South Africa stands at a critical juncture. The announcement of the proposed R100 billion Transformation Fund by Minister Parks Tau has sparked a national debate: Is this a bold step towards inclusive growth, or a replay of past missteps? As someone deeply invested in the mechanics of economic transformation, I find myself asking the tough questions.

The vision is undeniably compelling. A centralised fund, aiming to inject substantial capital into majority black-owned enterprises, particularly those in underserved rural and township economies. It’s a promise to break down systemic barriers, to finally unlock access to finance, markets, and opportunities for those historically excluded. But, as we’ve learned, grand visions don’t always translate to tangible results.

A Familiar Tune?

The draft concept document paints a picture of a unified, transparent platform, a stark contrast to the fragmented ESD programmes we’ve seen. It promises to leverage B-BBEE legislation for resource mobilisation, to drive meaningful economic participation. Yet, a nagging question remains: are we simply rebranding old problems with a shiny new label?

Critics are vocal, and rightly so. They point to a history littered with failed state-led initiatives, a landscape marred by corruption and mismanagement. The credibility of this fund hangs precariously in the balance.

Where the Draft Raises Eyebrows

Let’s dissect the draft, shall we?

1. B-BBEE Ambiguity: How will this fund integrate with existing B-BBEE scorecards? Will it replace or supplement current ESD contributions? The lack of clarity is a red flag, potentially deterring private sector buy-in.
2. Governance Concerns: The proposed governance model, with a board appointed by the Minister and an Oversight Committee of cabinet members, raises serious concerns about independence. Where are the robust accountability mechanisms? The independent audit requirements? In a country grappling with state capture, transparency is non-negotiable.
3. Redundancy Risks: We already have institutions like the NEF, SEDA, SEFA, and IDC. How will this fund complement, not cannibalise, their mandates? Duplication is a recipe for inefficiency.
4. Implementation Challenges: The reliance on local and provincial government structures, entities often flagged for poor financial management, is a gamble. Can we afford another execution framework riddled with flaws?
5. Transparency Deficit: Vague mentions of quarterly reporting and a Transformation Index don’t cut it. We need public disclosure of beneficiaries, disbursements, and performance outcomes. Opacity breeds distrust.
6. Funding Uncertainty: Where will the promised R20 billion per year come from? Potential sources are listed, but concrete commitments are missing. This is a critical gap.
7. Job Creation Fantasies: Projections of creating 700,000 jobs by 2029, in an economy struggling to grow, seem overly optimistic. We need realism, not wishful thinking.

What Must Change?

If this fund is to succeed, we need more than just good intentions. We need concrete action.

• Independent Governance: A mixed advisory board, free from political appointments, is essential. Include representatives from successful ESD programmes, civil society, and labour.
• Radical Transparency: A real-time public dashboard detailing beneficiaries, disbursements, and impact metrics. Let the sunlight illuminate every corner of this fund.
• Private Sector Alignment: Businesses need clarity. Develop a detailed B-BBEE scorecard framework that allows for hybrid approaches, not a one-size-fits-all solution.
• Leverage Existing Infrastructure: Instead of reinventing the wheel, strengthen existing DFIs and development agencies. Use the fund to de-risk lending, not replace it.
• Address Root Causes: Why do so many black-owned businesses fail? Focus on skills development, market access, and supply chain efficiency, not just capital injection.

A Call to Action

The R100 billion Transformation Fund has the potential to be a game-changer. But it requires more than just political will. It demands rigorous planning, unwavering transparency, and a commitment to genuine accountability.

The Department of Trade, Industry and Competition has opened this draft for public comment until 7 May 2025. This isn’t just an opportunity; it’s a responsibility. We must engage, we must challenge, and we must demand a fund that delivers real, sustainable transformation.

South Africa cannot afford another failed promise. Let’s ensure this fund is built on a foundation of integrity, not just good intentions.