Funding from the newly established Transformation Fund will be allocated to various productive sectors of the economy, including the services industry, tourism and agriculture, among others, thereby supporting majority black-owned entities, Deputy President Paul Mashatile has said.

Technical support and market access would be prioritised to ensure sustainability through inclusive interventions, he added during a speech at the launch of the fund on April 30.

“We are going to make sure that the Transformation Fund is at the centre of government, specifically the Presidency, and will work with the Minister of Trade and Industry as well as the key economic cluster Ministers to ensure we meet the set targets, especially in the procurement of goods and services.”

This will include expanding spending aimed at supporting African and black enterprises in townships and rural South Africa led by women, youth and people with disabilities. The National Treasury and the Department of Women, Youth and People with Disabilities have already collaborated to develop such a framework.

The focus is to ensure speed of execution and equally implement the Preferential Procurement Policy Framework Act, he added.

The Transformation Fund was a voluntary fund that aimed to improve the impact of broad-based black-economic empowerment and enterprise and supplier development (ESD) spending by companies, and would not interfere with companies that were implementing successful ESD initiatives of their own, Trade, Industry and Competition Minister Parks Tau said during the launch.

“The Transformation Fund will serve as a strategic vehicle for businesses to embrace change, foster innovation and drive growth. This fund will serve as a catalyst for financial support, guiding organisations through crucial transitions and enabling them to seize new opportunities that arise in the market,” Mashatile emphasised.

The Transformation Fund would help enterprises seeking improved access to capital to remain competitive in the current dynamic environment, and would leverage ESD's potency in driving economic inclusion and participation, he said.

Further, the fund is anchored by private and public sector contributions to the Enterprise Supplier Development and Equity Equivalent Investment Programme obligations.

Additionally, as a centralised fund, administered in partnership with the private sector, it would ensure greater access to funding opportunities, especially in township and rural economies, Mashatile noted.

Investing in a Transformation Fund signified a commitment to progress and a dedication to long-term sustainability. It would enable businesses to navigate challenges with resilience, adjust in response to changing dynamics, and establish themselves as adaptive leaders in their respective industries, he said.

Government is planning to invest in Fourth Industrial Revolution (4IR) skills development to revive economic development, revitalise skills and generate high-quality employment.

“We must take advantage of the African Continental Free Trade Area, which promotes industrialisation by reducing reliance on raw material exports and promoting value-addition.

“The AfCFTA improves our bargaining position in trade negotiations and allows us to attract more foreign direct investment, negotiate better trade deals with other countries and develop diverse industries,” said Mashatile.

Government's approach was informed by the recommendations of the Presidential Commission on the 4IR, which viewed AI as a tool that caould drive social and inclusive economic progress, he added.

The government will also provide a framework for inclusive collaboration between industry, labour, higher education institutions and society to develop new skills and capabilities for the nation through the National Digital and Future Skills Strategy.

“We are implementing measures to increase productivity and develop necessary skills for a knowledge and skills-based economy,” he said.