The Minister of Trade and Industry, Dr Rob Davies, says the overall progress of the National Empowerment Fund (NEF) in becoming a Development Finance Institution of significance with an exclusive mandate to support Black Economic Empowerment and the productive economy, is not in question. Minister Davies and the NEF were briefing the Portfolio Committee on Trade and Industry regarding the loan to Ndalo Luxury Ventures (NLV) by the NEF.
In August 2012 the NEF approved loan finance to the value of R34.1 million for construction of the Luminance store, the local manufacture of a clothing range for the Luminance brand and the procurement of stock and shopfit material from local suppliers.
Davies told the committee that the transaction could not be seen as the touch stone and emblem of the NEF as it is less than one percent of the total NEF’s loan portfolio of R5 billion.
“What I think we are looking at in retail in particular, is retail activities which stimulate productive activities in this country. If we look at this transaction, there were features that were in line with that. All of the local procurement and support for the cooperatives factory, are perfectly in line with all those objectives. The NEF did much to improve this transaction in those respects,“ said Minister Davies.
In her submission to the Portfolio Committee, the CEO of NEF, Ms Philisiwe Mthethwa said that the transaction is in line with the mandate of the NEF as it seeks to promote rural economic development, empowerment in an untransformed sector, local manufacturing and procurement.
‘Ndalo Luxury Ventures (Pty) Ltd is a broad-based 100% black women-owned and managed company that manufactures clothing locally and imports a variety of top-end international brands. Black rural women own a 10% stake in NLV, while staff and management of NLV own 10% of the business. Ultimately, 81% of the NEF's funding will be used for localisation purposes. In addition to skills transfer from international fashion luminaries, the locally manufactured products, which include the arts and crafts procured from women in the rural areas, some of whom are NLV shareholders, will enjoy access to local and international markets,” alluded Mthethwa
Minister Davies welcomed the Portfolio Committee’s positive response to the presentation and said that the interest in this transaction had highlighted the need for the dti to re-emphasise some important objectives. The Minister had therefore decided to make public the department’s directive to its agencies. The shareholder instruction (attached) seeks to ensure that all transactions including procurement, lending and developmental activities relevant to the agency comply with both the spirit and the letter of the need to support the local industry and the productive sectors of the economy: The directive requires the following of the agencies falling within the dti family of institutions;
I. Government funds may not be used to support the importation of finished goods and services. Where local suppliers do not exist, the agency must obtain the concurrence of the dti’s Accounting Officer and Executive Authority to deviate from this instruction.
II. Agencies should make every effort to find local suppliers of finished, intermediate and capital goods.
III. Where agencies provide support directly to private enterprises, agencies should actively encourage these enterprises to procure locally. Enterprises may also be referred to the Industrial Procurement Unit at the dti for assistance in finding local suppliers.
IV. Government funds are to be prioritised to supporting the productive sectors of the economy, namely Agriculture, Mining, Manufacturing and Value-added Services such as Tourism, Business Process Services and the Creative industries.
At the conclusion of the meeting, Minister Davies welcomed the committee’s unanimous support for the NEF’s recapitalisation, and said the dti would continue to work to secure an adequate capital base to expand the work the NEF is doing.
Enquiries:
Sidwell Medupe- Departmental Spokesperson
Tel: 012 394 1650
Cell: 079 492 1774
E-mail: MSMedupe@thedti.gov.za
Follow us on Twitter: @the_dti
Moemise Motsepe
Manager: Marketing & Communications
National Empowerment Fund
Tel: 011 305 8127
Cell: 083 533 4114
E-mail: motsepem@nefcorp.co.za
