SA unveils Transformation Fund to tackle economic inequality, boost black-owned enterprises

Deputy President Paulus Mashatile announced the launch of South Africa’s landmark Transformation Fund during a keynote address at the Business Breakfast Session in Pretoria on Monday, marking a decisive step toward dismantling apartheid-era economic disparities.

The fund, backed by public-private partnerships, aims to accelerate inclusive growth by channeling resources into Black-owned businesses, township economies, and rural enterprises led by women, youth, and persons with disabilities.

Highlighting South Africa’s stark inequality—a Gini coefficient of 0.63 and a poverty rate of 17.82%—Mashatile stressed the urgency of economic redress.

“Our democracy’s 31-year milestone cannot mask the reality that wealth remains concentrated in the hands of a privileged few.

The Transformation Fund will be the catalyst to pull millions out of poverty by 2055,” he declared, referencing the centenary of the Freedom Charter.

The fund will prioritise access to capital, technical support, and market opportunities for small businesses, addressing systemic barriers like stringent loan requirements and “tick-box” compliance under the Broad-Based Black Economic Empowerment (B-BBEE) Act.

Private sector commitments, including a R1.32 billion Microsoft partnership for Black tech and non-tech SMMEs, signal growing collaboration to bridge skills gaps in artificial intelligence (AI) and Fourth Industrial Revolution (4IR) technologies.

Anti-corruption measures were underscored as critical to safeguarding progress.

Mashatile vowed to strengthen institutions and establish specialised “War Rooms” to fast-track economic deliverables, including job creation, poverty reduction, and clean governance.

“Corruption stifles SMEs and erodes public trust. We will dismantle these networks with deliverology precision,” he asserted.

The government also plans to leverage the African Continental Free Trade Area to diversify exports and attract foreign investment.

A national dialogue later this year will seek to forge a social compact between citizens, businesses, and policymakers, aligning with the Medium-Term Development Plan’s targets.

“Transformation demands courage to challenge the status quo. By uniting behind this fund, we commit to an economy where no South African is left behind,” added Mashatile.