IDC to drive economic development

Economic Development Minister Ebrahim Patel has called on aspiring entrepreneurs to take advantage of the R23 billion that has been set aside over the next five years to fund “new players”.

Minister Patel said the funding, made available by the Industrial Development Corporation (IDC) aims to transform the economy and create jobs as government makes a big push to industrialise the economy.

The Minister said this when he recently tabled his department’s Budget Vote speech in the National Assembly. He said the fund would contribute towards industrialisation and that it would go a long way in eradicating inequality and poverty.

The Minister urged aspiring black industrialists to come up with proposals in the productive sectors of the economy where they can set up industries.

“The IDC is committing R100 billion over five years to industrial development. “What is new, and what is significant, is that we are setting aside R23 billion to promote black industrialists.

“This is a five-year programme that is intended to support those companies where black South Africans are both owning and controlling the enterprises in the productive sectors of the economy and is intended to bring more South Africans into the economic mainstream,” he said.

The Minister said the decision to set aside the funding was meant to promote transformation and boost economic growth by unlocking the potential and talent pool of the economy. He said South Africa needed to achieve sustainable and inclusive growth, and that the funding would be made available on concessional terms.

“Aside from black industrialists, there is of course a compelling need to bring more black South Africans into the economy.

“There are also targeted groups – young people, women – they have not been sufficiently brought into the productive activities. So the IDC will make available R9 billion in total – R4,5 billion for women, R4,5 billion for youth,” she said.

The Minister said the funding would be in the form of loans or equities.

Good news for small township enterprises, spaza shops

The Minister said during the current financial year, the Competition Commission would conduct an inquiry to see how smaller businesses in the formal and informal economy can be supported. He said the inquiry would also seek ways in which smaller players could be incorporated into this lucrative sector.

“The Competition Commission will be launching a market inquiry into the retail sector, looking at how we can bring more black South Africans, more small businesses, into the retail sector. “It will examine amongst others, the tenancy arrangements in shopping malls, the growth of township enterprises, small shops, spaza shops and so on, and it is intended to ensure that we have got a competitive but also inclusive retail sector,” he said.

He said another inquiry into the health care industry, which he announced last year, would hold public hearings during the current financial year.

The inquiry was established with the aim of addressing several concerns about the industry, including the cost of health care in South Africa.

How African firms are creating jobs

On the back of attacks on foreign nationals, on 25 May – a date the African Union (AU) Commission has declared as Africa Day – the Department of Economic Development convened a symposium of investors, workers, intellectuals and public officials with the University of the Witwatersrand and the Industrial Development Corporation. The symposium looked at the economic impact of South Africa’s relationship with the rest of the continent. The minister went on a road show to different parts of the country to spread the message that South Africa’s prosperity is intimately tied to economic relations with the rest of the continent. Last year, South Africa exported R300 billion worth of goods to the rest of Africa which was an increase of R36 billion.

“Our total manufacturing, mining and agricultural exports to the rest of Africa sustained 244 000 direct jobs in South Africa, of these, 169 000 are manufacturing. “Africa is now more important for growth in manufacturing exports than Europe, the United States or China,” he said.