Business Leadership South Africa (BLSA) has issued a strong critique of the government’s proposed R100 billion Transformation Fund, warning that as currently structured, it risks becoming financially unviable, poorly governed—and hostile to economic growth.
By Busisiwe Mavuso – Politics Web
⚠️ Key Concerns from BLSA’s Submission
- Input-Based Goals, Not Outcomes
BLSA notes that the fund’s draft document focuses on input metrics—such as annual funding quotas—rather than defining clear, measurable outcomes like job creation targets or SME growth rates. The submission calls for specific milestones, e.g. “supporting 5 000 black-owned businesses with 30% annual growth over five years,” to enable effective monitoring (mg.co.za). - Weak Financial & Governance Framework
The proposed structure lacks a strong governance model and does not analyse why existing entities such as the National Empowerment Fund have underperformed. BLSA cautions that creating yet another institution without clear oversight or alignment risks waste and overlap (politicsweb.co.za, mg.co.za). - Potential for Elite Capture
Independent analysts—such as the Centre for Development and Enterprise—express concern that funneling B-BBEE funds into a central purse without rigorous controls may simply redirect resources toward politically connected elites (mg.co.za).
🚀 BLSA’s Proposal for a Better Fund
- Adopt Outcome-Based Targets: Set clear, quantifiable goals (e.g., jobs created, SMEs sustained) rather than broad spending targets.
- Leverage Private Sector Oversight: Establish a joint governance model involving public and private sector partners to ensure best practices and accountability.
- Align with Existing Plans: Prevent duplication by coordinating with industry master plans and platforms like the National Empowerment Fund and Black Business Supplier Development initiatives.
👥 Why This Matters for South Africa
- Credibility in Transformation Efforts: Clear targets and transparent governance are essential to maintain public trust and ensure real benefits reach the intended communities.
- Economic Stability: Without measurable outcomes, the fund could disrupt rather than support growth—diluting impact and deterring investment.
Inclusive Growth: Effective use of funds depends on integrating mentorship, enterprise development, and rigorous performance tracking.
