A fund aimed at supporting small and medium sized enterprises (SME) to grow the economy has been established, with the private sector having contributed over R1 billion to its coffers.
Addressing the media following the Presidential CEOs Initiative meeting on Friday, President Jacob Zuma said the SME Fund that will make equity investments in small enterprises with growth potential.
“The fund has been established, a Board of Directors appointed and thus far, the private sector has contributed almost R1.5 billion,” the President said.
The meeting was convened at the Union Buildings to give President Zuma an opportunity to get a report back on work that has been done by business and government, with the support of labour, to build confidence in the economy and reignite growth.
Also speaking after the meeting, Finance Minister Pravin Gordhan said the contribution by the private sector is a formidable achievement.
Progress made since the last meeting in May includes a youth employment programme that will aim to place one million youth in paid internships in the private sector over a three-year period.
The cost of the internships will be borne by the private sector and supported by a negotiated package of government incentives.
President Zuma said consultative processes among relevant stakeholders in government, labour, business and civil society will start, with further details to be announced in due course.
The Presidential CEOs Initiative will address the proposal raised by the Black Business Council (BBC) for black fund managers to be involved in the management of the SME Fund.
In line with government’s Nine-Point Plan, work has been done to analyse eight economic sectors and identify areas for new investment and growth.
Parties at the meeting, particularly business, also prioritised the establishment of an Agricultural Growth Fund. Emphasis was also placed on measures to support South Africa’s tourism marketing strategy and revitalising declining industrial areas, particularly the Vaal Triangle.
SA’s economic standing
President Zuma commended the work done by the private sector, in partnership with labour and government, to meet investors and rating agencies. He said this Team SA initiative has built confidence and ensured a positive outcome in the June ratings review.
“This partnership sees its work as initiating activities that are intended to foster inclusive growth through joint activities by all social partners. This will be ongoing work involving business, labour and government,” said President Zuma.
Minister Gordhan said the test for South Africa will be to prove to rating agencies that the country is serious about the commitments it has made to improve prospects for growth.
“The test for us as a country and this partnership … arising from the work we did in the first six months is … [if we] are keeping to the commitments we made to ourselves and to our country … [to] attend to certain growth areas in the economy,” said Minister Gordhan.
South Africa will meet with Moody’s Investor Services when the agency is in the country on 21 and 22 September.
The Minister expressed confidence that South Africa will have sufficient proof about its seriousness to get things right.
“We feel confident that the work we have been doing together will provide sufficient evidence that we are serious about the commitments we made to improve prospects for growth, stabilise our financial situation and ensure that government keeps to its undertaking to continue with fiscal consolidation, although it will be very tough in a low growth environment.”
Standard and Poor’s will be in South Africa in early November, while Fitch will be in South Africa in early December.
“The rating agencies and others want to see proof that we’ve taken a few steps in the direction … [we said] we would take,” said the Minister.
Meanwhile, President Zuma said government is encouraged by the work done thus far by the initiative.
“It is encouraging that we are working together in this manner, as business, government and labour. It is an important partnership, which augurs well for the economy of our country and well-being of our people,” said President Zuma.
The President also urged all sectors of society to support the initiative. – SAnews.gov.za