Minister Parks Tau
The DTIC has issued a draft document on the creation of a R100bn Transformation Fund.
Closing date for comments: 7th May 2025
Minister Parks Tau has said that the aim of the fund is to aggregate especially Enterprise and Supplier Development (ESD) funds in support of transformation and the participation of and sustainability of black-owned enterprises in the economy.
“This provides an opportunity for the 7th Administration, working with the private sector to increase the effective economic participation of black-owned and managed enterprises, including small, medium and micro enterprises and co-operatives and enhance their access to financial and non-financial support in line with the requirements of the B-BBEE Act” says Tau.
It is expected that an amount of R100 billion will be aggregated over the term of the current administration through a joint effort by the government in partnership with the private sector. “We firmly are in pursuit of transforming the economy as guided by the Vision 2030 of the National Development Plan, which is to eliminate poverty and reduce inequality. Our Constitutional imperative places a collective burden on all of us to advocate for equality and redress”, emphasises Minister Tau.
The objectives of the fund are as follows:
* Promote economic transformation in order to enable meaningful participation of black people in the economy.
* Improve access to funding for Black owned and controlled enterprises.
* Empower and support Black owned and controlled enterprises’ participation in value chains across key sectors of the economy.
* Mobilise financial resources from the private and public sector using B-BBEE legislation.
DTIC statement: The Minister would like to affirm that the requirements of the Fund are no additional requirements for entities over and above what currently exists in the B-BBEE policy. The B-BBEE policy through the Codes of Good Practice requires that entities must contribute through Enterprise and Supplier Development (ESD) in the 3% of Net Profit After Tax (NPAT), on the development of black suppliers, black industrialists and SMMEs to broaden the industrial and services base of our country.
“Through the Transformation Fund, we maintain this principle of establishing partnership between established businesses and emerging businesses as well as diversification of suppliers within the value chains, as contained in the B-BBEE Codes. However, we would like to see a much greater impact and spending on relevant ESD activities that must lead to growth and sustainability of black owned enterprises and SMMEs, by having a coordinated effort”, says Tau.
Particular attention will be given to businesses owned by women, youth and people living with disabilities, especially those based in rural and township areas.
In terms of governance, says Tau, “we will be putting in place governance structures that will ensure that there is accountability to both government and private sector, transparency and efficiency in managing the fund. The DTIC will be establishing a Special Purpose Vehicle that will have accountability to an Oversight Committee and a board with required skills and capacity.”
During the 30-day commentary period, the DTIC will be having sessions with stakeholders to create awareness while soliciting more inputs.