Gordhan unveils jobs fund details
Cape Town - Finance Minister Pravin Gordhan declared the government’s
new Jobs Fund open for business on Tuesday, saying a “new boldness and
energy” were needed in the job creation process.
reporters at parliament the R9bn fund, first announced in February this
year, would be managed by the Development Bank of SA (DBSA).
South Africa, more so than any other country in the world, we require a
new boldness and a new energy to be infused into the job creation
process,” Gordhan said.
“More importantly, we need to be able to
demonstrate we can deliver on policy pronouncements, and focus more on
delivery than on talk about jobs.”
He described government’s latest attempt to stimulate job creation as a “challenge” fund.
we want a competitive environment in which as many government entities,
private sector entities and non-governmental entities as possible come
forward with ideas that will require co-funding in one form or another.”
The fund would provide grants, not loans. It has been allocated R2bn for the current financial year.
“The idea of the fund is it will not be giving loans, it will be giving grants on a co-funding basis,” he said.
to a document distributed at the briefing, the financing offered by the
Jobs Fund will vary in funding ratio and contribution according to the
type of applicant.
“To ensure real ownership, there will be a
cost and risk sharing by applicants, with a matched funding ratio of 1:1
for private sector applicants.
“However, for non-private sector
applicants there is a reduced own contribution, given that such
applicants are likely to have less resources to contribute.... In some
cases, a minimum contribution may apply,” it states.
Gordhan said one of the fund’s focus areas would be unemployed youths.
whole idea would be that through engagement at a grassroots level, we
can excite young people in particular but other members of the
communities as well to become participants in this process... to
increase access to institutions (and) to funding.”
The fund was about providing people “with the leverage they require to become connected to... the formal economy“, he said.
deputy chairperson Frans Baleni, who will chair the Job Fund’s
investment committee, said at the same briefing applications to the fund
were welcome “from today".
Those wishing to apply could obtain details on the website www.jobsfund.org.za or call the toll-free number 086-100-3272.
recognise that the success of this Jobs Fund depends on strong
cooperation between the public sector, private sector and
non-governmental organisations," he said.
deputy chair on the investment committee, Business Trust chief
executive Brian Whittaker, said the fund’s establishment was an
acknowledgement of the scale of South Africa’s unemployment problem.
a bold new venture that acknowledges we’ve got a problem; very high
numbers of especially young people out of work is something that the
country can’t live with... There’s an opportunity here to do something
innovative,” he said.
An estimated 42% of South Africans between the ages of 18 and 29 are unemployed.
debate on his department’s budget in the National Assembly later on
Tuesday, Gordhan told MPs that youth unemployment was a serious
“We face a serious unemployment challenge, particularly among our young people,” he said.
earlier at the briefing, the DBSA’s Paul Kibuuka, who heads the bank’s
development fund, said the Jobs Fund aimed to create “150 000 jobs over a
period of three years“.
This would include “short time” jobs of
one-year duration, and those longer than one year. The Jobs Fund was
looking at a range of 1 000 to 2 000 projects.
According to the
briefing document, applications for funding can be lodged “as of today
(June 7)“. It said the closing date for the first round of applications
is July 31 this year.
On the length of time it will take to
process applications, the document said a large portion of the process
would be done electronically.
“Once an application is received,
it will be screened against the eligibility criteria, the competitive
impact criteria, and then submitted for decision by the investment
On the type of projects to be funded, it said this
will include, among others, light manufacturing, critical transport and
communication links, investment in product development, local
procurement, marketing support, equipment upgrading or enterprise
Another focus area is support for work-seekers,
including help with job searches, enhancement of training facilities and
support for career guidance and placement services.