annual performance plan 20171/8 – 20 · pdf filemgi : mckinsey ... poverty, inequality,...

2017/18 – 20

AnnuAl PerformAnce PlAn

AnnualPerformancePlanFortheyears2017/18-20

NationalEmpowermentFund

AnnualPerformancePlanfor2017/18-20 2

TableofContents

1. Organisationalstructure.............................................................................................................................................5

2. Officialsign-off...............................................................................................................................................................6

3. ForewordbytheMinister............................................................................................................................................7

4. OverviewbytheAccountingAuthority.....................................................................................................................9

5. Vision.............................................................................................................................................................................12

6. Mission..........................................................................................................................................................................12

7. Values............................................................................................................................................................................12

8. Strategicgoalsandobjectives...................................................................................................................................13

9. RecentCourtRulings..................................................................................................................................................15

10. UpdatedSituationalAnalysis....................................................................................................................................16

11. KeyprogrammesalignedtoGovernmentPriorities............................................................................................22

12. DescriptionofthePlanningProcess.......................................................................................................................43

13. FinancialPlan..............................................................................................................................................................44

14. ProgrammePerformance..........................................................................................................................................50

14.1 Programme1:uMnothoFund........................................................................................................................50

14.2 Programme2:StrategicProjectsFund........................................................................................................56

14.3 Programme3:iMbewuFund..........................................................................................................................60

14.4 Programme4:Rural&CommunityDevelopmentFund...........................................................................64

14.5 Programme5:WomenEmpowermentFund..............................................................................................68

14.6 Programme6:EntrepreneurshipDevelopment........................................................................................72

14.7 Programme7:AssetManagement(InvestorEducation).........................................................................78

15. PerformancePlanMatrices.......................................................................................................................................81

16. AssetManagementPlan.............................................................................................................................................90

17. InformationTechnologyPlan...................................................................................................................................91

18. RiskManagementandFraudPreventionPlan......................................................................................................95

19 Subsidiaries................................................................................................................................................................105

20 ServiceDeliveryImprovementPlan......................................................................................................................107

21 IndicatorProfiles......................................................................................................................................................109

AppendixA:FinancialProjections.................................................................................................................................123



AcronymsandAbbreviations

APP : Annual Performance Plan

Approved: Final committee approval obtained, legal agreements not signed

B-BBEE: Broad-Based Black Economic Empowerment

BFS : Bankable Feasibility Study

Commitments: Legal agreements signed. (Deals may have been approved in current and previous financial periods.) All Conditions Precedent may not have been met yet.

COSO Committee of Sponsoring Organisations of the Tread way Commission

DFIs : Development Finance Institutions

Disbursements: Total cash advancements made against all approved deals (deals may have been approved in current and previous financial periods) subject to all Conditions Precedent having been satisfied by the investee.

EC : Eastern Cape

ERM Enterprise-wide Risk Management

FC : Financial Closure

FMD : Fund Management Division

FS : Free State

GDP : Gross Domestic Product

IDC : Industrial Development Corporation

IPAP : Industrial Policy Action Plan

IPF : Industrial Policy Framework

IRMSA Institute of Risk Management Standards of South Africa

IRR : Internal Rate of Return

IT : Information Technology

IST : Information Systems Technology Department

JSE : Johannesburg Stock Exchange

KZN : KwaZulu-Natal

KPI : Key Performance Indicator



MBAP : Mining Beneficiation Action Plan

MBO : Management Buy-Out

MGI : Mckinsey Global Institute

MOU : Memorandum of Understanding

MTEF Medium Term Expenditure Framework

MP : Mpumalanga

NEF : National Empowerment Fund

NIPF : National Industrial Policy Framework

QLFS : Quarterly Labour Force Survey

PFMA : Public Finance Management Act

PRASA : Passenger Rail of South Africa

PFS : Pre-feasibility study

PIU : Pre-Investment Business Support Unit

POIU : Post Investment Business Support Unit

RMC : Risk and Portfolio Management Committee

ROI : Return on Investment

RCDF : Rural and Community Development Fund

SAIs : State-Allocated Investments

SEDU : Socio Economic Development Unit

SME : Small and Medium Enterprise

SOCE : State Owned Commercial Enterprise

SPF : Strategic Projects Fund

TC : Technical Completion

WC : Western Cape

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1. Organisationalstructure



2. Officialsign-off

It is hereby certified that this Annual Performance Plan (APP):

Was developed by the management of National Empowerment Fund (NEF) under the guidance of Accounting Authority, Mr Rakesh Garach.

Was prepared in line with the current Strategic Plan of the NEF.

Accurately reflects the performance targets which NEF will endeavour to achieve given the resources made available in the budget for 2017/18.

Innocentia Pule : ________________________

: ________________________

Chief Financial Officer

Date: 27/01/2017

Philisiwe Mthethwa

Chief Executive Officer

Date: 27/01/2017

Recommended for approval by:

Rakesh Garach : ________________________

Accounting Authority

Date: 27/01/2017



3. ForewordbytheMinister

The South African economy has faced enormous challenges mainly due to subdued global

economic growth that has hampered our economic progress in solving the triple challenges of

poverty, inequality, and unemployment facing our people. The economy faces an onslaught

from the global economy’s lacklustre growth whilst internally there also exists a variety of

challenges that include a weakened currency, physical, social and economic infrastructure

constraints, high levels of unemployment, as well as increasing domestic food prices as result

of the severe drought.

The climate that South Africa finds itself in requires that we radically transform our country’s

economy. It is imperative now more than ever that we align the economy to the commitments

in the National Development Plan to ensure higher rates of inclusive growth. There is a strong

focus on setting our primary sector firmly at the heart of a new growth path that will move us

up the value chain. There is a need to significantly broaden the base of economic participation,

especially amongst the youth. There is further need for the transformation process of strategic

sectors to be fast-tracked to enable inclusive growth.

Manufacturing remains one of the least empowered sectors and the Black Industrialist

Programme aims to increase black ownership in order for black entrepreneurs to meaningfully

participate in the whole economic value chain. The Black Industrialist Programme plays a

pivotal role in harnessing resources to support black industrialists who have the potential to

facilitate economic development and create jobs. I am therefore pleased to note that the NEF

has 27 pipeline projects worth R28.6 billion to promote the Black Industrialist Policy. The NEF

continues to fulfill its mandate as a driver and thought-leader in promoting and facilitating black

economic participation in the economy.



The dti has noted that through its financial and non-financial support to black empowered

business, the NEF has made great strides towards the achievement of a number of

performance milestones. To date the NEF has approved transactions worth over R8.5 billion

to support black businesses in all sectors of the economy. The NEF’s investments are geared

to support over 89 000 job opportunities (of which over 62 000 are new). The NEF continues

to prioritise regional development and through its regional offices, it strives to improve regional

participation of black business in the mainstream economy.

DrRobDavies.MP

MinisterofTradeandIndustry



4. OverviewbytheAccountingAuthorityCritical risks continue to relate to Recapitalisation, Sustainability and Credit/Asset quality.

Securing additional capital remains the NEF’s key objective to ensuring the sustainability of

the organisation in order for it to fulfil its mandate. It is therefore critical to urgently implement

the business combination process as approved by the stakeholder ministries, as well as to

receive a bridging finance from the IDC to fund 2017/18 activities.

The Board of Trustees is currently not optimally composed. Trustees continue to be stretched

in attempts to ensure the Board’s adequate representation in all its sub-committees. The

Board looks forward to an expedited conclusion of the current recruitment process. In the

meanwhile, the Board has appointed five additional non-trustee members to serve on the

various board-subcommittees in order to enhance the skills set within these committees.

The NEF has continued to champion the quest for inclusive economic participation as

evidenced in the sterling performance reported for the 2015/16 financial year. The total value

of approvals since inception to the 2015/16 financial year is R7.6 billion towards 770 black

businesses; while R5.1 billion has been disbursed into the national economy.

It is pleasing to report that during the first three quarters of the 2016/17 financial year, the NEF

has approved sixty-nine transactions worth R927 million and has disbursed R467 million into

the economy. Through these disbursements, the NEF is geared to support 3 102 job

opportunities (1 155 of which are new). This brings total job opportunities geared to be

supported since inception in excess of 89 000.

Management is continuing to put all efforts to improve the quality of the portfolio for long term

sustainability and which will ensure that job opportunities created through the support of these

deals are protected. Some of the avenues that will be implemented going forward include



intensified workouts and turnaround of struggling businesses; proactive sector approach in

identifying good investment opportunities; enhanced entrepreneurial assessment and support

of entrepreneurs. Some of these increased efforts would require more financial support in the

form of grants to the NEF. Management is engaging a few parties in forging partnerships in

this regard.

The final draft of the APP is hereby presented to the dti for approval. As indicated above, a

key assumption made by the organisation as it presents its targets herein is that additional

funding will be sourced in time for the beginning of the 2017/18 financial year. This submission

has been deliberated on and approved by the Board of Trustees.



PartA:StrategicOverview



5. Vision

Our vision is to be the leading provider of innovative transformation solutions for an

economically inclusive South Africa. We seek to be the lead financier of Broad-Based Black

Economic Empowerment (B-BBEE) investments in the DFI space.

6. Mission

The National Empowerment Fund is a catalyst of B-BBEE in South Africa. We enable, develop,

promote and implement innovative investment and transformation solutions to advance

sustainable black economic participation in the economy.

7. Values

The NEF has implemented a values & culture programme which has been developed,

communicated and implemented through various workshops with staff. The NEF values are

the cornerstone of how the NEF expects its employees to conduct themselves when

discharging their duties. The leadership strives to ensure the entrenchment of these values

through targeted initiatives such as the values celebration program, as well as linking the

values and culture program to heritage month. The values by which we conduct ourselves are:

Ethics – Choosing to do what’s right over what’s wrong

Motivation – Being self-driven and passionate in what we do

Performance – Achieving results timeously, accurately and performing to create an impact

Ownership – Owning our actions, our decisions and consequences of our actions

Worthy – Creating an environment where we make a valued contribution and where we feel

valued for our contribution

Excellence – Consistently exceeding expectations and being the best in everything we do

Respect – Treating everyone fairly and with dignity and demonstrating humility



8. Strategicgoalsandobjectives

The NEF’s key strategic outcome-oriented goals against which performance is reported are

to:

1. Provide finance to business ventures established and managed by black people.

2. Invest in black empowered businesses that have high employment creating

opportunities.

3. Support the participation of black women in the economy.

4. Facilitate investment across all provinces in South Africa.

5. Encourage and promote savings, investment and meaningful economic participation

by black people.

6. Advance black economic empowerment through commercially sustainable

enterprises.

7. Establish the NEF in the South African economy as a credible and meaningful DFI.

8. Establish the NEF as a sustainable DFI.

In order to achieve these objectives the NEF is structured to deliver against this mandate by

performing the following core activities:

¥ Fund Management, which comprises:

o The Venture Capital & Corporate Finance Division, which is comprised of

uMnotho Fund, the Strategic Projects Fund and the Women Empowerment

Fund.

o The SME & Rural Development Division, which consists of Pre-Investment

Unit, iMbewu Fund, Rural & Community Development Fund and Regional

Offices.

o General Counsel, which provides the following:

§ Legal support,

§ Post-investment support services to the invested portfolio,



§ Turnaround, workout and restructuring services,

§ Socio-economic Development and Asset Management Units through

which the NEF provides support to communities, aims to foster a

culture of savings and investment among its beneficiaries as well as

promote Enterprise Development.

