Massive boost for black entrepreneurs as NEF gets incorporated to IDC

In a bid to meet funding demands for black entrepreneurs, the Department of Trade and Industry (DTI) has announced that the National Empowerment Fund (NEF) will become a wholly-owned subsidiary of the Industrial Development Corporation (IDC)

The deal was signed in Cape Town on Wednesday and is in line with the radical economic transformation pronouncements President Jacob Zuma made during his State of the Nation Address (Sona) last week, that seeks “fundamental change in the structure, systems, institutions and patterns of ownership, management and control of the economy in favour of all South Africans, especially the poor, the majority of whom are African and female”.

The merger is intended to accelerate broad-based black economic empowerment, particularly in creating more black industrialists.

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The Department of Trade and Industry (DTI) and the Department of Economic Development have described the move as a “landmark breakthrough”.

“The two ministers are confident that this historic integration of two leading development financing institutions will enhance the country’s developmental aspirations as outlined by President Zuma to open up the economy to new players, give black South Africans opportunities in the economy and indeed to help make the economy more dynamic, competitive and inclusive. This is our vision of radical economic transformation,” the DTI said in a statement.

During the financial year ending March 2016, the IDC reported R14,5 billion in approvals including R11,4 billion in disbursements.

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It also approved R4,9 billion in funding for black empowered businesses as well as R2,9 billion for black industrialists.

Since its inception in 2005, the NEF has approved R8,5 billion in funding to a total of 839 black companies across the country.