New BEE code for South Africa’s ICT industry launched – the details

Minister of Telecommunications and Postal Services Siyabonga Cwele has launched the Amended B-BBEE ICT Sector Code, following its placement in the Government Gazette.

Cwele said the Information Communication Technologies sector in South Africa needed to “move South Africa forward”, following the “devastating effects of more than 350 years of colonialism and institutionalised apartheid racism”.

Cwele also formally launched the Broad-Based Black Economic Empowerment ICT Sector Council, following its establishment in 2015.

“The Council is tasked with broadening the meaningful participation of blacks, women, youth, and people with disabilities in the ICT sector,” said Cwele.

The Amended B-BBEE ICT Code

Cwele said he was pleased that the amended code gives “weighting scores that are skewed towards enterprise and supplier development”.

“This is to encourage companies to put more effort in this transformation area where little action has taken place in the past.”

He added that the ICT council had produced the Sector Monitoring Report, which “outlines the status of the implementation of B-BBEE in the ICT Sector”.

“The report reflects the transformation efforts of ICT companies that were gleaned from 200 BEE verification reports. The report shows that the ICT sector is performing poorly on transformation by all measures,” said Cwele.

Among the stated objectives of the code, “enhanced recognition for certain categories of Black People” was detailed in the document.

“Throughout the Amended B-BBEE ICT Sector Code, various criteria appear which advance the interests of certain categories of Black People,” stated the document.

These include:

  • Black Women who should form between 40% and 50% of the beneficiaries of all Elements of the Scorecard.
  • Black People with disabilities, Black Youth, Black People living in rural areas, and Black Unemployed People who should form between 2% and 3% of the beneficiaries of all Elements of the Scorecard.

The Amended ICT Sector Scorecard and B-BBEE recognition levels are detailed in the tables below.

The amended code is available as a PDF on the gov.za site.

The Amended ICT Sector Scorecard

Element Weighting points Code series reference
Ownership 25 AICT100
Management Control 23 AICT200
Skills Development 20 AICT300
Enterprise and Supplier Development AICT400
Preferential Procurement 25
Supplier Development 10
Enterprise Development 15
Socio-Economic Development Initiatives 12 AICT500

A measured entity receives one of the following B-BBEE Statuses, based on the scorecard.

B-BBEE Status Qualification B-BBEE recognition level
Level One Contributor ≥120 points on the ICT Scorecard 135%
Level Two Contributor ≥115 but <120 on the ICT Scorecard 125%
Level Three Contributor ≥110 but <115 on the ICT Scorecard 110%
Level Four Contributor ≥100 but <110 on the ICT Scorecard 100%
Level Five Contributor ≥95 but <100 on the ICT Scorecard 80%
Level Six Contributor ≥90 but <95 on the ICT Scorecard 60%
Level Seven Contributor ≥75 but <90 on the ICT Scorecard 50%
Level Eight Contributor ≥55 but <75 on the ICT Scorecard 10%
Non-Compliant Contributor <55 on the ICT Scorecard 0%

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New BEE code for South Africa’s ICT industry launched – the details