Trade, industry and competition minister Parks Tau has committed to public engagement on the conceptual framework for the planned controversial Transformation Fund, which aims to raise R100bn by 2029 to foster BEE.
“The fund’s conceptual framework will be opened for public consultation and stakeholder engagement with a target to mobilise R100bn by 2029,” the minister said in a statement Friday.
“We welcome the ongoing debate on transformation and look forward to broad participation during the consultation process. This timeline underscores the department of trade, industry and competition’s (DTIC’s) commitment to achieving sustainable and impactful transformation.
“The Transformation Fund is not merely a funding mechanism, it is a catalyst for change. Through collaboration with the private sector, civil societ, and other stakeholders, we will create an economy that is inclusive, sustainable and reflective of SA’s diversity.”
Tau stressed that fund was not about imposing new obligations but about ensuring that existing commitments under the BBBEE legislation were strategically used to create meaningful economic transformation.
In response to a question in parliament by DA spokesperson on trade, industry and competition Toby Chance, Tau said the fund would be administered by a special-purpose vehicle of the National Empowerment Fund.
It would source its funds from the use of BBBEE codes of good practice and the public interest conditions imposed by the Competition Commission on mergers and acquisitions.
Parks noted that entities were obliged under the BBBEE codes of good practice to contribute an equivalent of 3% of annual net profit after tax for the development of black suppliers.
“Entities will be required to contribute to the Transformation Fund for compliance with enterprise and supplier development element,” Tau said.
The BBBEE codes of good practice also make provision for multinational entities in complying with ownership element to set aside funds (25% of the value of their SA operations), which will be used for transformation purposes.
He said the fund would support the implementation of the BBBEE codes of good practice, which require that established businesses must support black-owned enterprises and SMMEs.
The fund would offer equity funding, debt and grants.
In its statement Friday the department said the fund was a “critical initiative that advances SA’s constitutional commitment to economic redress and inclusive growth.
“The fund also reflects the statement of intent of the Government of National Unity (GNU), which emphasises fostering redress and inclusive economic growth. The GNU’s transformative agenda seeks to dismantle systemic barriers to economic participation, ensuring that historically disadvantaged communities are afforded equal opportunities to thrive in all sectors of society”.
The department said the fund was also anchored in the BBBEE Act, which obligates government to increase the effective economic participation of black-owned and managed enterprises, including small, medium and micro enterprises and co-operatives, and enhance their access to financial and non-financial support.
The fund would address the fragmentation of support by aggregating resources from existing enterprise and supplier development (ESD) obligations and other sources.
It would focus on high-impact sectors, including agriculture, tourism, ICT, manufacturing and businesses in township and rural areas. It would also enhance market access and offer technical assistance and support industrialisation.
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