Tag Archives: development finance

IDC R8.4bn funding facilitates job creation

The Industrial Development Corporation (IDC) has authorized funding of R8.4 billion in the last financial year, which will undoubtedly significantly help when it comes to job creation.

“This stands out as the largest amount ever for South African-based investments. Funding approvals in the past year under review are envisioned to generate 19 650 full time jobs in addition to preserving a further 11 650, which has a combined influence on employment of 31 300, up from 25 000 in 2010.

“An additional 8 100 job opportunities are likely to be created as a result of direct linkages to actions in the informal economy,” proclaimed the IDC in its financial results for the year ended 31 March 2011.

The IDC posted a R2.7 billion profit as a consequence of enhanced profitability from operations, performance of equity accounted investments, containment of operating expenses and lower impairments.

The South African economy recovered gradually from the latest recession, considering the pace of growth increasing in momentum towards the latter part of 2010 and firming in the initial quarter of 2011.

“We have maintained our focus both on sustaining and expanding high impact manufacturing capacity and also have been successful in enhancing our influence on job creation,” IDC CEO, Geoffrey Qhena, stated.


IDC CEO, Geoffrey Qhena


From the overall magnitude of funding approvals, 97 percent happen to be within the priority sectors determined in the New Growth Path (NGP), which includes manufacturing, infrastructure, agriculture and the mining value chain; 49 percent of funding approvals was allocated to developments in provinces other than Gauteng, Western Cape and KwaZulu-Natal to guarantee provincial fairness.

“The IDC will continue to leverage its portfolio to boost development outcomes. This approach consists of establishing ring-fenced programmes to subsidise industry development, much like the R10-billion Gro-e-Scheme with concessionary terms and conditions geared towards job creation, that has been launched in February 2011,” explained Qhena.

The corporation in addition has authorized R4.1 billion of the R6 billion allotted to support companies in distress. Over 17 000 job opportunities were generated and preserved as a consequence of the R2 billion UIF scheme unveiled in May this past year, R1.5 billion of which has already been authorized.

“IDC is going to make available R102 billion over the upcoming five years for investment. To accomplish this degree of investment, the collaboration of a variety of stakeholders and social partners is vital. These comprise of businesses, co-funders, labour, government and civil society,” said Qhena.

In his budged vote in April, Economic Development Minister Ebrahim Patel pointed out that over the next five years, green industries is going to be allocated R22.4 billion, while mining and beneficiation is going to be allocated R22.1 billion. Manufacturing will get R20.8 billion while the agriculture value chain will receive R7.7 billion.


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Source: BuaNews


Manuel appointed chairperson of Global Climate Fund

Minister in The Presidency Trevor Manuel

South Africa’s Minister in The Presidency Trevor Manuel has recently been appointed as joint chairperson of the Green Climate Fund, which happens to be given the job of coming up with a finance system to assist developing countries get accustomed to climate change.

Manuel, who heads the South Africa’s National Planning Commission, is going to chair the Green Climate Fund alongside Mexican Finance Minister Ernesto Cordero Arroyo and Kjetil Lund, state secretary of the Norwegian Ministry of Finance.

The Green Fund was created soon after an agreement was signed at the 2010 UN climate change conference in Cancun, Mexico. The master plan was to start up a new institution to be able to set in motion international action when it comes to addressing climate change.

The fund comprises of a 40-member committee and is commissioned to raise and distribute R674-billion (U$100-billion) a year by 2020 in order to safeguard poor countries against the influences of climate change and be of assistance when it comes to low-carbon development.

The committee will get together four times in 2011 to put together a written report on the fund. The report will be presented to around 190 countries due to attend the UN climate change conference in Durban, South Africa, in December this year.

“The high level of interest among governments in adding to the design process can be described as a demonstration of the truly amazing interest among parties within the Green Climate Fund,” said UN’s Framework Convention for Climate Change executive secretary Christiana Figueres. “Parties have put forward skilled and recognized individuals from the areas of finance and climate change.”

