The Industrial Development Corporation (IDC) had established a R2.7 billion youth industralisation fund to be disbursed over the next five years, the state funder said yesterday as it reported a pretax profit of R2bn in the past financial year.
Economic Development Minister Ebrahim Patel said the IDC had to focus on youth entrepreneurs and “bring young talent into industrialisation”.
IDC chief executive Geoffrey Qhena said the development finance institution had disbursed a record R16bn into the economy in the 2012/13 financial year.
In addition to this, the IDC had sustained its funding approvals at the R13bn mark recorded in the previous financial year, Qhena said.
Over the past five years, funding approved by the IDC had facilitated the creation of 114 000 jobs, with 37 600 jobs saved. In addition, about 8 000 informal jobs were expected to have been created.
Qhena said the bulk of support over the financial year under review had focused on improving conditions in capital-intensive industries to build the base for jobs to be created in downstream industries. This had, however, resulted in a decline in the jobs impact during the year compared with previous years.
Qhena said: “More labour-intensive sectors, such as downstream metals, clothing and textiles and agro-industries, also contributed a large number of jobs.”
Patel said the IDC was an important national asset and had a unique mandate to industrialise South Africa.
He welcomed the IDC’s results, pointing out that it had almost doubled its achievements in the past four years.
Since 2009, when the current administration had come into office, the IDC’s assets had risen 43 percent from R89bn to R127bn, Patel said.
The IDC had also invested R45bn in the past four years into projects in the form of equity or loans.
Patel said the corporation was injecting funds into the economy and creating jobs. It had made a profit of R10bn in the past four years.
The minister said the IDC had deepened its presence in core manufacturing through its spending.
Investment was needed not only in heavy manufacturing but also in light manufacturing, he said.
The IDC was also investing in the services sector, infrastructure development, and the green economy.
Patel said funding was at the core of the IDC’s operations. “If we are to maintain high and growing approval rates, the IDC has to increase its risk appetite,” he said.
While the state financier had done well, there were some shortcomings. Patel said he had told the board to look at facilitating the involvement of the youth in industralisation.