CHANGE WAS INEVITABLE – IT’S HOW YOU REACT THAT DEFINES THE OUTCOME.

The grace period for silence is officially over. Since the draft Enterprise and Supplier Development (ESD) amendments were gazetted on 29 January 2026, the South African business community has had time to digest the implications. The verdict? We are looking at a fundamental shift from active transformation to a centralized "tax" model that carries significant risk.

The 3% Reality Check

The proposed R100-billion Transformation Fund aims to collect 3% of net profit after tax from companies over five years. While the dtic frames this as a way to simplify compliance and accelerate inclusion, the practical reality for many businesses is far more complex.

B-BBEE should never be a tick-box exercise or a forced "pay to play" system. It should be a strategy embedded in your business, bought into by leadership, and extended through your supply chain. Crucially, it must work for your company—not force your company to work for B-BBEE.

The Core Concerns: Strategy or Slush Fund?

Market sentiment from BUSA, BLSA, and legal analysts highlights several critical red flags:

• Governance and Accountability: With a ministerial-appointed board managing R20 billion annually, there is a legitimate fear of the fund becoming a "kitty for the connected" rather than a mechanism for genuine empowerment.

• Unrealistic Targets: The proposed benchmarks for black women-owned businesses are widely seen as disconnected from current market capacity, potentially setting companies up for failure.

• Dilution of Impact: By allowing companies to simply pay into a central fund, we risk bypassing the structural transformation—like ownership and management control—that drives real economic change.

• The Death of ESD: Replacing traditional, direct ESD contributions with a state-run fund removes the flexibility businesses currently have to develop their own sustainable suppliers.

Engagement is Not Optional

The proposed changes will have a profound impact on your verification certificate and your operational costs. This is the moment to advocate for clarity, integrity, and measurable impact.

Silence means being shaped by others’ agendas. Engagement means shaping the future of empowerment in South Africa. We must ensure that transformation is not reduced to symbolic gestures but remains a mandate that delivers real value for businesses, suppliers, and communities alike.

The deadline for public comment is 28 March 2026.

Reflective Question: Is your current B-BBEE strategy robust enough to withstand these shifts, or are you waiting for the regulations to dictate your business's future?