IDC to invest R5-billion in jobs

14 June 2005

South Africa’s Industrial Development Corporation (IDC) plans to invest “just over R5-billion” in job-creation projects over the next financial year, the Sunday Times reports.

Industrial Development Corporation The newspaper says corporation chief executive Geoff Qhena wants to boost investment in small- to medium-sized enterprises (SMEs), backing projects that will create jobs. The target is to create
26 000 jobs in the new financial year.

“When we emphasise development, what is over-arching is jobs,” Qhena said. “We will have a bias towards projects that create jobs. We will still do major projects as we need the balance; they feed the SMEs and the SMEs feed into them.”

A key element of the corporation’s promotion of SMEs is backing franchisees, including those in fast-food chains such as Nando’s and McDonald’s, the Sunday Times reports. It has also discussed franchise deals with Sasol.

“Franchising is an opportunity for us,” Qhena said. “We are talking to the franchisors, where we can enter into an agreement with them or we can make facilities available. When we do that, we insist that they have an adequate black economic empowerment component.

“Franchising is one of the growing SME areas. The failure rate is minimal, as the franchisors want to make the business work.”

At an IDC-backed black economic empowerment conference in Mafikeng last week, Qhena said the organisation wanted to back more businesses in rural provinces such as the North West, Free State and Limpopo.

“We need to interact with provinces and local government,” Qhena told the Sunday Times. “We have realised that is where the resources are.”

Gauteng, KwaZulu-Natal and the Western Cape benefit the most from IDC backing.

“We will be talking to all the provinces,” Qhena said. “We could stay at home and we would surely find propositions from the three richest provinces. But now we want to develop other provinces.”

The IDC is likely to play a leading role in the restructuring of the diamond industry, according to the Sunday Times, prompted by the government’s desire to see more diamonds beneficiated in the country and as a result of the planned amendment of the Diamond Act.

De Beers has offered the government a partnership in the SA division of its diamond trading company Diamdel. And in her recent budget speech, Minerals and Energy Minister Phumzile Mlambo-Ngcuka said the government may look at forming one major diamond trading company for SA diamonds.

“We are very excited about what is happening in diamonds,” said Qhena.

He stressed that each company in the IDC’s portfolio – whether it was one in which the IDS held a stake, or one to which it provided financial backing – was making a real effort to transform, and not just at an equity level.

“We want to see the transfer of skills,” said Qhena.

The Sunday Times also reports that the IDC might still sell stakes in listed companies such as Sasol and BHP Billiton, but only when the time is right.

SouthAfrica.info reporter