Broad-Based Black Economic Empowerment (B-BBEE) is designed to increase the participation of black South Africans in the economy by transforming how businesses operate. Done correctly, B-BBEE drives job creation, boosts competitiveness, and fosters economic growth.
Yet despite being part of South Africa’s business landscape for years, misconceptions persist. These myths often cause confusion, discourage compliance, or lead to costly mistakes. In reality, B-BBEE is a structured, rule-based system with real benefits when implemented strategically.
Below, we break down the most common misconceptions and explain the facts.
1. “B-BBEE is just a compliance expense”
While many businesses treat B-BBEE as a tick-box exercise, it can be a strategic growth tool. A strong B-BBEE scorecard can help you:
- Win tenders
- Qualify for procurement opportunities with corporates and government
- Attract investment and partnerships
Think of your B-BBEE strategy as a business development tool, not just a cost.
2. “You have to give away shares to get ownership points”
The B-BBEE Codes do not force you to donate shares. Ownership points can be achieved in multiple ways, including:
- Selling equity to black individuals or black-owned entities at fair market value
- Empowerment deals through assets or business units
- Broad-based ownership schemes and employee trusts
Good structuring and advice from a B-BBEE consultant ensure compliance without sacrificing control.
3. “Only black-owned businesses can be B-BBEE compliant”
Not true. Your contributor status depends on your annual turnover and compliance with the scorecard:
- EMEs (Exempt Micro Enterprises) under R10 million turnover: automatic Level 4 by affidavit.
- Black-owned EMEs: Level 1 (100% black-owned) or Level 2 (≥51% black-owned).
- QSEs (Qualifying Small Enterprises) between R10 million and R50 million turnover: need verification unless ≥51% black-owned.
- Generic Enterprises above R50 million turnover: full verification required.
Any business can comply and improve its level with the right strategy.
4. “Ownership equals empowerment”
Ownership is only one element of the B-BBEE scorecard. To maximise your level, you must also address:
- Management control
- Skills development
- Enterprise & supplier development
- Socio-economic development
Focusing only on ownership will leave points – and opportunities – on the table.
5. “B-BBEE points are easy to calculate”
The scoring system is technical. Each element has its own formula, targets and weighting. Mistakes can cost you points or even your verification status. It’s best to work with an accredited B-BBEE verification agency or an experienced consultant like Cenfed to do the calculations properly.
6. “Hiring black staff automatically transforms your business”
Employment equity is just one part of the puzzle. True transformation requires:
- Diversity at all levels of management, not just junior roles
- Investment in skills development
- Support for black-owned suppliers
- A culture of inclusion across the business
When handled strategically, transformation benefits both the company and its employees.
Why This Matters for Your Business
B-BBEE isn’t going away – it’s evolving. The verification thresholds and codes have been tightened over the years, and compliance is increasingly a prerequisite for winning contracts. Understanding the realities (instead of myths) puts your business in a stronger position.
How Cenfed Can Help
Cenfed’s B-BBEE Consulting team helps businesses navigate the Codes of Good Practice, dispel myths, and implement practical strategies to improve your scorecard without unnecessary costs.
📋 Ready to take the guesswork out of B-BBEE?
Complete our quick online compliance request form here
One of our consultants will assess your needs and guide you through the process – making B-BBEE simple, strategic and effective.