The head of South Africa's flagship Black Economic Empowerment Programme plans to introduce additional incentives and potential fines to improve corporate participation and curb exploitation of the system meant to tackle the country’s gross inequality.
The head of South Africa ’s flagship Black Economic Empowerment Programme plans to introduce additional incentives and potential fines to improve corporate participation and curb exploitation of the system meant to tackle the country’s gross inequality, he said.
Two decades later, unemployment is five times higher for black people than for white people and income inequality is the worst in the world, according to the World Bank, and critics say the empowerment policy has not worked. However, Matona says some companies inflate their scores by falsely listing black people as managers, a practice commonly known in South Africa as “fronting”, a crime under the law.
Listed companies are required to disclose their black empowerment status in annual reports, but fewer and fewer are doing so.Matona said he had hoped to enhance company incentives for compliance while “naming and shaming” and possibly fining those which fail to submit the reports. Economist Duma Gqubule said his research – based on an analysis of companies’ annual reports and shareholding plans – found black ownership of the 50 biggest firms listed on the Johannesburg bourse was barely 1%, far below the official average figure of about 30%.
Black Economic Empowerment South Africa Inequality Corporate Participation Fronting
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