SA’s R100 Billion Transformation Fund Set to Reshape Inclusive Growth

In 1994, South Africa emerged from the grips of apartheid, burdened with a deeply fractured economy deliberately engineered to privilege a white minority. For centuries, discriminatory laws, racial capitalism, and institutionalised exclusion locked the Black majority out of meaningful participation in wealth creation. The legacy of that system continues to scar the nation’s economic landscape, leaving behind a dual economy—one marked by prosperity and the other by poverty and marginalisation.

Today, this legacy manifests as one of the world’s highest rates of inequality, with a Gini coefficient of 0.63 and the top 10% of earners controlling more than 85% of household wealth. Young Black South Africans, particularly women and people living with disabilities, continue to face systemic barriers to employment, ownership, and entrepreneurship. A decisive and inclusive policy response is no longer optional—it is essential.

The Birth of a Transformation Vision

To rewrite this economic narrative, the South African government is introducing the Transformation Fund, a R100 billion initiative aimed at radically reshaping ownership, investment, and opportunity across the economy. This fund is designed to provide catalytic financial and institutional support to Black-owned businesses, especially in high-impact sectors like:

• Manufacturing

• Agriculture

• Tourism

Targeted beneficiaries include Small, Medium and Micro Enterprises (SMMEs), women entrepreneurs, youth-led ventures, and individuals with disabilities—groups that have long been sidelined in formal economic structures.

Strategic Framework and Governance

The fund is being developed through a transparent, accountable structure, anchored in constitutional values and national transformation objectives. It will be managed through a Special Purpose Vehicle (SPV) governed by an independent board and an Oversight Committee composed of public and private sector experts.

This design ensures that resources are deployed efficiently and with integrity. A merit-based application system will prioritize funding based on a project’s:

• Social impact potential

• Financial sustainability

• Alignment with national development goals

Building on B-BBEE Foundations

The Transformation Fund will be capitalized through contributions already made under Broad-Based Black Economic Empowerment (B-BBEE) programmes, particularly the Enterprise Supplier Development (ESD) and Equity Equivalent Investment Programme (EEIP). While no additional compulsory contributions are required, the government encourages voluntary co-funding from corporate South Africa to accelerate change and foster a shared commitment to economic justice.

This collaboration signals a pivotal shift—transformation is not merely a compliance obligation; it’s an investment in future suppliers, markets, and customers, and in the economic resilience of the entire country.

Learning from Global Models: Korea and Malaysia

South Africa's vision is inspired by global success stories of economic transformation. In South Korea, the government worked hand-in-hand with companies—particularly Chaebols—to correct market failures. By securing bank guarantees and promoting export-led growth, Korea transitioned from poverty to global industrial leadership within decades.

Similarly, Malaysia's National Economic Policy (NEP) from 1970 successfully uplifted its Bumiputera population through wealth redistribution, preferential access to education, and business ownership schemes. Today, Malaysia stands as one of Southeast Asia’s wealthiest nations by GDP per capita, proving the efficacy of sustained and equitable policy intervention.

Catalysing Real Change at the Grassroots

The Transformation Fund’s ambitions are not merely macroeconomic—they are human. By improving access to capital, Black-owned businesses can:

• Invest in modern equipment

• Employ and train skilled workers

• Enter domestic and global value chains

• Expand product offerings

• Strengthen rural and regional economies

Beyond financial support, the fund will provide capacity-building services, business infrastructure, and mentorship. It aims to nurture a new class of Black industrialists and innovators who will define the next chapter of South Africa’s economic future.

Public Engagement and Next Steps

A draft concept document for the fund was released for public comment on 19 March 2025, with the consultation window closing on 28 May 2025. The feedback from stakeholders—businesses, communities, and policy experts—will shape the final implementation roadmap.

The fund is expected to become operational by the end of 2025, with information and updates available at www.dtic.gov.za.

A Shared Vision for an Inclusive Economy

This initiative is more than a financial mechanism; it is a moral and constitutional imperative. It represents a deliberate break from the past—a recognition that deracialising economic ownership is critical for unlocking the full potential of South Africa’s people. It is a call for shared responsibility, collaborative investment, and nation-building.

Transformation is not charity; it is strategy. It is not short-term aid; it is long-term development. With the Transformation Fund, South Africa takes a bold step toward a more just, equitable, and prosperous society—where no one is left behind.