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NEF To be incorporated into IDC to guarantee funding for Black Entrepreneurs
INDUSTRIAL DEVELOPMENT CORPORATION OF SOUTH AFRICA
(“IDC”)
REGISTRATION NUMBER: 1940/014201/06
JSE Code: ISIN:
IDCG02 ZAG000110164
IDCG03 ZAG000110149
IDCG04 ZAG000121682
IDCG05 ZAG000121716
IDCG06 ZAG000121732
IDCG07 ZAG000131350
IDCG08 ZAG000131368
IDCG09 ZAG000141011
IDCG10 ZAG000141029
IDCG11 ZAG000141037
IDCP04 ZAG000100629
IDCP05 ZAG000103896
IDCP06 ZAG000120395
NEF TO BE INCORPORATED INTO IDC TO GUARANTEE FUNDING FOR BLACK ENTREPRENEURS
In a landmark breakthrough for South Africa’s quest for inclusive growth
and radical economic transformation, the Ministers of Trade and Industry
and of Economic Development announced in Cape Town today that the National
Empowerment Fund(NEF) will become a wholly-owned subsidiary of the
Industrial Development Corporation (IDC) in order to meet the considerable
demand for funding by black entrepreneurs.
This is in line with the affirmation by President Jacob Zuma in the State
of the Nation Address (SONA) last Thursday that the quest for radical
economic transformation must seek “fundamental change in the structure,
systems, institutions and patterns of ownership, management and control of
the economy in favour of all South Africans, especially the poor, the
majority of whom are African and female”.
Both the IDC and the NEF have been identified by Government as central in
implementing radical economic transformation and development policies,
particularly in light of renewed efforts to develop black industrialists.
The merger will promote increased broad-based black economic empowerment
with a specific focus on promoting black industrialists.
This decision is in line with government policy to consolidate South
Africa’s development finance institutions to provide effective support to
emerging and existing black entrepreneurs, and thereby enhancing efficient
service delivery.
The DTI and EDD will appoint a technical team to drive the process
expeditiously. The Minister of Trade and Industry will continue to provide
legislative and policy guidance to the NEF.
The two Ministers are confident that this historic integration of two
leading DFIs will enhance the country’s developmental aspirations as
outlined by President Zuma in the SONA to “open up the economy to new
players, give black South Africans opportunities in the economy and indeed
to help make the economy more dynamic, competitive and inclusive. This is
our vision of radical economic transformation.”
IDC and NEF impact over the years over the last 75 years the IDC has been
instrumental in implementing the country’s industrial policy and
establishing key industries, particularly in the manufacturing sector:
petro-chemicals, mineral beneficiation, fabricated metals, agro-processing
and clothing and textiles. In the recent financial results announcement for
period ending 31 March 2016, the corporation reported R14.5-billion in
approvals including R11.4 billion in disbursements. In the same period the
IDC has approved R4.9 billion for black-empowered companies, R2.9 billion
of which was for black industrialists.
The NEF was capitalised in 2005 by Government to the value of R2.4 billion,
all of which had been fully disbursed by 2010. Since then, the NEF has been
self-financed from loan repayments, dividends and interests from its
investments and proceeds from the sale in 2007 of its stake in MTN through
the NEF Asonge Share Scheme. Since operational inception in 2005 to date
the NEF has approved over R8.5 billion worth of transactions to 839 black
companies countrywide, which have supported in excess of 89 900 decent
jobs.
Both DFIs have developed formidable human capital and possess exceptional
skills necessary for meaningful impact in driving economic growth and
transformation across industries and the country as a whole.
Debt Sponsor: Nedbank Corporate and Investment Bank, a division of Nedbank
Limited
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