IDC delivers on funding, jobs in challenging economic environment

IDC delivers on funding, jobs in challenging economic environment

The IDC has a track record of delivering under pressure and, as it did during the global financial crisis of 2008-09, successfully played a counter-cyclical role in the economy in 2015.

IDC Chief Executive Officer Geoffrey QhenaThe IDC remains committed to increasing industry capacity and facilitating job creation, CEO Geoffrey Qhena said as he presented the IDC’s results for the 2015 financial year on Monday, 14 September.

The Corporation approved funding to the value of R11.5-billion over the course of the year, disbursing R10.9-billion to help businesses expand, in the process helping to create and save over 20 000 jobs. This year’s approvals covered 210 transactions, an increase from the previous year’s 196 transactions.

“When you look at our performance, under the circumstances I think we’ve done well, we’ve seen growth in manufacturing and other sectors,” Qhena said. “Naturally we want to do more, we always want to do more, that’s the pressure that we always have to put on ourselves.”

Economic Development Minister Ebrahim Patel, also addressing the results briefing, said the Corporation had had “the same kind of year as the South African economy – tough trading conditions, complex environment, a global slowdown, and in that context the IDC performed competently.

“What we’re looking for is an institution that can create jobs, and we saw that through the IDC investments approved in the past year, 20 000 additional jobs were created,” Minister Patel said. “I think that’s important.”

The country expected even more from the IDC when the economy in general was having challenges, the minister said, which put enormous pressure on it to deliver industrial funding. The IDC had a track record of delivering under such pressure, however, and again, as it had done during the global financial crisis of 2008-09, had successfully played a counter-cyclical role in the economy in 2015.

Helping black South Africans become active players

Economic Development Minister Ebrahim PatelGoing forward, Minister Patel said, the focus would be on youth entrepreneurship, bringing young people into the mainstream economy, and the development of black industrialists. The aim was to empower more black South Africans to become involved, not as 10% shareholders but as active players in the industrial economy.

“The focus should be on helping black industrialists in setting up factories, running the big mines, providing components in the renewable energy industry, and promoting tourism by the kind of services that they render tourists who come to South Africa.”

The IDC would also be focusing on sectors such as clothing and textiles and film making, where the multiplier effects on job creation were strong, the minister said.

The Corporation approved funding to the value of R5.9-billion for 85 transactions involving black-empowered and owned companies during the year, which included providing support for 41 companies controlled by black entrepreneurs. At the same time, it invested R756-million in women-empowered businesses and R159-million in youth-empowered businesses.

Qhena said such investments were part of the IDC’s vision of a transformed South Africa. “We want a situation where the industrial production capacity is fully representative of the demographics of the country.”

Manufacturing and job creation

Looking to the year ahead, Qhena said the IDC would be taking a more proactive approach in its efforts to grow the economy, and would also be looking at sectors which had further potential for growth.

“We are looking at manufacturing, which we still need to grow more, because we’ve seen in time how manufacturing has reduced. We also need to do more in agro-processing, we need to process more as a country, this represents a good opportunity in the African region in terms of our exports.”

Manufacturing enjoyed the lion’s share of IDC funding in 2015, receiving 46% of the R11.5-billion in approvals and 47%, or R5.2-billion, of the R10.9-billion disbursed.

Funding for manufacturing supported the development of other key industries, Qhena said, adding that job creation and protection remained a key criterion when it came to choosing which businesses to fund. The Corporation’s funding approvals during the year were expected to facilitate the creation of more than 14 000 jobs and the retention of almost 6 000 jobs that were at risk of being lost.

Regional integration

Turning to regional integration, Qhena said the IDC had increased its investments in the rest of the continent to R1.8-billion in 2014/15.

“What we are doing is we are looking at the amount of money that we can bring and saying, how can we increase more and more, how do we take advantage of regional integration? How do we make sure that we increase the level of trade?”

Minister Patel supported the IDC’s commitment to growing regional trade, saying he was looking forward to South African companies taking the opportunity to build markets and strengthen their existing presence elsewhere on the continent.

“Some of it will mean new supply chains that will develop, where products are made not just in one African country but some of the components are sourced in other African countries,” he said. “Africa as a continent has an exciting opportunity to reposition itself so that it’s not simply a provider of minerals and agricultural products but also becomes a major manufacturer.

“Growing Africa is good for all African countries; growing Africa is good for South Africa.”


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