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Gordhan unveils jobs fund details

Jun 07 2011 14:28
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.

He told reporters at parliament the R9bn fund, first announced in February this year, would be managed by the Development Bank of SA (DBSA).

“In 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.

“Meaning 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.

According 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.

“The 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.

DBSA 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.

"We recognise that the success of this Jobs Fund depends on strong cooperation between the public sector, private sector and non-governmental organisations," he said.

Bold venture

His 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.

“(It’s) 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.

Opening debate on his department’s budget in the National Assembly later on Tuesday, Gordhan told MPs that youth unemployment was a serious challenge.

“We face a serious unemployment challenge, particularly among our young people,” he said.

Speaking 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 committee.”

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 franchising.

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.

dbsa  |  pravin gordhan  |  sa economy  |  job creation


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