IDC says funding criteria will not be driven by BEE
It has set aside about R800m for relief to firms hard hit by Covid-19, with race not a criterion for which receive it
The Industrial Development Corporation (IDC) says its relief measures to support distressed firms during the Covid-19 lockdown and beyond will not necessarily be driven by BEE considerations.
The IDC is a key national development finance institution set up to promote economic growth and industrial development. It also focuses on driving regional development, the economic empowerment of communities, and growing black industrialists. It has set aside about R800m to provide relief to firms hard hit by the coronavirus crisis, with R300m earmarked for small businesses. The IDC says it has received more than a million inquiries for funding in the past month.
“We do not hold a steadfast belief that we should choose those that we support on the basis of black and white. We give attention to all citizens,” IDC CEO Tshokolo Nchocho said in response to questions from MPs, during a briefing in parliament on Wednesday.
Nchocho said that while the IDC has transformation goals in mind to foster greater economic inclusion, it has a generic mandate of broadly advancing industrial development.
“In our work we do not discriminate on the basis of whether someone does not have BEE credentials,” he said.
BEE has been a thorny issue in recent weeks after tourism minister Mmamoloko Kubayi-Ngubane said that support to distressed firms and establishments in the sector will be based on broad-based BEE (B-BBEE) codes. Small-business development minister Khumbudzo Ntshavheni said in April that her department will also consider BEE in its relief programme, though she had earlier vehemently dismissed suggestions that such an approach would be adopted.
Union Solidarity and lobby group AfriForum subsequently launched a court bid to challenge the BEE considerations. However, in April, the North Gauteng high court ruled that the department of tourism’s decision to consider empowerment codes as criteria for assisting companies was not unlawful.
Solidarity said it would now approach the Constitutional Court to challenge the use of race as a criterion to grant companies relief.
Nchocho also said the IDC supports the opening up of the economy as soon as possible.
“It’s a balancing act. We have to consider the health implications while we think about opening up the economy. We have started by participating in sector forums and the nature of conversation is on the kind of safety measures we can put in place to ensure that people’s lives are not endangered when we open up the economy,” Nchocho said. “Our interest is to see as much of the economy opened as possible because we are exposed to many of the sectors.”