The National Empowerment Fund (NEF) and the Competition Commission have signed a memorandum of understanding (MoU) aimed at fostering collaboration in key areas of economic development and market regulation.

The four primary areas of collaboration are merger control; development fund management; market research; and the establishment of an Employee Ownership Fund.

These elements are designed to provide comprehensive support and drive sustainable growth for enterprises owned by historically disadvantaged persons (HDPs), the organisations say.

The partners will work together to manage and administer development funds created from penalties imposed by the Competition Tribunal on firms found to be in contravention of competition laws.

These funds will be used for developmental purposes within impacted industries, with the NEF positioned to effectively disburse and manage these resources.

The terms of the funds will be aligned with the conditions set by the tribunal, ensuring they meet specific industry needs, the commission says.

Additionally, for mergers and acquisitions, the commission will consult with the NEF to address issues affecting HDPs and small, medium-sized and microenterprises (SMMEs).

The parties will also exchange information, provide advice and collaborate on establishing merger remedies and development funds specifically tailored for HDPs. The agreement emphasises the importance of sharing market research and sector-specific information, the partners say.

"The commission will provide valuable market insights that align with the NEF’s mandate to enhance the economic participation of HDPs. This includes sharing data on market structures, opportunities for HDPs, and barriers to entry, which will inform funding strategies and development programmes."

Further, the MoU will see the establishment of the Employee Ownership Fund. The NEF and the commission will contribute equal monetary resources to this fund, which will be managed and administered by the NEF.

The Fund aims to promote and unlock value chain opportunities, facilitating greater uptake and impact.

The partners will also enter into a memorandum of agreement to regulate their collaboration regarding the Employee Ownership Fund and the development of a pipeline for meaningful and impactful projects, they say.

Meanwhile, the MoU highlights the parties' commitment to supporting the growth of HDP industrialists and enhancing market competitiveness while maintaining their respective operational independence.

It also outlines principles for cooperation, information sharing, and confidentiality, ensuring a robust and transparent collaboration. The MoU replaces an agreement signed between the two parties on the same areas of cooperation in 2021.

“This MoU is a testament to our dedication to empowering black industrialists and elevating market competitiveness, while preserving the operational independence of all parties involved.

“It establishes a framework for effective cooperation, transparent information sharing, and confidentiality. This partnership will pave the way for meaningful advancements in economic development,” says NEF chairperson Dr Nthabiseng Moleko.

“This MoU signifies a major advancement in our mission to support black-owned businesses. By partnering with the commission, we are enhancing our capacity to provide crucial resources and opportunities for growth. This collaboration will greatly strengthen our efforts to foster economic development and ensure that black industrialists have the support they need to thrive,” notes NEF acting CEO Mziwabantu Dayimani.

“This agreement is a testament to our shared commitment to fostering inclusive growth and advancing the participation of particularly historically disadvantaged persons in South Africa’s economy. Through this partnership we aim to deepen our collaboration and leverage each other’s expertise to drive meaningful economic development,” says Commissioner Doris Tshepe.