The economic transformation and growth of South Africa depend on breaking the cycle of underdevelopment through empowering black economics and entrepreneurship, said President Cyril Ramaphosa on Monday.
“Economic transformation and economic growth are intertwined. There cannot be one without the other,” he said in his weekly newsletter on Monday, adding that Black Economic Empowerment remains a pivotal part of the government’s economic reconstruction and recovery plan as the country recovers in the wake of the COVID-19 pandemic.
The President said the government last year approved 2.5 billion rands (161.6 million USD)in new support to 180 black industrialists in the form of loans from the Industrial Development Corporation and the National Empowerment Fund, as well as grants from the Department of Trade and Industry (DTIC) incentive scheme to create a new generation of black industrialists.
A further 21 billion rands will be pumped into black industrialists’ projects during the next three years. Another 25 billion rands is being committed to supporting black, female, youth, and worker-owned businesses.
Ramaphosa said the process of industrialization should be integrated with transformation so that South Africa can advance an inclusive growth model rather than concentrating wealth.
In 2003, the state established the Broad-Based Black Economic Empowerment (BBBEE) Act to transform and redress the apartheid economy plan that excluded the majority of Black people. The initiative contributes to redressing inequality and ensuring meaningful participation among the majority in our economy.
“The apartheid government deliberately built a distorted economy designed to benefit white people. The majority of South Africans were marginalized from the mainstream economy, with black entrepreneurs confined to small retail industries in the townships,” he noted.
Ramaphosa noted that progress over the past two decades has been significant, but there have been some regressions as well and expressed the government’s commitment to this.
“Our commitment to entrench and deepen economic empowerment is unwavering. That is why Black Economic Empowerment is an integral part of our economic reconstruction and recovery in the wake of the COVID-19 pandemic,” he said.