A new chapter for B-BBEE with draft Gazette 54032

Yuneal Padayachy | Chief Support Officer | The BEE Chamber | mail me |

On Thursday, 29 January 2026, the Department of Trade, Industry and Competition (DTIC) took a fundamental step in South Africa’s Broad-Based Black Economic Empowerment (B-BBEE) transformation narrative by publishing Government Gazette Number 54032. This development marks a new chapter for B-BBEE and signals a shift in regulatory direction.

The Gazette introduces a suite of draft amendments to the B-BBEE Codes of Good Practice for 60 days of public comment. These proposals signal a forward-looking re-engineering of South Africa’s empowerment landscape. They place greater emphasis on measurable economic participation, strategic funding mechanisms, and equitable enterprise growth. Collectively, these reforms represent a new chapter for B-BBEE in policy design and implementation.

Substantial revisions to the B-BBEE regulatory framework

The changes underscore the DTIC’s commitment to outcome-focused measurement. B-BBEE transformation spend will no longer focus only on volume. It will also require evidence of enduring economic uplift. In this sense, the amendments establish a new chapter for B-BBEE that prioritises tangible economic outcomes.

The proposals represent one of the most substantial revisions to the B-BBEE regulatory framework in years. They aim to strengthen accountability, refine the empowerment scorecard and incentivise transformation outcomes across the B-BBEE landscape.

We welcome the amendments. We’re looking forward to more clarity on practical implementation and an effective date.

The Gazette includes a number of draft Gazettes that introduce amendments to the following instruments (links below):

• Draft Statement 000 of 2026.
• Draft Statement 004 of 2026.
• Draft Schedule 1 of 2026.
• Draft Statement 103 of 2026.
• Draft Statement 400 of 2026.
• Draft Code Series 600 of 2026.

The drafts are not merely technical changes. They reflect a policy direction with practical implications for business transformation, compliance strategy and economic participation.

Some of the major areas introduced include the following:

• Introduction of a Transformation Fund

  • A major proposal is the establishment of a Transformation Fund as an alternative compliance route to traditional Enterprise and Supplier Development (ESD) spend.
  • Businesses could contribute a fixed percentage of 3% of Net Profit After Tax to this fund. They could earn a significant portion of the B-BBEE scorecard points, namely 20 points, while centralising and scaling funding for Black-owned and Black-managed enterprises.
  • Many stakeholders have questioned the corporate governance aspects of the Transformation Fund. However, others have welcomed it and seek clarity on how beneficiaries can receive sustainable support.

• Redesign of preferential procurement and supplier targets

  • The draft scorecards emphasise more nuanced supplier spend targets. They introduce distinct weighting for procurement from 100% Black-owned enterprises and 100% Black women-owned enterprises. This signals a shift toward more outcome-oriented procurement transformation.

• Equity equivalent investment programme for multinationals

  • Draft Statement 103 introduces the Transformation Fund as one of the programmes that multinationals can implement under the Equity Equivalent Investment Programme.

• Definition of the Transformation Fund

  • Draft Schedule 1 of 2026 defines the Transformation Fund as “an aggregated mechanism to accelerate economic transformation and support Black enterprises, particularly Exempted Micro Enterprises (EMEs) and Qualifying Small Enterprises (QSEs). It aims to pool resources from measured entities to create scalable impact rather than fragmented individual ESD initiatives.”

Key amendments

Furthermore, most amendments appear under Draft Statement 400 of the General B-BBEE Codes of Good Practice. They also appear in other statements.

The key amendments include the following:

1. The draft introduces clause 2.4 on the Transformation Fund. It sets an annual contribution value of 3% of Net Profit After Tax and introduces weighting points of 20. This option serves as an alternative to existing Enterprise Development and Supplier Development contributions. Measured entities will continue to score points for implementing existing Enterprise Development or Supplier Development initiatives.
2. The draft introduces a 15% procurement target for 100% Black-owned Exempted Micro Enterprises (EMEs) and Qualifying Small Enterprises (QSEs) each.
3. The draft introduces a 25% procurement target for 100% Black-owned enterprises.
4. The draft introduces a 25% procurement target for enterprises that are between 51% and 99% Black-owned.
5. The draft introduces a 12% procurement target for 100% Black women-owned enterprises.
6. The draft increases the procurement compliance target to 10% for bonus points for companies that are at least 100% owned by Designated Groups.
7. The draft increases bonus points for measured entities that enable recipients of Enterprise and Supplier Development contributions, and/or 100% Black-owned QSEs or EMEs, and first-time suppliers that have a minimum three-year contract with the measured entity.
8. The draft increases bonus points 0 Comments in moderationfor measured entities that enable average turnover and job creation growth of at least 10% per annum over a three-year contract period for all onboarded first-time suppliers.
9. The draft clarifies that measured entities must submit a needs analysis, performance metrics with outputs and outcomes, and an annual Monitoring and Evaluation report. Verification must occur before recognition of points.
10. The draft revises the ESD Recognition Matrix.

We encourage all companies to analyse the amendments in depth to understand the implications for their B-BBEE transformation and business strategy that will lead to sustainable impact.