Partnerships are key to growing Limpopo’s industrial base
IDC wants increased black participation in economic development
When Limpopo entrepreneur Vincent Mabunda realised there was a construction boom around Tzaneen and that builders in the area were struggling finding roofing sheets, he decided to exploit the gap.
Mabunda runs Miya Roofing, which manufactures roofing sheets of light, medium and heavy duty in galvanized or chromadek. The business, located in Nkowankowa Industrial Park in Nkowankowa, Limpopo, employs 30 people. He started the business during the lockdown imposed to curb the Covid-19 pandemic last year.
He is among a steadily growing number of black industrialists in the province. The Industrial Development Corporation (IDC) aims to introduce more black people into big business. If they meet the corporation’s requirements more entrepreneurs could see themselves growing from SME level to participating in big business ventures.
The Black Industrialists Policy aligns with the Industrial Policy Action Plan, the National Development Plan and the Nine Point Plan that was announced in 2015. According to the department of trade, industry and competition, the purpose of the Black Industrialists (BI) policy is to leverage the state’s capacity to unlock the industrial potential that exists within blackowned and managed businesses that operate in the country’s economy.
The department seeks to achieve this through deliberate, targeted and well-defined financial and non-financial interventions, as described in the Industrial Policy Action Plan.
“In addition to growing the economy of Limpopo, the IDC plays an important role in ensuring that the economic landscape of the province is transformed through the creation of black industrialists and the inclusion of women- and youth-owned enterprises into the mainstream economy, especially in the key sectors as alluded to,” says Limpopo IDC regional manager Mashweu Matsiela.
The growing number of black industrialists in the province augurs well for the transformation of sectors that previously excluded people on the basis of race and in addressing the unemployment challenges facing the country.
This week Statistics South Africa’s Quarterly Labour Force Survey (QLFS) for the second quarter of 2021 showed that the number of employed persons decreased by 54 000 in the second quarter of 2021 to 14.9-million.
It further noted that the number of unemployed persons increased by 584 000 to 7.8-million compared to the first quarter of this year.
“These changes resulted in the official unemployment rate increasing by 1.8 percentage points from 32.6% in the first quarter of 2021 to 34.4% in the second quarter of 2021 — the highest since the start of the QLFS in 2008. The unemployment rate according to the expanded definition of unemployment increased by 1.2 percentage points to 44.4% in quarter 2 of 2021 compared to quarter 1 of 2021,” according to Statistics SA.
Matsiela says in advancing a transformative industrialisation, the IDC seeks to promote a balanced racial and gender participation in ownership of assets as well as to provide opportunities for black industrialists, women and youth, to encourage tomorrow’s leaders of industry.
The lingering question asked by most start-up business owners, especially those run by women in Limpopo, is: what opportunities exist for them, and what is it that the IDC can do to assist them to contribute to the growth of the province’s economy?
“Opportunities exist across the sectors funded by the IDC, with the challenge being how to spot these. Belonging to relevant business chambers, research, etcetera, should assist. As alluded to, the IDC is biased towards the creation of Black Industrialists (BI) as well as the support for women and youth entrepreneurs. Through our innovative funding solutions the IDC is poised to support women entrepreneurs to ensure that they participate meaningfully in the mainstream economy,” says Matsiela.
If she qualifies for assistance by the IDC, Maggie Machumele, who runs the Ka-hina Guesthouse in Nkowankowa, could also realise her dream of expanding her operation and employing more people through the IDC Tourism and Services Strategic Business Unit (SBU).
The unit primarily invests in the accommodation sub-sector, focusing on business hotels in fast-growing areas. Machumele was among tourism operators who received donations from the Limpopo department of economic development, environment and tourism (Ledet) to assist such establishments cope with the effects of Covid19. She employs three full-time workers and hopes to grow her staff complement.
The IDC’S key mission goals in Limpopo are to grow the regional economy and tackle unemployment through the creation of sustainable economic opportunities. Matsiela says they plan to achieve these through, amongst others, proactive partnerships and collaboration with key stakeholders, which include relevant government departments, agencies and the business community.
He says they also want to take advantage of
the key economic activities that are prevalent in Limpopo which include mining, agriculture and tourism, all of which are big on job creation.
“Through these strategic partnerships [the] IDC intends to have a meaningful impact by stretching our money and reaching out to the rest of the province,” he says.
He adds that the IDC intends to exploit opportunities presented by Limpopo’s key economic sectors, including those presented by the province’s two Special Economic Zones (SEZS), as well as green energy and industrial infrastructure, in an effort to grow the economy and tackle unemployment.
The province’s two SEZS — the Musina Makhado Special Economic Zone and Tubatse — are set to pump billions into the province’s economy through investment.
The Musina Makhado SEZ has been given the green light by an Act of Parliament and will cover approximately 11 500 hectares of land, situated along the N1 highway that connects South Africa to the SADC region and the rest of the continent via Zimbabwe. It will include among others the building of a power station and smelters, expected to attract investment of up to R150-billion for the province. The MMSEZ is anticipated to create between 21 000 and 26 000 jobs in its initial stages.
Matsiela says the IDC aims to expand the province’s economy beyond mining, agriculture and tourism through its SME Connect initiative, which has the objective of creating strategic partnerships with relevant state-owned enterprises, corporates and other businesses “to exploit opportunities under their supplier/ Enterprise Development Programmes in order to speed up economic development and growth as well as the transformation of thereof”.
He says: “This initiative, which cuts across the sectors that IDC funds, is already starting to bear fruit, especially for SMES.”
Many entrepreneurs cite lack of funding and support as their major challenges. Matsiela notes that the IDC has a myriad of funding products including those managed on behalf of third parties. There are special funding schemes to advance initiatives such as the Youth Fund, the Covid-19 Distress fund and Agri-industrial Fund, among others.
“The IDC has a dedicated Business Support Unit where we provide support to our clients, mainly SMES. In addition, the IDC has a dedicated Socio-economic Development Specialist team under our Technical Services Department that assists with issues of community participation and development, such as community trusts, workers’ trusts, and communal land issues,” he says.