Empowerment Dividend

The NEF seeks to measure and assess its impact not only on the basis of financial return, but

in accordance with what is referred to as the Empowerment Dividend which is the socio-

economic impact of the NEF’s investment activities, as provided for in the Broad-Based Black

Economic Empowerment Act. The Empowerment Dividend has to manifest itself in

measurable impact results over and above financial returns.

Elements of the Empowerment Dividend are as follows:

¥ Contribution to Broad-Based Black Economic Empowerment – the NEF assesses

each transaction against the results of the B-BBEE scorecard, before and after funding,

to ensure that each transaction contributes to the advancement of B-BBEE.

¥ Participation by black women – the NEF emphasises the empowerment of women

by providing for an additional weighting for black women participation.

¥ Support of Job Opportunities – Contribution towards employment creation and the

number of job opportunities created per rand invested or job opportunities sustained

through investment in expansion type activities.

¥ Investment in Priority Growth Sectors – The number of investments facilitating black

ownership and control of existing and new enterprises in the priority sectors of the

economy as identified by the IPAP and the National Development Plan.

¥ Geographic Spread - Geographic spread of investments and contribution towards

increased economic activity across all provinces, particularly in areas of regional

economic disadvantage.



¥ Investment Return - The return that each Fund realises on capital employed after

impairment.

9. RecentCourtRulings

There are no recent court rulings which would impact on the NEF’s ability to implement its

strategy.



10. UpdatedSituationalAnalysis

The South African economic environment is characterised by minimal GDP growth projections

cited at 0.8% and 1.6% year-on-year for the periods 2017 and 2018, respectively. The purpose

of this section is to provide an economic outlook overview and to highlight the economic

challenges facing South Africa and relate these to the NEF’s operating environment in order

to identify key implications for its strategic and operational business models.

A Global Economic Snapshot

Major global macroeconomic dynamics continue to affect healthy economic prospects across

countries and regions by hampering economic growth. This includes the economic slowdown

in China, which is largely due to the restructuring of the economic activity away from exports

in favour of investment towards domestic consumption. This has had an adverse effect on

global commodity demand, in turn lowering commodity prices and leading to significant

economic production redistributive consequences being felt across various sectors, including,

but not limited to mining and mineral beneficiation, manufacturing as well as engineering and

construction, in different countries. Consequently, a slowdown in local and foreign direct

investments and trade as well as a reduction in capital flows to emerging markets, countered

by increased exports due, in part, to weakening commodity-driven domestic currencies, have

been observed. These dynamics, coupled with a host of non-economic factors, including

geopolitical tension and political discord, have exacerbated an already subdued economic

outlook.

According to the IMF, global output is estimated to have grown by 3.1% in 2015, with 1.9%

growth in advanced economies and 4.0% growth in emerging markets and developing

economies. Global output growth is expected to remain modest in 2016, at 3.1%, before

picking up to 3.4% in 2017. Whilst emerging markets and developing economies will continue

to account for a substantial share of global economic growth in 2016, the effective growth rate



is projected to increase only modestly relative to 2015 and remain around 2% which is below

the average growth of the past decade. Economic growth projections remain lacklustre due to

a combination of factors such as the economic weakness in oil-exporting countries, the

economic slowdown in China where growth continues to shift away from manufacturing and

investment and a persisting weak outlook for exporters of non-oil commodities, following

further price declines.

Notably, however, oil-importing emerging market economies are benefiting from falling oil

prices with Brent crude oil trading below 50 US dollars a barrel, but in some instances these

gains are eroded by high inflation, high interest rates, poor credit ratings and weakness in

external demand, which counter the positive terms-of-trade impact on domestic demand and

growth. Furthermore, there is a modest acceleration of growth in advanced economies, which

in turn affects global growth. Notably, however, beyond 2017, global growth is projected to

increase to just below 4% by the end of the forecast year 2021 horizon, reflecting a further

acceleration in growth in emerging markets and developing economies. This outcome relies

on a number of important assumptions holding true, these being:

¥ A gradual normalisation of economic conditions in developing economies currently

under economic stress;

¥ A successful rebalancing of China’s economy, with trend growth rates that, while lower

than those of the past two decades, remain high;

¥ A pickup in activity in commodity exporters, albeit with growth rates more modest than

in the past; and

¥ Resilient growth in emerging markets and developing economies.

In this context, the gradual increase in the global weighted economic contribution of fast-

growing countries such as China and India also plays a role in boosting global growth going

forward.



Inward Look: The South African Economy

While the South African economy faces an onslaught from the sluggish global economic

growth, internally there exists a variety of challenges including; a weak currency, physical

social and economic infrastructure constraints, a shrinking agricultural sector, high levels of

unemployment as well as a predominantly time-specific and seasonal energy crisis that

intensifies daily during peak power demand periods and in winter.

The on-going drought and electricity constraints slowed economic growth in 2015, whilst

tighter financial conditions (i.e. high inflation and reduced credit extension to consumers hence

reduced buying power) and low confidence in the South African economy, evidenced by the

recent threat of a potential sovereign rating downgrade to junk status, have hampered growth

in 2016. South Africa’s real gross domestic product rose by 0.2% (q-o-q) in Q3 2016 and year-

on-year growth as a result is 0.7%. The weak expansion is further dampened by continued

water restrictions and reduced electricity consumption. This is evidenced by the contraction of

the agriculture, forestry and fishing industry as well as the electricity, gas and water industry,

which have reported a decline of 0.3% and 2.9% respectively. Fixed investment contracted by

1% in Q3, which is less than Q2 where it had experienced a sharp decline of 4.6%. Even

though South Africa narrowly escaped a credit downgrade, it is still subjected to close scrutiny

and remains under pressure to improve economic conditions.

Mining and quarrying had the most positive impact on the GDP with a growth rate of 5.1% in

the third quarter. The local government elections contributed to the economy positively driving

the growth of general government services up by 1.8%. Other industries that showed positive

growth were finance (1.2%), personal services (0.6%), construction (0.3%) and transport

(0.3%).

Unemployment rose to 27.1% in the third quarter of 2016 up from 26.6% in the previous

quarter. Community and social services have, to date, recorded the bulk of the employment



losses, mainly due to fiscal consolidation efforts and the election cycle. The agriculture,

transport, manufacturing, mining and trade sectors continue to report substantial job losses

on a q-o-q basis.

These tough economic conditions have triggered inflationary pressures and the Monetary

Policy Committee has increased its benchmark interest rate four times since July 2015 to 7%

in an attempt to steer inflation back into its 3% to 6% target band. Inflation expectations for

2016 were lowered from 6.3% in Q2 to 6.2% in Q3. It is anticipated that inflation for 2017 will

be 6% (down from 6.2%) while expectations for 2018 remain unchanged at 5.9%.

Implications for the National Empowerment Fund

In light of the above-mentioned economic landscape, analysts agree that structural reforms

are needed in order to boost economic growth and to increase the economy’s labour

absorption capacity in South Africa. The reality presents a subdued picture for South Africa’s

growth prospects with the GDP growth rate forecast to average 2.2% from 2017 to 2020. In

the absence of radical, decisive intervention, the country will continue to fall short of targeted

GDP growth rates of 5.4% as stipulated by the National Development Plan (NDP). Now more

than ever, radical changes need to be made by key stakeholders in the economy such as the

state, the private sector and Development Finance Institutions (DFIs) in order to arrest the

decline in the economic climate and effect positive economic growth.

The NEF has a clear mandate to drive economic transformation in alignment with the goals of

the NDP. Therefore, as a funding agency with a niche focus on black economic empowerment,

the NEF seeks to address market inefficiencies where private capital may be unwilling or

unable to bear the risk of providing capital to black businesses that may be considered high

risk – an increasing reality faced by black entrepreneurs that are operating in this tough

economic climate. DFIs play a crucial role in investing in underserved economic spheres



(SMEs, rural and community development projects etc.) and also under-capitalised sectors in

the economy.

In launching IPAP 2016, the Minister of Trade and Industry emphasised the importance of

inclusive growth which could only be achieved through a strong Industrial Policy that was

embraced by all social partners. As such government has developed close cooperation with

industrial companies, with increased focus on black-owned industrial enterprises. This policy

landscape provides the backdrop against which the NEF will need to play a crucial role in

supporting and facilitating the success of government’s transformation agenda for inclusive

growth, despite the various challenges posed by an economy characterised by the global

slowdown. The economic climate continues to exert pressure on the NEF’s investees. There

has been an increase in the number of enterprises in distress, which has resulted in potentially

good business ideas losing their commercial viability, adversely impacting the investment

portfolio impairment level of the NEF loan book.

In order to continue supporting current investees, the NEF management continues to actively

work on various interventions to remedy issues that have arisen through consultation with the

Post-Investment Unit as well as the Turnaround, Workout and Restructure Unit (TWR).

Through the Post-Investment Unit, businesses in the NEF portfolio are actively monitored and

supported through necessary interventions such as finance and/or mentorship where

necessary. In-distress investees are referred to the TWR unit where an assessment is done

of the business and the best possible intervention(s) instituted.

Identifying Growth Strategies

In this challenging environment, the NEF recognises that in order to enhance support to future

investees in ways that ensure viability and sustainability it needs to focus on strategically

positioning itself in order to not only identify business opportunities with good market prospects

that require funding but also to take advantage of them. State-led initiatives such as the newly



established Black Industrialists Programme as well as Operation Phakisa present

opportunities for the NEF to expand its activities to tap into sectors where an enabling

environment is being created by various government programmes.

Also, some structural constraints that have restricted economic growth in the past have led to

opportunities for entrepreneurs to capitalise on. For example, South Africa was plagued with

an electricity supply crisis in 2015 that led to the emergence of green industry entrepreneurs

that specialise in renewable energy and harness natural resources e.g. wind and solar

radiation, and process them to create electricity for both the local and international markets.

The NEF also recognises the country’s high unemployment rate as an obstacle towards real

transformation and is proud of the progress it continues to make towards the support and

creation of employment opportunities. The NEF strives to maximise the empowerment

dividend through targeting investment activities with the most potential for job creation, with a

social multiplier effect, as well as sustainable business success.

The NEF continues to contribute to the national transformation agenda whilst remaining

responsive to the economic environment and adjusting accordingly. Also, discussions at

Board level continue to challenge the organisation to constantly interrogate ways in which it

operates and evaluate whether or not they enable the organisation to effectively fulfil its

mandate.



11. KeyprogrammesalignedtoGovernmentPriorities

The NEF seeks to align its strategy and activities with the priorities of national government.

Details of this are provided below.

11.1 Alignmenttothedti

The NEF actively contributes to the following strategic objectives of the dti.

the dti Strategic Objectives NEF Strategic Objectives Programmes/ Activities

Facilitate transformation of the

economy to promote industrial

development, investment,

competitiveness and employment

creation.

Provide finance to business

ventures established and

managed by black people.

Approval and Commitment

activities by the funds.

(iMbewu Fund, Rural &

Community Development

Fund, uMnotho Fund,

Women Empowerment

Fund and Strategic Projects

Fund)

Invest in black empowered

business’ that have high

employment creating

opportunities.

Approval and Commitment

activities by the funds.

(iMbewu Fund, Rural &

Community Development

Fund, uMnotho Fund,

Women Empowerment

Fund and Strategic Projects

Fund)

Black economic empowerment is

advanced through commercially

sustainable enterprise.

