Government Pushes Ahead with R100 Billion Fund for Black Businesses
The South African government is doubling down on its plan to launch a R100 billion Transformation Fund aimed at supporting black-owned businesses over the next five years — equivalent to R55 million a day.
The Department of Trade, Industry and Competition (DTIC), led by Minister Parks Tau, confirmed that the fund will consolidate existing Broad-Based Black Economic Empowerment (B-BBEE) contributions from companies rather than impose new costs.
Under current B-BBEE rules, firms must spend 3% of net profit after tax on developing black suppliers and small businesses. The Transformation Fund will pool these enterprise and supplier development (ESD) contributions to provide both financial and non-financial support — including mentoring, training, and access to markets.
“This isn’t a new burden on companies,” Tau said. “It’s a coordinated approach to channel resources where they can make the biggest impact.”
Stronger Oversight Promised
The revised proposal introduces tighter governance:
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An independent board with private and public sector representatives.
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Investment committees operating autonomously.
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Transparent reporting and a multi-stakeholder oversight council to ensure accountability.
Companies contributing to the fund will also earn BEE scorecard points immediately, eliminating the need to run their own ESD programmes.
Scepticism from Critics
Despite the assurances, economists and opposition figures are unconvinced.
Toby Chance from the DA said the plan ignores key structural barriers like policy instability, weak investor confidence, and energy insecurity.
Stuart Theobald, chair of Krutham, warned that deploying R20 billion a year productively is unrealistic:
“The government talks about spending, not outcomes. Disbursing R55 million a day into viable businesses isn’t remotely feasible.”
Hiten Keshave, CEO of Unconventional CA, added that centralising transformation may again benefit a small elite:
“Real transformation happens when corporates grow their own suppliers — not when responsibility is outsourced to a fund.”
The Bottom Line
While the Transformation Fund promises a more structured and transparent model for black enterprise development, critics warn that scale without impact could turn it into another costly compliance exercise rather than a true driver of inclusive growth.
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