South Africa has a range of dynamic developmental plans to realise economic growth, which offer potentially lucrative value and opportunities for international investors willing to become partners in a country that is uniquely positioned as the gateway into Africa.
Before the arrival of democracy in 1994 when Dr Nelson Mandela became South Africa’s first democratically elected president, social engineering under apartheid resulted in a gross imbalance in socio-economic status between black and white people. As a result, black people were systematically and effectively excluded from the economic mainstream.
Accordingly, in 1998 Dr Mandela’s government passed legislation establishing the National Empowerment Fund (NEF), an agency of the Department of Trade and Industry mandated to promote and facilitate black economic participation through the provision of financial and non-financial support to black empowered businesses, on the one hand, and by promoting a culture of savings and investment among black people, on the other.
As a driver of the Codes of Good Practice for Broad- Based Black Economic Empowerment, and as directed by the priorities identified in the Industrial Policy Action Plan and the New Growth Path, the NEF has developed finance products that are ideal for black entrepreneurs who would typically not be successful in raising funds from commercial funders.
Research conducted by Who Owns Whom, reveals that BEE equity ownership on the JSE’s average market cap of approximately R7.3 trillion, stands at about 3%, or approximately R219 billion, which is
directly and indirectly owned by black South Africans. To reach 25% of black ownership it requires an additional 22% worth R1.6 trillion at current estimated market cap. These statistics are correct as at 20 February 2012. Clearly, the journey towards meaningful black economic participation is far from over.
This mandate has met with many significant achievements and has seen the NEF approve over R3 billion for funding black entrepreneurs across virtually all spheres and sectors of the economy. To pursue its mandate the NEF provides finance for black empowered start-up, expansion and equity transformation purposes.