Non-financial support

activities including

mentorship, entrepreneurial

development, and portfolio

management activities.

Facilitate broad-based economic

participation through targeted

interventions to achieve more

inclusive growth.

Encourage and promote savings,

investment and meaningful

economic participation by black

people.

Investor education

campaign.

Natio

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11.2

Alignm

enttotheNationalDevelopmentPlan

Enab

ling

mile

ston

es li

sted

in th

e N

atio

nal D

evel

opm

ent P

lan

to w

hich

the

NEF

can

con

tribu

te in

clud

e:

¥ In

crea

sing

em

ploy

men

t fro

m 1

3 m

illion

in 2

010

to 2

4 m

illion

in 2

030.

¥ Br

oade

n ow

ners

hip

of a

sset

s to

his

toric

ally

dis

adva

ntag

ed g

roup

s.

By fo

cusi

ng o

n its

man

date

whi

ch is

to p

rom

ote

and

faci

litat

e bl

ack

econ

omic

par

ticip

atio

n in

the

econ

omy,

the

NEF

is a

ble

to c

ontri

bute

tow

ards

the

trans

form

atio

n of

the

econ

omy.

In

par

ticul

ar, t

he N

EF c

an c

ontri

bute

tow

ards

the

achi

evem

ent o

f the

se m

ilest

ones

by

cont

ribut

ing

to th

e

crea

tion

of e

mpl

oym

ent t

hrou

gh th

e fin

anci

al a

nd n

on-fi

nanc

ial s

uppo

rt of

ent

repr

eneu

rs.

Thro

ugh

the

fund

ing

of s

usta

inab

le lo

cal b

lack

-ow

ned

vent

ures

, the

NEF

wou

ld b

e ac

tivel

y co

ntrib

utin

g to

war

ds s

uppo

rting

loca

l, bl

ack-

owne

d,

smal

l and

med

ium

siz

ed e

nter

pris

es, a

nd in

doi

ng s

o, s

uppo

rting

the

job

crea

tion

abilit

ies

of th

ese

firm

s.

The

NEF

als

o st

rives

to c

ontri

bute

tow

ards

the

prom

otio

n of

labo

ur a

bsor

bing

indu

strie

s by

fund

ing

trans

actio

ns in

the

prio

rity

sect

ors.

In

addi

tion,

the

fund

ing

prov

ided

by

the

NEF

can

supp

ort l

ocal

bus

ines

ses

and

cont

ribut

e to

war

ds a

ttrac

ting

fund

ing

from

priv

ate

inve

stor

s th

roug

h co

-fund

ing

arra

ngem

ents

.

“Em

ploy

men

t sce

nario

s pr

epar

ed b

y th

e C

omm

issi

on s

ugge

st th

at

mos

t new

jobs

are

like

ly to

be

sour

ced

in d

omes

tic-o

rient

ated

busi

ness

es, a

nd in

gro

win

g sm

all-

and

med

ium

-siz

ed fi

rms.

”

(Pag

e 39

, Nat

iona

l Dev

elop

men

t Pla

n)

Natio

nalEmpo

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24

The

NEF

is a

ble

to c

ontri

bute

tow

ards

the

crea

tion

of a

n in

tegr

ated

rur

al e

cono

my

thro

ugh

its R

ural

& C

omm

unity

Dev

elop

men

t Fun

d, w

hich

focu

ses

on fu

ndin

g ag

ricul

tura

l pro

ject

s in

rura

l and

per

i-urb

an a

reas

. In

doi

ng s

o, th

e fu

nd c

ontri

bute

s to

the

deve

lopm

ent o

f rur

al e

cono

mie

s,

as w

ell a

s th

e de

velo

pmen

t of a

gric

ultu

re a

nd a

gro-

proc

essi

ng a

nd to

uris

m in

rura

l and

per

i-urb

an a

reas

.

Thro

ugh

the

cont

inua

tion

of it

s In

vest

or E

duca

tion

Prog

ram

me,

the

NEF

end

eavo

urs

to in

culc

ate

a sp

irit o

f ent

repr

eneu

rshi

p, a

s w

ell a

s sa

ving

s

and

inve

stm

ent.

The

alig

nmen

t of t

he N

EF’s

stra

tegy

and

act

iviti

es w

ith O

utco

me

4 of

the

Med

ium

Ter

m S

trate

gic

Fram

ewor

k is

pre

sent

ed b

elow

.

Sub-

Out

com

e A

ctio

ns

Indi

cato

rs

NEF

Tar

get &

Act

ions

1.

Pro

duct

ive

inve

stm

ent i

s ef

fect

ivel

y cr

owde

d in

th

roug

h th

e in

fras

truc

ture

bui

ld

prog

ram

me

Supp

ort f

or lo

cal

supp

liers

for

infr

astr

uctu

re

prog

ram

me

% s

hare

of l

ocal

in

puts

in

gove

rnm

ent

infr

astr

uctu

re

The

NEF

sup

ports

the

gove

rnm

ent’s

infra

stru

ctur

e pr

ogra

mm

es b

y su

ppor

ting

loca

l sup

plie

rs.

For

inst

ance

, th

e N

EF h

as f

unde

d lo

cal B

-BBE

E su

pplie

r

invo

lved

in th

e PR

ASA

rollin

g st

ock

supp

ly c

ontra

ct.

The

proj

ect a

lso

aim

s to

prov

ide

Blac

k w

omen

ow

ned

busi

ness

es w

ith a

n ef

fect

ive

plat

form

from

whi

ch

they

can

tran

sitio

n in

to in

depe

nden

t bus

ines

ses.

Pass

enge

r Rai

l Age

ncy

of S

outh

Afr

ica

(PR

ASA

) (R

90 m

illio

n co

mm

itted

)

¥ PR

ASA

initi

ated

a ro

lling

stoc

k fle

et re

new

al p

rocu

rem

ent p

rogr

am w

orth

R50

bn w

ith e

xpec

ted

mai

nten

ance

con

tract

of

R10

bn o

ver

10 y

ears

to

repl

ace

the

agin

g st

ock

¥ PR

ASA

inte

nd fo

r loc

al B

lack

ent

repr

eneu

rs to

par

ticip

ate

econ

omic

ally

in

the

roll

out o

f the

rollin

g st

ock

Natio

nalEmpo

wermen

tFun

d

Annu

alPerform

ancePlanfor2

017/18

-20

25

Sub-

Out

com

e A

ctio

ns

Indi

cato

rs

NEF

Tar

get &

Act

ions

D

urin

g th

e in

itial

sta

ges,

the

NEF

war

ehou

sed

the

shar

es in

tend

ed to

ben

efit

Activ

e Bl

ack

Ente

rpris

es, I

nves

tor

Blac

k En

terp

rises

, Em

ploy

ee T

rust

s, a

nd

the

Educ

atio

n Tr

ust w

hich

will

bene

fit a

ppro

xim

atel

y 12

0 pe

ople

.

The

proj

ect a

ims

to a

chie

ve a

min

imum

of 6

6% a

vera

ge lo

cal c

onte

nt.

Th

e bu

ildin

g of

st

rate

gic

infr

astr

uctu

re

stim

ulat

es c

row

ding

in

of p

rodu

ctiv

e in

vest

men

t.

New

pro

duct

ive

inve

stm

ents

util

ise

the

infr

astr

uctu

re

prov

ided

by

ever

y SI

P.

By s

uppo

rting

tou

rism

infra

stru

ctur

e an

d fil

m in

dust

ry p

roje

cts,

the

NEF

is

inve

stin

g in

stra

tegi

c in

frast

ruct

ure

that

has

the

abi

lity

to a

ttrac

t pr

oduc

tive

inve

stm

ent.

Tw

o of

thes

e in

vest

men

ts a

re o

utlin

ed b

elow

:

Gra

skop

(R

33.4

mill

ion

inve

sted

)

¥ Th

e G

rask

op G

orge

are

a is

bei

ng d

evel

oped

into

a m

ajor

tou

rism

node

on

the

Pano

ram

a To

uris

t Rou

te in

Mpu

mal

anga

thro

ugh

the

new

Adve

ntur

e C

entre

.

¥ Th

e m

ain

feat

ure

of th

e pr

ojec

t is

the

cons

truct

ion

of a

n ou

tdoo

r lif

t

syst

em th

at w

ill be

abl

e to

ferry

peo

ple

up a

nd d

own

off t

he c

liff-f

ace

into

the

fore

st e

nviro

nmen

t bel

ow. T

he fo

rest

env

ironm

ent w

ill ha

ve

vario

us e

leva

ted

and

grou

nd w

alkw

ays

that

will

allo

w v

isito

rs t

o

expl

ore

the

uniq

ue e

nviro

nmen

t.

¥ Su

ppor

ting

this

out

door

lift

syst

em w

ill be

a n

ewly

con

stru

cted

tour

ism

cent

re th

at w

ill pr

ovid

e a

mul

titud

e of

tour

ism

pro

duct

s an

d se

rvic

es,

incl

udin

g: a

res

taur

ant,

bar,

reta

il ou

tlets

, kid

s pl

ay a

rea

and

cent

re

man

agem

ent o

ffice

s th

at w

ill su

ppor

t the

ent

ire d

evel

opm

ent.

¥ In

the

med

ium

-term

the

pro

ject

will

cons

truct

a 3

6-be

d ho

tel i

n th

e

Gor

ge t

hat

will

supp

ort

Phas

e I

thro

ugh

the

prov

isio

n of

add

ition

al

Natio

nalEmpo

wermen

tFun

d

Annu

alPerform

ancePlanfor2

017/18

-20

26

Sub-

Out

com

e A

ctio

ns

Indi

cato

rs

NEF

Tar

get &

Act

ions

su

ppor

t inf

rast

ruct

ure

such

as

the

hote

l gue

st p

arki

ng, l

aund

ry, o

ffice

s

etc.

The

pro

ject

will

crea

te 1

45 jo

bs.

Cap

e Po

int F

ilm S

tudi

os

¥ C

ape

Poin

t Fi

lm S

tudi

os (

CPF

S) a

ims

to d

evel

op t

he f

irst

purp

ose

built

four

Pre

cinc

ts S

ea a

nd U

nder

wat

er S

ound

Sta

ge in

the

Sout

hern

Hem

isph

ere.

¥ Th

ere

has

been

gro

win

g de

man

d fo

r pr

oduc

tion

faci

litie

s of

an

inte

rnat

iona

l sta

ndar

d in

Sou

th A

frica

by

Hol

lyw

ood

prod

ucer

s.

¥ Th

eref

ore,

CPF

S ai

ms

to a

ddre

ss th

is s

hortf

all b

y of

ferin

g un

ique

and

nich

e w

ater

sta

ge f

acilit

ies

that

are

cur

rent

ly n

ot a

vaila

ble

in t

he

coun

try in

add

ition

to e

xist

ing

soun

d st

ages

.

¥ Th

e pr

ojec

t has

gre

at jo

b cr

eatio

n po

tent

ial a

nd w

ill as

sist

to re

vive

an

econ

omic

ally

-dep

ress

ed a

rea

in A

tlant

is, C

ape

Tow

n. T

his

proj

ect w

ill

crea

te 5

0 di

rect

and

450

0 in

dire

ct jo

bs.

2.

The

prod

uctiv

e se

ctor

s ac

coun

t fo

r a g

row

ing

shar

e of

pr

oduc

tion

and

empl

oym

ent.

