A glance at four government empowerment initiatives

Sep 12, 2024 3:12:14 PM

"Here we look at a few government initiatives which are giving a helping hand to black-owned businesses and the unemployed."

A glance at four government empowerment initiatives

By Koketso Mamabolo & Fiona Wakelin

The public sector has always recognised the importance it can play in economic empowerment, using its funds, networks and infrastructure to further transform the economy. Through various initiatives it has sought to decrease unemployment and assist black-owned SMMEs in finding a footing in the mainstream economy. Here we look at a few government initiatives which are giving a helping hand to black-owned businesses and the unemployed.

National Empowerment Fund

In order to increase black economic participation, The National Empowerment Fund (NEF) was created through the National Empowerment Fund Act. Its work involves “promoting and facilitating black economic participation by providing financial and non-financial support to black-owned and managed business [sic],” and is governed by the Public Finance Management Act.

The NEF takes three approaches. The first involves asset management, as the “custodian of certain equity allocations in State-Allocated Investments (SAIs)”. The second is fund management for start-ups, expansion efforts and equity transformation. The third approach involves a strategic project fund, providing entrepreneurs with the opportunity to enter into sectors at an early stage, which has seen the NEF break good ground in venture capital finance.

Besides assisting black people, communities and businesses to adhere to every part of the Codes of Good Practice, they also “focus on preferential procurement, broadening the reach of black equity ownership, transformation in management and staff and preventing the dilution of black shareholding”.

Black Business Supplier Development Programme

The Black Business Supplier Development Programme (BBSDP) offers a cost-sharing grant which supports black-owned businesses in becoming competitive and ensuring that they’re sustainable. The maximum grant is R1-million, R800 000 of which is for “tools, machinery and equipment” and R200 000 for business development and training.

It aims to speed up the integration of SMMEs, which show good promise, into the mainstream economy. Their second aim is to grow black-owned businesses by strengthening the ties between SMMEs and the private and public sectors. The BBSDP supports the work already being done in preferential procurement. The last objective is to support the grant recipients in ensuring they have the capacity to meet the requirements of the opportunities available with larger businesses and the public sector.

Black Industrialists Scheme

Much like the NEF and BBSDP, the Black Industrialists Scheme aims to increase the involvement of black-owned businesses in the economy. The scheme, which was started in 2016, is guided by the Industrial Policy Action Plan, and is separated into three pillars: funding, markets and non-financial support.

“The intended beneficiaries are entities that want to expand their current operations or start-up a new operation and become self-sufficient within 10 years of participation in the programme.”

The scheme offers funds for between 30 – 50% of a project, with a limit of R50-million, and provided a co-founder is available to match the funding. The funds cover capital investments, feasibility studies, post-investment support and business development support.

Groen Sebenza

In 2013 the South African National Biodiversity Institute (SANBI) embarked on a major skills development and job creation pilot programme – Groen Sebenza – a Jobs Fund Partnership Project funded by the National Treasury.

“Groen Sebenza is aimed at developing priority skills in the biodiversity sector to create sustainable job opportunities for unemployed graduates and non-graduates (school leavers with a matric certificate) for two and a half years.

“Groen (in Afrikaans meaning green) Sebenza (meaning work in isiZulu) brings young South Africans from previously disadvantaged backgrounds together with experienced biodiversity professionals to learn, grow and eventually gain the competence and confidence to embark on rewarding and meaningful biodiversity careers.

“The programme partnered with 43 host institutions across the country from all tiers of government, NGOs and the private sector and has equipped the participating young people, called Pioneers, with various life and generic skills training e.g. computer literacy, workplace communication, career guidance, leadership and project management skills” – SANBI

In 2022 the Groen Sebenza Phase II Programme was funded to the value of R300-million for the next three years, aiming to recruit 1 050 unemployed graduates (from Diploma to PhD level) and place them nationally in different organisations (government and non-governmental) where they will be trained and mentored in the management of environment/biodiversity.

Read about private sector empowerment initiatives