Cape Town - The National Empowerment Fund (NEF) will become a wholly-owned subsidiary of the Industrial Development Corporation (IDC) in order to meet the considerable demand of funding for black entrepreneurs.
According to a statement by the Department of Trade and Industry (DTI), the ministers of trade and industry and economic development signed the deal in Cape Town on Wednesday. The DTI and the Economic Development Department (EDD) regard the deal as "a landmark breakthrough for South Africa’s quest for inclusive growth and radical economic transformation".
It is seen as being in line with President Jacob Zuma's statements in the State of the Nation Address last Thursday that the quest for radical economic transformation must seek “fundamental change in the structure, systems, institutions and patterns of ownership, management and control of the economy in favour of all South Africans, especially the poor, the majority of whom are African and female”.
Both the IDC and the NEF have been identified by government as central in implementing radical economic transformation and development policies, particularly in the light of renewed efforts to develop black industrialists. The merger will promote increased broad-based black economic empowerment with a specific focus on promoting black industrialists.
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In line with government policy
According to the departments, the decision is in line with government policy to consolidate SA’s development finance institutions to provide effective support to emerging and existing black entrepreneurs, and thereby enhance efficient service delivery.
THE DTI and EDD will appoint a technical team to drive the process. The minister of trade and industry will continue to provide legislative and policy guidance to the NEF.
During its financial year to end-March 2016, the IDC reported R14.5bn in approvals including R11.4bn in disbursements. In the same period it approved R4.9bn for black-empowered companies, R2.9bn of which was for black industrialists.
Since operational inception in 2005 to date the NEF has approved over R8.5bn worth of transactions to 839 black companies countrywide, which have supported in excess of 89 900 decent jobs.
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