The Industrial Developmental Corporation (IDC) has announced that it had approved funding amounting to R8,4-billion in South African investments for the financial year ended March 2011.
This is the highest level ever for South African-based investments. Funding approvals during the year under review are expected to create 19 650 full time jobs and save an additional 11 650, with a combined impact on employment of 31 300, up from 25 000 in 2010. An additional 8 100 jobs are expected to be created through direct linkages to activities in the informal economy.
The South African economy recovered steadily from the recent recession, with the pace of growth gaining momentum towards the latter part of 2010 and firming in the opening quarter of 2011.
Speaking at the results announcement, IDC CEO Geoffrey Qhena says, “We have retained our focus both on preserving and growing high impact manufacturing capacity, and have succeeded in improving our impact on job creation.
“We recorded a profit of R2,7-billion during the financial year, as a result of improved profitability from operations, performance of our equity accounted investments, containment of operating expenses and lower impairments.”
In the year under review, the IDC embarked on a more proactive approach to building industrial capacity development.
Of the total new approvals, 97% were in the priority sectors as identified in the New Growth Path (NGP). These include manufacturing, mining value chain and infrastructure and agriculture.
In an effort to ensure provincial equity, 49% of approvals went to developments in provinces other than Gauteng, Western Cape and KwaZulu-Natal.
“The IDC continues to leverage its portfolio to improve development outcomes. This includes creating ring-fenced schemes to subsidise industry development, such as the R10-billion Gro-e-Scheme with concessionary terms aimed at job creation, which was launched in February 2011,” says Qhena.
Furthermore, of the R2-billion UIF scheme launched in May 2010, R1,5-billion has already been approved, facilitating the creation and saving of more than 17 000 jobs.
The corporation has also approved R4,1-billion of the R6-billion allocated to assist companies in distress.
The IDC will continue to be a key implementer of government policies (NGP and IPAP2). It further aims to continue influencing policy to create a more enabling environment for industrial development. More importantly, it will seek to be more active in early stage project development.
“IDC will make available R102-billion over the next five years for investment. To achieve this level of investment, the partnership of various stakeholders and social partners is key – these include businesses, co-funders, labour, government and civil society,” concludes Qhena.