The National Empowerment Fund (NEF) will become a wholly-owned subsidiary of the Industrial Development Corporation (IDC), according to the Ministers of Trade and Industry and of Economic Development in South Africa.
The development will enable the two institutions to meet considerable demand for funding to black entrepreneurs.
Both the IDC and the NEF have been identified by the Government as central in implementing radical economic transformation and development policies, particularly in light of renewed efforts to develop black industrialists.
The merger will also promote increased broad-based black economic empowerment with a specific focus on promoting black industrialists.
This decision is in line with government policy to consolidate South Africa’s development finance institutions to provide effective support to emerging and existing black entrepreneurs, and thereby enhancing efficient service delivery.
Accordingly, the Department of Trade and Industry and the Economic Development Department will appoint a technical team to drive the process expeditiously, while the Minister of Trade and Industry will continue to provide legislative and policy guidance to the NEF.
The two Ministers expressed confidence that this historic integration of two leading DFIs will enhance the country’s developmental aspirations as outlined by President Zuma in the SONA to open up the economy to new players, give black South Africans opportunities in the economy and indeed to help make the economy more dynamic, competitive and inclusive.
“This is our vision of radical economic transformation,” they said.
Established in 1940, IDC is a national development finance institution set up to promote economic growth and industrial development.
IDC is owned by the South African government under the supervision of the Economic Development Department.