Boost for black industrialists
A SHARP acceleration in the government’s black industrialist programme is planned for the coming fiscal year as expectations mount for more to be done to radically transform the structure of the economy.
The original target of 30 projects per year for the first two years starting March 2016 and 40 in the third year – bringing the three-year total to 100 – has been expanded to 100 projects by the end of 2017-18 alone. This requires a big increase in the allocation for the project in the budget to be announced on February 24 by Finance Minister Pravin Gordhan.
In his state of the nation address last week President Jacob Zuma emphasised that the black industrialists programme was “critical” to achieve the radical economic transformation required to deracialise the ownership structure and control of the economy.
Department of Trade and Industry DG Lionel October said the black industrialists project would be expanded in the new financial year because of the pressure to move faster. “We are on track for this year but the expectations are very, very high.”
Reaching 100 projects by end-March 2018 would mean approving about 70 more grants.
To date the Department of Trade and Industry has approved R577million in grants for 27 black industrialist projects with additional forms of loan and equity financing for the grant recipients from the Industrial Development Corporation (IDC), the National Empowerment Fund, the Public Investment Corporation and the Land Bank. All these institutions, as well as the Small Enterprise Finance Agency, are represented on the grants approval committee, which facilitates a holistic approach to the financing of projects. Once the grant is approved, the project is considered by the other institutions.
Including IDC financing, 55 projects have been assisted of about 200 applications received.
October said experience meant the pace of grant approval was likely to accelerate, although due diligence probes did take time. — TMG