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South Africa gazettes ICT Sector Code for BEE

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South Africa’s Minister of Trade and Industry, Dr Rob Davies, has gazetted the Information and Communication Technology (ICT) Sector Code in terms of Section 9 (1) of the B-BBEE Act.

South Africa’s Minister of Trade and Industry, Dr Rob Davies (image: Rhodes University)

The gazette means that the ICT Sector Code is legally binding on entities in the ICT sector from the date of gazette to the 31 April 2026, with the midterm five year review on the 31 April 2017.

It also closes the chapter of the development of a Sector Code by the ICT Steering Committee which began in 25th June 2003 when the ICT Charter was launched to the public to allow stakeholders in the industry to negotiate and agree on a Charter that will serve as transformation guidelines for the industry.

The Committee concluded the work formally in the meeting of the 16th February 2012, wherein it was agreed that application for gazette should be made. Although in most aspects the Sector Code is aligned to the Generic Codes there are some of the key highlights as follows:

* The ICT sector has set a black ownership target of 30% to be achieved by entities in the sector instead of the 25% of the Generic Codes. The target set for Equity Equivalent for multinationals that qualify is also 30%.

* The main feature of the charter is a set target of 5% Net Profit After Tax to be spend on enterprise development initiatives that are aimed at growing and developing black owned ICT enterprises. The target for the Generic Codes is 3% Net Profit After Tax.

* Another key highlight is the spend of 1.5% of Net Profit After Tax on Socio Economic Development Initiatives to improve the lives of communities through programmes such as ICT’s in education, and health. The ultimate goal is to bridge the digital divide in the country. The Generic Codes requires companies to spend 1% of their Net Profit After Tax.

The ICT Charter includes a sector-specific scorecard which was agreed for by the sector stakeholders to be used to determine the BEE scores of enterprises in the ICT sector. As in the Generic Codes, the scorecard includes the seven standard elements of BEE:  Ownership, Management Control, Employment Equity, Preferential Procurement, Skills Development, Enterprise Development and Socio-Economic Development (SED) initiatives.

The Minister of Communications, Ms Dina Pule,   supports the application of the ICT Sector Code in the ICT sector.  Minister Pule will also work towards establishing the ICT Charter Council that will monitor the implementation of the Sector Code as per the provision of the B-BBEE Codes of Good Practice.

Staff writer

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