Assessing impact of SA’s Equity Equivalent Investment Programme

The Department of Trade Industry and Competition (dtic) contracted Genesis Analytics to conduct a comprehensive impact assessment of its Equity Equivalent Investment Programme (EEIP), a component of South Africa’s Broad-Based Black Economic Empowerment (B-BBEE).

The EEIP allows multinational companies operating in South Africa to fulfil the black ownership requirement of the B-BBEE scorecard. Instead of selling equity or assets to black South Africans, they can invest in skills development, enterprise and supplier development, and research and development for up to 10 years.

The dtic, which is responsible for B-BBEE governance, contracted Genesis Analytics to conduct a comprehensive impact assessment, including:

Developing a theory of change to enable the dtic and relevant stakeholders to understand how the EEIP aims to contribute to economic transformation.
Developing a robust EEIP monitoring and evaluation (M&E) framework, ensuring consistent and effective tracking of both individual and collective EEIP contributions.
Analysing the relevance, efficiency, coherence, sustainability, effectiveness and impact of EEIP in relation to the wider South African socioeconomic context and the stated economic transformation goals of B-BBEE Codes. This comprehensive impact assessment incorporated insights from wide-ranging stakeholder consultation, extensive desktop research and rigorous economic modelling.
Identifying areas for improvement related to implementing the EEIP, proposing policy recommendations, and consulting the dtic to ensure that all recommendations were actionable and feasible.
Building internal capacity at the dtic by hosting six skills transfer workshops, encompassing skills from economic modelling to M&E framework training.

B-BBEE has been central to South Africa’s developmental agenda. Its Codes of Good Practice of 2007, as amended in 2013, recommend that all entities operating in South Africa contribute towards driving the B-BBEE agenda. One element of the B-BBEE scorecard―the criteria against which a business’s contributions to B-BBEE are measured―is black ownership, which refers to selling equity or assets to black South Africans.

For many multinational companies operating in South Africa, selling equity to black South Africans is prohibitively difficult or in some cases, against global company policy. Acknowledging this, the dtic introduced Statement 103 of the Codes, or the EEIP, allowing multinational companies operating in South Africa to fulfil the ownership requirement by investing in a B-BBEE programme instead of through selling equity or assets to Black South Africans.

Full details about the programme are available on the dtic website here.