The funds is going to be raised by way of public and private sponsorships, and additionally through a system of environmental taxes. The South African government’s proposed carbon levy is an example of an environmental tax.

Penalties for polluters

The South African government is contemplating a tax of R75 ($10.63) per ton of carbon dioxide emitted. In accordance with the government’s suggested “polluter pays principle”, they would like to take advantage of the carbon tax to cut back South Africa’s greenhouse emissions at the same time making certain that polluters are penalised. The country is looking to reduce its carbon emissions by 34% by 2020 and 42% by 2025.

“Carbon emissions have to be priced,” said Manuel. “The indisputable fact that you can pollute the atmosphere and never pay for that pollution has to be one of the most manifest market failures.”


South Africa is to a great extent dependent on coal as well as being the world’s 14th largest emitter of greenhouse gases. Committed to cutting emissions, the country intends to penalise companies which include state power company Eskom, along with other companies in dominant industrial sectors such as metals, mining and petrochemicals that operate with coal, which are classified as the most significant carbon emitters.

A world of experience

Manuel has vast practical experience and knowledge when it comes to dealing with global development. He has served on the UN’s High Level Advisory Group on Climate Change Finance in 2010 in addition to being appointed UN special envoy for Development Finance in 2008.

He chaired the 2007 G-20 summit and was previously a member of former UK prime minister Tony Blair’s 2004 to 2005 Commission for Africa.

In 2000 he chaired the World Bank and International Monetary Fund’s board of governors, not to mention the bank’s development committee from 2001 to 2005. He was also one of two UN special envoys to the 2002 Monterrey Financing for Development summit.

Source: mediaclubsouthafrica.com,


Global economic recovery for 2011 looks grim

The recovery from the worldwide financial crisis continues to be confronted with setbacks ever since the middle of 2010 additionally , the prospect for development in next year remains grim, states a brand new UN document pre-released on Wednesday.

The particular annual United Nations document titled the “World Economic Situation and Prospects 2011 (WESP)” pointed to high unemployment rates, fiscal tightening up and the risk of international currency wars as the primary risks to global economic recovery.

The full report will be released in 2011.

Based on UN expectations, the world economy will most likely increase by 3.1 percent in next year and 3.5 percent in 2012 – most certainly lower than the numbers needed to recover the jobs lost during the economic crisis.

Rob Vos, director of the development policy and analysis division of the UN Department of Economic and Social Affairs (DESA), told reporters that “we are not out of the woods yet and greater risks are looming.”

The latest tensions around currency and trade, a weakening US Dollar, as well as exchange rate unpredictability have all contributed to an unclear outlook for next year and 2012.

“We foresee many downside risks in the next two years,” said Vos.

Countries have already begun to enact protective monetary measures to maintain investment capital flowing into their financial systems. “There is still much more finger pointing,” than concrete policies, said Vos.

While the major financial systems of Europe, Japan and the United States continue to pursue uncoordinated monetary policies, turbulence and uncertainty in worldwide financial markets will continue to persist.

“Failure to arrive at more coordinated policy responses aimed at a more benign global rebalancing will put the process of economic recovery and the stability of financial markets at further risk,” notes the report.

In the mean time, the WESP report illustrates substantial lack of employment worldwide as “the Achilles heel for the recovery.”

The global economy will need to create close to 22 million fresh jobs in order to get  pre-crisis employment levels, said Vos.

To prevent further stagnation in the worldwide economic recuperation and a “double dip recession,” world leaders will need to confront significant policy issues, said Vos.

The particular document outlines five major challenges facing policy makers, which includes: delivering additional fiscal stimulus, redesigning policies aimed at job growth, obtaining better synergy between fiscal and monetary stimulus, ensuring the provision of development finance, and coordinating policies amongst major economies.

Source: BuaNews, internet-marketing-london.com, worldslatestnews.com, topnews.in, abcnews.go.com, Reuters.com