The National Employers’ Association of South Africa (Neasa) has called on President Cyril Ramaphosa to set aside BEE requirements when it comes to the allocation of the proposed support package to address the needs of vulnerable firms.
President Ramaphosa said in his recent address to the nation that the Industrial Development Corporation (IDC) together with the Department of Trade, Industry and Competition (DTIC) had put together a support package of more than R3 billion in industrial funding to address the needs of vulnerable firms and to fast-track the financing of companies’ critical to efforts in the fight against Covid-19 and its economic impact.
“Although not much is known about the qualification criteria for this fund, what seems clear is that R200 million which has been allocated to the National Empowerment Fund (NEF) for businesses involved in medical equipment and essential food production and distribution, is limited to companies with not less than 51% black ownership,” says Neasa’s Gerhard Papenfus. .
“A further R200 million has been allocated to the Small Enterprise Finance Agency (Sefa) for purposes of Covid-19-related assistance. In this case South Africa’s demographics, among others, will determine the allocation of the aid. Businesses owned by minorities (whites, coloured and Indian people), regardless of any other determining factor and economic contribution, can only access less than 20% of this critical aid,” he said
Papenfus believes the impact on black workers employed by potentially deserving companies owned by minorities will also be felt, both in the short term and perhaps in the months and years to come when the lingering effect of Covid-19 hits South Africa. “The impact of BEE policies on SMMEs is already a massive contributing factor in South Africa’s unemployment crisis.”
