Economic Development Minister Ebrahim Patel said R23bn will be set aside over the next five years to fund “new players” as government makes a big push to industrialise the economy, at his department’s Budget Vote at the National Assembly yesterday. He continued that the fund would contribute towards job creation, industrialisation and transformation and go a long way in eradicating inequality and poverty.
“The Industrial Development Corporation (IDC) is committing R100bn over five years to industrial development.What is new, and what is significant is that we are setting aside R23bn 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.
Patel continued that the decision to set aside the funding was meant to promote the transformation and boosting economic growth by unlocking the potential and talent pool of the economy. He said South Africa needed to achieve a 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 R9bn in total – R4.5bn for women, R4.5bn for youth,” he said.
The funding will be distributed in the form of loans or equities.
How African firms are creating jobs
At the back of attacks on foreign nationals, Patel said he will on 25 May – a date the African Union (AU) Commission has declared as Africa Day – convene a symposium of investors, workers, intellectuals and public officials with Wits University and the IDC. He said the symposium would look at the economic impact of South Africa’s relationship with the rest of the continent.
He said he would also go on a road show to different parts of the country to communicate one message – that South Africa’s prosperity is intimately tied to economic relations with the rest of the continent.
South Africa’s efforts of economic integration with the rest of the continent were yielding success. South Africa exported R300bn worth of goods to the rest of Africa – an increase of R36bn.
“Aside from the damage that the [attacks on foreign nationals] do to our humanity, we cannot unscramble ourselves from Africa, our continent, without serious economic damage. 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.
Competition Commission to conduct market research
Patel said the Competition Commission would, during the current financial year, conduct an inquiry to see how smaller businesses in the formal and informal economy can be supported so that they are able to compete in the retail sector. He said the inquiry would also seek to find ways in which smaller players could be incorporated into the 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.
Patel said another inquiry into the healthcare industry, which he announced last year, would conduct its 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 healthcare in South Africa.
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