The history of the country’s economy had been marred by high levels of inequality that was skewed in favour of the white minority while the black majority were deliberately locked in poverty and squalor. However, the advent of democracy has ensure that government intervenes to reverse this unfortunate legacy by amongst other things formulating transformational policies including affirming black people to funds to enable them to initiate new or expand existing business operations.
The above-mentioned funding model is one of the interventions which is guided by the supply chain management legislation under the auspices of Public Finance Management Act (PMFA) that promotes the utilisation of public funds in a fair, equitable, transparent, competitive and cost effective fashion. For many years the Department of Economic Development, Tourism and Environmental Affairs has been receiving applications for business financing, including unsolicited funding requests, where some of them where clearly defined practical business cases with healthy prospect of success in the competitive business terrain.
However, in view of strict criteria to be considered for funding by government entities, some applicants couldn’t meet the basic requirements which implied that many aspirant entrepreneurs couldn’t make the cut and their good intentions of contributing to the province’s economy couldn’t be realised which had adverse implications for the future of the province.
The new funding policy has been therefore initiated to address possible gaps that could have resulted in many potential contributors to the economy of the province not realising their business dreams. This policy framework will therefore held guide the Department in selecting business applications and projects that have potential to meet the fundamental tenants of transformation and sustainable economic advancement whilst eliminating unfair and irregular practices that sometimes cloud the noble policies of transforming the country’s economy. In a nutshell the fund had been established to:
- Provide a framework for grant funding to initiatives that promote the mandate of the Department such as those targeting manufacturing, SMME development, localisation, tourism, economic infrastructure development and job creation;
- Provide a framework for leveraging funding from the private and public sectors in support of broad economic development in the province;
- Support the implementation of radical economic transformation objectives geared towards attaining inclusive and sustainable economic growth;
- Support the promotion of innovation among local entrepreneurs;
- Support and promote growth and competitiveness of priority sectors in KZN as enshrined in the Provincial Growth and Development Strategy (PGDS); and
- Promote industry clusters in order to reposition the province into higher value-added segments of supply chains while increasing equitable participation within these value chains.
Broadly speaking the objective of this funding policy is to provide a clear framework that can be applied to all departmental funding mechanisms that will enable allocation and disbursement of funds that would best support the mandate of the department in a manner that ensures accountability, consistency, fairness, transparency and competitiveness.