Access to finance for South Africa’s black industrialists could become easier as the Department of Trade and Industry (DTI) announces several State-led support initiatives as part of its Black Industrialists Development Programme.

Unpacking the DTI’s plans for black industrialist development, with the publication of a “very early draft” Black Industrialist Policy Framework, DTI director-general Lionel October said that, with access to finance being the number one constraint for existing and emerging black industrialists, financial support initiatives could provide the shot in the arm needed to accelerate South Africa’s industrialisation.

In line with this, exclusive grants and incentives, as well as a syndicated finance package, would be on offer for qualifying black business within the next few months.

The DTI had set aside a dedicated R1-billion incentive scheme for black industrialists, as well as a separate grant scheme for participating private-sector companies, he told delegates at the recent DTI-hosted Black Industrialists Indaba last week.

Currently, R6-billion a year was disbursed to private-sector companies, creating a significant number of jobs – an initiative that had revitalised the clothing sector and led to the development of a R20-billion automotive sector.

Further, through development finance institutions (DFI’s), including the National Empowerment Fund, the Development Bank of Southern Africa, the Land Bank, the Industrial Development Corporation and the Public Investment Corporation, besides others, the DTI would establish a syndicated low-interest-rate facility to set aside a “pool of capital” for black industrialists.

Many DFIs employed measures similar to those of commercial banks when determining eligibility for credit and, with a limited pool of financiers, the high cost of borrowing and borrowing conditions that cannot be met, black industrialists were often sidelined.

“We have now been able to convince all our DFIs [that their time for] operating as banks has come to an end,” Trade and Industry Deputy Minister Mzwandile Masina said, adding that loans would be anchored on the needs of the black industrialist.

The DTI also indicated that it intended to launch the Black Industrialists Development Programme within a month.

The department unpacked its “very early draft” of the Black Industrialists Policy Framework at the recent Black Industrialists Indaba, an event used to canvass stakeholder input for a comprehensive policy document, which would be presented for Cabinet approval as soon as possible.

The Black Industrialists Development Programme, first tabled in August last year, aimed to create more than 100 black industrialists within three years and put black industrialists at the forefront of South Africa’s industrialisation efforts.

The policy would also align with South Africa’s Industrial Policy Action Plan and its current black economic-empowerment programme, while unlocking financial and nonfinancial support exclusively for black industrialists, who were expected to drive the country’s industrialisation ambitions.

“We are in [Operation] Phakisa mode, so this [policy for the Black Industrialists Development] Programme will be finalised in a month . . . [and] the programme must start running [immediately],” he said.

“We will have a concrete [policy-driven] support package [for existing and emerging black industrialists],” October said of the policy that had a “golden triangle” of three driving forces, namely the State, education and training institutions, and the private sector.