SA's R9bn jobs fund open for business
8 June 2011
South Africa's R9-billion Jobs Fund, which aims to help the government create 150 000 jobs over the next three years, is now accepting applications from companies and non-governmental organisations with innovative job-creation projects.
Finance Minister Pravin Gordhan told a media briefing before his Budget Vote in Parliament in Cape Town this week that the aim was to give out R2-billion in grants this financial year to those in the private sector.
These would either be in the form of matching grants, or grants where companies and organisations had committed a portion of funding to the respective project.
The fund will run for three years and is administered by the Development Bank of Southern Africa (DBSA).
Gordhan said his department chose the DBSA to administer the fund because of the development bank's footprint - which covers over 200 municipalities across the country and its experience in funding community development
Paul Kibuuka, who heads the DBSA's development fund, said the fund aimed to create 150 000 jobs over three years, adding that each job funded should last for at least one year.
He said the fund aimed to target between 1 000 and 2 000 projects.
Four target funding areas
The fund is targeted at established companies with a good track record and that plan to expand existing programmes or pilot innovative approaches to employment creation, with a special focus on opportunities for young people.
Gordhan said the fund would target four areas, namely enterprise development, local infrastructure development, support for work seekers and institutional capacity building.
Enterprise development includes assistance to local procurement, marketing support, equipment upgrading or enterprise franchising.
Local infrastructure development included the funding of light manufacturing zones and communication links to market goods, he said.
Support for work seekers would include setting up networks and projects that can provide training and career guidance, while improving institutional capacity would include funding internships and mentorship programmes.
Financial assistance for small or micro businesses is not covered through this fund, as the government has other programmes to assist entrepreneurs.
These include the Small Enterprise Development Agency for business support; Khula, the National Empowerment Fund, the South African Micro-Finance Apex Fund and the Industrial Development Corporation for small business funding; and the Technology Innovation Agency for innovation funding.
The closing date for the first round of applications is July 31 and a large portion of applications will be processed electronically. Those interested, as well as applicants, can contact the Jobs Fund on 086 100 3272 or visit www.jobsfund.org.za
Job creation possibilities
The National Treasury will continue to monitor and assess the performance and sustainability of projects funded through the initiative and all projects must be run for at least three to five years.
Gordhan said the level of urgency around the country's high level of unemployment meant that the country required a new energy and infusion in the job creation process.
He said the fund would not compete with other government initiatives, but rather complement them: "One hopes that this will inspire new forms of innovation, new forms of creativity and open new areas of job creation possibilities," he said.
'A bold new initiative'
The fund's investment committee will be chaired by DBSA deputy-chairperson Frans Baleni, who said that investment would target poor and rural regions.
The success of the jobs fund depended on strong co-operation between the private sector
and the government, he said.
He said the team had been given directives to process application timeously. The technical team, which processes applications, would meet weekly and the investment team, which makes the final selection, would meet monthly.
"We are expected to submit bi-monthly reports to the shareholder (the National Treasury), so there would be no time to relax," he said.
Business Trust CEO Brian Whittaker, who has been chosen as the fund's vice-chair, said the fund was a bold new initiative that would release a degree of creativity on tackling unemployment.
"There's an opportunity here to do something innovative and that's what excites me," he said.