The impact of black economic empowerment policy on turnover and profitability of businesses in Polokwane area of Limpopo Province, South Africa

Abstract

The aim of this paper is to investigate the impact of Black Economic Empowerment (BEE) policy on turnover and profitability of businesses in Polokwane area of Limpopo Province, South Africa. Data was collected through the use of self-administered questionnaires in a survey. The study focused on businesses that have benefitted from BEE deals over the past 5 years. Because of the difficulty in obtaining the population of businesses that have benefitted from BEE deals over the past 5 years in the study area, purposive and snowball sampling methods were used. The questionnaires were distributed to a sample of business owners (N=38) to respond on the impact of BEE policy on turnover and profitability of businesses in the Polokwane area of Limpopo Province, South Africa. Descriptive statistics was used for data analysis. The findings revealed that BEE positively impacted on the turnover and profitability of businesses.95% of the respondents indicated that their annual turnover increased over the past 5 years because of the BEE tender deals and 5% indicated that BEE policy did not impact on their turnover. Furthermore, 92% of the respondents indicated that their annual profit increased over the past 5 years because of the BEE tender deal and 8% indicated that BEE policy did not impact on their profit. Based on the results of this study, it is recommended that the South African Government should continue to support businesses using BEE policy to stimulate employment and economic growth.