The South African government has proposed the establishment of a R100 billion Transformation Fund to support black-owned businesses and promote inclusive economic growth, in what is being hailed as one of the boldest empowerment strategies in post-apartheid South Africa.
The fund, spearheaded by the Department of Trade, Industry and Competition (the dtic), aims to address the structural challenges that continue to exclude black entrepreneurs from mainstream economic activity—particularly in township and rural communities.
A draft concept document was released for public comment this week by Trade and Industry Minister Parks Tau. If adopted, the fund will be capitalised at R20 billion per year over a five-year period.
A Tool for True Economic Redress
Rooted in Section 9(2) of the Constitution, which mandates redress for historical injustices, the Transformation Fund will provide financial and non-financial support to majority black-owned and managed businesses, with a specific focus on women, youth, and people with disabilities.
“This fund is a direct response to the persistent inequalities that plague our economy. We need a mechanism that enables meaningful participation of black South Africans in wealth creation and economic production,” reads the document.
Backed by government departments, state-owned entities, and the private sector—including contributions via B-BBEE Enterprise and Supplier Development (ESD) commitments—the Fund aims to provide a coordinated, accountable, and high-impact model for economic transformation.
Focus Areas: Townships, Rural Economies, and Productive Sectors
Unlike existing fragmented ESD mechanisms, the Transformation Fund proposes a more inclusive approach, with earmarked funds for township businesses, rural enterprises, and high-growth sectors like agriculture, tourism, ICT, manufacturing, and renewable energy.
Key pillars include:
- Access to markets and technical support
- Concessionary grants and equity funding for high-risk businesses
- Dedicated support for designated groups
- Training and accreditation support
- Infrastructure and real estate development in townships
“It’s not just about funding, but about building resilient ecosystems in communities that have long been excluded from the economy,” the document notes.
Transparent Governance and Inclusive Oversight
The Fund will be managed through a Special Purpose Vehicle (SPV) overseen by a board composed of public and private sector representatives. An Oversight Committee, including ministers and business leaders, will ensure accountability and compliance with B-BBEE objectives.
A unique feature of the Fund is the proposal to issue B-BBEE scorecard credits and possible tax deductions to contributing entities, providing immediate value for corporate participants.
Call for Public Comment
The concept paper is now open for public input until 7 May 2025. Stakeholders and members of the public are encouraged to send their submissions to:
📧 transformationfund@thedtic.gov.za
“We are building a transformation index and new financial architecture that ensures the aspirations of the Government of National Unity are met with measurable outcomes,” said Minister Parks Tau in a statement.
