The use of catalytic capital as a means to create employment in SA is the focus of this edition of Business Day Spotlight.
Host Mudiwa Gavaza is joined by Rob Nagel, credit portfolio manager at Ashburton Investments.
The discussion focuses how Ashburton Investments plans to invest in businesses and create jobs.
SA’s unemployment crisis, characterised by 32% of eligible people unable to find jobs, is driving new conversations about where real, sustainable jobs can come from.
On his way out of the CEO’s office at Capitec, Gerrie Fourie, argued that SA’s jobless rate was inflated, suggesting it could be as low as 10% if the informal sector were fully accounted for, with the Stellenbosch-based bank estimating as many as 3-million informal businesses in SA.
Nagel highlights the public-private collaboration between Ashburton Fund Managers and the National Treasury’s Jobs Fund.
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Through this project, the National Treasury gave R90m in catalytic capital, structured as a contingent guarantee, which enabled Ashburton to mobilise R900m in private investment.
According to Nagel, this capital was used to support more than 26,000 jobs, channelled into parts of the economy that traditional investors typically avoid.
Catalytic capital refers to targeted financial tools that shift the risk-return balance to crowd in private investment.
Through the discussion, Nagel outlines the case for using catalytic capital in SA; the importance of public private partnerships; the replicability of the process; Ashburton’s investment focus; and alternative ways of deploying capital.
Business Day Spotlight is an Arena Podcasts Production.
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