Blend of private and government finance is a formula for success

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Programmes that rely on both sources have proved to be effective in fixing some of our economic woes

President Cyril Ramaphosa has done well in building bridges with the private sector after many years of fractious relationships between business and government.

However, I would argue that we have yet to see bridges built between the public and private sectors that will practically reform the way we rebuild our economy and reverse the years of industrial decline that have been caused by the terrible trio of corruption, mismanagement and, more recently, Covid-19.

As the budgets for government investment incentives continue to be whittled away, signs of blended finance playing a role are appearing more often, for instance in the way the department of small business development is supporting enterprises in the tourism sector via the Small Enterprise Finance Agency. Other examples have cropped up in the agriculture and agro-processing sector, with the government partnering with commercial banks.

The department of trade, industry & competition does have a programme, the strategic partnership programme, wherein government provides funding to big corporates to develop mostly black-owned businesses in their supply chains. While it may be the right idea, the uptake has been regretfully small, counted on the fingers of one hand.

 

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