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The objective of the South African government's BEE policy is to increase the number of black people that manage, control and own enterprises. Most sectors of the South African economy have already drafted charters defining targets and timeframes for BEE, with the government itself setting the objective of 25% for black ownership across the economy by 2017.
Though many doubt this target will be reached on schedule, due in part to the slowdown in the South African economy - with growth in 2008 tipped to be below the 5% averaged for the past five years - and the lack of black institutional and private investors hampering efforts to expand BEE, progress is being made.
At the end of July, South Africa's largest mobile phone network operator, Vodacom, announced it had finalised a $997.8m deal to transfer 6.25% of its local business to black investors.
Vodacom, a joint venture between South Africa's Telkom and UK's Vodafone, expects up to 50,000 individual investors to buy into the company. The only condition set for the sale is that potential buyers must be black and have at least $325 to apply for a minimum of 100 shares.
Both the black investment group Thebe Investments Corporation and Royal Bafokeng Holdings, one of South Africa's richest tribal groups, will be among the main investors in the Vodacom BEE offer, with the remaining shares to be made available through a public offering.
The plan foresees the two strategic equity black partners holding 2.81% of Vodacom South Africa, while 3.44% will be held by black individuals. The remaining 93.7% will go to the Vodacom Group.
BEE does come at a cost, with Vodacom estimating that the 10% discount on shares offered to investors would reduce its full year earnings by around $260m, approximately 2% of the value of its operations.
Mining giants BHP Billiton and Rio Tinto have also got into the act recently, agreeing to sell a 26% stake in their joint venture Richards Bay Minerals (RBM) to black investors and employees.
The deal, announced on July 30, will see a consortium consisting of seven lead investors and four communities - who live on or are traditional owners of the land in the area where RBM operates - take a 24% stake, while the remaining 2% will be reserved to staff.
The sale puts RBM well ahead of the schedule set by the government, under which mining companies ought to have achieved 15% black ownership by 2009 and 26% by 2014 in order to retain their operating licences.
Though BEE is gaining momentum in the mining and telecommunications sectors, it is a different story in the banking and insurance industries, where a debate is being played out between senior managers on the one side and the Congress of South African Trade Unions (COSATU) and the South African Communist Party (SACP) on the other.
COSATU and the SACP, long at the forefront of the campaign to widen BEE and raise the programme's quotas, have been pushing to have direct black ownership levels in the financial sector lifted to 15%. The sector as a whole has agreed to a BEE charter in 2002, setting targeted ownership levels at 10%.
On August 25, Sim Tshabalala, the chief executive of Standard Bank South Africa (SBSA), warned that moves to lift the BEE quota in the banking and insurance industries at the present time would be counter productive.
"By diverting capital resources into funding direct black ownership of banks, we would be incorrectly constrained to move the focus away from much-needed productive and transformational initiatives," he told the local media.
If BEE levels in the financial sector were to be raised, bank reserves would be reduced and funding denied to low-income housing, development, black agricultural projects and access to financial services by marginalised communities, Tshabalala said.
Talks between the Banking Association of South Africa, the SACP and COSATU broke down on August 25, when COSATU threatened to stage a series of strikes if its demands were not met by the end of the month.
Even before the talks reached an impasse, Ross Jenvey, an analyst at Credit Suisse Standard Securities, said banks were unwilling to take further risks in the BEE sector.
"Because the environment for raising capital has become difficult, the banks are not keen to do anything that will impair capital in these markets," Jenvey was reported as saying on August 3. "Banks play a bigger role in BEE and take on more risk than other companies. They fund these deals - some of which lead to bad debts."
While there have been criticisms of the BEE programme, including the fact that it has done little to reduce black unemployment - which remains above 30% - or boost wealth in the broader black community, the policy is considered to be a mainstay in efforts to redistribute wealth and build for the country's future. Though targets may not be met on time, BEE will continue to be a buzz word for the South African economy.