President Cyril Ramaphosa has announced that the government has finalized its “bounce-back loan plan,” which will provide much-needed cash injections to businesses in order to create jobs.
On Thursday, he mentioned this during a debate on the Presidency Budget Vote in the National Assembly.
“The reform effort’s overarching goal is to improve the entire business operating environment and our country’s competitiveness as an investment destination.”
“To that aim, we’ve completed the bounce-back loan program, which provides additional capital to businesses to help them build the economy and generate jobs,” he said.
The bounce-back system, according to the National Treasury, consists of two mechanisms: the first is a loan guarantee, which allows the government to guarantee loans to eligible enterprises.
The loans would help qualifying firms recover from financial restraints caused by COVID-19 lockdowns, civil unrest in July 2021, and calamities such as the KZN floods.
Funds borrowed from this plan can be utilized for growth and expansion, as well as job creation, through participating banks, Development Loan Institutions (DFIs), and non-bank Small Medium Enterprise (SME) finance providers.
The bounce-back scheme builds on the lessons learned from the 2020 Loan Guarantee Scheme to encourage expanded participation from DFIs and non-bank SME credit sources, who will be treated equally to participating banks.
Meanwhile, the President announced that the employee tax incentive was expanded in March to make it simpler for businesses to hire younger people.
Black industrialists are being backed up.
Last year, the government awarded R2.5 billion in new loans and grants to roughly 180 black businessmen as part of the government’s goal to establish a new generation of black industrialists, generate jobs, and restructure the economy.
“An additional R21 billion has been pledged to support black industrialists over the next three years, as well as an additional R25 billion to support black, women, youth, and worker-owned businesses,” he stated.
Exploration Strategy for Mining
The publishing of the long-awaited Mining Exploration Strategy, according to the President, has increased policy certainty in the mining sector.
The Infrastructure Office’s oversight and coordination work on a number of catalytic infrastructure projects continues.
The President mentioned the Welisizwe Rural Bridges Program, rural roads, social infrastructure, bulk water, and other initiatives.
“The Red Tape Reduction team is collaborating with other departments to identify priority interventions and remove barriers to growth in order to solve onerous bureaucracy that stifles corporate growth.”
“These programs adopt a collaborative and cooperative approach, because policy is ultimately implemented by agencies, not the White House.”
Interventions in the fight against unemployment
The President stated that one of the government’s responsibilities is to come up with innovative methods to solve unemployment, particularly in a situation when there is a labor shortage and the private sector is failing to create enough jobs on a large scale.
He claimed that the President’s Employment Stimulus has allowed for a rapid development of public employment while also providing much-needed relief from the pandemic’s impacts.
“The President’s Employment Stimulus has created 879, 000 jobs to date.” Youth make up 84 percent of participation in both phases, while women make up 62 percent.
“Hundreds of thousands of individuals in both urban and rural areas have benefited from these programs, which range from rubbish collection to small-scale farming.”
As part of our commitment to help the rehabilitation of this key sector of our economy and society, the President stated that the initiative has offered livelihood support for persons working in the arts and cultural sector.