The R100 Billion Question: Will South Africa’s Transformation Fund Deliver More Than Money?

I was born in Soweto, where resilience thrives at every corner and entrepreneurship isn’t just a buzzword; it’s a necessity. In those narrow streets, people build businesses with grit and hustle. Aunties sell ice lollies from their front stoeps, while uncles fix cars on the pavements. Young people trade hardbody chicken and clothes on WhatsApp. Yet, most of these everyday entrepreneurs remain excluded from the formal economy, out of reach of capital, mentorship, markets, or support.

They possess talent and ambition but lack an ecosystem crafted to support, nurture, and enable their growth. Ultimately, they remain stuck in a perpetual cycle of surviving from moment to moment

That’s why the recently released draft Transformation Fund concept paper from the Department of Trade, Industry and Competition (DTIC) represents a potentially powerful moment. It acknowledges the real barriers that continue to prevent the majority of Black South Africans from participating meaningfully in the economy and proposes a R100 billion commitment over five years to address this issue.

It’s ambitious, bold, and potentially transformative if we implement it effectively and recognise that funding is just one part of the equation.

 A Country Still Waiting for Its Economic Freedom

Thirty years into democracy, economic apartheid still casts a long shadow.

The Transformation Fund’s concept paper confronts this issue head-on. It identifies our painful realities: 

• Ownership and control remain concentrated in the hands of a small minority.

• Most Black South Africans continue to be excluded from the economic mainstream.

• SMMEs owned by Black entrepreneurs struggle disproportionately to access funding, markets, and support.

• Despite years of Enterprise and Supplier Development initiatives, meaningful transformation remains elusive.

While these issues have long been acknowledged in policy circles, this Fund feels different not only because of its size but also because of its stated intention to focus on Black entrepreneurs, women, youth, people with disabilities, and rural and township-based businesses. It aims to allocate resources to where they are most urgently needed.

The goal of supporting 2,500 businesses each year, with a strong emphasis on fostering ownership and transformation in strategic sectors, could genuinely reshape parts of our economy. If executed properly, this presents an opportunity to build wealth not just income in communities that have historically been overlooked.

It is also vital that the cultural and creative industries (CCIs) are integral to South Africa's transformation agenda. In 2020, the CCIs contributed approximately R161 billion to the nation's GDP, accounting for just under 3% of total economic output comparable to the agricultural sector's contribution of around 2.5% to 3.2% in recent years . Beyond this direct economic input, the CCIs demonstrate a significant multiplier effect; for instance, the audiovisual and interactive media sector alone has a multiplier of 2.8, exceeding that of tourism, with an employment multiplier of 4.1, indicating substantial indirect job creation across various sectors . Collectively, the CCIs employ over one million individuals, representing about 6.7% of South Africa's workforce, which is notably higher than the agricultural sector's employment figures . The extensive value chain of the CCIs includes areas such as design, fashion, film, music, and digital media, offering immense potential for entrepreneurship and innovation. Integrating the CCIs into economic transformation initiatives not only utilises their capacity for job creation and economic growth but also ensures the preservation and promotion of South Africa's rich cultural heritage.

The Ecosystem Equation

However, one essential fact remains: funding alone has never sufficed to achieve long-term economic inclusion.

Too often, we see well-meaning funds launched with fanfare, only to falter because the entrepreneurs they support are isolated, disconnected from supply chains, underprepared for growth, or simply lacking the business fundamentals needed to navigate the market.

The concept paper mentions “technical assistance,” “business development support,” and “pre- and post-investment interventions.” These are encouraging signs but they must be integrated into the DNA of the Fund, not regarded as optional extras. When the entrepreneurial support ecosystem is weak, even generous funding can evaporate into failed businesses and missed opportunities.

Entrepreneurship exists within an ecosystem that includes training, mentorship, infrastructure, networks, digital access, demand-side support, and more. It isn't solely about access to capital; it’s about access to capability.

The Fund’s focus on ecosystem partners is promising, but it needs to go further to support the builders of the ecosystem, not just its users. This means backing incubators, mentors, township-based co-working spaces, accelerators, and platforms that assist entrepreneurs in navigating complex processes and growing over time. We require more than one-off workshops; we need comprehensive support that evolves as the entrepreneur evolves.

Five Principles for Turning Vision into Impact

To ensure that this Fund doesn’t turn into another missed opportunity, here are five key focus areas that could help it thrive: 

1.        Radical Accessibility

If the application process is overly complex, bureaucratic, or available only in English, it will exclude the very people it aims to support. Accessibility must be practical and intentional: application forms that are mobile-friendly, translated into multiple languages, and backed by physical help desks or intermediaries who can guide entrepreneurs through the process.

2.        Capacity Before and After Capital

Many entrepreneurs aren’t “investment-ready” yet, but they could be with the right support. The Fund should intentionally offer phased assistance: idea validation, early-stage boot camps, post-investment coaching, and mentorship. We must build businesses, not just support them.

3.        Close the Loop Between Supply and Demand

It’s not enough to fund small businesses; we must also help them access markets. Structured supplier development programs, incentives for corporate procurement from funded businesses, and local government procurement pipelines can assist entrepreneurs in moving beyond survival mode.

4.        Define Success Differently

Instead of solely measuring the amount of money disbursed, let’s consider: how many jobs were created? How many businesses expanded after one year? How many transitioned into supply chains or hired locally? Let’s foster a performance culture centred on sustainable transformation, not merely on funding delivery.

5.        Invest in Ecosystem Builders

Transformation isn’t just about entrepreneurs; it’s also about the environments in which they operate. This involves investing in intermediaries who understand local realities and are already engaged in the challenging work of supporting entrepreneurs in townships, rural areas, and informal markets. Additionally, it means creating long-term pathways for these ecosystem builders to expand their impact.

Hope, Yes. But Also Honesty.

It’s easy to get excited about R100 billion; that kind of figure turns heads. However, we’ve seen money before, and we’ve witnessed how quickly it disappears or is misused when processes lack transparency, decisions are politicised, and support is superficial.

To avoid these pitfalls, governance is essential. The proposed structure involving a special purpose vehicle (SPV), an oversight committee, and board governance is a good start, but clarity is needed on who gets to decide, how those decisions are audited, and how the public can track progress.

And most importantly, political will must align with institutional humility: listening to entrepreneurs, adapting over time, and co-creating with communities rather than imposing from above.

A Country of Doers

South Africa is full of doers- people who wake up every day to create a plan, promote an idea, sell a product, and build a brand often without support and sometimes without hope.

The Transformation Fund can serve as a lifeline for these doers, but only if we acknowledge that entrepreneurship does not occur in a vacuum. It takes place within systems. It unfolds in Soweto, Khayelitsha, uMlazi, and Seshego where people are already hustling, dreaming, and doing.

If this Fund enables them to not only survive but also thrive, it will transform not only their businesses; it could also transform our beloved South Africa.