Navigating the Proposed ICT Sector Code Amendments – What Businesses Need to Know

In an effort to deepen transformation and accelerate economic inclusion, South Africa’s Department of Trade, Industry and Competition (DTIC) has proposed critical amendments to the ICT Sector Code under the Broad-Based Black Economic Empowerment (B-BBEE) Act. These proposed changes — currently open for public comment — are poised to reshape how ICT businesses approach compliance, ownership, skills development, and supplier engagement.

For stakeholders in the ICT sector, this is not just a compliance update — it’s a strategic inflection point that demands proactive planning and informed action.

Understanding the ICT Sector Code

The ICT Sector Code is one of the sector-specific B-BBEE codes developed to address unique transformation needs and challenges within the Information and Communication Technology industry. It tailors the general B-BBEE framework to:

• Reflect the unique economic and structural dynamics of the ICT sector.
  
• Support Black participation and ownership in high-growth, high-innovation areas.
  
• Encourage investment in digital skills, enterprise development, and inclusive procurement.
  

The proposed amendments are intended to close implementation gaps, align with national development strategies (such as the National Digital and Broadband Plans), and support youth employment initiatives.

Key Proposed Amendments: What’s Changing?

1. Ownership Requirements are Going Up

One of the most prominent changes is the increase in Black ownership thresholds. If enacted, the amendments would require:

• A minimum of 35% Black ownership, up from 30%.
• A minimum of 15% Black women ownership, up from 10%.

These changes could significantly impact existing shareholding structures, especially for multinationals and large corporates. Businesses that do not meet these revised thresholds may see penalties on their scorecard, particularly if ownership becomes a priority element.

2. Revamped Skills Development Targets

The ICT sector remains a vital driver of South Africa’s digital future — yet there is a consistent shortage of critical digital skills in cybersecurity, cloud computing, data science, and software engineering. To address this:

• The amendments place a greater emphasis on technical skills development among Black South Africans.
• Companies will be expected to channel more spend into ICT-specific learnerships, internships, and apprenticeships, particularly for youth and people with disabilities.
• A new sub-element introduces weighting for high-impact learning outcomes, such as recognised qualifications or work placement success.

This aligns with the Digital Skills Master Plan, which prioritises skilling young South Africans in emerging tech to foster employability.

3. Stronger Supplier and Enterprise Development Focus

The amendments sharpen the focus on Enterprise and Supplier Development (ESD), promoting a more inclusive ICT economy. Proposed updates include:

• Adjusted procurement targets to favour Black-owned ICT suppliers (with 51%+ Black ownership).
• New provisions for supporting Black-owned start-ups and SMMEs through funding, mentoring, and capacity building.
• A longer-term view of supplier development outcomes, encouraging sustainable partnerships over once-off interventions.

These shifts mean that companies will need to do more than just spend — they must show meaningful impact and long-term value creation within their supplier base.

4. YES Initiative Gains Strategic Importance

The proposed amendments also integrate the Youth Employment Service (YES) more deliberately into the sector code. Businesses that:

• Create YES-compliant youth employment opportunities
• Meet additional transformation criteria

…will be eligible for enhanced B-BBEE recognition, including bonus points and possible level promotion.

This gives forward-thinking businesses an incentive to invest in youth employment while enhancing their scorecard performance.

Strategic Implications for ICT Businesses

These amendments are not just regulatory shifts — they represent a strategic realignment of transformation priorities in the sector. Businesses that want to remain competitive and future-proof must:

Review Their B-BBEE Strategy Holistically

An internal gap analysis against the proposed codes will highlight where structural, spend, or policy changes are needed.

Reassess Ownership Structures

Companies with static shareholding or outdated empowerment schemes may need to explore new ownership models, including ESOPs, family trusts, or equity equivalents.

Boost Skills Investment

Redirect training budgets toward ICT-relevant programmes and form partnerships with TVET colleges, SETAs, and coding academies.

Deepen Supplier Relationships

Beyond compliance, consider long-term supplier incubators and technology transfer programmes to build sustainable Black-owned businesses in your supply chain.

Why This Matters Now

Although these changes are still under review, they are expected to come into effect in late 2025 or early 2026. Delaying your response could:

• Lead to missed procurement opportunities.
• Jeopardise your competitive position in state and enterprise tenders.
• Increase cost and complexity of last-minute scorecard adjustments.

Early planning allows your business to lead the curve, not chase it.

How Excellous Group Can Help

At Excellous Group, we specialise in helping ICT businesses navigate the complexities of transformation. With deep experience across the sector, we offer:

• B-BBEE audit preparation
• Ownership restructuring support
• ICT-relevant skills development programme design
• ESD strategy development and implementation
• YES Initiative planning and execution

We don’t just help you comply — we help you build transformation strategies that drive growth, innovation, and inclusion.

Let’s Start Your Transition Today

Contact us to schedule a transformation readiness assessment and receive a personalised roadmap tailored to your ICT business goals.

Get in touch now | info@excellousgroup.co.za

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