IDC’s achievement was exceptional

DEAR SIR — They say that sometimes the good bits are buried at the bottom. This was the case with the recent Business Day coverage of the Industrial Development Corporation’s (IDC’s) results (Patel downplays effect of strikes, electricity costs on stateowned IDC, September 10).

The reader had to wade through controversy and side-swipes before coming to the real story. And a story that is a tonic for our times, I’d venture to say. The IDC made a profit of about R2bn in difficult global and domestic economic conditions. It approved R13bn in new investments. Its disbursements — money reaching investors — grew by about 90% to R16bn for the year.

During this administration, the IDC approved R45bn in investments, and its assets rose in value from R79m in 2009 to R126bn this year.

That is an exceptional achievement that a less caustic world-view may well have turned into the headline instead of burying them away late into the story. Your readers may have benefited from interviews, if any were conducted, with IDC clients reflecting on their experience with the corporation, possibly the significant reduction in turnaround times for approval of transactions by the IDC.

You may have explored Economic Development Minister Ebrahim Patel’s (pictured) lighthearted reference to the IDC “milk and honey” investments to see the Coega Dairy and 100 businesses in Bushbuckridge’s African Honey Bee. Alas, that coverage would have been a tad too positive?

The IDC is a national asset with a unique mandate — to industrialise SA, growing decent and productive job opportunities. In 2009, Mr Patel asked the IDC to use its mandate and resources to respond to the effect of the global economic crisis; to support government to develop a new growth path for the economy; to increase the level of industrial funding; to become more responsive to the needs of its users; and to retool itself to play a stronger developmental and empowering role.

Surely the following are matters all South Africans can rejoice in:

The IDC shifting investments into areas identified as strong growth and job drivers: infrastructure development; investment in core productive sectors including heavy industry, agro-processing, clothing and mineral beneficiation; promoting high-level service sectors including, delightfully, the film Long Walk to Freedom and tourism; developing new sectors such as the green economy; and supporting regional integration and African industrialisation.

The corporation’s funding over the four-year period supported the creation of 133,000 direct jobs — 90,000 new direct formal sector jobs, more than 8,000 jobs in the informal economy, and a further 35,000 existing jobs saved.

The IDC’s support of major industrial enterprises during difficult economic times, with the creation of a platform for the expansion of companies as growth prospects improved — benefiting Bell Equipment and the Ford Motor Company’s local operation. The IDC invested R5.7bn in companies in distress over the past five years.

The IDC’s support in broadening the pool of entrepreneurs while R26bn went into financing approvals for black empowered companies in the past five years.

The corporation continued to strike the right balance between calculated risk-taking and prudency in its funding procedures, ensuring public monies are used carefully, properly and with impact on the economy and jobs as a countercyclical measure to address slow growth in private funding of new investment.