Include Black Industrialists in the Economy – Minister Davies
South Africa’s future lies in moving up the value chain and industrialisation and we need to do it in a way that promotes economic inclusion. This was said by the Minister of Trade and Industry, Dr Rob Davies in Cape Town today. He was addressing the media on the Black Industrialists Policy that was approved by Cabinet recently.
According to Davies, South Africa will not be able to industrialise unless it simultaneously includes Black Industrialists in the economy on a sustainable basis. Davies adds that the future of the economy is in the manufacturing sector and the inclusion of the black industrialists in it has to be encouraged.
He added that while encouraging the inclusion of the black industrialists in the manufacturing sector, they need to also be committed, willing to take risks and be willing to look for long-term returns not short-term rents.
”This policy proposes focused efforts to facilitate inclusion and participation of black industrialists in manufacturing activities, with an understanding that more equal societies tend to grow faster than those that are unequal,” said Minister Davies.
He emphasised that the Black Industrialists Policy was an enabler for black industrialists to move to another level and not everyone who applies for the Black Industrialists Programme will be accepted.
“We want to work with the winners and the best,” added Davies.
According to him, a number of the Developmental Finance Institutions have already set aside funding commitments in collaboration with the Department of Trade and Industry (the dti) to support this programme.
The Black Industrialists Policy, according to Davies, is expected to leverage the state’s capacity to unlock the industrial potential that exists within black-owned and managed businesses that operate within the South African economy.
Davies added that the intention was to contribute towards shifting the demographic composition of the South Africa’s industrial sector and engage the under-utilised source of jobs, revenue, taxes and innovation, which are black industrialists.
“This policy complements Broad-Based Black Economic Empowerment by focusing support directly at black manufacturers. Current support measures provided to business in general by the department will continue as normal,” added Davies.
Financial support will be provided through concessional loans, investment grants and concessional export insurance funding and export market exploration support.
the dti will work with all Development Finance Institutions to assist black industrialists. The Black Industrialist Financing Forum has already been established to facilitate syndicated funding for black industrialists.
Black Industrialists Incentive Scheme (BIS)
The Black Industrialists Scheme offers a cost sharing grant ranging from 30% to 50% to approved entities to a maximum of R50 million. The quantum of the grant will depend on the level of black ownership and management control and the project value.
The maximum grant of R50 million may be fully utilised on capital investments or can be split between Capital investment and other support measures (i.e. Investment Support, Business Development Services and Working Capital).
Private banks support
A number of banks have already approached the dti, indicating their interest to partner with government on this initiative.
Access to Markets
The dti will be working with various institutions to facilitate access to market opportunities. These include:
- State-Owned Enterprises
- Government departments
- Chief Procurement Office – Transversal and Targeted procurement
- Private Sector companies
The Cabinet approval of the Black Industrialists Policy indicated that the dti would work with the State Owned Enterprises Procurement Forum, in order to explore market opportunities, both in government departments, SOEs and private sector.
Potential applicants are encouraged to contact the dti on the processes before lodging an application. The assessment forms and policy are available on www.thedti.gov.za.
Enquiries can be sent to firstname.lastname@example.org
Tel: 012 394 1650
Cell: 079 492 1774