Money pooled by the Department of Trade, Industry and Competition (DTIC), the Industrial Development Corporation (IDC), the National Empowerment Fund and the Solidarity Fund to address disruption and losses to businesses affected by the mid-July civil unrest has amounted to R1.5-billion.
Trade, Industry and Competition Minister Ebrahim Patel says this money will go directly, in 123 separate transactions, towards 320 businesses (some of which involve more than one business site), which support and employ about 13 800 workers.
“These transactions would be where a company or an association or intermediary put forward an application for support,” he says.
Patel says the events of July in parts of KwaZulu-Natal and Gauteng left in its wake “enormous economic damage”, with key infrastructure and commercial infrastructure in particular, damaged.
This, he says, undermined the livelihoods of ordinary South Africans.
“As we saw the unrest unfolding, the DTIC put together a communication line with businesses, fielding an enormous number of phone calls. We had a hotline going, trying to link the police with hotspots and challenges taking place,” says Patel.
At the time, he says the DTIC worked to map out the damage to the supply chain, running a survey in which the department fielded more than 1 000 responses for assistance.
As part of its assistance package, the organisations partnered to assist sugarcane farmers in KwaZulu-Natal, some of whom had their crops burnt. In this instance, Patel says the IDC made available R85-million that will cover 192 sugarcane farmers in re-establishing their crops.
Further, the organisations have also put togther a package to rebuild critical infrastructure. “These could be public infrastructure, like industrial parks or it could be support for big the malls that have been affected,” he says.
“Part of what we have attempted to do . . . is to try build back better. To see how the support can strengthen those businesses that have been affected. How we can get more sourcing from local industrialists, how we can bring local communities into providing services in the rebuilding effort, particularly bringing in young people,” he notes.
IDC CEO TP Nchocho says the appropriateness of the funding package was an important factor in compiling it and that, in situations like the mid-July events, where socioeconomic reconstruction was required, assistance money needed to be offered on a concessionary basis.
For this reason, he says that, of the R1.5-billion set aside by the IDC and in addition to other allocations from the DTIC, parts thereof were in the form of debt, carrying a 5% interest rate; while another portion was in the form of a grant. This enabled the IDC to deliver the package on a blended finance basis, says Nchocho.
In processing assistance applications, he says, speed was of the essence in terms of getting the help out to those who most needed it.
In this regard, Nchocho says the efficiency in processing applications at the IDC was underpinned by having a dedicated team working on the matter and, as such, a group of about 20 IDC staff were pulled out of their regular work to instead focus on that particular project.
In addition, he says the IDC streamlined its assessment processes, while its decision-making dispensation was revised accordingly to enable the IDC executives to “move with speed”.