Business has welcomed the Department of Trade and Industry’s decision to investigate concerns into the National Empowerment Fund (NEF) of Ndalo Luxury Ventures (NLV).
“The South African Chamber of Commerce and Industry (Sacci) welcomes the swift action by the dti to investigate concerns into recent funding by the NEF. It is critical to ensure that funding is in line with the NEF’s mandate,” Sacci chief executive officer Neren Rau said on Wednesday.
On Tuesday, the dti said that Minister Rob Davies had requested a detailed report from the NEF, regarding the funding of NLV.
The NEF approved a total R34.1 million in loan finance to NLV for the construction of the Luminance store, procurement of stock from local and international suppliers, and the local manufacture of a clothing range for the Luminance brand.
Davies said it would be premature to comment on the transaction before receiving the report. The minister told the Portfolio Committee on Trade and Industry what he expects to see in the report regarding the transaction.
“Among the other things I want to hear about this particular transaction, is whether the transaction has or has not been within the framework that we have been articulated for on empowerment. It must support productive sector entrepreneurship and support local productive activity in our country,” said Davies.
He added that government wants to see more public funds supporting empowerment and the actual people who are getting involved in the productive sector of the economy and also in local productive activities.
“The action by Minister Rob Davies is a welcome continuation of a push towards greater transparency and accountability. There is an urgent need to restore confidence in public institutions – whether it relates to funding mechanisms, officials on the ground or courts of law,” explained Rau.
Up to now, the NEF has been doing good work, and increasing part of its portfolio has included supporting small businesses and strategic investment, said Davies.
The NEF, which is an agency of the dti, was established by the National Empowerment Fund Act No 105 of 1998 (NEF Act). The fund is a driver and thought-leader in promoting and facilitating black economic participation by providing financial and non-financial support to black empowered businesses, and by promoting a culture of savings and investment among black people.
South African Government News Agency