The Transformation Fund and the draft B-BBEE amendments: what is proposed, and what still applies today

On 29 January 2026, the Minister of Trade, Industry and Competition published draft amendments to the Codes of Good Practice in Government Gazette 54032. Public comment closed on 30 March 2026. Since then, many clients have asked us the same question: do we need to change our B-BBEE strategy now?

The short answer is no, not yet. The current Codes still apply to every verification until final amendments are gazetted and take effect. But the direction is clear, and the businesses that plan for it early will spend less later.

Important: for now, this only applies to the Generic Codes. The draft amends the Generic Codes of Good Practice. If your business is measured under a sector code, such as the ICT, Transport, Construction or Financial Sector Code, you are not yet affected. We do expect the other sectors to follow once the amendments are final. One indirect effect to watch: if your clients are measured under the Generic Codes, the new procurement targets may change what they ask of you as a supplier.

What is proposed?

The draft touches five parts of the Codes, including Statement 400 (Enterprise and Supplier Development) and the QSE scorecard in Code Series 600. The main proposals are:

• A Transformation Fund. Instead of running your own enterprise and supplier development programmes, you could contribute 3% of net profit after tax to a central fund and earn 20 points.

• New procurement targets. The draft rewards spend with fully black owned suppliers much more strongly: 15% of procurement spend with 100% black owned EMEs, 15% with 100% black owned QSEs, 25% with 100% black owned suppliers and 12% with 100% black woman owned suppliers.

• Less weight on 51% black owned suppliers. Spend with suppliers that are majority but not fully black owned would earn far fewer points than today.

Try it: same spend, different points

The calculator below starts with the example from this article: a business that spends R10 million a year with its suppliers. R7.5 million of that goes to suppliers that are 51% to 99% black owned, R500 000 to a 100% black owned EME and R2 million to other suppliers. Under the current Codes it earns 23 of the 27 procurement points. Under the draft, the exact same suppliers and the exact same spend earn 13.79 points. Nothing about the suppliers changed, only the rules. Change the amounts to match your own spend and see where you would land.

Why this matters so much: Enterprise and Supplier Development is a priority element, and preferential procurement carries its own sub minimum. You must score at least 40% of the procurement points, which is 10.8 out of 27. Fall below that and your final B-BBEE level drops by one level, on top of the points you have already lost. The draft keeps the same 40% sub minimum, so a supplier base that is mostly 51% black owned could push you below the line without anything else in your business changing.

What does this mean for your business?

Two things stand out.

1. Your supplier base matters more than your supplier count. If most of your spend sits with 51% black owned suppliers, your procurement score could drop sharply under the new targets, even if nothing else changes.

2. Enterprise and supplier development may become a choice. The fund route would trade control over beneficiaries for simplicity. Which route costs less per point will depend on your profit, your suppliers and the results you want to see.

How to plan without guessing

• Keep verifying under the current Codes. Do not stop programmes that earn you points today.

• Map your top suppliers by black ownership level, so you know how exposed your procurement score is.

• Budget your enterprise and supplier development spend on net profit after tax, as you do now. The proposed fund uses the same base.

• Watch for the final gazette. Final amendments normally come with a date when they take effect, and that date decides which verification they apply to.

Inclusion Works Consulting models your scorecard under the current Codes and the draft amendments side by side, so you know your exposure before anything changes. Email info@inclusionworks.co.za.