The 67CEOS Foundation commends the Department of Trade, Industry and Competition (DTIC) for its recent clarification on the R100 billion Transformation Fund. This initiative aligns seamlessly with our mission to empower Small, Medium, and Micro Enterprises (SMMEs), which are the cornerstone of South Africa’s economic vitality.
Five Reasons the Transformation Fund is a Catalyst for SMME Growth:
- Promoting Economic Inclusion: By providing both financial and non-financial support to black-owned enterprises, the fund ensures meaningful participation in the economy, bridging gaps that have historically hindered inclusive growth.
- Addressing Fragmentation: The fund consolidates resources from existing Enterprise and Supplier Development (ESD) obligations and other sources, enhancing impact and efficiency. This unified approach streamlines support mechanisms, making them more accessible to SMMEs.
- Fostering Sectoral Growth: With a focus on high-impact sectors such as agriculture, tourism, ICT, manufacturing, and businesses in township and rural areas, the fund directs resources where they can generate substantial economic returns and job creation.
- Enhancing Market Access: Offering technical assistance, along with pre- and post-investment support, the fund opens avenues for SMMEs to access broader markets, ensuring their products and services reach a wider audience.
- Supporting Industrialisation: Aligned with South Africa’s industrial policy, the fund stimulates growth in productive sectors and underdeveloped areas, promoting balanced economic development across the nation.
We firmly believe that the Transformation Fund represents a preferred approach to consolidating corporate ESD efforts. However, to maximise its effectiveness, it is imperative that a significant portion of the fund is allocated directly to SMME grants, loans, and other development financing options, rather than being consumed by administrative overheads. A lean administration and a streamlined application process with minimal bureaucracy are essential to ensure that support reaches those who need it most.
As Minister of Trade, Industry, and Competition, Mr. Parks Tau, aptly stated, “The Transformation Fund is not merely a funding mechanism; it is a catalyst for change. Through collaboration with the private sector, civil society, and other stakeholders, we will create an economy that is inclusive, sustainable, and reflective of South Africa’s diversity.”
Echoing this sentiment, Sam Apata, Executive Convener of the 67CEOS Foundation, emphasises, “For the Transformation Fund to truly serve its purpose, it must prioritise direct support to SMMEs. Reducing administrative burdens and ensuring an accessible application process will empower entrepreneurs to drive innovation and economic growth.”
To ensure the success of the Transformation Fund, it is imperative to adequately engage mainstream, township, and rural-based SMME ecosystem enablers in its planning and execution phases. These stakeholders possess invaluable insights into the unique challenges and opportunities within their respective communities, making their input critical for the development of a robust framework and practical guidelines. By involving local chambers of commerce, community-based business networks, and grassroots development organisations, the fund can address regional disparities, create inclusive growth strategies, and establish a framework that resonates with the realities of diverse SMME environments. This collaborative approach will not only enhance the fund’s impact but also ensure it serves as a genuine catalyst for broad-based economic transformation.
Enhancing the Support Functions of DSBD and Agencies like SEDA and SEFA
The Transformation Fund amplifies the existing efforts of the Department of Small Business Development (DSBD) and its agencies, such as the Small Enterprise Development Agency (SEDA) and the Small Enterprise Finance Agency (SEFA), rebranded as Small Enterprise Development and Finance Agency (SEDFA). By integrating resources and aligning objectives, the fund enhances the capacity of these agencies to deliver targeted support, including mentorship, funding, and market access opportunities, to SMMEs across various sectors. This synergy ensures that the fund builds upon a robust foundation, enabling small businesses to access a comprehensive suite of services to drive growth, resilience, and sustainability.
Corporate Engagement and Embracing the Transformation Fund
Corporates have a pivotal role in the success of the Transformation Fund and should actively participate in public consultations and stakeholder engagements. By aligning their Enterprise and Supplier Development (ESD) programmes with the fund’s objectives, companies can maximise their impact and contribute to a unified vision for economic transformation. Engagement in dialogue sessions with the DTIC and other stakeholders allows corporates to share insights, influence policy directions, and ensure their investments create lasting value. This collaborative approach not only strengthens the fund’s implementation but also fosters shared accountability in building an inclusive economy.
Ring-fencing the Transformation Fund to Eliminate Corruption and Mismanagement
Ring-fencing the Transformation Fund involves creating strict boundaries that ensure its resources are used solely for their intended purpose—supporting the growth and development of SMMEs. By establishing clear and transparent allocation protocols, coupled with independent oversight mechanisms, ring-fencing eliminates the risk of funds being diverted for unrelated expenses or personal gain. It promotes accountability by requiring regular audits, public reporting, and stringent compliance checks, reducing opportunities for corruption and mismanagement. Additionally, ring-fencing minimises bureaucratic inefficiencies by ensuring funds directly reach SMMEs in the form of grants, loans, or technical assistance, bypassing unnecessary intermediaries. This approach builds public trust and maximises the fund’s impact on South Africa’s economic transformation.
The 67CEOS Foundation stands ready to support and collaborate from public consultation and stakeholder engagement to the successful implementation of the Transformation Fund, ensuring that it fulfils its promise of fostering a more inclusive and dynamic South African economy.
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