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Linking IDC finance to structural transformation and inclusivity in post-apartheid South Africa

Sumayya Goga, Teboho Bosiu and Jason Bell

Development Southern Africa, 2019, vol. 36, issue 6, 821-838

Abstract: The need for structural transformation and inclusivity in South Africa is urgent, given poor economic growth, employment and equality outcomes. This article examines the role of South Africa’s main industrial finance institution – the Industrial Development Corporation (IDC) – in providing finance for structural transformation and inclusive economic growth post-apartheid. We find that the IDC’s funding has been concentrated in capital-intensive upstream sectors of the economy, with limited concessional finance to facilitate meaningful entry of SMEs into high-value and labour-absorptive downstream sectors. The IDC’s funding model (in being a self-sustainable institution) is a significant constraining factor in this regard. Furthermore, the lack of a purposeful integrated industrial policy strategy which directs investments clearly means that IDC’s funding priorities are not clearly defined.

Date: 2019
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DOI: 10.1080/0376835X.2019.1696181

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