THE DA rejects the R100 billion Transformation Fund, saying it will enrich a politically connected few.
The party called the fund a failed Broad-Based Black Economic Empowerment (B-BBEE) that will not benefit workers.
DA spokesman on trade, industry and competition Toby Chance told a media briefing on Thursday, 29 May, the fund blocks growth by focusing on race, not investment or jobs.
"The DA opposes the so-called Transformation Fund for several reasons, its continuation of B-BBEE policies which have failed to bring disadvantaged South Africans into the economic mainstream and have left 8 million people unemployed while enriching a small elite, its failure to address barriers to foreign investment inherent in B-BBEE and other heavy-handed government policies and a lack of focus on new business formation and growth, which should be the main source of jobs created in the economy," he said.
Chance said there's no alignment with existing enterprise and supplier development (ESD), ecosystems and programmes run by the private sector and their business partners.
He stated that there's no solution for businesses lacking collateral or business records required to qualify for financial assistance.
"It's a contradiction to the Government of National Unity's inclusive growth commitments by choosing race rather than broader, more systemic reforms," he said.
The DA released its submission to the department fund.
Chance said the department's concept document has attracted much attention, in terms of impractically.
"Organised business and think tanks have all been vocal against the fund, as it will not deliver economic growth and job creation."
The R100 billion fund was announced in 2024 by Trade, Industry and Competition Minister Parks Tau.
The aim of the fund is to aggregate especially ESD funds in support of transformation and participation of and sustainability of black-owned enterprises in the economy.
Chance pointed out that a recently released survey shows South Africans are against government continuing with B-BBEE, after 20 years of failed implementation.
"Our submission details these inherent weaknesses and why the department must abandon its plan to implement the proposed fund," he said.
"The most effective tool for empowering South Africans is a growing economy that delivers jobs. Without growth, there can be no transformation. Transformation, as practised by the ANC, benefits a select, connected few, which the Transformation Fund will worsen."
He said poverty must be the matrix used to achieve real transformation and redress rather than focus on benefiting an elite politically connected few.
Chance said the DA's plan will replace B-BBEE with the attainment of globally recognised United Nations Sustainable Development Goals, as outlined in the party's Economic Justice policy.
"The so-called Transformation Fund is a misguided proposal in its contradiction with government's Medium-Term Development Plan, which is to foster inclusive economic growth," he said.
