Johannesburg - A conversation about economic and industrial growth in South Africa will always include the contribution of the Industrial Development Corporation (IDC).
Since its establishment in 1940, the corporation has contributed significantly towards shaping the country’s industrial policy, helping to establish the petrochemicals, agroprocessing and renewable energy and minerals beneficiation industries – all cornerstones of the local economy.
As one of the institutions mandated to help implement many of the government’s policies, the IDC’s presence and influence extends to nearly every sector of the economy, underscoring the significance of the corporation to the country’s economic growth prospects.
One of the notable attributes of the IDC over the years has been its ability to respond timeously to the shifting dynamics of both the local and global economic landscape, says Zama Luthuli, the IDC’s divisional executive for corporate affairs.
Over the years, the corporation has consistently been a key driver of transformative industrial development, as evidenced by its performance in the 2017 financial year ending March 31.
Of notable significance, its approvals to women-empowered businesses almost tripled from the previous year’s R1.1 billion to R3.2 billion, while funding support to youth- and black-owned business also increased exponentially.
“We view the support and growth of black business, and empowering women and youth-owned businesses, as a lever to the increased participation of black industrialists in the economy,” says Luthuli, adding that empowering women in the workplace and providing them with support so they can participate in the economic and social development of the country are equally at the core of the IDC’s objectives.
As proof of its commitment towards fostering gender diversity, women make up 55% of the IDC board, and 40% of the IDC’s executive committee is made up of women.
Four women executives – Josephine Gaveni; Zama Luthuli; the chief financial officer, Nonkululeko Dlamini; and the divisional executive for agroprocessing, industrial infrastructure and new industries, Lizeka Matshekga – serve on the IDC’s executive committee, which is the organisation’s key decision-making body.
Of the staff count of 839 (as of March 31 2017), 54% were women.
This is an indication of the corporation’s concerted effort to place women in senior management and other influential positions.
“We attribute a large measure of our successes thus far to our staff, who are dedicated to the organisation’s values and ethos,” says Josephine Gaveni, the IDC’s divisional executive for human capital.
“It is also important to note that gender diversity is an imperative at the IDC.”
Gaveni adds that her department’s strategy focuses on attracting and retaining the best talent in the country.
“To run a development finance institution such as the IDC, you require people with particular sets of skills that can respond to pressing challenges at any given time.”
What is most important to the IDC is facilitating the creation of employment opportunities and preserving jobs in all the sectors of the economy in which it operates.
This is not an easy task, considering the challenging economic environment.
Yet, from her financial vantage point, Dlamini remains upbeat about prospects for entrepreneurs in the year ahead.
She says that by continuing to focus on providing cost-effective funding to businesses across the economy, while ensuring financial sustainability of the corporation, the IDC is playing its part in keeping the outlook hopeful.
The corporation has been instrumental in driving economic transformation and was an early adopter of black economic empowerment.
In the financial year to March 31 2017, the IDC approved 175 transactions to the value of R15.3 billion – thereby facilitating the creation of 18 206 jobs and saving a further 2 675 jobs.
Black industrialists, who are key to transforming the economy, accounted for 63% of approvals.
And approvals to businesses in which young people own more than 25% increased by 142% to R2.3 billion, compared with the previous corresponding period.
Over the past five years to 2017, the IDC injected R59 billion into the economy. This resulted in the creation of 245 000 direct jobs and 99 006 indirect jobs.
The sectors concerned include manufacturing, electricity generation, mining, agriculture and services.
“We will continue to play a meaningful role in developing industries and contributing to the transformation of South Africa’s economic landscape, while maintaining a positive balance sheet,” says Dlamini.
Central to the IDC’s involvement in renewable energy was the green industries’ Special Business Unit (SBU), which until 2015 was managed by the corporation’s Lizeka Matshekga.
Having helped de-risk the renewable energy industry, the green industries SBU, under the stewardship of Matshekga, boldly ventured into this untapped energy industry.
Doing so helped to galvanise private sector investment.
In the past five years, the IDC has supported 31 projects, valued at R15.7 billion, in the department of energy’s Renewable Energy Independent Power Producer Procurement Programme.
Matshekga has since been promoted to divisional executive for agroprocessing, industrial infrastructure and new industries.
“The diversity of this portfolio gives me exposure to industries that are critical to the industrialisation of our economy,” she says.
“It is important that we leverage our funding activities to transform the economy and bring more black industrialists, women and youth into the mainstream economy.”
Citing the lack of capital as a barrier to entry for most black industrialists, Matshekga stresses the need for lending institutions to structure funding products in a way that benefits previously disadvantaged communities across all sectors of the economy.