IPA

P im

plem

ente

d an

d re

view

ed re

gula

rly in

te

rms

of im

pact

s on

gr

owth

, em

ploy

men

t, in

vest

men

t, ou

tput

, ex

port

s an

d A

fric

an

regi

onal

dev

elop

men

t.

IPA

P se

ctor

in

terv

entio

ns

tow

ards

gro

wth

, em

ploy

men

t cr

eatio

n an

d m

ore

equi

tabl

e in

com

es

unde

rway

.

In 2

007,

the

Nat

iona

l Em

pow

erm

ent F

und

(NEF

) est

ablis

hed

the

Stra

tegi

c Pr

ojec

ts F

und

(SPF

), to

pro

vide

ven

ture

cap

ital e

ntre

pren

eur f

undi

ng in

early

dev

elop

men

t sta

ge p

roje

cts

with

in s

trate

gic

Sout

h Af

rican

eco

nom

y-

driv

ing

sect

ors

as p

er g

over

nmen

t’s In

dust

rial P

olic

y Ac

tion

Plan

(IPA

P).

In li

ne w

ith I

PAP,

SPF

was

est

ablis

hed

to:

crea

te n

ew m

anuf

actu

ring

and

indu

stria

l cap

acity

, cre

ate

an in

clus

ive

econ

omy

and

new

job

oppo

rtuni

ties,

incr

ease

So

uth

Afric

a’s

expo

rt ea

rnin

g po

tent

ial

and

redu

ce

impo

rt

Natio

nalEmpo

wermen

tFun

d

Annu

alPerform

ancePlanfor2

017/18

-20

27

Sub-

Out

com

e A

ctio

ns

Indi

cato

rs

NEF

Tar

get &

Act

ions

de

pend

ency

, as

wel

l as

to in

crea

se c

o-in

vest

men

t and

link

age

with

fore

ign

dire

ct in

vest

men

t.

SPF

focu

ses

its in

vest

men

ts in

the

stra

tegi

c So

uth

Afric

an e

cono

my-

driv

ing

sect

ors,

inc

ludi

ng b

ut n

ot l

imite

d to

; m

iner

al a

nd r

esou

rces

ben

efic

iatio

n,

infra

stru

ctur

e, g

reen

/rene

wab

le i

ndus

tries

, m

anuf

actu

ring,

agr

o-pr

oces

sing

,

busi

ness

pro

cess

ser

vice

s an

d to

uris

m.

SPF

curre

ntly

has

abo

ut 2

7 pr

ojec

ts u

nder

dev

elop

men

t.

The

tota

l pot

entia

l num

ber o

f job

opp

ortu

nitie

s to

be

crea

ted

is o

ver 8

5 00

0.

The

impl

emen

tatio

n of

the

pro

ject

s re

quire

s ap

prox

imat

ely

R28

.5 b

illion

in

capi

tal,

of w

hich

app

roxi

mat

ely

R4

billio

n is

due

by

the

NEF

, in

resp

ect o

f its

equi

ty in

tere

sts

held

in th

e pr

ojec

ts.

A

gric

ultu

ral P

olic

y A

ctio

n Pl

an (A

PAP)

de

velo

ped,

im

plem

ente

d an

d re

view

ed re

gula

rly in

te

rms

of im

pact

on

grow

th, e

mpl

oym

ent,

rura

l inc

omes

, in

vest

men

t, ou

tput

,

APA

P se

ctor

and

cr

oss-

cutti

ng

inte

rven

tion

tow

ards

gro

wth

, em

ploy

men

t cr

eatio

n an

d hi

gher

ru

ral i

ncom

es

unde

rway

.

The

Rur

al &

Com

mun

ity D

evel

opm

ent

Fund

foc

uses

on

the

prov

isio

n of

finan

ce t

o ru

ral

and

agric

ultu

ral

com

mun

ities

, w

hich

sup

ports

em

ploy

men

t

crea

tion

in ru

ral a

reas

and

the

agric

ultu

ral s

ecto

r. T

his

is a

chie

ved

by:

1.

Prom

otin

g ac

cess

to fi

nanc

e fo

r bla

ck e

ntre

pren

eurs

.

2.

Prom

otin

g ec

onom

ic

trans

form

atio

n in

or

der

to

enab

le

mea

ning

ful

parti

cipa

tion

of b

lack

peo

ple

in th

e ec

onom

y.

3.

Incr

ease

the

par

ticip

atio

n of

com

mun

ities

, w

orke

rs,

co-o

pera

tives

and

othe

r col

lect

ive

Ente

rpris

es o

wn

and

man

aged

by

blac

k pe

ople

.

Natio

nalEmpo

wermen

tFun

d

Annu

alPerform

ancePlanfor2

017/18

-20

28

Sub-

Out

com

e A

ctio

ns

Indi

cato

rs

NEF

Tar

get &

Act

ions

ex

port

s an

d A

fric

an

regi

onal

dev

elop

men

t.

4.

Cre

atin

g su

stai

nabl

e ru

ral

ente

rpris

es a

nd t

here

by a

ssis

ting

in t

he

crea

tion

of jo

b op

portu

nitie

s an

d su

stai

nabl

e in

com

es.

The

Rur

al &

Com

mun

ity D

evel

opm

ent F

und

forg

es re

latio

nshi

ps w

ith v

ario

us

depa

rtmen

ts a

nd a

genc

ies

that

are

act

ive

in th

e se

ctor

. W

e in

tend

to c

oncl

ude

thre

e M

OU

s to

sup

port

our i

nter

vent

ions

and

a jo

int p

ropo

sed

fund

to a

ddre

ss

the

key

elem

ents

of

sect

or d

evel

opm

ent,

espe

cial

ly A

gro

proc

essi

ng a

nd

Fore

stry

tran

sfor

mat

ion.

A

gric

ultu

re, F

ores

try

and

Fish

erie

s M

arke

t an

d Tr

ade

Dev

elop

men

t St

rate

gy.

Trad

e an

d D

evel

opm

ent

Stra

tegy

and

cro

ss-

cutti

ng

inte

rven

tions

to

war

ds g

row

th,

empl

oym

ent

crea

tion

and

high

er

rura

l inc

omes

un

derw

ay.

Min

ing

Ben

efic

iatio

n A

ctio

n Pl

an (M

BA

P)

deve

lope

d im

plem

ente

d an

d re

view

ed re

gula

rly in

te

rms

of im

pact

on

grow

th, e

mpl

oym

ent,

rura

l inc

omes

, in

vest

men

t, ou

tput

, ex

port

s an

d A

fric

an

regi

onal

dev

elop

men

t.

MB

AP

deve

lope

d an

d im

plem

ente

d.

In s

uppo

rt of

the

MBA

P, S

PF h

as s

ever

al m

iner

al b

enef

icia

tion-

rela

ted

proj

ects

und

er d

evel

opm

ent.

Rar

e M

etal

Indu

strie

s (R

MI)

(R13

.5 m

illio

n in

vest

ed)

¥ R

MI i

nten

ds to

est

ablis

h th

e w

orld

-firs

t int

egra

ted

chem

ical

refin

ery

plan

t

prod

ucin

g pu

re T

itani

um, Z

ircon

ium

, Haf

nium

and

PV

grad

e Si

licon

.

¥ Th

e pr

ojec

t is

curre

ntly

at t

he B

anka

ble

Feas

ibilit

y St

age

(BFS

) an

d w

ill

crea

te c

irca

7,00

0 jo

b op

portu

nitie

s (2

,800

dire

ct/4

,200

indi

rect

).

Natio

nalEmpo

wermen

tFun

d

Annu

alPerform

ancePlanfor2

017/18

-20

29

Sub-

Out

com

e A

ctio

ns

Indi

cato

rs

NEF

Tar

get &

Act

ions

SA

Met

als

(SA

ME)

(R

40 m

illio

n in

vest

ed)

¥ Th

e SA

ME

proj

ect

is f

or t

he p

oten

tial

esta

blis

hmen

t of

a p

ig i

ron

prod

uctio

n pl

ant w

ith a

pro

duct

ion

capa

city

of c

irca

500,

000

mtp

a of

pig

iron,

incl

udin

g tit

aniu

m a

nd v

anad

ium

sla

gs a

s by

pro

duct

s.

¥ Th

e pr

ojec

t is

curre

ntly

at t

he B

anka

ble

Feas

ibilit

y St

age

(BFS

) an

d w

ill

crea

te c

irca

1,30

0 jo

b op

portu

nitie

s (6

00 d

irect

/700

indi

rect

).

The

NEF

has

inve

sted

a to

tal o

f R66

.5 m

illion

in m

iner

al b

enef

icia

tion

proj

ects

.

D

eter

min

e vi

able

sha

le

gas ¥

Expl

orat

ion

plan

dev

elop

ed

¥ A

ppro

pria

te

legi

slat

ion

deve

lope

d

Econ

omic

ally

vi

able

sha

le g

as

rese

rves

de

term

ined

.

Alth

ough

not

inv

olve

d in

sha

le g

as e

xplo

ratio

n, b

y su

ppor

ting

a nu

clea

r

indu

stry

trai

ning

initi

ativ

e th

e N

EF s

eeks

to c

ontri

bute

tow

ards

cle

an e

nerg

y

deve

lopm

ent i

n So

uth

Afric

a.

Nuc

lear

Lea

rnin

g To

ur (F

ranc

e, 2

012)

In

ant

icip

atio

n of

the

roll-

out o

f the

Nuc

lear

Bui

ld P

rogr

amm

e in

Sou

th A

frica

,

the

Nat

iona

l Em

pow

erm

ent

Fund

(N

EF)

soug

ht t

o ed

ucat

e its

elf

and

blac

k

entre

pren

eurs

on

the

nucl

ear

ener

gy s

ecto

r va

lue

chai

n re

late

d to

nuc

lear

plan

ts h

ence

it s

ent a

del

egat

ion

of 1

4 to

Fra

nce

in 2

012

to a

ttend

the

Area

Nuc

lear

Lea

rnin

g To

ur.

¥ Th

e N

EF, i

n co

llabo

ratio

n w

ith th

e N

ucle

ar In

dust

ry A

ssoc

iatio

n of

Sou

th

Afric

a (N

IASA

), ho

sted

the

Nuc

lear

Indu

stry

Em

pow

erm

ent C

onfe

renc

e in

Oct

ober

20

12

in

prep

arat

ion

for

and

to

mar

ket

the

Nuc

lear

Bu

ild

Prog

ram

me,

as

wel

l as

to

prov

ide

a ne

twor

king

pla

tform

for

nuc

lear

indu

stry

sta

keho

lder

s, in

clud

ing

nucl

ear p

lant

OEM

s, fu

ndin

g in

stitu

tions

Natio

nalEmpo

wermen

tFun

d

Annu

alPerform

ancePlanfor2

017/18

-20

30

Sub-

Out

com

e A

ctio

ns

Indi

cato

rs

NEF

Tar

get &

Act

ions

an

d bl

ack

entre

pren

eurs

(s

ervi

ce

prov

ider

s,

equi

pmen

t su

pplie

rs,

inve

stor

s et

c.).

¥ Th

e N

EF fa

cilit

ated

for a

tota

l of 1

4 de

lega

tes

to a

ttend

the

Area

Nuc

lear

Lear

ning

Tou

r in

Fra

nce

in 2

012.

