SA entrepreneurs' two-year journey to secure funding amid Trump's tariffs

Two years is how long it could take to help an entrepreneur get finance-ready before they can unlock government funding, seeking to reindustrialise South Africa in the face of US President Donald Trump’s punitive tariffs.

The government’s response to trade tariffs, which will affect an estimated 7% of all products exported to America, is to create an Export Support Desk to help companies diversify into new markets, a Block Exemption for Exporters to enable collaboration, and an Export and Competitiveness Support Programme to provide financial support.

Separately, the government, in partnership with the private sector, aims to establish a R100 billion aggregated fund to support what the National Empowerment Fund says is “the ever-growing funding requirements for businesses owned and managed by black entrepreneurs to propel inclusive growth across various sectors of South Africa’s economy”.

This Transformation Fund is anticipated to be capitalised at R20 billion per annum over five years.

Uzenzele Holdings CEO Nadia Rawjee warned that rebuilding industries such as automotive, mineral and agri-processing will require significant investment in entrepreneurs who can expand manufacturing capacity.

Tralac said that “the US tariff could cause tens of thousands of job losses, especially in the agriculture and automobile manufacturing industries”. The 30% sweeping tax came into effect on August 8.

Rawjee told IOL Business that South African entrepreneurs looking to tap into industrial and manufacturing funding face a long road before capital is unlocked, with the process of becoming funding-ready taking as much as 5 000 hours – or just more than two years.

There is growth capital available for small businesses, yet the real challenge lies in structuring funding in a way that satisfies lenders and government incentives, said Rawjee.

“South Africa has no shortage of capable entrepreneurs with credible projects and strong business cases. The real challenge lies not in talent but in accessing and structuring the right funding to unlock their potential,” Rawjee said.

Rawjee explains that preparing a project to the point where commercial lenders and the Department of Trade, Industry and Competition will sign off on loans and incentives such as the Black Industrialist grant requires significant technical work.

“This is not work that a bookkeeper or accountant can do in isolation. It is technical and time consuming,” Rawjee said. She added that navigating the process can take years and requires entrepreneurs to adjust to changing interest rates and economic conditions.

Rawjee added that “many entrepreneurs think that they can raise capital for their businesses in a couple of days / weeks / months”.

IOL Business