We fully support the Transformation Fund. The Fund is estimated at R100 billion administered at R20 billion over a five-year period and will provide both financial and technical support to struggling entrepreneurs. This is a bold and progressive move by the government and should be supported by those who seek meaningful transformation in the country. We realise that with the triple burden of poverty, unemployment, and inequality that disproportionately impact black women and youth as well as the unsustainable levels of public debt we cannot continue with the current macro-economic policies and, unless we grow the economy from the bottom-up through initiatives such as the Transformation Fund, we are going to see the triple burden worsen.
Of course, the success of the Fund will be dependent on a number of factors. First, it needs to take an integrated approach and by that we mean that it needs to align and complement the initiatives that are already underway instead of duplicating these. Also, it needs to be focused. In its current form, the Fund looks at industrialization, job-creation, livelihood support, land reform, infrastructure development, structural reform, transformational chance, fiscal sustainability, and sustainable use of national resources and endowments these are all imperative to addressing the triple burden of poverty, unemployment, and inequality in South Africa, however, our concern is that with such a broad focus the Fund risks overextending itself and not meeting its intended goals.
Second, the Fund targets marginalized communities such as the informal sector, spaza shops, collective investments such as stokvels which we find to be revolutionary but the concept draft does not specify how it intends on getting over the legislative hurdles of the grey economy. The clandestine way in which the informal economy operates may prevent broad-based usage of the fund. Also, the marginalized lack access to information so we are of the view that the National Empowerment Fund needs to prioritise public education to ensure that everyone has a fair chance at applying and getting the assistance they need. At the moment, the public is finding the NEF application processes cumbersome so these need to be streamlined to ensure ease of use.
Third, one of the major reasons for some sectors opposing the Fund is corruption. The BMF is of the view that you cannot deprive an entire nation of the social transformation they were promised in 1994 just because a few people were found guilty of corruption, we therefore strongly advise that the Fund is managed well to ensure public trust and confidence. The Fund is structured as a centralized Special Purpose Vehicle (SPV) and the concept draft needs to state who the custodians are. Clear terms of reference need to be established regarding the personnel managing the Fund. Furthermore, the Fund needs to specify accountability measures through the board.
Lastly and by far most importantly, the Fund needs to work pass the hurdles of systematic and structural economic exclusion which, as we all know, B-BBEE has failed to overcome. In order to ensure transformation, we need to bridge the divide between the haves and have nots, between rural and urban economies as well as the mainstream urban and kasi economy. In order to do that, we need to disrupt long-standing monopolies in the South African economy. We know that the Fund is intended to be a public-private-partnership (PPP), the success of the Fund will, therefore, depend on the political will of the private sector in, not only, contributing to the fund but also increasing accessibility to markets of those who have long been outside the supply chain due to structural and systematic oppression and exclusion and this will require buy-in. The ‘soft skills’ aspect of policy-making is often a missing yet crucial component of implementation that the NEF needs to be cognisant of in rolling out this Fund.