Johannesburg – Black industrialists would be able to access a R1 billion grant from the Department of Trade and Industry as a support measure. This was in addition to a syndicated pool of funds to be created by funding institutions, including the National Empowerment Fund, the Public Investment Corporation and the Industrial Development Corporation.
This was announced by Lionel October, director general of the Department of Trade and Industry, who addressed the inaugural Black Industrialists Indaba, in Midrand, Gauteng, on Wednesday.
The event was hosted by the Department of Trade and Industry
October said the grant and associated funding constituted one leg of support for the creation of 100 black industrialists over the next three years. The other leg was procurement by large state-owned enterprises such as Eskom, Transnet, Petro SA and PRASA, as well as large government departments.
October argued that the only path for prosperity that successful countries had followed was through industrialisation. “Until you make your own goods and service and stop being an exporter of raw materials, you will not achieve prosperity,” October said.
South Korea was cited as an example. The country moved from poverty to a world-leading industrialised modern market economy in less than half a century.
Earlier, President Jacob Zuma said the creation of black industrialists was about allowing black people to “enter critical spheres” of the economy and was ultimately about liberation.
“The creation of black industrialists is about letting black people enter critical spheres of the economy and it is ultimately about uprooting poverty and racism,” Zuma said at the event.
The programme was launched in August last year after a year of deliberation with black business through the Black Business Council and the Black Economic Empowerment Advisory Council. The aim was to create 100 black industrialists over the next three years, a figure which Zuma has now qualified as a minimum.
“We would like to see scores of factories and other means of ownership in the hands of black people,” Zuma said, noting that was one area in which black participation needed to be increased.
That goal may prove challenging, however. Manufacturing is still an important contributor to South Africa’s GDP, standing at 15% in 2013 according to Zuma, but the sector was declining in its influence and was currently struggling to create jobs.
The latest Quarterly Employment Survey, released on Tuesday, showed that the sector created only 1 000 jobs in the last quarter of last year.
Zuma reiterated his assertion that black people own 3% of the Johannesburg Securities Exchange, a claim since proven correct and widely accepted after the JSE initially sought to argue that the number was 23%, using indirect ownership.
Zuma cited Brazil, Japan, Malaysia and South Korea as examples of countries “that offer insights into the journey to industrialisation”
He noted that government would create conditions that allowed for the growth of black industrialists but would need to be told by business what those condition should entail.
The summit was also addressed by Deputy Trade and Industry Minister Mzwandile Masina, who told delegates that government finance institutions and state owned enterprises would be asked to set aside funding specifically for black industrialists.
The forum also heard from leading businesswoman Dr Anna Mokgokong, who called on South Africa to celebrate, rather than vilify, BEE’s success.
ANA