Johannesburg - The National Empowerment Fund (NEF) had accelerated its funding efforts and for the first time since it was established would be able to allocate all its annual investments budget by year-end in March, Philisiwe Buthelezi, the chief executive, said yesterday.
The fund, established in 1997 to support the development of black business, has been criticised for its failure to spend money allocated to it. It had not been able to use all its annual budget for investments in one year.
The government capitalised the NEF with R410 million for the current financial year and in the seven months from March the fund had approved deals worth more than R200 million, said Buthelezi.
The fund had approved more than 49 deals worth R222.5 million since March.
Of those transactions about 27 deals worth R41.6 million had been paid out while 22 deals worth R180.5 million had been approved and were waiting for legal processes.
Buthelezi said the NEF would have invested the R410 million allocated for deals by next March compared with the deals worth a paltry R26 million, it concluded last year.
The fund was working on applications worth R200 million. The applications were at an advanced stage and would be concluded before the end of the year.
The fund uses a portion of a government grant to pay staff and for administration. It has allocated R40 million for administration this year compared with R26 million last year, which is reflected in its annual report.
Buthelezi, who was appointed in June, said the NEF had not been able to spend its budget for investments because its investment committee had not been meeting regularly enough.
The fund's performance improved because the seven-member committee had met seven times since June compared with meeting only once in the past financial year, she said.
"I just explained to the committee members that the committee was the life blood of the NEF and it had to meet regularly for things to happen," Buthelezi said.
The committee was made up of two private equity specialists, one government official, NEF's chief investment officer Claire Busetti, Buthelezi, NEF's former acting chief executive, Nchaka Moloi, and former department of trade and industry director-general Alistair Ruiters.
Buthelezi also attributed the poor spending to the uncertainty about the chief executive position in the NEF. Former chief executive Khanya Motshabi left under a cloud of controversy in 2003 and Sydney Maree, who took over from, him resigned less than a year after his appointment.
The fund has been without a chief executive since the resignation of Maree, who has since been charged with fraud, in August last year.
Ronnie Ntuli, the newly appointed chairman, was optimistic about the future, saying the work that had been done since the beginning of the current financial year showed that it had improved its ability to deliver on its mandate.
Lionel October, the deputy director-general at the department, which is responsible for the NEF, said the department had appointed a new board of directors at the fund.
The new board is made up of senior business people and only three government officials, as opposed to the previous one, which was made up of government officials only.
Other people on the new board are Sonja Sebotsa, an executive director of WDB Investment Holdings, a broad-based women's empowerment group; Jeniffer Hoffman, the chief executive of MTN Banking and former managing director of Teba Bank; Thando Mhlambiso, who started Seaview Partners, a private equity investment firm; James Theledi, the deputy director-general of analysis and risk management in the department of public enterprises; Polo Radebe, the acting chief director of the black economic empowerment unit at trade and industry; and Kabelo Seitshiro, the chief director in the asset and liability management division in the national treasury.