Govt Seeks Public Input on Draft Transformation Fund to Drive Economic Inclusion

According to Minister Tau, this initiative aligns with the government’s broader economic transformation agenda, reinforcing South Africa’s Vision 2030 under the National Development Plan (NDP).

In a bid to bolster economic transformation and inclusivity, Trade, Industry, and Competition Minister Parks Tau has unveiled the Draft Transformation Fund concept document for public commentary. The government has called upon members of the public, business stakeholders, and industry experts to submit their inputs and comments between March 20 and May 7, 2025.

The primary objective of the proposed Transformation Fund is to aggregate Enterprise and Supplier Development (ESD) funds to enhance the participation, transformation, and sustainability of black-owned enterprises in the South African economy. With an ambitious target of R100 billion over the current administration’s term, the fund seeks to be a game-changer for black-owned businesses, particularly small, medium, and micro enterprises (SMMEs) and cooperatives.

Advancing Economic Transformation

According to Minister Tau, this initiative aligns with the government’s broader economic transformation agenda, reinforcing South Africa’s Vision 2030 under the National Development Plan (NDP). “We are committed to transforming the economy, reducing inequality, and eliminating poverty. This fund presents an opportunity for the seventh administration, working in collaboration with the private sector, to increase meaningful economic participation by black-owned and managed enterprises,” he stated.

The fund’s objectives include:

• Promoting economic transformation to enable substantial participation of black entrepreneurs and businesses in the economy.
• Improving access to financial resources for black-owned and controlled enterprises.
• Supporting black businesses in integrating into the value chains of key economic sectors.
• Mobilizing financial contributions from both public and private sectors in line with the Broad-Based Black Economic Empowerment (B-BBEE) Act.

Tau emphasized that the fund will not introduce additional regulatory burdens beyond the existing B-BBEE framework. Under the current policy, businesses are already required to allocate 3% of their Net Profit After Tax (NPAT) towards ESD efforts aimed at developing black suppliers, industrialists, and SMMEs.

Enhancing the Impact of Enterprise and Supplier Development

The minister highlighted that while the ESD policy has facilitated some level of support for black-owned enterprises, a more structured and impactful approach is necessary. “Through the Transformation Fund, we want to ensure that there is greater impact and a more coordinated effort in supporting black businesses. This means aligning established businesses with emerging enterprises and encouraging diversified supplier networks,” he explained.

A key feature of the fund will be its focus on historically disadvantaged groups, particularly women, youth, and people living with disabilities. These groups have long faced systemic barriers to economic participation, and targeted interventions will be implemented to bridge these gaps. The fund will prioritize businesses based in rural and township areas, where economic challenges are often most pronounced.

“Their meaningful participation in industries such as manufacturing, agriculture, and tourism is crucial for driving economic activity across all regions of South Africa. We need to harness the unique potential of businesses in these areas,” Tau remarked.

Governance, Oversight, and Transparency

To ensure effective management and accountability, the Transformation Fund will operate through a Special Purpose Vehicle (SPV). This entity will report to an Oversight Committee and a dedicated board composed of experts with the necessary skills and experience.

“We are putting in place robust governance structures to guarantee transparency, efficiency, and accountability to both the government and the private sector. This will help build trust and ensure that resources are allocated effectively,” Tau assured.

During the public commentary period, the government will host engagement sessions with various stakeholders, including business leaders, industry bodies, and civil society groups. These sessions aim to create awareness about the initiative while gathering valuable input to refine and optimize the fund’s framework.

A Call for Public Participation

The Department of Trade, Industry, and Competition encourages all interested parties to participate in the consultation process and submit their views. The feedback will play a crucial role in shaping the final structure and implementation strategy of the Transformation Fund.

“This is a critical moment for economic transformation in South Africa. By working together, we can create a more inclusive economy that provides real opportunities for black-owned enterprises to thrive. We urge stakeholders to take advantage of this period to contribute their insights and ensure the fund effectively meets its objectives,” Tau concluded.

For more information and details on how to submit comments, stakeholders can visit the official website of the Department of Trade, Industry, and Competition. Public consultations and workshops will be scheduled throughout the commentary period to facilitate greater engagement.

Conclusion

The proposed Transformation Fund represents a significant step in South Africa’s ongoing efforts to foster a more inclusive economy. By mobilizing resources from both public and private sectors, the fund aims to create a lasting impact on black-owned businesses, ultimately driving economic growth and reducing inequality. With a collective approach and constructive input from stakeholders, this initiative could serve as a powerful tool for achieving meaningful economic transformation.