Socio-Economic Development forms part of the government’s Black Economic Empowerment (BEE) policy. It is the 5th element of the BEE Scorecard for both Qualifying Small Enterprises (QSEs) and Generic Entities.
Socio-Economic Development contributions
Socio-Economic Development (SED) contributions are any monetary or non-monetary contribution implemented for individuals (natural individual or group of natural individuals) or communities, where at least 75% of the beneficiaries are classified as black people in terms of race.
QSEs and Generic Entities will be recognised with valuable points under the SED element for making these contributions towards the beneficiaries under the criteria.
In terms of the BEE Codes of Good Practice, the objective of SED contributions is the promotion of sustainable access for beneficiaries to the economy.
What counts as SED contributions?
SED contributions can be in the following forms:
- Grant Contributions
- Offering Discounts
- Covering overheads or direct costs
- Providing professional services at no cost
- Providing professional services at a discount rate
It is important to note that these contributions must be made within the financial period on which the BEE rating of the entity will be conducted. If an enterprise has a financial period running from March 2017 – February 2018, the contributions must have taken place within this period.
To claim points under this element the beneficiary must provide the entity with a letter acknowledging receipt of the contribution, declaring that the beneficiaries are at least 75% black as defined by the Codes of Good Practice and that the full contribution was allocated to these black beneficiaries. All contributions need to be proved by providing the proof of payment and an Article 18A receipt.
Lastly, a competent third party must also provide confirmation of the percentage of black beneficiaries who benefited from the contribution. The third party confirmation can be provided by, for instance, the auditor of the organisation.
An excerpt from the Preseidents SONA 2020 speach highlighting the urgent need for initiatives to support young people in South Africa
"To create opportunities for young people, we must achieve two things.
Firstly, we must accelerate the growth of competitive, export-oriented, labour-intensive industries where the rate of youth labour absorption is high.
Secondly, we must ensure that the most marginalised young people have the support that they need to access these opportunities – young people who have been unemployed for a long time, who cannot afford the costs of searching for work, and who lack strong social networks.
Our first priority is to create a National Pathway Management Network for young work-seekers to view and access learning and work opportunities, to receive a basic package of support and work readiness training, and to be matched to employment and other economic opportunities.
This is especially important for those young people who are marginalised and excluded from the economy.
Through this platform, young people will receive support in person and online to create their CV and to develop their job search and interview skills.
They will also complete online assessments to show their capabilities, so that they can be matched to jobs and opportunities that are available in the market.
This will be a game changer for many young people who simply don’t know where to start.
Our second priority is to ensure that young people have the skills that they need to access opportunities in key growth sectors such as global business services, digital and technology, tourism, agriculture, and social services.
Our skills development system must be more responsive to demand, in the immediate term as well as the long term."