Minister Pravin Gordhan has launched the Jobs Fund, first mooted in President Jacob Zuma’s State of the Nation Address. The fund targets 150 000 jobs I three years and has three unique characteristics:
- Co-finance projects with the potential of job creation, supporting both existing and new programmes. The fund thus seeks to gear additional funding into the programme
- Grants instead of loans – Importantly, the funds provide grants for projects, signalling a shift in government to directly fund projects through grants and supporting venture capital. There will be no repayment or financial return sought, although funds that are not spent for the purpose for which they were allocated, or are misappropriated, will be reclaimed by the National Treasury.
- Supporting existing and new programmes – The fund is designed to provide for a range of different partnerships, including for existing government programmes and new programmes.
Details on the application forms and criteria can be found at http://www.jobsfund.org.za/
The fund has a wide ambit, covering four areas:
- Enterprise Development – investments in product development, local procurement, marketing support, equipment upgrading or enterprise franchising.
- Infrastructure Investment – local infrastructure investment projects such as light manufacturing enterprise zones, local market and business hub facilities, critical transport and communication links and upgrading of infrastructure services.
- Support for Work Seekers – support programmes with a particular focus on unemployed young people such as job search projects, training activities and support for career guidance and placement services.
- Institutional Capacity Building – projects aimed at strengthening institutions through which jobs are created or overcoming institutional barriers to job creation.
In the press statement, the motivation for the fund is described as follows:
The Fund recognises the capacity for enterprise and skills development in South Africa, which are undermined by structural distortions, inequality and a fragmented economy. Neither the state nor the market can address these challenges alone. Well structured partnerships are needed combining both state capacity and private sector resources.
An earlier article on Zapreneur covered possible options for the fund.