B-BBEE Codes Update: What Businesses Need to Know
On 29 January 2026, the Minister of Trade, Industry and Competition published proposed amendments to the Generic Codes of Good Practice for public comment. These proposed changes carry significant implications for how businesses approach transformation and compliance.
The Transformation Fund: A New Route for ED & SD
The headline change is the introduction of a National Transformation Fund as an alternative to Enterprise Development (ED) and Supplier Development (SD) contributions. Currently, businesses earn:
5 points for spending 1% of Net Profit After Tax (NPAT) on ED
10 points for spending 2% of NPAT on SD
Under the proposed framework, businesses may instead contribute 3% of NPAT to the Fund in exchange for 20 points.
However, this is an either/or decision, businesses cannot do both. Choosing the Fund means existing ED and SD programmes would must be discontinued, and no wounding down/phasing‑out period is provided raising potential operational and contractual challenges for companies and their beneficiaries.
Procurement Scorecard Changes
The proposed amendments also tighten procurement scoring significantly.
Key changes include:
A 100% Black ownership threshold is now required for procurement spend to qualify for points, a standard many regard as impractically high.
Introduction of new targeted procurement percentages, including:
15% procurement from 100% Black owned EMEs and QSEs
25% procurement from 100% Black owned enterprises
25% procurement from 51-99% Black owned enterprises
Failure to meet the minimum 40% sub-minimum on ED/SD or Fund contributions will result in an automatic downgrade of a business's B-BBEE rating level.
What Remains Unchanged (For Now)
These proposed changes apply only to the Generic Codes. Sector-specific codes covering industries such as agriculture, construction, financial services, and ICT are not affected at this stage. Additionally, the EME and QSE revenue thresholds remain unchanged at R10 million and R50 million respectively, figures that have not been reviewed since 2013.
IN CONCLUSION
These changes are not yet law. A minimum 60-day public comment period is currently underway, and businesses have an opportunity to engage with the process. However, they signal a clear government policy direction and companies should begin assessing the impact now.
OUR ADVICE
Don't wait for the ink to dry.
Review your current ED/SD spend
Procurement supplier profiles,
Overall B-BBEE scorecard strategy.
The decisions you make now will determine your rating readiness when these changes are enacted.
Reach out to our team at grok Consulting, we're here to help you stay ahead of the curve.
