SOCIO-ECONOMIC DEVELOPMENT

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Socio-Economic Development

Socio-Economic Development
The revised Broad Based Black Economic Empowerment (BBBEE) codes consist of five elements. Socio-Economic Development (SED) forms part of the codes and is one of the elements. This element is about facilitating sustainable access into the economy for black people and encourages organisations to help the previously disadvantaged. Qualifying Small Enterprises (with a turnover of more than Ten million rand but less than Fifty million rand) and Generic entities (with a turnover of more than Fifty million rand) earn valuable points on their BEE scorecard for their contribution.
Socio-Economic Development is a means to add to the growth of our economy and to promote BBBEE is part of uplifting the previously disadvantaged. Government is encouraging businesses to commit to this development in our country and encourages empowerment to enable people and communities to better their lives. Since announcing the BBBEE codes in 2007, many companies have supported various skills development programmes without recognition. But unlike corporate social investment, SED is a means for companies to help black people and earn valuable points on their BEE scorecard.

Socio-Economic Contributions
SED contributions by Qualifying Small Enterprises and Generic Companies to defined beneficiaries include:
• Grant and related contributions. This include grant contributions and direct costs incurred by a company in assisting beneficiaries. Offering discounts in addition to normal business practices and covering overhead costs. Guarantees given or security provided for beneficiaries. Developmental capital advanced to beneficiaries.
• Contributions made in the form of human resource capacity. This include professional services provided at no cost or at a discounted rate to qualifying beneficiaries. Provision of training or mentoring to beneficiaries. Time of employees of **Measured Entity deployed in assisting beneficiaries and supporting SED.

How the Scorecard for Socio-Economic Development works
The SED scorecard allocates points for the average annual value of all SED contributions made by a company. Measured Entities are compensated for contributions that are quantifiable as a monetary value using a Standard Valuation Method. The contributions consist of monetary or non-monetary, recoverable or non-recoverable contributions initiated and implemented in favour of beneficiaries with the goal of facilitating sustainable access to the economy. The compliance target is set at 1% of net profit after tax for a weighting of five points. The full value of SED contributions is recognisable if at least 75% of the full value benefits black people. If less than 75% benefits black people, only the value of the contribution made multiplied by the percentage that benefits black people is recognisable.

 

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