Recapitalisation and the proposed SME Venture Capital Fund
In this financial year, the NEF approved R1.2 billion worth of deals in 127 transactions. This is just shy of its record of R1.3 billion in approvals. This, plus a record R541 million in collections is the most compelling case the NEF can present for its recapitalisation. The Board recognises recapitalisation as a strategic imperative and is continually engaged with government to nd a long-term resolution. The National Treasury and the Department of Trade and Industry issued directives to help facilitate the NEF’s recapitalisation. We remain con dent that, if acted upon, these could offer short to medium term stability for the NEF.
The year also witnessed the launch of a proposed Venture Capital Fund aimed at assisting Small and Medium sized enterprises. This followed a meeting between President Jacob Zuma and leaders of business ahead of the State of the Nation address in February in Cape Town. The publicly disclosed amount on the fund of R1.6 billion has been pledged by the private sector, with government expected to announce its contribution at the next budget and the fund is expected to reach R10 billion, ultimately.
Players including the Black Business Council have made a call and observation that the NEF would be better placed to manage the proposed fund.
The NEF concurs with this view and affirms that it has the capacity, track record and expertise to manage the entire value spectrum of a transaction and is open to have scrutiny and have its performance benchmarked against peer organisations within both public and private sector.
Partnership with DRDLR
The NEF's partnership with the Department of Rural Development and Land Reform (DRDLR) solves a number of policy challenges, starting with helping improve the valuation of some of the concluded transactions. It also addresses the long-standing challenge of having re-allocated land lying fallow and not in productive use. Most importantly, it af rms the dignity of the farm workers, one of the most historically exploited and downtrodden.
Rural and Township economies
The NEF is excited by the renewed focus on township economies, most notably by the Gauteng Province. The Fund has long seen value in investing in township economies. Through its Rural and Community Development Fund, the NEF has a portfolio of ve shopping malls in various towns across the country with an investment value of R213 million. These are in Orange Farm, Gauteng, Umlazi and Greytown in Kwa-Zulu Natal as well as Qumbu and Willowvale in the Eastern Cape.