The Department of Trade, Industry and Competition (the DTIC) has published a draft Transformation Fund Concept Document for public comment. As a collective of industry professionals and business leaders committed to advancing economic empowerment, ABSIP invites you to contribute your insights to help shape this crucial national initiative.
Overview of the Draft Transformation Fund
The proposed Transformation Fund is a landmark initiative aimed at unlocking access to finance and accelerating the inclusion of black-owned enterprises in South Africa’s mainstream economy. The Fund is envisioned as a R100 billion aggregated financing mechanism over five years (R20 billion per annum), with blended finance and strong public-private partnerships at its core.
Purpose and Funding Mechanism
- Designed to address systemic barriers faced by majority black-owned businesses and SMMEs.
- Will provide grants, concessional debt, and equity funding to high-potential businesses especially those based in townships and rural areas.
- Emphasis on supporting designated groups (women, youth, and people with disabilities) and businesses in productive sectors like agriculture, green energy, manufacturing, and ICT.
Governance, Administration and Fund Managers:
- The Fund will be administered via a Special Purpose Vehicle (SPV), with a ring-fenced, tax-exempt bank account.
- Oversight will be provided by a Transformation Fund Council, comprising both public and private sector leaders.
- A Board of Directors will be appointed to guide strategy and implementation.
- An Oversight Committee (including ministers and representatives from business and civil society) will ensure accountability and alignment with national goals.
- Independent Fund Managers will be appointed to manage the deployment of capital, assess investment readiness, and support beneficiaries.
- Sector-focused Investment Committees will evaluate funding proposals based on transformation impact and alignment with Fund objectives.
Policy Integration
- The Fund is aligned with existing transformation legislation, including the B-BBEE Act, Equity Equivalent Investment Programme (EEIP), and Enterprise and Supplier Development (ESD) frameworks.
- Proposed amendments to the B-BBEE Codes will allow contributors to earn immediate scorecard points.
- Regular reporting and monitoring will track transformation progress, job creation, and inclusive growth outcomes.
Why Your Input Matters
Similar to the role that ABSIP has historically played in the development of key legislation such as the BBBEE Sector Code of good practice amongst others. The success of the fund will hinge on the collaboration of stakeholders in ABSIP’s ecosystem. Your feedback can directly influence the governance, structure, and implementation of the Fund. ABSIP’s consolidated submission will reflect the lived experiences and priorities of our members.
Submission Guidelines
- Deadline: Sunday, 27 April at 23h59
- Format: Submit concise feedback ideally not more than 3 pages via Submission Link below.
- Focus Areas:
- Fund governance and SPV structure
- Role and accountability of Fund Managers
- Investment strategy and sectoral focus
- Inclusion of rural/township-based businesses and designated groups
- Alignment with B-BBEE/ESD frameworks
- Identified gaps or risks in the current model
Next Steps
- Review the draft document on the link below.
- Make your submission before the deadline.
We urge you to contribute actively to this transformative initiative. Together, we can drive inclusive economic growth and redress historical inequalities.