exchange in South Africa’s Parliament over a draft policy direction gazetted on 23 May 2025 has ignited a robust debate about the future of Broad-Based Black Economic Empowerment (B-BBEE) and the introduction of Equity Equivalent Investment Programmes (EEIPs) for licensed broadband providers.
The policy, proposed by Communications and Digital Technologies Minister Solly Malatsi, offers a transformative alternative to the long-standing requirement that telecom companies allocate 30% equity to Black People, including Black individuals and firms. Amid the controversy, The BEE Chamber, which assists businesses with B-BBEE compliance, believes that EEIPs could be an alternative step toward economic inclusion and innovation, while we do acknowledge the concerns of critics. However, we should also not lose sight of actual Equity Ownership under the realm of B-BBEE which is significant in our country.
The parliamentary tension arose as some lawmakers questioned whether EEIPs dilute the transformative intent of B-BBEE, which has mandated equity sales since the Electronic Communications Act of 2005. Critics argue that replacing direct ownership with investment programmes risks sidelining Black entrepreneurs who have benefited from equity stakes, potentially widening economic gaps.
However, some see EEIPs as a pragmatic evolution. They see that the policy could open doors for global tech giants and local providers to invest in socio-economic initiatives, skills development, infrastructure, and job creation, without the financial strain of equity sales.
The BEE Chamber, with over two decades’ experience, supports companies navigating B-BBEE legislation, offering services like scorecard assessments, training, and strategic planning to ensure companies are B-BBEE compliant. EEIPs could allow broadband providers to channel resources into measurable community benefits, such as broadband access in underserved rural areas, rather than solely transferring ownership. Our clients, which include telecoms companies, could meet empowerment goals through investments that uplift Black communities, fostering sustainable growth. This flexibility could accelerate digital inclusion, a key national priority.
The policy’s timing is significant, following a 23 May 2025 parliamentary session where EEIPs were defended and consistent with existing exemptions for multinationals that have global policies that do not allow for the selling of equity. It is important to remember that B-BBEE is about empowering through opportunity in a sustainable manner. EEIPs could fund training programmes or SMME development. These are areas where The BEE Chamber excels in assisting clients. Other entities have participated under the EEIP and have been successful with the initiatives implemented.
Yet, the B-BBEE ICT Sector Council has raised alarms, warning that EEIPs might undermine transformation gains and threaten local jobs by favouring foreign-controlled models. They demand transparent reporting and Key Performance Indicators (KPIs) to ensure impact. The BEE Chamber acknowledges these concerns, urging robust oversight. Transparency is critical. We work with businesses designing EEIPs that deliver tangible benefits, ensuring compliance and accountability. This dual perspective underscores the policy’s potential to balance economic transformation with global competitiveness. It is also important to understand that there is not a one size fits all solution for all entities under this area, but rather a choice between actual equity stake holding versus the implementation of EEIPs for those who qualify. The element of Ownership under B-BBEE Legislation needs to be assessed from a Company perspective and not a generic approach.
For broadband providers, EEIPs could be enabled by reinvestment in network expansion. The BEE Chamber’s expertise in crafting compliant strategies positions it as a vital partner, helping firms avoid penalties while embracing this new framework. As the debate unfolds, The BEE Chamber remains optimistic that decisions are made for the best of our country in terms of economic growth and impact for Black people through B-BBEE legislation.
ABOUT THE BEE CHAMBER
The BEE Chamber was established 2016 by BEESA (est. 2007) as the next evolution of a B-BBEE consulting partner – not a traditional consultancy, seeking to implement Broad-Based Black Economic Empowerment (B-BBEE) best practices and enable businesses in promoting South Africa’s diversity and equity policies, rather than leaving them reliant on isolated sets of complex information.
Operating virtually and with offices in Cape Town and Johannesburg since 2016, The BEE Chamber’s team of highly skilled and passionate experts enables BEE practitioners within businesses to truly understand and instill South Africa’s evolving diversity and equity policies. As a group of specialised B-BBEE Consultants, The BEE Chamber supports internal capacity-building, simplifies complexity, and elevates its clients’ B-BBEE practices to a level of excellence by using the tools of continuous support and engagement. It provides support, information, services, and software to those practitioners who are responsible for managing a company’s B-BBEE Scorecard – and who as caring corporate citizens desire to move beyond box-ticking to the implementation of truly meaningful and transformative B-BBEE policies for the benefit of the country. For more information, visit www.bee.co.za
About Yuneal Padayachy:
Mr Yuneal Padayachy (MBA) is the Chief Support Officer at the BEE Chamber. He previously served as the Accreditation Manager for the B-BBEE Programme at the South African National Accreditation System (SANAS). Before taking up his role at SANAS, he played a critical part in the B-BBEE Policy Unit at the Department of Trade, Industry & Competition. He was responsible for drafting and developing B-BBEE legislation for implementation. Yuneal played an instrumental role in establishing the Youth Employment Service, otherwise known as the Y.E.S Initiative with the specific focus on addressing unemployment for Black Youth.
