Empowerment funding target should be doubled, NEF’s Mthethwa says
CEO Philisiwe Mthethwa suggests this figure be invested in the economy with a 61% and 39% split between targeted investments and the black industrialist programme
The empowerment financing target of R122bn under the financial sector charter is too low and should be increased by an additional R245bn, National Empowerment Fund (NEF) CEO Philisiwe Mthethwa has proposed. Mthethwa said the R122bn figure was too low for a sector that had assets estimated at R4.8-trillion at the end of September 2016. Just taking the 17 financial services companies listed on the JSE, there was a 4% shortfall between the R65.2bn worth of broad-based black economic empowerment deals they have concluded and the 10% ownership target set out in the financial sector charter. These companies have a total market capitalisation of about R1.6-trillion. A study of these 17 companies established that they had only achieved an average of 6% direct black ownership. "Since the 10% financial sector ownership target is below the 25% ownership target in terms of the codes, the companies will have to spend an additional R244.6bn in empowerment finance to make up for the 15% gap," Mthe...
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