The Department of Trade, Industry and Competition (DTIC) has announced that it intends to explore the aims of the envisaged transformation fund to generate discussion before its implementation.
The fund’s ideal framework will be opened for public consultation and stakeholder engagement with a target to mobilise R100bn by 2029, to fund and empower black-owned businesses and small, medium, and micro enterprises (SMMEs).
The department said the fund was a project aimed at addressing a critical issue through research, policy, and action to advance South Africa’s constitutional commitment to economic redress and inclusive growth.
According to the Minister of the Trade, Industry and Competition Parks Tau, the fund aims to promote equality through legislative and other measures to empower black-owned businesses.
“The fund also reflects the statement of intent of the government of national unity (GNU), which emphasises fostering redress and inclusive economic growth. The GNU’s transformative agenda seeks to dismantle systemic barriers to economic participation, ensuring that historically disadvantaged communities are afforded equal opportunities to thrive in all sectors of society,” said Tau.
He pointed out that through evolving the constitutional authoritative of economic redress, the fund is anchored in the Broad-Based Black Economic Empowerment (B-BBEE) Act, to increase the effective economic participation of black-owned and managed enterprises, including small, medium, and micro enterprises and cooperatives, and enhance their access to financial and non-financial support.
“The transformation fund is not about imposing new obligations but about ensuring that existing commitments under the B-BBEE legislation are strategically utilised to create meaningful economic transformation. It embodies our constitutional mandate to achieve equality and empower historically disadvantaged communities,” Tau said.
“The transformation fund is not merely a funding mechanism, it is a catalyst for change. “Through collaboration with the private sector, civil society, and other stakeholders, we will create an economy that is inclusive, sustainable, and reflective of South Africa’s diversity.”
However, the announcement of the fund has come under strong criticism from certain quarters, including the DA.
“The DA will not support this madness. The minister’s plan to impose further obligations on the private sector through the B-BBEE codes and force companies to contribute to this fund or face penalties is not only uncompetitive but also illegal.
“It is unthinkable that the minister would announce a policy of this magnitude without ensuring the necessary legal processes are followed. The government cannot arbitrarily impose taxes or new financial obligations on businesses without proper legislative procedures,” the party said in a statement.
