Malevu leading IDC finances to calmer waters
During the 2022/23 financial year, amid a sea of despair among the country’s stateowned enterprises (SOEs), the Industrial Development Corporation (IDC) stood as a beacon of hope.
When the year ended in March, 2024, the national development finance institution had an impressive story to tell.
A critical jigsaw puzzle piece of the parastatal’s executive management was its chief financial officer, Isaac Malevu.
This much became evident at the 2023 CFO Awards where he pipped two of his colleagues to the Public Sector CFO of the Year gong. Also in the running in this category were his counterparts at the Department of Higher Education and Training and South African Forestry Company, in Pretty Makukule and D'Shorne Human.
“I was thrilled to be nominated and even more ecstatic to receive the award, especially considering the esteemed Public Sector CFOs who were also in the running,” said Malevu in a recent interview with the Public Sector Manager (PSM) magazine.
His recognition was on the back of the corporation’s impressive showing in the 2022/23 financial year. It was during this period that the SOE’s funding approvals reached a record R20.7 billion.
This was a 29% increase compared to the previous corresponding period. During that year under review, the entity’s disbursements surged by 147% to R17.8 billion from R7.2 billion recorded for the preceding year.
In its annual report, the IDC said the bulk of this funding was directed towards capacity expansions, projects and startups, in line with the Corporation’s mandate of facilitating South Africa's industrial capacity by financing viable businesses within key sectors to stimulate the country's economic growth.
The increased levels of investments have had a positive knock-on effect on the IDC’s developmental outcomes. For the year, the IDC created or saved 34 035 jobs compared to 27 130 for the 2021/22 reporting period.
Malevu said the impressive results could be attributed to the resilience of the entity’s investments, interest in dividends received from its listed portfolio and loan repayments. Beyond these, the performance could also be credited to the strict management of impairments, the strength and resilience of IDC staff and the sound project pipeline that the entity had generated over the last two years.
A chartered accountant by training, Malevu was a vital cog to the SOE’s achievement. He joined the IDC from Standard Bank’s Corporate and Investment Banking division in October
2020. Before this, the University of KwaZulu-Natal and Witwatersrand graduate was an audit partner at Ernest and Young. He boasts a wealth of experience
both locally and internationally having worked at the latter’s United States of America operation.
Reflecting on his transition from the private to the public sector, he said while professionals in the two spheres managers share the same financial management skills, these differed in scope.
He said: “Private managers focus on corporate financial management and wealth maximisation for defined stakeholders, while public managers deal with government finances and serve a larger stakeholder group.
“The IDC operates as a selffunding institution, like a bank we have criteria-based and riskinformed lending practices, and we collect repayments. Despite differences in stakeholders and policies, standard banking rules and financial management principles remain the same.”
On the award, he said the accolade acknowledges the excellent work done by his colleagues and himself in managing the IDC’s finance portfolio over the past three years. The period was characterised by mammoth challenges that required the IDC to intervene significantly. These ranged from the COVID-19 pandemic, the 2021 civil unrest, and the KwaZulu-Natal floods.
“Despite these challenges, our team of committed financial managers turned our R7 billion operating loss into an impressive R6 billion profit. I am honoured to lead such a team that is dedicated to driving IDC towards financial sustainability and delivering on its mandate,” he reflected.
Professional achievements and recognition, he elaborated, were just the visible part of the hard work and dedication that goes into creating a collaborative and team-oriented work environment.
“At the IDC, we have successfully fostered such an environment, and it is a source of immense pride for me. This positive workplace culture has not only contributed to our recognition as a leading financial institution but also ensured that we remain an example in public sector fiscal management,” he explained.
The interventions saw the IDC buck the trend of the struggling SOEs amid a myriad of challenges that stymie performance. Government entities on, an ad hoc basis, have to contend with issues that range from slow economic growth, geopolitical tensions, domestic power supply constraints and weather-induced natural disasters.
Expanding, Malevu said: “Our struggling economy has created challenging conditions for businesses and IDC clients alike. Rising production costs and consumer prices, coupled with reduced economic activity, have led to a decrease in production and export volumes, as well as a decrease in household spending. This has also deterred fixed investment activity.”
Despite these challenges, he added, the IDC’s financial performance has remained consistent over the past few years. He said this was testament to the hard work and dedication of IDC employees, who had worked tirelessly to generate revenue and support struggling clients to turn their performance around and increase their ability to repay loans.
“Additionally, our focus on reducing costs and minimizing impairments has contributed to our excellent performance last year,” he said.
He added that for the IDC to continue contribute to the growth of South Africa's economy and society, the corporation needed to remain financially sustainable.
In this regard, he said the IDC remained fully committed to ensuring that it not only fulfills its purpose as a development funding institution but also supports viable businesses that create employment opportunities.
“Our aim is to be fit for both purposes and to make a positive impact on our mandate,” he concluded. ❖