R100 Billion Transformation Fund: Growth V Cronyism

Dear Editor

The Democratic Alliance (DA) notes the publication of the Draft Transformation Fund Concept Document by Trade, Industry and Competition Minister Parks Tau yesterday.

Minister Tau has invited public comment within 30 working days, until 7th May 2025. We will study the document in detail and submit a robust critique, together with recommendations for how the DA approaches transformation through inclusive growth.

The Fund, which aims to raise R100 billion from both the public and private sectors by 2029, was first announced by Minister Tau in Parliament last year. While we share the goal of empowering previously disadvantaged South Africans, we reject the notion that this can be achieved by re-directing money into a new fund.

The DA will fight to ensure that the Transformation Fund or any redress initiatives should benefit the poor forgotten South Africans, not the politically connected ANC cadres

The DA believes that real transformation can only be achieved by focusing on economic growth by reducing the regulatory burden on companies large and small, unleashing enterprise and stimulating investment in the entire economy.

The Fund aims to entrench the grip the Broad-Based Black Economic Empowerment (B-BBEE) Act and associated regulations have on the economy. These have failed to deliver sustainable economic transformation. Instead, they have entrenched corruption, patronage, inefficiency and waste and have left millions of mainly black people without work or opportunities to start and grow a business.

Our primary concern with the Fund, as it was originally outlined by Minister Tau and the department, is that it will not address the root causes of our economic malaise but instead perpetuate the same cycle of mismanagement that has led to flatlining economic growth. South Africa has already lost an estimated R1.5 trillion due to corruption and inefficient regulations in the past five years.

A R100 billion fund, built on this flawed framework, will likely lead to further financial waste and political cronyism rather than true economic empowerment.

The public comment period provides an opportunity for South Africans to voice their concerns and make recommendations, and the DA will take full advantage of this.

We will submit a comprehensive review of the proposed fund, cautioning against any likely outcome such as further perpetuating the benefiting of a small political elite rather than the broader population. The DA is committed to ensuring that this proposal does not proceed unchecked.

Regards

Toby Chance MP
DA Spokesperson on Trade, Industry & Competition