Draft Transformation Fund Concept Document

The Minister of Trade, Industry and Competition, Mr Parks Tau has published the Draft Transformation Fund concept document for a 30-day public commentary period.

Comments can be emailed to the following address [email protected] by no later than Wednesday, 7 May 2025.

View: DTIC Statement

According to the Minister, the aim of the fund is to aggregate especially Enterprise and Supplier Development (ESD) funds in support of transformation and the participation of and sustainability of black-owned enterprises in the economy.

“This provides an opportunity for the 7^th Administration, working with the private sector to increase the effective economic participation of black-owned and managed enterprises, including small, medium and micro enterprises and co-operatives and enhance their access to financial and non-financial support in line with the requirement of the B-BBEE Act” says Tau.

It is expected that an amount of R100 billion will be aggregated over the term of the current administration through a joint effort by government in partnership with the private sector. “We firmly are in pursuit to transform the economy as guided by the Vision 2030 of the National Development Plan, which is to eliminate poverty and reduce inequality. Our Constitutional imperative places a collective burden on all of us to advocate for equality and redress”, emphasises Minister Tau.

The objectives of the fund are as follows:

• Promote economic transformation in order to enable meaningful participation of black people in the economy.
• Improve access to funding for Black owned and controlled enterprises.
• Empower and support Black owned and controlled enterprises participation in value chains across key sectors of the economy.
• Mobilise financial resources from the private and public sector using B-BBEE legislation.

The Minister would like to affirm that the requirements of the Fund are no additional requirements for entities over and above what currently exists in the B-BBEE policy. The B-BBEE policy through the Codes of Good Practice requires that entities must contribute through Enterprise and Supplier Development (ESD) in the 3% of Net Profit After Tax (NPAT), on development of black suppliers, black industrialists and SMMEs to broaden the industrial and services base of our country.

“Through the Transformation Fund, we maintain this principle of establishing partnership between established businesses and emerging businesses as well as diversification of suppliers within the value chains, as contained in the B-BBEE Codes. However, we would like to see a much more impact and spending on relevant ESD activities that must lead to growth and sustainability of black owned enterprises and SMMEs, by having a coordinated effort”, says Tau.

Particular attention will be given to businesses owned by women, youth and people living with disabilities especially those based in rural and township areas. These groups have historically faced significant barriers to economic participation, and the challenges of unequal access to resources and opportunities remain deeply entrenched in South African society.

Their meaningful participation in key sectors of the economy such as manufacturing, agriculture, tourism is vital for stimulation of economic activities across all regions of our country with their unique potential.

In terms of governance, says Tau, we will be putting in place governance structures that will ensure that there is accountability to both government and private sector, transparency and efficiency in managing the fund. We will be establishing a Special Purpose Vehicle that will have accountability to an Oversight Committee and a board with required skills and capacity.

During the 30-day commentary period we will be having sessions with stakeholder to create awareness while soliciting more inputs.

Enquiries can be directed to Mr Bongani Lukhele on tel (012) 394 1643 or cell 079 508 3457 and on WhatsApp 074 2998 512 or email at [email protected]

Issued by: The Department of Trade, Industry and Competition (the dtic)