Unrest Fund approvals surpass R1 billion, save 22 493 jobs, says the IDC
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THE INDUSTRIAL Development Corporation (IDC), a national development finance institution, said at the weekend its IDC's Post Unrest Business Recovery Funding approvals had surpassed the R1 billion mark, sustaining 22 493 jobs.
The businesses, impacted by civil unrest and looting, which hit parts of Gauteng and KwaZulu-Natal in July, were now slowly returning to activity, it said.
Following the unrest that disrupted businesses and livelihoods in the two provinces, the IDC established a Post Unrest Business Recovery Fund to help affected businesses recover and rebuild. Supported clients are spread across a variety of sectors, including the retail, manufacturing and agricultural sectors.
IDC chief executive TP Nchocho said there was still work to be done to bring many businesses to full operations. According to him, the unrest did not only impact growth, but also affected job creation opportunities, economic transformation as well as investor confidence in the domestic economy.
While they were encouraged by the impact of the collective effort led by the Department of Trade, Industry and Competition (dtic), the National Empowerment Fund (NEF), and the business community at large. “The objective is not only to bring these businesses to full operation but ensure that jobs that could be lost because of the unrest are retained. Hence the funding interventions and funding packages that we devised post the unrest speak precisely to this objective,” said Nchocho.
“These approvals will go a long way to refurbishing and restoring infrastructure such as factories and warehouses including plant and machinery that were either set alight or looted.”
One of the beneficiaries is clothing manufacturing giant Kingsgate, whose four business sites were severely affected by the unrest. To date, IDC has provided funding to restore Kingsgate operations at all four business sites from where the business conducts its operations.
“This business has more than 770 employees in its stable and the majority of these employees are breadwinners. Loss of jobs would have not only have impacted employees but their dependants as well,” said Nchocho.
Trade Call Investments, an apparel design, manufacturer, and supplier, is also one of the companies that were impacted by the looting. Post the unrest, its factory located in Mobeni, north of Durban, went out of operation affecting close to 120 employees. The company's other manufacturing factory in Ladysmith, employing close to 1 100 employees, faced disruption in the supply of raw materials. In addition to these challenges, Trade Call's stock consisting of cutting-edge electronics valued at close to R120 million was damaged during the looting.
The challenges faced by Trade Call before receiving IDC funding reflected the disruption in the supply chain which had impacted several businesses that were looted both in Gauteng and KwaZulu-Natal. While the unrest occurred in July, Fitch Ratings said it believed that the direct economic impact of riots in South Africa would be limited for the sovereign's creditworthiness.
It said, however, that the violence highlighted tail risks to social and political stability and could affect fiscal policy, including public sector wage negotiations, complicating efforts to stabilise the level of government debt and gross domestic product.