The

obj

ectiv

es o

f th

e to

ur i

nclu

ded;

crea

ting

an u

nder

stan

ding

of n

ucle

ar b

asic

s an

d ph

ysic

s, e

stab

lishi

ng a

n

appr

ecia

tion

of th

e nu

clea

r ind

ustry

from

ura

nium

min

ing

to n

ucle

ar p

ower

plan

t eq

uipm

ent

prod

uctio

n, i

nclu

ding

dev

elop

ing

an u

nder

stan

ding

of

proj

ect f

inan

cing

nuc

lear

pla

nts

and

risk

miti

gatio

n.

¥ Fu

rther

mor

e, it

was

exp

ecte

d of

the

blac

k SM

E’s

who

par

ticip

ated

in th

e

lear

ning

to

ur

that

th

ey

wou

ld

iden

tify

and

expl

ore

for

expl

oita

tion,

entre

pren

euria

l opp

ortu

nitie

s w

ithin

the

valu

e ch

ain

of th

e pr

opos

ed S

outh

Afric

an N

ucle

ar b

uild

Pro

gram

me,

incl

udin

g id

entif

ying

pot

entia

l fun

ding

mea

ns fo

r any

inve

stm

ent p

rosp

ects

.

The

ultim

ate

goal

of

th

e pr

ogra

mm

e is

to

su

ppor

t bl

ack

SME’

s an

d

entre

pren

eurs

who

may

wan

t to

posi

tion

them

selv

es in

this

sec

tor.

Im

plem

ent N

atio

nal

Tour

ism

Str

ateg

y an

d re

view

impa

ct re

gula

rly

in te

rms

of im

pact

on

grow

th, e

mpl

oym

ent,

inve

stm

ent,

outp

ut,

expo

rts

and

Afr

ican

re

gion

al d

evel

opm

ent.

Tour

ism

Str

ateg

y in

terv

entio

ns

tow

ards

gro

wth

, em

ploy

men

t cr

eatio

n an

d hi

gher

in

com

es fo

r poo

r ho

useh

olds

un

derw

ay.

The

NEF

’s in

terv

entio

ns in

tour

ism

incl

ude

the

fund

ing

of h

otel

s an

d ga

me

lodg

es.

Thes

e in

clud

e in

vest

men

ts in

Tal

a G

ame

Res

erve

, Rhi

no L

odge

and

Jozi

ni C

ount

ry L

odge

.

The

follo

win

g tra

nsac

tion

wer

e un

derta

ken

in a

n ef

fort

to a

ddre

ss th

e im

pact

of g

row

th a

nd s

usta

inab

le e

mpl

oym

ent i

n th

e to

uris

m s

ecto

r

Natio

nalEmpo

wermen

tFun

d

Annu

alPerform

ancePlanfor2

017/18

-20

31

Sub-

Out

com

e A

ctio

ns

Indi

cato

rs

NEF

Tar

get &

Act

ions

TA

LA P

rivat

e G

ame

Res

erve

(R14

.1 m

illio

n in

vest

ed)

TALA

Priv

ate

Gam

e R

eser

ve is

a w

ildlif

e co

nser

vanc

y hi

dden

in th

e hi

lls o

f a

quie

t fa

rmin

g co

mm

unity

not

far

fro

m D

urba

n in

Kw

aZul

u-N

atal

. T

ALA

is

situ

ated

bet

wee

n D

urba

n an

d Pi

eter

mar

itzbu

rg,

conv

enie

ntly

acc

essi

ble

off

the

N3

thro

ugh

the

Cam

per-d

owns

off-

ram

p on

the

R60

3. S

pann

ing

over

209

2

hect

ares

and

inco

rpor

atin

g m

any

dive

rse

natu

ral e

nviro

nmen

ts, t

he r

eser

ve

feat

ures

wel

l ove

r 38

0 bi

rd s

peci

es, w

ith g

ame

such

as

rhin

o, k

udu,

hip

po,

gira

ffe a

nd th

e ra

re s

able

ant

elop

e. S

ever

al d

istin

ctiv

e an

d re

mar

kabl

e pl

ant

spec

ies

are

also

to b

e fo

und

on T

ALA

. The

gam

e re

serv

e is

ow

ned

100%

by

the

Nku

mbu

leni

Com

mun

ity T

rust

.

Bel

lalu

na B

outiq

ue H

otel

(PTY

) LTD

(R5

mill

ion

inve

sted

) Be

llalu

na B

outiq

ue H

otel

is a

n en

tity

inco

rpor

ated

to d

evel

op a

nd m

anag

e, a

new

mid

-mar

ket 1

5 ro

om H

otel

with

con

fere

ncin

g an

d w

eddi

ng fa

cilit

ies

and

a re

stau

rant

, lo

cate

d in

Lad

ysm

ith,

KwaZ

ulu

Nat

al.

Lad

ysm

ith i

s w

ell-

posi

tione

d be

twee

n D

urba

n an

d Jo

hann

esbu

rg a

nd i

s a

gate

way

to

the

north

ern

Dra

kens

burg

Mou

ntai

ns (W

ord

Her

itage

Site

) and

Bat

tlefie

lds

of th

e

Angl

o Bo

er W

ar (

1899

-190

2) lo

cate

d in

Lad

ysm

ith, C

olen

so a

nd S

pieo

nkop

Battl

efie

ld s

ites.

The

bou

tique

hot

el w

ill ha

ve a

four

sta

r loo

k an

d fe

el w

hile

char

ging

thre

e st

ar ra

tes.

The

hot

el w

ill ha

ve a

bed

cap

acity

of 3

0. T

he la

nd

mea

sure

s 38

615

m².

Bel

lalu

na is

100

% o

wne

d by

Ms.

Rub

y Sh

abal

ala.

The

proj

ect i

s ex

pect

ed to

cre

ate

10 p

erm

anen

t job

s.

Natio

nalEmpo

wermen

tFun

d

Annu

alPerform

ancePlanfor2

017/18

-20

32

Sub-

Out

com

e A

ctio

ns

Indi

cato

rs

NEF

Tar

get &

Act

ions

R

hino

Lod

ge K

ZN (R

23.7

mill

ion

inve

sted

) Th

e pr

ojec

t ent

ails

the

esta

blis

hmen

t of a

44

bed

Safa

ri Lo

dge

loca

ted

in th

e

Mpe

mbe

ni

Gam

e R

eser

ve.

The

man

agem

ent

of

the

lodg

e ha

s be

en

cont

ract

ed to

Tou

rves

t and

they

will

offe

r Big

5 g

ame

driv

es a

nd w

alks

, bird

ing

and

spa

treat

men

t. Th

e M

pem

beni

Com

mun

ity T

rust

repr

esen

ts th

e in

tere

sts

of a

ppro

xim

atel

y 60

0 ho

useh

olds

who

fall

unde

r the

Trib

al A

utho

rity

of iN

kosi

Hla

bisa

and

the

Empe

mbe

ni T

ribal

Cou

ncil.

The

pro

ject

has

bee

n en

dors

ed

by th

e Ez

emve

lo K

ZN W

ildlif

e, K

ZN T

ouris

m A

utho

rity

and

the

offic

e of

the

MEC

of E

cono

mic

Dev

elop

men

t and

Tou

rism

.

Pr

ovid

e co

achi

ng

incu

batio

n, in

tens

ive

supp

ort a

nd fi

nanc

ing

to g

row

the

smal

l bu

sine

ss a

nd

coop

erat

ive

sect

or

tow

ards

a m

ore

incl

usiv

e ec

onom

y.

% o

f gro

wth

in th

e nu

mbe

r of s

mal

l bu

sine

ss a

nd

coop

erat

ives

%

of s

mal

l bu

sine

ss a

nd

coop

erat

ives

that

ar

e su

ppor

ted

and

that

are

stil

l op

erat

ing

one

year

af

ter s

uppo

rt

prov

ided

.

The

Entre

pren

euria

l D

evel

opm

ent

Stra

tegy

int

ends

to

enha

nce

the

NEF

’s

impa

ct i

n de

velo

ping

ent

repr

eneu

rshi

p in

Sou

th A

frica

, m

ore

broa

dly

with

focu

s on

Fin

anci

al a

nd n

on-F

inan

cial

Sup

port

as w

ell a

s ad

voca

cy o

n is

sues

perta

inin

g to

ent

repr

eneu

rshi

p. W

e fu

rther

see

k to

incr

ease

the

parti

cipa

tion

by w

omen

and

you

th in

the

mai

n st

ream

eco

nom

y th

roug

h en

trepr

eneu

rshi

p.

The

follo

win

g in

itiat

ives

hav

e al

read

y be

en im

plem

ente

d as

par

t of t

he 3

-yea

r

impl

emen

tatio

n pl

an:

¥ Bu

sine

ss T

rain

ing

¥ In

cuba

tion

¥ G

over

nanc

e Tr

aini

ng

¥ M

ento

rshi

p (P

re a

nd P

ost I

nves

tmen

t)

¥ Th

e Bu

sine

ss P

lann

er to

ol is

on

an o

nlin

e so

ftwar

e to

ol, i

nten

ded

to a

ssis

t

entre

pren

eurs

to d

evel

op th

eir o

wn

busi

ness

pla

n an

d fin

anci

al p

roje

ctio

ns.

Natio

nalEmpo

wermen

tFun

d

Annu

alPerform

ancePlanfor2

017/18

-20

33

Sub-

Out

com

e A

ctio

ns

Indi

cato

rs

NEF

Tar

get &

Act

ions

Th

e to

ol i

s ac

cess

ible

fre

e of

cha

rge

to a

ll en

trepr

eneu

rs (

not

only

entre

pren

eurs

wan

ting

to a

pply

for

fun

ding

fro

m N

EF)

to d

evel

op t

heir

busi

ness

pla

ns in

an

easy

and

use

r frie

ndly

man

ner.

To

date

, mor

e th

an

19,0

00 e

ntre

pren

eurs

hav

e ac

cess

ed th

e Bu

sine

ss P

lann

er T

ool.

¥Bu

sine

ss t

rain

ing

is p

rovi

ded

prim

arily

to

entre

pren

eurs

ope

ratin

g in

outly

ing

area

s, in

clud

ing

NEF

bro

ad b

ased

inve

stee

gro

ups.

Thi

s is

mad

e

up o

f 4-

day

sim

ulat

ed t

rain

ing

sess

ions

int

ende

d to

del

iver

lea

rnin

g

expe

rienc

es o

n bu

sine

ss m

anag

emen

t prin

cipl

es a

nd b

asic

kno

wle

dge

and

unde

rsta

ndin

g on

fin

anci

al s

yste

ms,

rep

ortin

g an

d co

ntro

ls.

A

min

imum

of 1

8 tra

inin

g se

ssio

ns a

re ta

rget

ed to

be

prov

ided

p.a

., 90

% o

f

thes

e in

rura

l are

as a

nd m

ore

than

70%

of t

he d

eleg

ates

are

wom

en.

¥Ac

cess

to

busi

ness

inc

ubat

ion

is f

acilit

ated

for

sta

rt-up

and

exi

stin

g

ente

rpris

es. K

ey e

xit o

utco

mes

inco

rpor

ate

finan

cial

gro

wth

, job

cre

atio

n

and

full

com

plia

nce

with

lega

l and

regu

lato

ry re

quire

men

ts.

The

NEF

is

targ

etin

g 75

ent

erpr

ises

to b

e re

ferre

d fo

r inc

ubat

ion

in 2

016/

17.

¥Tr

aini

ng o

n co

rpor

ate

gove

rnan

ce a

nd a

ssis

tanc

e w

ith th

e im

plem

enta

tion

ther

eof

is p

rovi

ded

to t

he N

EF’s

bro

ad-b

ased

inv

este

e gr

oups

and

bene

ficia

ries.

