R2.7bn of funding available to youth entrepreneurs

Wednesday, May 8, 2013

Cape Town – Youth entrepreneurs will have R2.7 billion in funding available to them with the announcement by Minister of Economic Development Ebrahim Patel that the Small Enterprise Finance Agency (Sefa) will put aside R1.7 billion in funding for youth entrepreneurs over the next five years.

This follows the announcement last month by Deputy President Kgalema Motlanthe of a R1-billion fund set up by the Industrial Development Corporation (IDC) to finance youth entrepreneurship.

Presenting his Budget Vote Speech on Tuesday, Patel said Sefa will aim this financial year to approve R220 million in finance to entrepreneurs aged between 18 and 35 years old.

He said Sefa in 2012/13 approved loans to the value of R435 million - which is 106% higher than the combined approvals made by its predecessors -  the SA Micro-finance Apex Fund (Samaf) and Khula Enterprise Fund as well as the IDC’s small business finance portfolio.

Sefa was launched in April last year after a merger between Khula and Samaf.

Patel said the IDC was also making progress in funding industrial projects, with funding of R27 billion approved in the last two years – 48% higher than in the preceding two years.

He said IDC funding had helped the country make several inroads into local industrialisation.

South Africa’s first of 240 locally manufactured innercity buses are set to roll off the production line from a Germiston factory in June, to meet orders by the cities of Cape Town and Johannesburg.

Added to this by 2015, two out of three mini-bus taxes will have been assembled in South Africa, while the country had landed an export contract to make trains for Mozambique.

Patel also outlined several large new industrial developments. These include: the expected launch in July of the largest Manganese cinder plant near Hotazel, in the Northern Cape; the investment of R2.2 billion so far by commodities trading giant Noble Resources to set up a soya crushing plant and a R250 million investment by a Turkish investor to restart the Cape based steel mill Cisco in August.

He said the national infrastructure build programme had created about 150 000 jobs, with much of these created by the S’hamba Sonke road building initiative, with 31 000 jobs.

He expected that the number of those employed in infrastructure development to increase significantly over next two decades, on the back of a R4-trillion pipeline of projects.

Patel has also issued a trade policy directive to the International Trade Administration Commission (Itac) to limit the export of scrap metal.

A notice issued by Patel in the government gazette called on exporters, scrap metal merchants, foundries and other stakeholders to comment on the directive.

Briefing media before presenting his budget vote speech, Patel explained that the directive was necessary because large exports of scrap metal, largely to Asia, had led to job losses at many of the country’s foundries.

He pointed out that to produce iron from scrap metal requires less energy than when one uses iron ore to produce iron.

Patel noted that the directive won’t result in a direct prohibition of all scrap metals exports, but that it would none the less have the effect of reducing the scrap metal exports.

Itac will help Patel’s department to recognise the appropriate mechanisms, and have already had extensive consultations with industry stakeholders to come up with such a mechanism.

He said the Competition Commission will launch an enquiry soon into the pricing costs and the state of competition in private health care.

The department also presented a status report on four of the accords – national skills, youth employment, the green economy and local procurement. – SAnews.gov.za

 

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