R2.3 billion availed to assist business

The National Treasury has availed R2.3 billion in the current financial year to assist in rebuilding businesses affected by the COVID-19 third wave and destruction of infrastructure in Gauteng and KwaZulu-Natal during the civil unrest in July.

Finance Minister Enoch Godongwa revealed this while delivering his inaugural Medium Term Budget Policy Statement (MTBPS) in Parliament on Thursday.

The MTBPS said, of this amount, R1 billion was reprioritised from the Departments of Trade, Industry and Competition (R700 million) and Small Business Development (R300 million). Over the medium term, the Treasury said about 80% of this function group’s allocation would provide transfers and subsidies to departmental agencies, public corporations and private enterprises.

“The baseline is expected to grow by 5.4% over the next three years,” it read.

Medium-term priorities include reindustrialising through the implementation of the master plans; growing exports through the African Continental Free Trade Area; implementing the Tourism Sector Recovery Plan; supporting township and rural economies and promoting localisation, inclusive economic growth and job creation.

During this period, the Department of Science and Innovation would implement its recently approved decadal plan on science, technology and innovation for 2021–2031. The plan aims to rejuvenate sectors such as mining, agriculture and manufacturing, while improving research and innovation across government.

In addition, reads the MTBPS, the department has reprioritised funds over the Medium Term Expenditure Framework (MTEF) period to support technology localisation, beneficiation, advanced manufacturing and research by the National Research Foundation.

The Department of Tourism has also reprioritised funds to support short-term public jobs in the tourism sector and transform the sector through the rollout of the Tourism Equity Fund.

The Minister in his speech revealed that government was considering a smaller Loan Guarantee Scheme. The scheme was introduced last year in an effort to enable commercial banks to support firms in distress as a result of the COVID-19 crisis.

“We are considering a new small business support measures to enable affected businesses to bounce back.”

Affected businesses will be provided expanded funding options, broadening the types of financial institutions, which can provide this funding to include Development Finance Institutions (DFI’s) and non-banks.

“We are working closely with the South African Reserve Bank, the Banking Association of South Africa and other stakeholders to finalise this proposal. Further details will be announced shortly,” said the Minister.

Source: South African Government News Agency