08 - 05 - 25

South Africa launches Transformation Fund to drive economic inclusivity

Deputy President Paul Mashatile has hailed the launch of the Transformation Fund as a significant step towards fostering inclusive economic growth and transformation in South Africa. Speaking at a Business Breakfast Session at the Freedom Park Heritage Site and Museum in Pretoria recently, Mashatile described the day as historic, marking a key milestone in the nations journey toward economic transformation. He expressed strong support for the fund, stating it would act as a strategic vehicle for businesses to embrace change, foster innovation, and drive growth.



According to Mashatile, the fund will serve as a catalyst for financial support, guiding organizations through essential transitions and enabling them to seize new market opportunities. The Transformation Fund, which combines contributions from both public and private sectors, aims to unlock the potential of Enterprise and Supplier Development (ESD) and the Equity Equivalent Investment Programme, with a focus on economic inclusion for historically disadvantaged communities.



Mashatile emphasized the importance of the fund in providing enterprises with improved access to capital, which is crucial for remaining competitive in a dynamic environment. He noted that the fund would unleash the potential of ESD in driving economic inclusion and participation, positioning it at the center of the government’s economic agenda.



The deputy president highlighted the collaboration between the National Treasury and the Department of Women, Youth, and People with Disabilities in developing a framework for the fund. He stressed the need for speedy execution and the implementation of the Preferential Procurement Policy Framework Act to meet targets, particularly in the procurement of goods and services.



Mashatile commended the involvement of the private sector in co-funding the initiative, stating that the fund is anchored by contributions from both sectors to meet ESD and Equity Equivalent Investment Programme obligations. He noted that the centralized administration of the fund would enhance access to funding, particularly for Black-owned businesses in rural and township areas.



Funding will be allocated to various productive sectors, including services, tourism, and agriculture, with a focus on supporting majority Black-owned entities. Technical support and market access will be prioritized to ensure sustainability through inclusive interventions. Mashatile underscored the long-term benefits of the fund, which would foster resilience and adaptability in the face of economic challenges.



He also addressed the issue of corruption, asserting that economic transformation cannot be achieved without tackling corruption in both public and private sectors. He pointed out that corruption undermines small businesses by increasing costs and creating instability. To promote an inclusive economy, he called for a commitment to strengthening institutions, fostering transparency, and encouraging public engagement.



Furthermore, Mashatile stressed the need for solutions to improve access to finance for Black businesses, acknowledging that funding deficits contribute to the failure of small enterprises. He noted that while government interventions exist, additional measures are necessary to expand access to funding for SMMEs. He encouraged small businesses to explore government funding programs and support agencies like the National Empowerment Fund and the Small Enterprise Finance Agency.