The Minister of Trade, Industry and Competition, Mr. Parks Tau, has released the Draft Transformation Fund Concept document for public commentary, inviting members of the public and interested parties to submit their inputs between 20th March 2025 and 7th May 2025.
The proposed Transformation Fund is designed to aggregate Enterprise and Supplier Development (ESD) funds, aiming to drive economic transformation and enhance the sustainability of black-owned enterprises. Minister Tau emphasizes the opportunity for government and the private sector to work together to increase the participation of black-owned and managed businesses, particularly small, medium, and micro enterprises (SMMEs) and cooperatives, by providing financial and non-financial support in alignment with the Broad-Based Black Economic Empowerment (B-BBEE) Act.
Key Objectives of the Transformation Fund:
- Promote economic transformation and meaningful participation of black-owned businesses.
- Improve access to funding for black-owned and controlled enterprises.
- Empower black-owned businesses to integrate into key sector value chains.
- Mobilize financial resources from both the private and public sectors using B-BBEE legislation.
The fund is expected to aggregate R100 billion over the term of the current administration through a joint government-private sector effort. This initiative aligns with Vision 2030 of the National Development Plan, which seeks to eliminate poverty and reduce inequality.
No Additional B-BBEE Requirements for Businesses
The Minister has clarified that no additional requirements will be imposed on entities beyond the existing B-BBEE policies. Businesses are already expected to contribute 3% of their Net Profit After Tax (NPAT) towards ESD initiatives, which focus on developing black suppliers, industrialists, and SMMEs. The Transformation Fund will enhance coordination and impact, ensuring that ESD efforts lead to long-term growth and sustainability for black-owned enterprises.
Focus on Women, Youth, and People with Disabilities
Special attention will be given to businesses owned by women, youth, and persons with disabilities, particularly those based in rural and township areas. Historically, these groups have faced systemic barriers to economic participation, and the fund seeks to address these inequalities by facilitating access to opportunities in key sectors like manufacturing, agriculture, and tourism.
Governance and Oversight
To ensure accountability, transparency, and efficiency, a Special Purpose Vehicle (SPV) will be established to manage the fund, reporting to an Oversight Committee and a skilled board. This governance framework will ensure that both government and private sector stakeholders are held accountable for the effective management of the fund.
Have Your Say
Stakeholder engagement sessions will be held during the 30-day public commentary period to raise awareness and gather further input.
Download the Draft Transformation Fund Concept Document.
Members of the public and interested parties are encouraged to submit their comments and suggestions via email to transformationfund@thedtic.gov.za.
This is a pivotal moment to contribute to shaping South Africa’s economic transformation.
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