Tra

inin

g is

pro

vide

d to

all

qual

ifyin

g in

vest

ee g

roup

s w

ithin

6-m

onth

s of

pr

ojec

t im

plem

enta

tion

and

com

plia

nce

to

corp

orat

e

gove

rnan

ce re

quire

men

ts in

12-

mon

ths.

Natio

nalEmpo

wermen

tFun

d

Annu

alPerform

ancePlanfor2

017/18

-20

34

Sub-

Out

com

e A

ctio

ns

Indi

cato

rs

NEF

Tar

get &

Act

ions

¥Th

e N

EF e

stab

lishe

d a

men

tors

hip

pane

l co

mpr

isin

g m

ore

than

110

indu

stry

and

tec

hnic

al e

xper

ts l

ocat

ed t

hrou

ghou

t th

e co

untry

. Ke

y

obje

ctiv

es o

f th

e m

ento

rshi

p pr

ogra

mm

e in

clud

e th

e de

velo

pmen

t an

d

mai

nten

ance

of s

usta

inab

le b

usin

esse

s w

hich

will

in tu

rn c

ontri

bute

to th

e

sust

aina

ble

grow

th

of

the

econ

omy,

as

sist

w

ith

the

turn

arou

nd

man

agem

ent

of

dist

ress

ed

com

pani

es

and

busi

ness

co

achi

ng.

A m

inim

um 3

-mon

th m

ento

rshi

p is

pro

vide

d to

all

smal

l bu

sine

ss a

nd

coop

erat

ives

fu

nded

to

as

sist

pr

imar

ily

with

th

e im

plem

enta

tion

of

adeq

uate

fina

ncia

l sys

tem

s an

d co

ntro

ls.

This

is p

rovi

ded

is a

dditi

on to

othe

r rel

evan

t pre

- and

pos

t-fun

ding

non

-fina

ncia

l sup

port.

Job

driv

ers

on

supp

ortin

g th

e in

vest

men

t in

the

gree

n ec

onom

y, th

e so

cial

ec

onom

y an

d pu

blic

se

rvic

es a

s w

ell a

s A

fric

an re

gion

al

deve

lopm

ent t

o be

im

plem

ente

d an

d re

view

ed re

gula

rly in

te

rms

of im

pact

on

grow

th, i

nves

tmen

t, ou

tput

, exp

orts

and

Sect

or a

nd c

ross

-cu

tting

in

terv

entio

ns

tow

ards

gro

wth

, em

ploy

men

t cr

eatio

n an

d hi

gher

in

com

es fo

r poo

r ho

useh

olds

un

derw

ay in

sp

ecifi

ed jo

bs

driv

ers.

The

NEF

ac

tivel

y se

eks

to

supp

ort

proj

ects

w

ith

high

jo

b-cr

eatio

n

oppo

rtuni

ties,

esp

ecia

lly th

roug

h its

Stra

tegi

c Pr

ojec

ts F

und.

A

few

pro

ject

s

in th

e re

new

able

ene

rgy

sect

or w

ith jo

b cr

eatio

n po

tent

ial a

re o

utlin

ed b

elow

.

Sala

max

166

0

¥Th

e pr

ojec

t of

fers

an

oppo

rtuni

ty t

o in

vest

in

a pr

iorit

y in

dust

ry

acco

rdin

g to

dti'

s IP

AP w

here

dev

elop

men

t and

com

mer

cial

izat

ion

of

Sout

h Af

rican

inte

llect

ual p

rope

rty is

sup

porte

d an

d pa

rtici

patio

n in

proj

ects

that

con

tribu

te to

the

gree

n en

ergy

quo

ta is

enc

oura

ged.

¥Sa

lam

ax 1

660

has

deve

lope

d a

seco

nd g

ener

atio

n bi

ofue

l pro

cess

that

use

s gr

ass

and/

or l

eave

s to

pro

duce

bio

etha

nol

and

own

Natio

nalEmpo

wermen

tFun

d

Annu

alPerform

ancePlanfor2

017/18

-20

35

Sub-

Out

com

e A

ctio

ns

Indi

cato

rs

NEF

Tar

get &

Act

ions

A

fric

an re

gion

al

deve

lopm

ent.

elec

trici

ty,

thro

ugh

a lo

cally

dev

elop

ed t

echn

olog

y in

vent

ed b

y th

e

proj

ect s

pons

or.

¥ Th

e pr

oces

s of

fers

sig

nific

ant a

dvan

tage

s ov

er c

onve

ntio

nal m

etho

ds

that

ar

e cu

rrent

ly

in

use,

by

be

ing

cost

ef

fect

ive.

This

co

st

effe

ctiv

enes

s m

ay

mak

e th

e pr

ojec

t vi

able

w

ithou

t re

quiri

ng

gove

rnm

ent s

ubsi

dies

.

¥ Th

is p

roje

ct is

als

o al

igne

d to

key

prio

ritie

s of

the

ND

P of

job

crea

tion

thro

ugh

its p

oten

tial t

o cr

eate

sig

nific

ant q

ualit

y jo

bs a

t fin

anci

al c

lose

,

and

cont

ribut

ing

to S

A’s

expo

rts a

s a

siza

ble

porti

on o

f pro

duct

ion

will

be e

xpor

ted

to n

eigh

bour

ing

SAD

C c

ount

ries.

The

NEF

has

com

mitt

ed R

7 m

illion

tow

ards

the

cons

truct

ion

of a

pilo

t pla

nt a

t

the

Nor

th W

est

Uni

vers

ity,

Potc

hefs

troom

Cam

pus;

in p

artn

ersh

ip w

ith t

he

dti’s

Sup

port

Prog

ram

me

for

Indu

stria

l In

nova

tion

whe

re a

gra

nt o

f R

4.9

milli

on w

as s

ecur

ed. T

he p

roje

ct w

ill pr

ocee

d to

full

scal

e co

mm

erci

aliz

atio

n

upon

suc

cess

of t

he p

ilot p

lant

.

Pa

ckag

e su

ppor

t for

su

pplie

r dev

elop

men

t es

peci

ally

sta

te

proc

urem

ent.

Prog

ress

ivel

y ris

ing

loca

l con

tent

le

vels

in to

tal s

tate

pr

ocur

emen

t.

The

Proc

urem

ent f

inan

ce p

rodu

ct p

rovi

des

fund

ing

for e

quip

men

t and

wor

king

capi

tal t

o as

sist

SM

Es w

ith th

e im

plem

enta

tion

of th

e co

ntra

cts

awar

ded

by

both

priv

ate

and

publ

ic s

ecto

r en

titie

s, in

clud

ing

stat

e-ow

ned

entit

ies.

The

NEF

als

o pr

ovid

es s

hort-

term

revo

lvin

g fa

cilit

ies

to a

ssis

t SM

Es to

fulfi

l onc

e-

off o

rder

s fro

m th

e sa

me

entit

ies.

Natio

nalEmpo

wermen

tFun

d

Annu

alPerform

ancePlanfor2

017/18

-20

36

Sub-

Out

com

e A

ctio

ns

Indi

cato

rs

NEF

Tar

get &

Act

ions

Th

e N

EF i

s in

the

pro

cess

of

forg

ing

dire

ct r

elat

ions

with

sta

te-o

wne

d

ente

rpris

es a

nd g

over

nmen

t dep

artm

ents

to in

crea

se v

olum

es a

nd s

uppo

rt fo

r

proc

urem

ent s

et a

side

s, e

.g. T

rans

net.

To d

ate:

Ove

r R

500

milli

on o

f in

vest

men

ts w

ere

mad

e in

ove

r 25

0 SM

Es t

o ac

cess

proc

urem

ent

oppo

rtuni

ties

with

Sta

te-o

wne

d en

terp

rises

and

gov

ernm

ent

depa

rtmen

ts.

¥R

1.25

billi

on m

illion

has

bee

n di

sbur

sed

to d

ate

in 4

00 S

MEs

sin

ce 2

005

¥49

% in

Gau

teng

Pro

vinc

e an

d 51

% s

prea

d ac

ross

Sou

th A

frica

¥25

% in

val

ue o

f inv

estm

ent a

re in

SM

Es o

wne

d an

d m

anag

ed b

y Bl

ack

wom

en

The

targ

et f

or P

rocu

rem

ent

Fina

nce

form

s pa

rt of

the

bro

ader

tar

get

to

“Pro

vide

fin

ance

to

busi

ness

ven

ture

s es

tabl

ishe

d an

d m

anag

ed b

y B

lack

peop

le.”

The

NEF

targ

et fo

r the

Pro

cure

men

t Fin

ance

pro

duct

in th

e cu

rrent

fina

ncia

l

year

: R15

0 m

illion

and

50

SMEs

.

3..E

limin

atio

n of

unne

cess

ary

regu

lato

ry b

urde

nsan

d lo

wer

pric

ein

crea

ses

for k

eyin

puts

fost

ers

Not

app

licab

le

Natio

nalEmpo

wermen

tFun

d

Annu

alPerform

ancePlanfor2

017/18

-20

37

Sub-

Out

com

e A

ctio

ns

Indi

cato

rs

NEF

Tar

get &

Act

ions

in

vest

men

t and

ec

onom

ic g

row

th.

4. W

orke

rs’

educ

atio

n an

d sk

ills

incr

easi

ngly

m

eet e

cono

mic

ne

eds.

Not

app

licab

le

5. E

xpan

ded

empl

oym

ent i

n ag

ricul

ture

.

Dev

elop

men

t of

smal

lhol

der p

rodu

ctio

n in

con

text

of i

mpr

oved

di

stric

t pla

nnin

g an

d lin

k to

land

refo

rm,

exte

nsio

n, m

arke

ting

and

othe

r sys

tem

s.

Plan

to s

uppo

rt

smal

lhol

ders

de

velo

ped

and

inco

rpor

ated

in

APA

P, w

ith c

lear

an

nual

targ

ets.

Dev

elop

men

t of s

mal

lhol

der p

rodu

ctio

n:

Thro

ugh

the

prov

isio

n of

fun

ding

we

expe

ct t

o ac

cele

rate

gro

wth

and

trans

form

atio

n th

e ru

ral

econ

omy,

to

crea

te d

ecen

t w

ork

and

sust

aina

ble

livel

ihoo

ds,

and

furth

er

cont

ribut

e to

bu

ildin

g ec

onom

ic

and

soci

al

infra

stru

ctur

e. T

his

form

s pa

rt of

the

rura

l dev

elop

men

t stra

tegy

that

is li

nked

to la

nd a

nd a

grar

ian

refo

rm, f

ood

secu

rity,

and

tour

ism

.

¥ To

dat

e w

e ha

ve in

vest

ed R

165

milli

on in

the

Agric

ultu

ral s

ecto

r, eq

uatin

g

to R

79k

per j

ob. A

vera

ge w

omen

em

pow

erm

ent a

chie

ved

is a

bout

60%

and

abou

t 90

% o

f th

e in

vest

ed p

ortfo

lio i

s lo

cate

d in

mar

gina

lised

Prov

ince

s.

