Addressing stakeholders and the media at its year-end financial results presentation, CFO Gert Gouws said that the State-owned enterprise has 'significant' fire power to deliver on its developmental mandate, while continuing to pay tax and dividends and without recourse to the national fiscus.
With capital and reserves touching R40-billion, Gouws said, “there is no financial institution in this country with capital and reserves of R39-billion, including the four big banks”.
Its stated aim is to position itself to create about 52 000 jobs a year by 2011, double its current figures.
It has stakes in both listed and unlisted companies and, last year, only realised some R283-million from its high-powered R26-billion listed portfolio, which includes holdings in Sasol, Mittal, BHP Billiton, Sappi, Kumba Resources and Acerinox.
Gouws said that it was unlikely that the IDC would have to realise much of these investments in the next financial year, but that it might increase its borrowings given its conservative debt-to-equity ratio of 14%.
This was the first year that the IDC was reporting a full twelve months to end-March, having realigned itself with the government's financial year.
CEO and president Geoffrey Qhena said that the institution had approved R4,2-billion in net new financing, of which R3,7-billion had been disbursed in 150 transactions. This is estimated to facilitate over R12,8-billion in total investments.
Its funding was anticipated to create over 26 000 direct jobs, and about 80 000 jobs in total through a multiplier effect on indirect employment. By 2011, it hoped to be creating 52 000 jobs a year, which, using a multiplier effect of 3,077, should theoretically result in 160 000 jobs in total that year.
The IDC's own calculations indicate that about 250 000 jobs a year, on average, need to be created in the first few years of Asgisa to meet government's targets of halving the official unemployment rate. These would be accelerated incrementally, and would later accelerate between 2011 and 2014 to about 430 000 jobs a year on average.
However, economist in the Presidency, Alan Hirsch, has often pointed out that this is a moving target.
This is because, as more jobs are created, more people will seek jobs.
Officially, South Africa's unemployment rate is 27%, but this does not take into account discouraged job seekers who have, for example, taken to standing on the side of the road with a placard.
The IDC's objective is to aid in developing South Africa, and Qhena has indicated that job creation is its priority emphasis.
Last year, most new jobs were created in agriculture, mining and the services industry.
In the Eastern Cape and Limpopo provinces, this amounted to 2 500 jobs, while 4 600 jobs were created in townships and 6 700 jobs in rural areas. Some 10 000 jobs were created through small and medium enterprises.
The IDC also aims to become more active in rural areas and townships, while seeking to develop new entrepreneurs and aid broad-based black economic development.
While focussing on start-up concerns, and expansions, the IDC will continue to play a role in BEE of an acquisitive nature.
In the 2005/6 financial year, about 69% of the R4,2-billion in approvals went to small and medium enterprises, while R370-million was invested in township enterprises.
Of the R4,2-billion, 39% was spent in BEE concerns, accounting for 68% of the total number of approvals.
Some 32% of funding was for expansions and start-ups by black businesses.
The institution is also rolling out development agencies, which will work hand-in-hand with local governments to ensure that projects get off the ground.
So far, two new agencies have been approved, and two have evolved from preestablishment to establishment phase.
In addition, two agencies have progressed from establishment to operations phase.
Qhena added that the IDC needed to ensure that poor provinces and rural areas benefited from its presence, which was not an easy task, but after one year under the new strategy, the IDC could do much more than was currently the case.