The Industrial Development Corporation (IDC) of South Africa has allocated R3bn ($168.4m) and an addition R700m ($39.3m) from the South African government’s
Manufacturing Competitiveness Enhancement Programme (MCEP) facility to support working capital, machinery and equipment for the supply of critical goods during the COVID-19 pandemic.
The initiative is part of IDC’s wider attempt to support the South Africa’s efforts to prepare for the impact COVID-19 will have on the people and economy.
The funding will be supplemented by IDC funding and is specifically earmarked to assist suppliers of identified critical goods that are affected by the COVID-19 outbreak. The additional funding will be shared with Small Enterprise Finance Agency (SEFA) and National Empowerment Fund (NEF), where IDC will receive R300m ($16.8m) and SEFA and NEF will each receive R200m ($11.2m).
The funds transferred to these institutions will be used to fund businesses that fall within the mandate of the institutions and support prioritised products that are required to curtail the impact of the virus.
In addition to support for essential medical supplies, IDC said in s statement that it is currently engaging its clients to determine specific sector interventions.
Businesses can apply for the IDC COVID-19 Fund online.
According to the national development finance institution, the impact on the economy cuts across all economic sectors and includes: supply chain interruptions, access to raw materials – cost and quality, access to markets – perishable products lost in transit due to longer delivery periods, working capital disruptions – longer lead times, market loss – e.g. export markets constrained by logistics or replaced by production, surge of imports to address the spike in demand, underperforming budgets – impact of extended downtime and reduced productivity – employees wellbeing: physical and psychological.
IDC said its immediate priority is to focus on sectors critical to limit the spread and immediate impact of the virus and support supply chains critical for the economy.
In addition,the company stated that it is assisting the South African government to compile a list of suppliers, importers and gathering key data on manufacturing capacity, ability to scale and constraints.