BUSINESS REPORT / 2 OCTOBER 2017, 06:00AM / LUYOLO MKENTANE
JOHANNESBURG - The Industrial Development Corporation (IDC) will over the next three years provide more than R23billion to fund black industrialists, with a special focus on youth, as they’ve been identified as having potential to steer Africa’s largest economy.
The remarks were made by IDC chief executive Geoffrey Qhena at the Black Business Council (BBC) summit on radical economic transformation, held in Johannesburg at the weekend. He said of the R15.4bn approved by the corporation, R4.7bn was expected to benefit companies controlled by black industrialists, while women- and youth-owned enterprises were expected to benefit R3.3bn and more than R2bn respectively.
IDC chief executive Geoffrey Qhena. File picture: Simphiwe Mbokazi
Qhena pointed out that the IDC has been involved in transformation for more than two decades and that 54percent of their portfolio was “exposed” to broad-based black economic empowerment. “To date the IDC has the largest BEE book by value. Over the next three years we will provided more than R23bn to fund black industrialists. We will be focusing on youth, because those are the people who will be able to run the economy in the future,” said Qhena.
He also called for a special focus on ways to increase localisation, development of new industries and that business needed to embrace the fourth revolution “which everyone is talking about”. Qhena said the summit came at a time when the country’s economy had been “declining for a number of years”, with the gross domestic product rate contracting by 0.3percent in the fourth quarter of 2016.
Unemployment rate was at an “all time high of 27.7percent” and South Africa has dropped 14 places from 47 to 61 in the World Economic Forum’s Global Competitiveness Report 2017-2018.
BBC secretary-general George Sebulela said the contentious radical economic transformation (RET) topic has been a jargon a lot of people have been exposed to, “but unfortunately it has been confused by a lot of people”.
Caused a stir
South Africa’s richest man, Johann Rupert, caused a stir recently when he said RET was “just a code word for theft”. President Jacob Zuma and his ex-wife, who is his preferred candidate to succeed him, Dr Nkosazana Dlamini Zuma, have been championing the RET concept to address the country’s socio-economic challenges.
BBC president Dr Danisa Baloyi lashed out at Rupert, saying RET was an imperative and called on him to remove systems that were making it difficult for the economy to grow.
“You (Rupert) have a spider web of companies, just open up those companies and allow black businesses to participate in that value chain and that takes away the theft. Open up. We didn’t just dream RET. "Let’s be honest and not be cowards about coming up with radically implementable ideas,” she said.
ANC national treasurer-general Zweli Mkhize said: “Our economy needs to deliver three things, growth, job creation and RET.” He said RET was an ANC policy and not the concept of disgraced PR firm Bell Pottinger.
The narrow base from which the economy has grown was unsustainable and business and government needed to work together to change the economic ownership patterns in the country.
Mkhize criticised the fact that about 80% of chief executives in the JSE were white and foreign, saying: “This tells you we have a long way to go.” It was also not helpful to have black chief executives if there would be no support for them to increase the intake of other qualified black officials, said Mkhize.
Dlamini Zuma, who is campaigning to succeed Zuma as ANC leader in December and possibly become the country’s president in 2019, has said peace couldn’t be guaranteed in the country if RET was not implemented.
- BUSINESS REPORT