A Winning Partnership for Enterprise and Supplier Development

As an agency of the dtic mandated to implement B-BBEE, the NEF has in addition to its core mandate of funding black entrepreneurs carved a niche that propels the Enterprise Development (ED) and Supplier Development (SD) element of empowerment in partnership with the corporate sector.

In line with the demands of the B-BBEE Codes of Good Practice, the NEF is positioned to assist corporations channel some energy into the ED and SD area. This is in recognition of the fact that South Africa can push back poverty and unemployment significantly by developing a robust Small to Medium Enterprise (SME) sector.

The NEF has identified an opportunity to partner with and provide a mechanism to private and public organisations for delivery of sustainable B-BBEE solutions to black enterprises at an accelerated pace. The opportunity entails private sector enterprises making their ED and SD contributions to the NEF’s Enterprise and Supplier Development (ED and SD) Fund, the NEF ED and SD Fund, and the NEF utilising these contributions to co-finance its investments in ED and SD beneficiaries, in order to facilitate their development, financial and operational independence.

The NEF ED and SD Fund falls under the administrative and management authority of the NEF, and has benefited from its institutional fund-management infrastructure, support and investment expertise, which have contributed to the success of black entrepreneurs since 2012 when the programme was launched with operational excellence. The application of this expertise ensures that investments are appropriately targeted, have a high rate of success, and that the investments assist in the development and growth of sustainable black- empowered SMEs.

The NEF leverages its existing product offering when making these investments from the Fund but also works closely with participating contributing companies in identifying specific opportunities in sector value chains suitable for support by the NEF ED and SD Fund. Through the Fund, private sector contributors, referred to as ‘measured entities’ in the B-BBEE Act, receive ED and SD credits in compliance with Code 400 while still retaining focus on their core business. They also develop sector value chains in partnership with the NEF through the ED and SD Fund, while the beneficiaries have access to an additional source of funding. Most importantly, the NEF ED and SD Fund makes more investments designed to enable meaningful participation of black business in the country’s economy. The NEF is one of three gazetted BEE-Facilitator organisations in South Africa. It was awarded this status by the department of trade and industry in terms of the provisions of Statement 100 of the Codes of Good Practice on B-BBEE. This means that the equity investments held by the NEF in any company are automatically regarded as 100% black-owned, including 40% owned by women and 10% by black designated groups. Any equity stakes would also be regarded as unencumbered, resulting in the investee company receiving a perfect ownership score in respect of the equity stakes held by the NEF.