Black-owned businesses in South Africa fall by 1.5% in 2022

By: Chime Amara

The South African Industrial sector has witnessed a further reduction in the number of Black-owned businesses operating in the country. According to the recent survey carried out by the B-BBEE; it was discovered that the number of Black-owned businesses operating in South Africa has dropped by 1.5% this year bringing the ratio below 30% recorded in 2021. The downward trend in the black-owned businesses in South Africa has persisted notwithstanding the Broad-Based Black Economic Empowerment (B-BBEE) Act passed two decades ago which sought to address the inequities stemming from the apartheid in South Africa, where four in every five people are black. To this end, over 500 B-BBEE ownership deals worth over 600 billion rands ($36.1 billion) were created from 2017 till the present moment to facilitate the transfer of business ownership to Black people in South Africa.

This effort seems to have witnessed a significant decline this year with the current decline in number of Black-owned businesses in South Africa falling by 1.5% point bringing the count below 30% recorded last year.

Similarly, the Black management control was also observed to have dropped by 5.4% percentage points bringing the annual record to 51.6%.

Speaking on this recent development, the committee for B-BBEE assured South Africans that the body remains committed to supervising and ensuring due adherence to the Broad-Based Black Economic Empowerment Act passed two decades ago intending to address the inequalities arising from the South African apartheid movement where four in every five people were Blacks. Hence the committee reiterated that:

“There is a need for less-expensive and unencumbered funding for black people to make acquisitions that can give real value in the hands of Black people, especially from government funding institutions,”

Nonetheless, there has been poor compliance so far in this regard. Thus, judging by the number of certificates uploaded for approval by verification agencies this year, a huge drop was recorded compared to the previous records.

The data has been obtained based on the annual compliance reports submitted for the 130 listed companies, 82 state entities, and 1373 entities whose B-BBEE certificates were uploaded to the B-BBEE certificate portal in 2022.