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Background

The Province of KwaZulu-Natal is the second largest economic hub in the country after Gauteng and its diverse sectors of the economy amongst the ingredients that make it tick. At the helm of the province’s effort to increase its contribution to the nation’s socio-economic development is the Department of Economic Development, Tourism and Environment Affairs which boasts an array of public entities that serve as levers of implementation of the portfolio’s policies and strategies. At the same time the Department, as the custodian of the province’s economic advancement, it works in tandem with a variety of other stakeholders in the province’s economy such as the private sectors, organised labour and civic organisations.

The Department’s activities are however linked to the national policies and strategies inclusive of transformational interventions directed at addressing the racially inspired socio-economic disparities engineered under the apartheid government rule. It is that reason that following the landmark Provincial Procurement Indaba in 2015 that committed the province to the activation of Radical Economic Transformation directed at affirming the historically excluded sections of the society to the equitable share of the country’s economy. 

Using massive government procurement system worth billions of rand, the provincial government established a practical framework to help co-ordinate the transformation of the province’s economy under the banner of Operation Vula where around 56 sectors of the economy were identified as potential vehicles to accelerate socio-economic transformation in the province. 

These sectors that feature agriculture, fertilisers, bakery, clothing and textiles and as well as construction are tipped to draw more black people into the mainstream of the economy where government departments at all levels serve as primary market for emerging black enterprises. Meanwhile, several interventions have been activated in KwaZulu-Natal through the Department and all of these constitute the pillars of the grand Operation Vula that include: 

  • Radical Agrarian Radical Economic Transformation (RASET):- with small scale farmers funded to till their land to supply fresh produce to government departments though district based fresh produce hubs,
  • Black Industrial Programme:- initiated at national level to encourage black business people to access high profile economic sectors such as manufacturing, processing and construction,
  • Bulk Buying:- directed at instilling effective entrepreneurial skills amongst emerging business people who are encouraged to purchase retails supplies from manufacturers or suppliers in large quantities to achieve economics of scale that guarantee good profit margins essential for sustainable growth,
  • Rural & Township Economic Revitalisation:- to motivate entrepreneurs operating in the formally neglected communities to access technical and financial support to run different business operations to create more economic activities in these areas,
  • Youth Business Development Fund:- this had been established to stimulate youth interest in participating in the economy as entrepreneurs. 

Moreover, working jointly with social partners in the private sector, the province is determined to fast-track growth that would ensure the expansion of the economic cake essential to drive sustainable transformation in the province’s economy. 

Besides government’s role in the economy, KwaZulu-Natal has taken a pole position with respect to the mobilising of investment commitments from local enterprises, especially those operating in the first economy space where in excess of R200 billion worth of investments had been declared by different business organisations. 

Although the province was experiencing positive economic outlook, there are many aspirant entrepreneurs from historically marginalised communities that still finding difficult accessing funding to transform their entrepreneurial ideas into practical business operations. Most mainstream financial institutions are reluctant to grant them financial support hence government becomes their reliable hope to assist them enter the business world. 

The provincial government has therefore felt necessary that amid numerous state driven business funding models, the concept of Operation Vula would have to consider funding applications from emerging entrepreneurs with bankable business plans to be able to effect meaning socio-economic transformation. 

The KwaZulu-Natal Operation Vula Fund Policy had been conceived to support business operations that promise to survive in the highly competitive business environment. This is an intervention that speaks to the genesis of Radical Economic Transformation policy that seeks to equate economic growth with active participation of black people in the country’s economy in terms of ownership, management and control of various enterprises.

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