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As part of its pushto support black female-owned enterprises, the IDCwants womento play a leading role in key sectors of the economy, writes Caiphus Kgosana.
Water, petrochemicals, coal, agroprocessing – there are huge manufacturing opportunities in these sectors.
However, very few women – and even fewer black female entrepreneurs – are active in them. The Industrial Development Corporation (IDC) wants to change that.
Speaking at this week’s IDC Women in Manufacturing Conference, Lizeka Matshekga, the divisional executive for agroprocessing, infrastructure and new industries, said the IDC had supported a majority black female-owned fuel tank in Saldanha in the Western Cape, the only one in the country with this pattern of ownership.
She urged those in attendance to consider entering this sector because female participation was low.
“These are sectors that black women do not participate in because of capital, but there are huge opportunities,” Matshekga said.
“The private sector is under pressure because the government has changed sectoral codes. Therein lie opportunities.”
The IDC Women in Manufacturing Conference, held last week in Johannesburg, brought together more than 220 female entrepreneurs, IDC executives, business leaders and other stakeholders under one roof to discuss opportunities that the development finance institution is aiming to unlock for women looking to venture into the manufacturing sector.
This is part of the institution’s broader black industrialists programme, kick-started in 2015 with R23 billion that was set aside to fund and create more than 100 black industrialists within three years as the IDC sought to play an active role in the transformation of the economy.
Matshekga urged female entrepreneurs attending the conference to also consider playing a supporting role in the coal sector. With Eskom’s increasing demand for quality coal, opportunities exist for entrepreneurs to invest in laboratories that provide quality testing services to coal mines.
She said the IDC had funded a similar black-owned coal testing laboratory in Limpopo and was keen to support another one, preferably black women-owned.
“Before Eskom takes any coal, it needs to understand the quality of that coal. These sorts of laboratories are very monopolistic. We want to change that,” she said.
The IDC has also funded majority black-owned business ventures in the agroprocessing sector. It was particularly encouraged by one that was immediately offered a market for its products by retail giant Woolworths.
An investment in a female-led business which the IDC is most proud of is a manganese mine in Sishen in the Northern Cape, owned by businesswoman Daphne Mashile-Nkosi.
Matshekga said the IDC had partnered with Mashile-Nkosi for almost two decades, starting with an initial R10 million investment which, if everything falls into place, will turn her mining venture into one of the five largest manganese producers in the world.
“It has been a long journey, but the IDC walked with her,” said Matshekga.
“We have shown others that it can be done. Now banks and other development finance institutions have started to support her.”
Matshekga said the IDC was looking at the rural economy, which had the potential to create thousands of jobs through cultivating and processing herbs such as the popular moringa, which is indigenous to Limpopo.
IDC board chairperson Busisiwe Mabuza said a common thread observed among women and youth entrepreneurs was the lack of access to funding.
She said the IDC had approved deals worth R15 billion in the past financial year and disbursed R11 billion of that into the economy. However, only R3.2 billion of that money went towards businesses with a female ownership of 25% or more.
The IDC had also spent R2.3 billion to fund youth-owned businesses during the same period.
“This figure represents a significant increase from the previous year; we were coming from a low base. Remember that management is measured on where we were before,” said Mabuza.
She said the board had requested figures indicating how much was going into businesses with a 50% female ownership. She noted that the first female entrepreneur that the IDC had funded in its history, spanning more than 70 years, was the maker of Ouma Rusks. She was given a R3 000 loan in 1940 to create what is now an iconic brand, known around the world.
Mabuza said hard work still lay ahead for development finance institutions like theirs if the economy was to be transformed enough to bring black and female entrepreneurs into the mainstream.
“Our staff know that no matter how hard they work, the economy needs us to work even harder as we endeavour to deliver on our developmental mandate. We need to ensure that the impact of our work includes discernible and distinguishable transformation and empowerment targets,” she said.
Mabuza urged female entrepreneurs at the conference to help nudge the institution in the right direction if they felt it was not doing enough to empower them.
“Stay on our case to assist us in assisting you. Do not lose heart. We need to do this together to regain the position we have lost in terms of our competitiveness rating as a country.”
IDC board member Philisiwe Mthethwa, who is also the CEO of the National Empowerment Fund (NEF), said while she acknowledged that the conference focused on women in manufacturing, they should also be made aware of opportunities in other sectors.
Mthethwa said women should look into opportunities in infrastructure development to tap into government’s trillion-rand investment in new roads, dams, bridges, railway lines, electricity connections and other projects.
She also urged female entrepreneurs to consider entering the retail sector, which accounts for 7% of South Africa’s GDP.
Mthethwa said her experience at the NEF had taught her that female entrepreneurs were highly driven and had a propensity to succeed against the odds.
“We have found that female entrepreneurs are more likely to succeed in business because they are focused, driven and true to their dreams.”
Investing in women entrepreneurs made sense for funders, she said, as women were prudent with money and were known to service their debt in record time.
“They actually service their loans with far greater diligence. They will not take the money we give them and buy huge cars and waste money. They know that those funds are meant for the advancement of their businesses. They have been known to service their loans in record time,” she added.
In partnership with the IDC
