President Cyril Ramaphosa says government has finalised its “bounce-back loan scheme” which is set to give businesses a much-needed cash injection to create jobs.
He said this when he participated in a debate on The Presidency Budget Vote during a sitting of the National Assembly on Thursday.
“The broader context of the reform process is to improve the overall business operating environment and to improve our country’s competitiveness as an investment destination.
“To this end, we have finalised the bounce-back loan scheme, which gives additional funding to businesses to grow the economy and create jobs,” he said.
According to information from the National Treasury, the bounce-back scheme comprises two mechanisms – the first is a loan guarantee which facilitates loans guaranteed by government to eligible businesses.
The loans will assist eligible businesses in recovering from constraints in accessing finance due to COVID-19 lockdowns, the July 2021 civil unrest and disasters like the floods affecting KZN.
Funds borrowed from this scheme, through participating banks, Development Finance Institutions (DFIs) and non-bank Small Medium Enterprise (SME) finance providers, can be used for growth and expansion and to foster job creation.
The bounce-back scheme benefits from lessons learnt from the 2020 Loan Guarantee Scheme to provide for greater take-up including by DFIs and non-bank SME finance providers which will participate on the same basis as participating banks.
The President said, meanwhile, that in March the employee tax incentive was expanded to make it easier for employers to hire more young people.
Support for black industrialists
As part of government’s drive to create a new generation of black industrialists, create jobs and transform the economy, government last year approved R2.5 billion in new support to about 180 black industrialists in the form of loans and grants.
“Over the next three years, a further R21 billion has been committed to support black industrialists and an additional R25 billion to support black, women, youth and worker-owned companies,” he said.
Mining Exploration Strategy
The President said policy certainty in the mining sector has been bolstered by the publication of the long-awaited Mining Exploration Strategy.
The Infrastructure Office continues with its work of oversight and coordination over a number of catalytic infrastructure projects.
These include the Welisizwe Rural Bridges Programme, the rural roads programme, social infrastructure, bulk water, and others, the President said.
“To address onerous bureaucracy that impedes business growth, the Red Tape Reduction team is working with other departments to identify priority interventions and remove obstacles to growth.
“These initiatives take a collaborative and supportive approach, because ultimately it is departments and not the Presidency that implement policy.”
Interventions to address unemployment
The President said one of the tasks of government is to devise innovative solutions to address joblessness, particularly in a climate where there is a shortage of employment opportunities at a time when the private sector is not creating enough jobs at scale.
He said that the Presidential Employment Stimulus has enabled the rapid expansion of public employment and provided much-needed relief to mitigate the effects of the pandemic.
“To date, the Presidential Employment Stimulus has created 879 000 opportunities. Of the participants across both phases, 84 percent are youth and 62 percent are women.
“These programmes, which range from waste collection to small-scale farming, have provided work and an income for hundreds of thousands of people in both urban and rural areas.”
The President said the programme has provided livelihood support for people working in the arts and culture sector as part of our commitment to support the recovery of this vital sector of our economy and society.