Zuma’s R10 Billion Job Creation Fund Swept Under The Carpet


The Democratic Alliance (DA) says the Zuma-led government is far from implementing its R10 billion venture capital fund earmarked for job creation as promised.

The party which claims to be concerned about the rising unemployment in the country  said President Zuma and his government  are no where close to launching the venture capital fund that the president announced over two months ago.

The party revealed this after requesting for a briefing at the parliament on government’s plans towards the launching.

Also See: More South Africans Flee SA For Greener Pasture Overseas – CEB

The party said neither Minister of Finance Pravin Gordhan nor Minister of Small Business Development, Lindiwe Zulu, could provide substantive details on the mandate, composition, governance structures, funding, board of directors or launch date of the venture capital fund that President Zuma announced on 9th May.

“This means that the job creation promised by this venture capital fund will be stalled because of government’s hollow commitment to placing job creation at the apex of its agenda.”

The fund, which was aimed at kick-starting South Africa’s economy and avoiding a ratings downgrade, was one of the three work streams set up under Minister Gordhan and BUSA President, Jabu Mabuza.

President Zuma and his deputy Cyril Ramaphosa had on May 9th, chaired a meeting of chief executive officers of major companies and leaders of labour unions to discuss long and short term measures to grow the economy and create job opportunities.

 In the hastily arranged press conference, the president acknowledged that supporting small and growing businesses is a key ingredient to growth and job creation.

“There is a need for some concrete initiatives which ensure a turn-around in the country economic fortunes,” President Zuma stated on May 9 2016

“The first initiative is a joint private and public sector fund for small business support. It will be established with roughly 50:50 contributions by the partners.

“The focus is to provide “venture” capital-type funding and mentoring to the target groups, especially black entrepreneurs,”

This was followed by report from SABC which said that the meeting agreed to set up R10 billion fund to boost small and medium enterprises.

In reaction to this, the DA shadow minister for Small Business Development said government has yet to show its hand so the fund is waning even as business claims to have stumped up R1.5 billion to inject into the fund.

“This means that the job creation promised by this venture capital fund will be stalled because of government’s hollow commitment to placing job creation at the apex of its agenda.”

“The DA understands that a big sticking point holding things back is the extent to which government will have the ultimate say over the fund’s mandate and investment strategy. This speaks to the composition of the board of directors and the fund’s articles of association, which will determine its level of independence.”

Not Enough Fund!

The party said government already has the National Gazelles Programme and the Black Industrialists programme which are run through the Departments of Small Business Development and Trade and Industry.

However, details of the beneficiaries of these programmes are shrouded in secrecy. Minister Zulu has promised to release the names of the Gazelles competition winners but nothing is forthcoming.

“Delays over the venture capital fund launch suggest internal disagreements between National Treasury and other departments. The Treasury is under pressure to implement major structural economic reforms which will ease the cost of doing business and reduce uncertainty holding back investment desperately need to jump-start our economy and create jobs.” the party stated.

Also See: EFF Prepares To Establish Its First Kingdom In Limpopo

The party said that SA venture capital industry is “embryonic” and desperately in need of financial support in order to fund thousands of worthy business ventures which we need to drive economic growth and job creation.

It however noted that the Treasury and business are rightly wary of committing taxpayers’ and shareholders’ money into a fund which will end up as yet another piggy bank for connected insiders.