The President recently announced that the Industrial Development Corporation (IDC), together with the Department of Trade, Industry and Competition (DTIC), have put together a support package of more than R3 billion industrial funding to address the needs of vulnerable firms and to fast-track the financing of companies critical to efforts in the fight against Covid-19 and its economic impact.
Although not much is known about the qualification criteria of this fund, what seems clear is that R200 million which has been allocated to the National Empowerment Fund (NEF), for businesses involved in medical equipment and essential food production and distribution, is limited to companies with not less than 51% black ownership.
A further R200 million has been allocated to the Small Enterprise Finance Agency (SEFA) for purposes of Covid-19 related assistance. In this case South Africa’s demographics, among others, will determine the allocation of the aid. Businesses owned by minorities (whites, coloured and Indian people), regardless of any other determining factor and economic contribution, can only access less than 20% of this critical aid.
It is disappointing that race is once again brought into the equation and this at a time when all South Africans are required to pull together to face an unprecedented enemy. This approach does not contribute to the State President’s call for unity to address the current challenge. There is no colour in the trenches.
The impact on black employees in the employ of potentially deserving companies owned by minorities will also be felt, both in the short term and perhaps in the months and years to come when the lingering effect of Covid-19 hits South Africa. The impact of BEE policies on SMMEs is already a massive contributing factor in South Africa’s unemployment crisis.
Those who do not benefit from these funds, do not despair. These funds, the R400 million and the R3 billion, are insignificant in comparison to the demands of sustaining individual businesses and the economy at large. What will be required is wisdom to conduct business against all odds, within adversity, with guts and determination.
This is a press release by Gerhard Papenfus, Chief Executive of the National Employers’ Association of South Africa (NEASA).