Black Industrial Programme to boost job creation, industrialisation

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"There is a compelling need to increase the number of black industrialists, in particular entrepreneurs in the mainstream economy," says Tapie Marlie, partner in the practice.

"BIP will advance the government's key objectives of industrialisation, skills development and job creation. Currently, access to finance and skills have been identified as the primary constraints for many existing and emerging black industrialists. Government has indicated that more initiatives and incentives need to be put in place to help develop and create black industrialists in the country."

With the recent introduction of the new Broad-Based Economic Empowerment codes, government intends to adopt a focused approach to support black industrialists in a bid to enhance South Africa's industrialisation efforts. On 4 November 2015, the Cabinet approved the BIP programme, which is a key component of the dti's industrial policy action plan. The dti will launch the BIP programme in early 2016, as well as provide more details on the programme.

The BIP programme will form stakeholder relationships with multi-corporations, commercial banks, development finance institutions and state-owned enterprises - all with a common goal of assisting black industrialists towards accessing capital markets and growing in the sectors that they operate in.

According to the dti, black industrialists refers to black people who are directly involved in the origination, creation, majority ownership (= 50%), management, control and operation of industrial enterprises that derive value from manufacturing goods and services.

Targeted beneficiaries include established industrialists with extensive experience, operations and records of accomplishment in their respective industrial sectors who require support to expand their operations and/or improve their business efficiencies. Also included are emerging new black industrialists in pursuit of starting a new business or taking over brownfield projects.

The BIP will target priority sectors and will include and increase the participation of black industrialists. "The ultimate aim is to enhance job creation which is line with the government's National Development Plan of 2030."

The BIP programme is also aimed at providing a complete suite of incentives and other business support. With on-board support from various interested stakeholders, the programme package will include:

• Investment grants and equity loans for the purpose of acquiring, constructing, expanding or rehabilitating plants;
  
• Working capital support via low-interest concessional loans;
  
• Incubation and mentorship support for emerging entrepreneurs and enterprises;
  
• The creation of a portal for networking and match making;
  
• A joint venture support package consisting of an investment grant and an equity loan;
  
• Funding of feasibility studies, licenses and quality assurance standards on a cost-sharing basis; and
  
• Export support in the form of export insurance funding and market access support.

The programme is looking to provide substantial assistance to both existing and new entrants into the competitive industrial market such that they develop into key role players.

"If we want a strong economy that is inclusive and sustainable, we must address the challenges that black businesses face. In so doing, we will broaden the industrial foundation together, as a diversified nation," concludes Marlie.