Ber

lin B

eef (

R27

mill

ion

inve

sted

)_

The

busi

ness

invo

lves

the

esta

blis

hmen

t of a

feed

lot i

n Be

rlin,

Eas

tern

Cap

e

for t

he s

uppl

y of

a h

igh

thro

ugh-

put a

batto

ir in

Eas

t Lon

don

in te

rms

of a

10

year

off-

take

agr

eem

ent,

incl

udin

g up

stre

am in

vest

men

t in

the

cattl

e su

pply

regi

on fo

r im

prov

ed b

reed

ing

of c

attle

sup

plie

d to

the

Berli

n Be

ef fe

edlo

t. Th

e

beef

ope

ratio

n cu

rrent

ly h

as a

one

-tim

e st

andi

ng c

apac

ity o

f 7 0

00 h

ead

on

Natio

nalEmpo

wermen

tFun

d

Annu

alPerform

ancePlanfor2

017/18

-20

38

Sub-

Out

com

e A

ctio

ns

Indi

cato

rs

NEF

Tar

get &

Act

ions

ba

ckgr

ound

ing

and

3 00

0 he

ad o

n fe

edlo

t, th

is c

apac

ity h

as m

ore

than

doub

led

in th

e fir

st y

ear o

f ope

ratio

ns. T

he p

roje

ct h

as a

dopt

ed a

nd c

ompl

ies

with

requ

irem

ents

of I

SO 1

4001

, a g

loba

lly re

cogn

ised

sta

ndar

d sp

ecifi

catio

n

that

stru

ctur

es th

e im

plem

enta

tion

of a

n ef

fect

ive

envi

ronm

enta

l man

agem

ent.

The

curre

nt lo

cal c

lient

ele

incl

udes

Fam

ous

Bran

ds, S

hopr

ite a

nd P

ick

and

Pay.

Inte

rnat

iona

l mar

kets

incl

ude

Hon

g Ko

ng, T

haila

nd a

nd V

ietn

am.

Part

ners

hip

with

the

Dep

artm

ent o

f Rur

al D

evel

opm

ent a

nd L

and

Ref

orm

(D

RD

LR)

The

NEF

est

ablis

hed

a pa

rtner

ship

with

the

DR

DLR

afte

r th

e H

on. M

inis

ter

Gug

ile N

kwin

ti in

vite

d th

e N

EF to

bec

ome

a pa

rtner

in th

e pi

lot i

mpl

emen

tatio

n

of t

he p

rogr

amm

e ca

lled

STR

ENG

THEN

ING

OF

REL

ATIV

E R

IGH

TS O

F

PEO

PLE

WO

RKI

NG

TH

E LA

ND

, als

o kn

own

as t

he 5

0 –

50 p

roje

ct.

The

obje

ctiv

es o

f th

e pi

lot

proj

ect

are

at t

he h

eart

of t

he e

xist

ence

of

the

NEF

,

beca

use

they

see

k to

em

pow

er fa

rmw

orke

rs to

bec

ome

entre

pren

eurs

thus

redr

essi

ng th

e in

just

ices

of t

he p

ast i

n th

e ar

eas

that

wer

e de

vast

ated

mor

e

seve

rely

by

apar

thei

d.

Thro

ugh

the

partn

ersh

ip, t

he N

EF a

ssis

ted

in th

e fa

cilit

atio

n of

app

rovi

ng a

nd

final

isin

g le

gal a

gree

men

ts fo

r fiv

e de

als

wor

th R

154

milli

on.

6. M

acro

-eco

nom

ic

cond

ition

s su

ppor

t em

ploy

men

t-cr

eatin

g gr

owth

.

Incr

ease

in in

dust

rial

finan

ce a

vaila

ble.

In

crea

se in

in

dust

rial f

inan

ce

avai

labl

e.

¥ SP

F, th

e ve

ntur

e ca

pita

l fun

d of

the

Nat

iona

l Em

pow

erm

ent F

und

(NEF

),

curre

ntly

has

27

proj

ects

und

er d

evel

opm

ent,

in w

hich

it h

olds

equ

ity

that

is w

areh

ouse

d fo

r fut

ure

dist

ribut

ion

to B

-BBE

E en

titie

s.

Natio

nalEmpo

wermen

tFun

d

Annu

alPerform

ancePlanfor2

017/18

-20

39

Sub-

Out

com

e A

ctio

ns

Indi

cato

rs

NEF

Tar

get &

Act

ions

¥ Th

e im

plem

enta

tion

of th

e af

orem

entio

ned

proj

ects

requ

ires

circ

a R

28.6

billio

n in

cap

ital,

of w

hich

circ

a R

4 bi

llion

is d

ue b

y th

e N

EF, i

n re

spec

t of

its e

quity

inte

rest

s he

ld in

the

proj

ects

.

7. R

educ

ed

wor

kpla

ce c

onfli

ct

and

impr

oved

co

llabo

ratio

n be

twee

n go

vern

men

t, or

gani

sed

busi

ness

and

or

gani

sed

labo

ur.

Dev

elop

men

t of

prog

ram

mes

to

addr

ess

wor

kpla

ce

conf

lict t

hrou

gh (a

) im

prov

ed

com

mun

icat

ion,

car

eer

mob

ility

, ski

lls

deve

lopm

ent a

nd

fairn

ess

in w

orkp

lace

s,

and

(b) s

tron

ger l

abou

r re

latio

ns s

yste

ms.

Num

ber o

f w

orkp

lace

dis

pute

s de

clar

ed.

The

NEF

bel

ieve

s in

bui

ldin

g th

e re

quire

d hu

man

reso

urce

cap

acity

thro

ugh

appr

opria

te m

echa

nism

s th

at w

ill en

sure

the

tra

inin

g an

d de

velo

pmen

t,

upgr

adin

g sk

ills, k

now

ledg

e, c

ompe

tenc

e an

d at

titud

e th

at w

ill co

ntrib

ute

to

the

achi

evem

ent o

f the

NEF

’s g

oals

and

obj

ectiv

es.

The

NEF

’s o

vera

ll tra

inin

g an

d de

velo

pmen

t obj

ectiv

es a

re to

enc

oura

ge a

nd

supp

ort e

mpl

oyee

s to

atta

in th

eir

max

imum

pot

entia

l the

reby

con

tribu

ting

to

the

achi

evem

ent o

f the

NEF

’s g

oals

and

obj

ectiv

es.

8. E

xpan

ded

econ

omic

op

port

uniti

es fo

r hi

stor

ical

ly

excl

uded

and

vu

lner

able

gro

ups.

Prog

ram

mes

to e

nsur

e in

crea

sed

acce

ss to

em

ploy

men

t and

en

trep

rene

ursh

ip fo

r w

omen

and

you

th in

th

e co

ntex

t of s

tron

ger

supp

ort f

or e

mer

ging

an

d sm

alle

r ent

erpr

ises

ov

eral

l.

Shar

e of

you

th

empl

oym

ent o

r ed

ucat

ion.

Sh

are

of w

omen

in

form

al

empl

oym

ent.

The

NEF

has

est

ablis

hed

the

Wom

en E

mpo

wer

men

t Fu

nd (

WEF

) th

at w

ill

focu

s on

onl

y su

ppor

ting

wom

en in

tran

sact

ions

. An

amou

nt o

f R27

9 m

illion

has

been

allo

cate

d to

the

fund

in th

e 20

16/1

7 fin

anci

al y

ear.

The

NEF

has

pre

viou

sly

allo

cate

d R

1 m

illion

to th

e Ka

belo

Sei

tshi

ro B

ursa

ry

Sche

me

whi

ch fo

cuse

d on

fund

ing

univ

ersi

ty s

tudi

es fo

r you

th a

nd s

uppo

rting

them

to q

ualif

y as

Cha

rtere

d Ac

coun

tant

s.

Natio

nalEmpo

wermen

tFun

d

Annu

alPerform

ancePlanfor2

017/18

-20

40

Sub-

Out

com

e A

ctio

ns

Indi

cato

rs

NEF

Tar

get &

Act

ions

D

urin

g th

e 20

15/1

6 fin

anci

al y

ear,

the

NEF

est

ablis

hed

a R

2 m

illion

bur

sary

fund

to fu

nd d

eser

ving

lear

ners

acr

oss

the

coun

try, t

o fu

rther

thei

r stu

dies

in

obta

inin

g qu

alifi

catio

ns th

at a

re id

entif

ied

as c

ritic

al in

the

deve

lopm

ent o

f the

coun

try.

In it

s ye

ar o

f inc

eptio

n, th

e N

EF b

ursa

ry fu

nd a

dvan

ces

R1.

6 m

illion

to f

und

31 l

earn

ers

from

pre

viou

sly

disa

dvan

tage

d ba

ckgr

ound

s.

61%

of

thes

e le

arne

rs a

re fe

mal

e.

As p

art o

f its

inte

rnsh

ip p

rogr

amm

e, th

e N

EF ta

rget

s gr

adua

tes

from

diff

eren

t

terti

ary

inst

itutio

ns a

nd p

rovi

des

them

on

the

job

train

ing

for

a ye

ar w

ith th

e

hope

of a

bsor

bing

them

in th

e sy

stem

bas

ed o

n th

eir p

erfo

rman

ce.

The

NEF

has

pre

viou

sly

man

aged

and

pro

vide

d ad

ditio

nal f

inan

cial

sup

port

to th

e JI

PSA/

AFD

Jun

ior M

anag

emen

t Dev

elop

men

t Pro

gram

me,

whi

ch is

an

exch

ange

pro

gram

me

for

juni

or S

outh

Afri

can

man

ager

s to

gai

n va

luab

le

busi

ness

sch

ool t

rain

ing

and

prac

tical

wor

k ex

perie

nce

in F

ranc

e. 3

4 ju

nior

man

ager

s pa

rtici

pate

d in

the

firs

t in

take

, w

hich

was

fol

low

ed b

y 58

in t

he

follo

win

g ye

ar.

The

NEF

is c

urre

ntly

look

ing

at d

evel

opin

g ot

her p

artn

ersh

ips

with

the

BRIC

s an

d EU

cou

ntrie

s fo

r sim

ilar p

rogr

amm

es.

We

have

set

our

selv

es a

targ

et o

f ens

urin

g th

at B

lack

wom

en p

artic

ipat

e in

and

hold

eco

nom

ic b

enef

it of

a c

erta

in p

erce

ntag

e of

the

tota

l dis

burs

emen

ts

inve

sted

ann

ually

. A

nnua

l ta

rget

s fo

r th

is a

re 4

0% i

n 20

16/2

017

and

ther

eafte

r.

Natio

nalEmpo

wermen

tFun

d

Annu

alPerform

ancePlanfor2

017/18

-20

41

Sub-

Out

com

e A

ctio

ns

Indi

cato

rs

NEF

Tar

get &

Act

ions

Th

e N

EF m

ust i

ncre

ase

the

num

ber

of b

usin

esse

s ow

ned

and

man

aged

by

Blac

k pe

ople

in S

outh

Afri

ca b

y pr

ovid

ing

fund

ing

to s

uch

ente

rpris

es.

We

aim

to

appr

ove

new

tra

nsac

tions

wor

th R

4.7

billio

n by

202

0 , a

nd d

isbu

rse

R3.

8billi

on m

ore

into

the

econ

omy

durin

g th

e st

rate

gic

plan

ning

per

iod.

The

NEF

als

o ai

ms

to p

rom

ote

econ

omic

par

ticip

atio

n of

peo

ple

hist

oric

ally

excl

uded

from

mai

nstre

am e

cono

my

by in

crea

sing

tran

sact

ions

in p

rovi

nces

with

low

act

ivity

and

in r

ural

are

as.

