Black Business Council rejects funding deal for industrialists
FNB and the DTI signed a pledge at the unveiling of the Black Industrialist Scheme to improve access to funding
The Black Business Council (BBC) has scoffed at the Department of Trade and Industry’s and First National Bank’s (FNB’s) partnership to bolster manufacturing through the black industrialists programme, dismissing it as nothing more than a public relations exercise.
FNB and the department signed a pledge at the unveiling of the Black Industrialist Scheme, to improve access to funding for black industrialists to roll out 100 programmes by March 2018. The partnership would facilitate information-sharing regarding the department’s incentive programmes.
BBC secretary-general George Sebulela said: "The way the agreement has been entered into, it sounds like an agreement to utilise FNB for access to information rather than finance."
The BBC would have preferred to see an agreement about funding at a discounted rate rather than an agreement about information sharing.
"The statement does not detail access to finance. What finance options are black industrialists being offered that makes FNB different?"
Sebulela said the black industrialists programme was one of the major policy instruments that could be used to achieve radical economic transformation, for which the BBC has long made a call.
This comes as the manufacturing sector has been under pressure, with the Manufacturing Circle calling for a strategy to reverse the decline of the industry and for the creation of 1-million new jobs. In May, manufacturing production fell 0.8%, compared with May 2016.
The Absa purchasing managers index (PMI) fell below the neutral 50-mark in June to 46.7 index points, indicating a contraction in the sector.
Manufacturing Circle executive director Philippa Rodseth said the numbers and the PMI both indicated that the sector was contracting, but she remained upbeat that manufacturing was the key in turning around the economy.
Manufacturing Circle chairman André de Ruyter said that the Treasury and the Manufacturing Circle had a shared "priority to grow manufacturing and to reindustrialise the economy, as an important step in reversing recent ratings downgrades and boosting investment, economic growth and employment".
So far, the black industrialists programme has approved 52 projects with an estimated value of R4.5bn and created 9,000 jobs. Versions of the programme are being mirrored in other industries, based on the success in the manufacturing sector.
The Black Industrialist Scheme was an important step in reindustrialisation, says Trade and Industry Minister Rob Davies. The scheme was set up as an incentive programme to help black entrepreneurs access finance and markets, to beef up skills development and standards, and quality and productivity improvement.
"Getting into the value-added space [of manufacturing] is imperative. The challenge is to promote industrialisation generally but also greater inclusivity in the manufacturing sector."
It was important for the department to supply skills development and not just ownership deals, Davies said.