South African corporates channel about R20 billion a year into Enterprise and Supplier Development, yet nearly 40% of ESD targets are not being met. Unconventional CA’s co-founder, Jameel Khan, says too many programmes are treated as a tick-box to boost B-BBEE scores rather than a lever for real SMME growth, with unemployment still at 33% and small firms struggling.
By Paula Luckhoff – Primedia Plus
Khan argues the sector is over-regulated and compliance-driven. Companies typically calculate ESD at 3% of net profit after tax — 1% for Enterprise Development and 2% for Supplier Development — but much of this spend is aimed at maintaining ratings instead of supporting small businesses with what they actually need.
Citing the B-BBEE Commission’s 2023 findings, he notes that fewer than two-thirds of corporates have effective ESD strategies, and barely 60% of programme targets are achieved. These gaps suggest initiatives are often poorly designed, inadequately measured or misaligned with SMME realities.
The opportunity, Khan says, is to reimagine ESD as an engine for sustainable business growth rather than a compliance exercise — turning billions of rands into tangible, long-term impact for South Africa’s small enterprises.
