Industrial Development Corporation Creates, Saves 160 000 Jobs
The Industrial Development Corporation (IDC) has over the past year facilitated the creation and saving of 160 000 jobs.
This is according to its annual report, which documents its funding activities for the financial year ending March 2014.
The development finance institution has also disbursed billions of rands over the past five years as it reviewed its business operations to align them to government’s mandate to bolster economic participation.
In a foreword of the IDC’s annual report for the 2013/14 financial year, Economic Development Minister Ebrahim Patel said when he assumed office five years ago, his department initiated a process of transforming the IDC to play a role of empowering small, medium and big corporations in order to create jobs and respond to economic and social imperatives.
“The IDC heeded our call, realigning its focus areas and strategies with industrialisation priorities.
“These included the broadening and deepening of productive value chains, both domestically and regionally, the beneficiation of our country’s resource wealth and the green economy.
“The Corporation geared itself for a more proactive and catalytic role in the expansion and diversification of South Africa’s industrial base, with a special focus on labour- absorbing investment activities. It thus joined forces with other public sector entities in signalling to the marketplace the desired orientation, inclusivity and pace of economic development in the years ahead,” Minister Ebrahim said.
Of the 160 000 jobs that were saved or created, 11 500 were in income-generating informal economy activities related to recycling of waste materials. Industrialisation is crucial for the sustainability of economic growth, the balance of payments, job creation and poverty alleviation, the IDC said.
“Nevertheless, perseverance and proactivity in seeking opportunities for the expansion of industrial capacity translated into R13.8 billion in financing approvals for 2014, a 5.8% increase compared to the previous year.”
IDC mainly funds major projects in the production sectors of the economy, like manufacturing, mining and agriculture, among others, as the plan is to use empowerment policies to create an enabling environment for entrepreneurs to get into the productive sectors of the economy.
What has the corporation done over the past five years?
When the recession was on the verge of devastating local and foreign markets, South Africa’s economy shed just over one million jobs when the meltdown peaked in 2009.
During that period, the IDC stepped up its funding support and played an important role in creating and saving almost 130 000 jobs.
Sefa has since approved R1.5 billion in direct and indirect lending to about 74 000 small and micro enterprises.
In response to alarming youth unemployment figures, IDC and Sefa jointly set aside R2.7 billion to launch the youth fund in partnership with the National Youth Development Agency in 2013 to support youth entrepreneurship.
According to the report, the IDC has approved R105.3 million for 11 businesses with significant youth ownership during financial year 2014.
Sefa disbursed R157 million to more than 10 200 youth owned enterprises.
One of the businesses that Sefa has supported recently is Kolourful Empowerments (Pty) Ltd, an 18-month-old goods transport company based in Durbanville, Cape Town.
The business, which is owned by four university graduates who have equal shareholding, was awarded funding of R1 250 000 to buy a truck to enable them to fulfil the requirements of a contract that the company won.
Jason Trout, the company’s managing director, said the funding has been a stepping stone for the infant company, which transports goods such as granite, containers, machinery, equipment and sometimes foodstuff to nationwide.
“Through the loan facility SEFA has provided my company, it has allowed us to grow to the next level of growth as well as many subsequent opportunities and more impactful networking sessions.
“Kolourful Empowerments has two heavy duty commercial vehicles. The intention is to grow and diversify the fleet as far as is organically possible,” he said.