DTI director-general Lionel October
Photo by: Duane Daws
Access to finance for South Africa’s black industrialists could become easier as the Department of Trade and Industry (DTI) announces several State-led support initiatives as part of its Black Industrialists Development Programme.
Unpacking the DTI’s plans for black industrialist development, with the publication of a “very early draft” Black Industrialist Policy Framework on Wednesday, DTI director-general Lionel October said that, with access to finance being the number-one constraint for existing and emerging black industrialists, financial support initiatives could provide the shot in the arm needed to accelerate South Africa’s industrialisation.
In line with this, exclusive grants and incentives, as well as a syndicated finance package, would be on offer for qualifying black business within the next few months.
The DTI had set aside a dedicated R1-billion incentive scheme for black industrialists, as well as a separate grant scheme for participating private-sector companies, he told delegates at the DTI-hosted Black Industrialists Indaba on Wednesday.
Currently, R6-billion a year was dispersed to private-sector companies creating a significant number of jobs – an initiative that had revitalised the clothing sector and led to the development of a R20-billion automotive sector.
Further, through development finance institutions (DFI’s), including the National Empowerment Fund, the Development Bank of Southern Africa, the Land Bank, the Industrial Development Corporation and the Public Investment Corporation, besides others, the DTI would establish a syndicated low-interest-rate facility to set aside a “pool of capital” for black industrialists.
Many DFIs employed measures similar to that of commercial banks when determining eligibility for credit and, with a limited pool of financiers, the high cost of borrowing and borrowing conditions that cannot be met, black industrialists were often sidelined.
“We have now been able to convince all our DFIs [that their time] operating as banks has come to an end,” Trade and Industry Deputy Minister Mzwandile Masina said, adding that loans would be anchored on the needs of the black industrialist.