{"id":816404,"date":"2025-03-12T09:30:00","date_gmt":"2025-03-12T07:30:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=816404"},"modified":"2025-03-12T09:30:35","modified_gmt":"2025-03-12T07:30:35","slug":"r100-billion-fund-for-black-businesses-in-south-africa-here-soon","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/816404\/r100-billion-fund-for-black-businesses-in-south-africa-here-soon\/","title":{"rendered":"R100 billion fund for black businesses in South Africa here soon"},"content":{"rendered":"\n

The Minister of Trade, Industry, and Competition, Parks Tau, said the new R100 billion Transformation Fund will give black-owned enterprises access to funding.<\/p>\n\n\n\n

He provided details about the Transformation Fund in response to a parliamentary question from Thokozani Makhosonke Langa.<\/p>\n\n\n\n

The R100 billion fund rose to prominence last year after Toby Chance, DA spokesperson on trade, industry, and competition, sounded the alarm about the new fund.<\/p>\n\n\n\n

Chance warned that the R100 billion transformation fund risks being a slush fund and is open to abuse by connected politicians.<\/p>\n\n\n\n

He likened it to South Africa\u2019s R500 billion coronavirus funding, which was rife with corruption, fraud, and looting.<\/p>\n\n\n\n

\u201cNot only does the DA reject race-based legislation, but BBBEE has proven counterproductive in closing our inequality gap,\u201d Chance said.<\/p>\n\n\n\n

He added that most black empowerment funding does not stimulate high-growth enterprises in South Africa.<\/p>\n\n\n\n

Another controversial part of the R100 billion transformation fund is how it will be funded, considering businesses are already overtaxed.<\/p>\n\n\n\n

Tau wants South African businesses to pay 3% of their annual net profit after tax for a new R100 billion transformation fund.<\/p>\n\n\n\n

In response to Chance\u2019s question, Tau told parliament that money for the fund would be raised according to the BBBEE codes of good practice.<\/p>\n\n\n\n

Another funding source will come through the Competition Commission\u2019s public interest participation.<\/p>\n\n\n\n

\u201cEntities are obliged under the BBBEE codes of good practice to contribute an equivalent of 3% of annual net profit after tax for the development of black suppliers,\u201d Tau said.<\/p>\n\n\n\n

\u201cEntities will be required to contribute to the transformation fund for compliance with the enterprise and supplier development element.\u201d<\/p>\n\n\n\n

He explained that the BBBEE codes of good practice make provision for multinational entities to comply with ownership elements.<\/p>\n\n\n\n

This includes setting aside funds, 25% of the value of their South African operations, for transformation purposes.<\/p>\n\n\n\n

\u201cTherefore, funds from the equity equivalent investment programme will form part of the transformation fund,\u201d Tau said.<\/p>\n\n\n\n

President Cyril Ramaphosa promoted the controversial R100 billion black economic empowerment fund during his State of the Nation Address.<\/p>\n\n\n\n

\u201cWe will set up a transformation fund worth R20 billion a year over the next five years to fund black-owned and small enterprises,\u201d he said.<\/p>\n\n\n\n

R100 billion Transformation Fund details<\/strong><\/h2>\n\n\n\n
\"\"<\/a>
Minister of Trade, Industry, and Competition, Parks Tau<\/figcaption><\/figure>\n\n\n\n

Langa asked Minister Parks Tau for a detailed breakdown of the R100 billion Transformation Fund and how he will ensure the money reaches the intended beneficiaries.<\/p>\n\n\n\n

Tau responded<\/a>, saying the fund will be administered through a partnership between the private and public sectors.<\/p>\n\n\n\n

He added that the Transformation Fund will have a governance structure consisting of a board and oversight committees.<\/p>\n\n\n\n

The Minister explained that Section 9(2) of the Constitution places a collective burden on all to advocate for equality and redress.<\/p>\n\n\n\n

He said the constitutional undertaking is given legislative impetus through Section 2(h) of the B-BBEE Act.<\/p>\n\n\n\n

This obliges the government to \u201cincrease the effective economic participation of black-owned and managed enterprises\u201d.<\/p>\n\n\n\n

He added that it includes small, medium and micro enterprises and co-operatives and enhance their access to financial and non-financial support.<\/p>\n\n\n\n

\u201cThe Transformation Fund is established to address access to funding for black-owned enterprises and SMMEs,\u201d Tau said.<\/p>\n\n\n\n

\u201cThis will increase their economic participation and income-earning potential in line with the Constitution.\u201d<\/p>\n\n\n\n

It will be achieved by aggregating various funds, such as the Enterprise and Supplier Development contributions and the Equity Equivalent Investment Programme.<\/p>\n\n\n\n

R500 million fund to support and assist spaza shops in rural areas<\/strong><\/h2>\n\n\n\n
\"\"<\/a>
Minister of Small Business Development, Stella Ndabeni-Abrahams<\/figcaption><\/figure>\n\n\n\n

The R100 billion Transformation Fund is not the only initiative to assist black businesses in South Africa.<\/p>\n\n\n\n

On 3 March 2025, the Minister of Small Business Development, Stella Ndabeni-Abrahams, launched a R500 million fund to support spaza shops in rural areas.<\/p>\n\n\n\n

Ndabeni-Abrahams said the Spaza Shop Support Fund will bolster the competitiveness of spaza shops and help them compete with larger retailers.<\/p>\n\n\n\n

She explained that the fund will provide financial and operational support to township convenience stores.<\/p>\n\n\n\n

\u201cThe fund will be launched in the next two weeks, and the exact date will be communicated,\u201d she stated.<\/p>\n\n\n\n

The initiative will be jointly funded by the Department of Small Business Development (R150 million) and the Department of Trade, Industry and Competition (R350 million).<\/p>\n\n\n\n

\u201cThe fund aims to boost economies of scale by linking spaza shops and food-handling outlets with buying groups for bulk purchasing,\u201d she said.<\/p>\n\n\n\n

\u201cIt will strengthen business operations through training and support, improving their overall market competitiveness.\u201d<\/p>\n\n\n\n

She told parliament<\/a> that the R500 million had not yet been disbursed because Spaza Shops first had to be registered.<\/p>\n\n\n\n

The registration process, which ended on 28 February 2025, helped to determine the extent and type of support required by their owners.<\/p>\n\n\n\n

\u201cThis information was essential to design appropriate support mechanisms tailored to their needs,\u201d she said.<\/p>\n\n\n\n

Now that the registration process has been completed, the fund will soon be open for applications.<\/p>\n","protected":false},"excerpt":{"rendered":"

The Minister of Trade, Industry, and Competition provided details about the planned R100 billion Transformation Fund to help black businesses in South Africa.<\/p>\n","protected":false},"author":10,"featured_media":810798,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[1998,21981,21983,5129,21982],"class_list":["post-816404","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-parks-tau","tag-r100-billion-transformation-fund","tag-spaza-shop-support-fund","tag-stella-ndabeni-abrahams","tag-toby-chance"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/816404","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=816404"}],"version-history":[{"count":2,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/816404\/revisions"}],"predecessor-version":[{"id":816408,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/816404\/revisions\/816408"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/810798"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=816404"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=816404"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=816404"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}