Fund boosts plan to grow industrialists

Public Enterprises Minister, Malusi Gigaba says the Godisa Fund will be used to help black industrialists. Image: GCIS

The Godisa Fund, a partnership between Transnet, Anglo American and the Industrial Development Corporation's Small Enterprise Finance Agency, would benefit black suppliers who provide goods and services to the state transport utility.

It could help stem the high rate of failures of small businesses, where access to finance, as well as financial management and business development expertise, are often wanting.

It follows the signing in December of Transnet's largest black empowerment transaction, a R15.5bn five-year contract for the supply of fuel.

Until now the Department of Public Enterprises' talk of creating "special purpose vehicles" and other consortia to finance black business has been vague.

Public Enterprises Minister Malusi Gigaba has previously discussed putting "financial levers" in place to support the development of black industrialists and to transfer wealth to black people.

Plan may be extended

The fund seeks to give meaning to that concept and how it is applied. The department has also suggested that the model be extended to other state enterprises including parastatals such as Eskom and the Passenger Rail Agency of SA.

Both have extensive capital expenditure plans providing further opportunities for the development of black enterprises.

Gigaba said at the fund's launch in Pretoria that it marked the start of a process of building constructive collaborations between state enterprises, the mining sector and development finance institutions.

A role for the Development Bank of Southern Africa has also been mooted.

However, the fund itself is small with each of the three partners committing R55m to it. The Godisa Fund will be managed by Anglo Zimele, the company's enterprise development arm.

"It will target light and heavy manufacturing and related services," Transnet's spokesman Mboniso Sigonyela said.

Prerequisites

A contract with Transnet was one of the prerequisites for participating in the fund - only companies in Transnet's supply chain or in the process of being awarded a contract would qualify to benefit from the funding plans.

Transnet's chief executive Brian Molefe said the fund aimed to nurture the company's black-owned suppliers to help them meet their obligations.

"It is our intention to foster enterprise development in such a way that recipients will be able to create new jobs in the communities in which they operate," Molefe said.

Over a 10-year period, R150m was expected to be used for investment financing, and the remaining R15m would be used for support services.

At the launch, Gigaba said the initiative aimed to get suppliers to the point where they had a diversified customer base and were able to sustain themselves independently of any individual customer relationship.

"One of the ways that this will be achieved will be through looking for opportunities for emerging Transnet suppliers in the Anglo American group which will enable greater economies of scale and customer diversification," Gigaba said.

Source: Business Day via I-Net Bridge