The 2026 draft B-BBEE amendments propose significant changes to how South African businesses approach Enterprise and Supplier Development (ESD), preferential procurement and transformation-related contributions.
Published in January 2026, Draft Statement 400 introduces a proposed Transformation Fund alternative, revised procurement targets and additional requirements for measuring the outcomes of ESD initiatives.
For businesses preparing their B-BBEE strategies, understanding these proposed amendments is important. Changes to procurement targets, contribution requirements and verification evidence could influence how companies structure their existing transformation programmes.
While the proposals remain subject to their final regulatory status, businesses can use the draft framework to review their current ESD performance and identify areas that may require attention.
2026 Draft B-BBEE Amendments: A New Alternative for Enterprise and Supplier Development
One of the most significant proposals in Draft Statement 400 is the introduction of a Transformation Fund as an alternative to traditional Enterprise and Supplier Development contributions.
Under the draft, measured entities would have the option of contributing 3% of Net Profit After Tax (NPAT) to the Transformation Fund instead of meeting the Enterprise Development and Supplier Development contribution requirements separately.
The proposed scorecard allocates 20 weighting points to the Transformation Fund alternative. Businesses would also retain the option of implementing their existing Enterprise Development and Supplier Development programmes.
This proposed alternative could require businesses to assess how their existing ESD initiatives compare with a contribution to the Transformation Fund, taking into account financial commitments, scorecard recognition and the outcomes achieved through their current programmes.
The proposed Transformation Fund at a glance
3% of NPAT
Proposed annual contribution target to the Transformation Fund.
20 weighting points
Proposed scorecard weighting allocated to the Transformation Fund alternative.
An alternative ESD pathway
The draft provides for measured entities to continue with their existing Enterprise Development and Supplier Development programmes or consider the proposed Transformation Fund option.
Proposed changes to preferential procurement targets
Understanding the 2026 draft B-BBEE amendments can help measured entities prepare for potential regulatory developments while continuing to meet their existing B-BBEE obligations.
The proposed scorecard places particular emphasis on procurement from 100% Black-owned enterprises, Black-owned Exempted Micro-Enterprises (EMEs), Qualifying Small Enterprises (QSEs) and Black women-owned suppliers.
These proposed changes could require measured entities to review their existing supplier databases, procurement expenditure and sourcing strategies to understand how their current procurement practices compare with the draft requirements.
| Supplier category | Proposed target |
|---|---|
| 100% Black-owned QSEs | 15% |
| 100% Black-owned EMEs | 15% |
| 100% Black-owned enterprises | 25% |
| 51%–99% Black-owned enterprises | 25% |
| 100% Black women-owned enterprises | 12% |
What could this mean for measured entities?
The proposed procurement indicators could make it increasingly important for businesses to understand the ownership profiles of their existing suppliers and identify opportunities to source from qualifying enterprises.
Companies may need to assess whether their current procurement expenditure supports the proposed targets, whether sufficient qualifying suppliers are available within their supply chains and how new supplier relationships could contribute to their broader ESD objectives.
Importantly, these targets form part of the proposed scorecard and should not be interpreted as immediate obligations until the final regulatory requirements and applicable implementation arrangements have been confirmed.
Stronger monitoring and verification of ESD contributions
These requirements are intended to demonstrate the impact of contributions on beneficiary businesses, including improvements in turnover, job creation, profitability, innovation and access to local and international markets.
For measured entities, this could mean maintaining more detailed records of their ESD initiatives, establishing measurable development objectives and monitoring the progress of beneficiaries throughout the programme.
The proposed requirements would also place greater emphasis on the quality and availability of supporting evidence during B-BBEE verification. Businesses may therefore need to review their existing documentation and reporting processes to ensure that their ESD activities can be properly assessed.
Proposed ESD reporting requirements
- A needs analysis identifying the beneficiary's development requirements.
- Performance metrics covering measurable outputs and outcomes, including business growth, job creation and improved operational capacity.
- An annual Monitoring and Evaluation report demonstrating the impact of contributions and providing supporting evidence for verification.
Greater recognition for long-term supplier development
The proposed amendments also place greater emphasis on building sustainable supplier relationships and demonstrating measurable development outcomes.
Draft Statement 400 proposes additional bonus-point recognition where a measured entity establishes a qualifying first-time supplier relationship supported by a minimum three-year contract.
Further bonus points are proposed where qualifying first-time suppliers achieve average annual turnover and job-creation growth of at least 10% over the three-year contract period.
These proposed indicators would place additional importance on the long-term performance of supplier development initiatives, including the ability to support business growth and employment creation.
For measured entities, this could mean reviewing supplier development programmes not only in terms of contribution value, but also in terms of contract duration, supplier performance and the outcomes achieved through ongoing support.
3 years
Supplier partnership
Proposed bonus-point recognition for qualifying first-time supplier relationships supported by a minimum three-year contract.
10%
Annual growth
Proposed recognition linked to average annual turnover and job-creation growth of at least 10% over the three-year contract period.
What should businesses be reviewing?
The proposed amendments provide an opportunity for businesses to evaluate their existing Enterprise and Supplier Development strategies and identify areas that may require adjustment if the draft provisions are finalised.
Rather than making immediate changes based on proposals that have not yet been confirmed as binding requirements, measured entities can review their current scorecard performance, supplier profiles, contribution structures and supporting documentation.
Understanding the potential implications of the draft now could help businesses make informed decisions once the final regulatory requirements and implementation arrangements are confirmed.
- Review existing ESD contributions - Assess current Enterprise Development and Supplier Development expenditure and the performance of existing programmes.
- Evaluate procurement expenditure - Review supplier ownership profiles and existing procurement spend against the proposed preferential procurement indicators.
- Assess supplier development outcomes - Review supplier contract periods, beneficiary growth and the measurable outcomes of existing development initiatives.
- Check supporting documentation - Identify any gaps in needs analyses, performance metrics, beneficiary records and monitoring reports.
- Monitor regulatory developments - Confirm the final status of the amendments and any applicable implementation requirements before changing compliance strategies.
Preparing for the next phase of B-BBEE compliance
The 2026 draft B-BBEE amendments to Statement 400 could influence how businesses approach preferential procurement, Enterprise and Supplier Development contributions and the measurement of transformation outcomes.
Although the final regulatory requirements must be confirmed, businesses can use the published draft to evaluate their existing B-BBEE strategies, identify potential compliance implications and review whether their current supplier development programmes are sufficiently structured.
Understanding the proposed changes can help measured entities prepare for future developments while continuing to meet their existing B-BBEE obligations.
Is your B-BBEE strategy prepared for potential changes?
FinX BEE can assist your business with reviewing its current B-BBEE position, evaluating existing Enterprise and Supplier Development initiatives and understanding the potential implications of the proposed amendments.
Further reading and official documentation
This article discusses the proposed amendments contained in Draft Statement 400 of 2026, issued by the Department of Trade, Industry and Competition, alongside industry commentary on their potential implications for South African businesses.
Official draft: Draft Statement 400 of 2026 – Enterprise and Supplier Development.
Industry commentary: The Weight of the 2026 Draft B-BBEE Amendments – LabourNet.
The proposals discussed in this article should not be treated as final or enforceable amendments without confirmation of their regulatory status and applicable commencement arrangements.