The state, through the Industrial Development Corp (IDC), intends to invest R100bn in job-creating activities in the next five years, including R23bn specifically to promote industrialisation owned and managed by blacks.
This was announced in the budget vote by economic development minister Ebrahim Patel in parliament on Tuesday.
“The R23bn funding commitment towards black industrialists forms part of the increased funding that the IDC has made to the South African economy and region,” he said.
Patel said the IDC would give a discount of 150 basis points on its pricing for loan finance to black industrialists “who own and control their operations”. Further discounted pricing would also be possible for meeting targets related to jobs, localisation and regional development.
He said some R4,5bn respectively would be spent on developing business opportunities for women and youth in the next five years.
In the debate, Congress of the People leader Mosiuoa Lekota, a former ANC defence minister, said it was “well and good” to suggest that some jobs “15 here and 20 there” had been created at such places as new shoe factories, but the reality was that the economy and the country were “going down”.
Lekota said in the debate that “we must do something about sustaining what we inherited … there are things that we (even) inherited from the unpleasant circumstances of apartheid”. These included good infrastructure and big business.
There appeared to be a mentality of breaking things down first and attempting to rebuild them again. “We don’t have to break it down first and rebuilt it … unless we recognise that hard reality … we will … take the country backwards.”
He noted that in the gold production sector 4 000 jobs were about to be lost.
Patel replied to Lekota saying that the reality was that world ore, gold and platinum prices had placed pressure on the mining industry. That was why government was directing funding of the infrastructure drive.
“What do you do in an economy where we have a rapid decline of the price of iron ore or platinum and gold … when global demand begins to dry up?” Patel asked.
The answer was to “deepen industrialisation and give small and medium business a fillip. That was why there was celebration when a woman opened a shoe factory or a man started out as a soya or maize farmer. “We are celebrating our long term … prosperity … we can’t rely on high prices of ore … to sustain us.” — Fin24