What is Socio Economic Development?
Socio-Economic Development refers to the process of social and economic development in a society. Socio-Economic Development is meassured with indicators such as GDP, literacy and life expectancy. Less tangabile indicators such as personal dignity and freedom of fear are also meassured.
In South Africa Socio- Economic Development forms a part of the governments Broad-Based Black Economic Empowerment (B-BBEE) policy. It is the Seventh element of the Generic B-BBEE Scorecard.
What is B-BBEE?
Broad-Based Black Economic Empowerment is a policy of the South African Government which is aimed at encouraging business to help in the transformation of the country.B-BBEE is about broad-based activities that will benefit black people.B-BBEE compliance is meassured according to a scorecard.
The scorecard is based on various elements in your business and meassured out of a maximum of 100 Points. The scorecard is explained in the BEE Codes of Good Practice.
Socio-Economic Development and BBBEE
B-BBEE is described as Broad-Based because it focuses on many various aspects of the company, the economy and the society. One of these aspects being the Socio-Economic Development (SED) Contributions from the company. SED Contributions are any monetary or non-monetary contribution that the company implemented for individuals or communities where at least 75% of the beneficiaries are classified as black people in terms of race. According to the BEE Code of Good Practice the objective of Socio-Economic Development Contributions is the promotion of sustainable access to the beneficiaries or community.
What counts as a Socio-Economic Development Contribtution?
SED Contributions can be done in the following forms:
These SED Contributions need to be made in the financial period in which the B-BBEE rating of the company will be evaluated. i.e If your company has a financial year running from March 2018 - February 2019, SED Contributions must have been made within that period. In order for the company to claim these points the beneficiary must porvide the company with a letter declaring that the beneficiaries are at least 75% black as defined by the BEE Codes of Good Practice and that the full contribution was allocated to these black beneficiaries.
Socio-Economic Development can increase your B-BBEE score while providing much needed assistance to communities in need
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