This

will

be a

chie

ved

by in

crea

sing

the

over

all v

alue

of p

ortfo

lio in

und

er-re

pres

ente

d pr

ovin

ces

by e

nsur

ing

that

25%

of a

nnua

l di

sbur

sem

ents

is

inve

sted

in

the

unde

rrepr

esen

ted

prov

ince

s

(nam

ely,

Nor

ther

n C

ape,

Eas

tern

Cap

e, L

impo

po, M

pum

alan

ga, N

orth

Wes

t

and

the

Free

Sta

te).

9.Pu

blic

em

ploy

men

tsc

hem

es p

rovi

desh

ort-t

erm

relie

ffo

r the

unem

ploy

ed a

ndbu

ild c

omm

unity

solid

arity

and

agen

cy.

Not

app

licab

le

10. In

vest

men

t in

rese

arch

,de

velo

pmen

t and

Not

app

licab

le

Natio

nalEmpo

wermen

tFun

d

Annu

alPerform

ancePlanfor2

017/18

-20

42

Sub-

Out

com

e A

ctio

ns

Indi

cato

rs

NEF

Tar

get &

Act

ions

in

nova

tion

supp

orts

gro

wth

by

enh

anci

ng

prod

uctiv

ity o

f ex

istin

g an

d em

ergi

ng

ente

rpris

es a

nd

impr

ovin

g liv

ing

cond

ition

s of

the

poor

.



12. DescriptionofthePlanningProcess

The strategic planning process starts with an assessment of where the NEF is, market failures

that are being addressed and what resources are available to the organisation. A reflection

and examination of recent history and changing contexts (both internal and external) of the

economy, organisation, strategic thrust and progress made on strategic objectives allows an

assessment of key impacting factors on the NEF. Answering the question of what we have to

work with involves consideration of strengths and weaknesses and determination of how to

capitalise on strengths.

We then determine the strategic direction/focus for organisation for the long term. Through a

thorough stakeholder engagement and assessment of stakeholder needs, the vision and

values of the NEF are then defined. The vision is then translated into a mission statement

which is a broad, comprehensive statement of the purpose of the organisation.

The next step in the planning process is the articulation of goals. Goals indicate the intended

future direction of the organisation. After articulating the vision and determining goals, we

then address the means of reaching those goals. This step involves articulating strategies for

achieving results. Strategies should reflect the strengths and weaknesses of the organisation.

Once all the objectives are defined and agreed upon, performance measures and targets are

then set. Goal measurement involves articulation of objectives, indicators, and benchmarks.

These measures are then included in the NEF’s organisational scorecard for approval by the

Board of Trustees. Key measures are further included in the Annual Performance Plan for

approval by the Minister of Trade and Industry. These targets are then monitored by both the

Board and the dti on a quarterly basis.



13. FinancialPlan

The NEF’s strategic objectives are detailed in section 8 of this Plan, and detailed Financial

Projections are provided in Appendix A.

13.1 Projectionsofrevenue,expenditureandborrowings

The NEF is currently engaged in a recapitalisation exercise with its Shareholder Ministry,

Government and other relevant stakeholders. The projections in this section and in the

appendices are dependent on the NEF’s recapitalisation being realised in the 2017 financial

year.

Revenue projections include interest on loans and investments, interest on cash in bank,

dividend income from listed and unlisted equity investments, raising / origination fees and

enterprise and supplier development contributions received. The interest on loans is projected

at rates based on the pricing policies of each fund and the interest rate projections over the

entire investment portfolio. Most of the NEF’s loan instruments are priced against the prime

lending rate. Fees are projected at 1% of a third of funds disbursed each year.

Interest on cash in the bank is projected at between 6% and 7%, which are the projected rates

achieved on money invested with the South African Reserve Bank.

Dividend income is particularly difficult to predict / project as these are linked to different

dividend policies of the NEF’s investee companies. The NEF has a portfolio of listed and

unlisted investments, the majority of which relates to the MTN shares allocated to the NEF by

Government. The dividend projections included in the overall revenue is therefore based our

best estimate of what the NEF could receive each year.



The Net Asset Value of the NEF has increased from R2.1 billion in 2005/06 to about

R5.3 billion as at financial year end 2015/16. This overall increase over the period has largely

been a factor of appreciation in fair value of the NEF’s listed investment portfolio and retained

earnings, but the financial year ended 2015/16 saw a R713.8 million unrealised fair value loss

on listed investments.

Total Expenditure (i.e. including funding for non-financial services offered by the NEF) has

increased in line with increased activities and targets. Operational expenditure includes

general & administration and employee costs, and apart from office rental and salaries, are all

budgeted for from a zero base. The overall methodology applied when budgeting for

operational expenditure is largely linked to the organizational targets and activities. The NEF

has continued with a targeted critical role recruitment drive since the lifting of the funding

moratorium.

The NEF also embarked on various mandate related projects (i.e. non-financial services) for

which specific budget allocations are required. To this end a further average of R15m per

annum has been budgeted for over the next three years. Some of the projects that the NEF is

and will be involved in are Investor Education road shows and non-financial support to NEF

investees (mentorship, entrepreneurship development as well as governance training).

Over the strategic period, the efficiency ratio (based on total costs) is forecasted to breach the

intended long term range of 54%-58%. This is mainly as a result of reducing interest from

cash deposits which ultimately convert to finance charges from 2019 as a result of no

confirmed cash allocations to fund activities beyond 2018. In addition, non-financial support

activities are not subsidised. In the event that the NEF gets transfers from the dti to fully fund

the non-financial services we currently undertake, the efficiency ratio could be brought down

from an average of 63% and maintained around 60% over the course of the strategic period.



The current and required capitalisation of the NEF will allow it to move forward and make a

meaningful contribution in achieving its mandate, with its investment approvals projected to

reach the R12 billion milestone by the end of the strategic period.

13.2 Assetandliabilitymanagement

The NEF, as a Schedule 3A entity under the PFMA, is required to operate fully on the basis

of not budgeting for a deficit. Investment activity is funded out of cash balances and thus all

liabilities will at all times be off-set by cash balances.

Excess cash is managed through a cash management process where short term cash is

invested in call accounts of three approved banks to meet short term cash requirements and

excess cash with the South African Reserve Bank in terms of the requirements of the PFMA.

13.3 Cashflowprojections

Please refer to Appendix A.

13.4 Capitalexpenditureprojects

Annual capital expenditure allocation is mostly related to replenishment of existing capital

expenditure items such as computers, furniture and office equipment. The NEF has also

embarked on a regional presence programme through the opening of regional offices in all

nine provinces of the Republic. In the 2015/16 financial year, the last regional office in the

Northern Cape was opened. The average budget allocation for capital expenditure over the

three year period is R5.8 million.



13.5 Infrastructureplans

The NEF does not directly fund infrastructure for itself or the country as part of its mandate

though there may be an element of infrastructure funding provided through projects funded by

the Strategic Projects Fund that is a specific requirement of that project and in line with national

targeted strategic sectors. In addition, the NEF is involved in assisting with funding and/or

planning phases for the PRASA and AREVA infrastructure development initiatives.

13.6 Dividendpolicies

The NEF does not have a dividend policy with respect to any surplus reported. Surpluses are

retained following a section 53(3) application to the National Treasury each year in order to

meet further capitalisation needs of the NEF since it is not currently on the MTEF.



PartB:ProgrammePerformance



StrategicObjective:Providefinancetobusinessventuresestablishedandmanagedbyblack

people.

Natio

nalEmpo

wermen

tFun

d

Annu

alPerform

ancePlanfor2

017/18

-20

50

14.

Program

mePerform

ance

14.1Program

me1:uMnothoFund

Purposeoftheprogramme

Th

is F

un

d is d

esig

ne

d t

o im

pro

ve

acce

ss t

o B

EE

ca

pita

l a

nd

ha

s s

ix p

rod

ucts

: A

cq

uis

itio

n F

ina

nce

, N

ew

Ve

ntu

res F

ina

nce

, E

xp

an

sio

n F

ina

nce

,

Ca

pita

l M

ark

ets

Fu

nd

, L

iqu

idity a

nd

Wa

reh

ou

sin

g, a

nd

Pro

pe

rty. T

he

se

pro

du

cts

pro

vid

e c

ap

ita

l to

bla

ck-o

wn

ed

an

d-m

an

ag

ed

en

terp

rise

s, b

lack

en

tre

pre

ne

urs

wh

o a

re b

uyin

g e

qu

ity s

ha

res in

esta

blish

ed

wh

ite

-ow

ne

d e

nte

rpri

se

s, n

ew

ve

ntu

res fin

an

ce

an

d B

EE

bu

sin

esse

s th

at a

re o

r w

ish

to b

e lis

ted

on

th

e J

SE

. F

un

din

g r

an

ge

s fro

m R

2 m

illio

n to

R7

5 m

illio

n. T

he

Fu

nd

pri

cin

g is t

o a

ch

ieve

re

turn

s th

at a

re in

lin

e w

ith

th

e le

ve

l o

f ri

sk

take

n b

y t

he

NE

F.

Natio

nalEmpo

wermen

tFun

d

Annu

alPerform

ancePlanfor2

017/18

-20

51

Descriptionoftheprogramme

De

tails o

f th

e s

ix p

rod

ucts

pro

vid

ed

by u

Mn

oth

o F

un

d a

re p

rovid

ed

be

low

:

Acq

uisi

tion

Fina

nce

New

Ven

ture

Fin

ance

Ex

pans

ion

Cap

ital

Cap

ital M

arke

ts

Liqu

idity

&

War

ehou

sing

Pr

oper

ty F

und

Inve

stm

ent

thre

shol

d R

2 m

illio

n t

o R

75

millio

n

R5

millio

n t

o R

75

millio

n

R5

millio

n t

o R

75

millio

n

R2

millio

n t

o R

75

millio

n

R2

millio

n t

o R

75

millio

n

R5

millio

n t

o R

75

millio

n

Prod

uct

purp

ose

BE

E a

pp

lica

nts

se

ekin

g t

o f

un

d e

qu

ity

pu

rch

ase

s o

f b

etw

ee

n

R2

millio

n a

nd

R7

5

millio

n in

exis

tin

g

bu

sin

esse

s

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art

ies s

ee

kin

g t

o

pa

rtic

ipa

te in

me

diu

m-

siz

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en

fie

lds

pro

jects

with

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tal

fun

din

g r

eq

ue

sts

of

be

twe

en

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0 m

illio

n

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illio

n.

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titie

s t

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ad

y

bla

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t

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th

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nte

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rly t

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d b

y b

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om

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tha

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ek t

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n t

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JS

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r its ju

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ltX

ma

rke

t. T

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uM

no

tho

Fu

nd

will a

lso

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lp

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EE

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mp

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ies

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EE

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w B

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d

Natio

nalEmpo

wermen

tFun

d

Annu

alPerform

ancePlanfor2

017/18

-20

52

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Natio

nalEmpo

wermen

tFun

d

Annu

alPerform

ancePlanfor2

017/18

-20

53

A

cqui

sitio

n Fi

nanc

e N

ew V

entu

re F

inan

ce

Expa

nsio

n C

apita

l C

apita

l Mar

kets

Li

quid

ity &

W

areh

ousi

ng

Prop

erty

Fun

d

Type

s of

in

stru

men

t

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stm

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t in

str

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n in

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a

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.

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Bla

ck

equi

ty

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shol

d

Min

imum

of 2

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inim

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f 25.

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imum

of 5

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inim

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f 25.

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imum

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f 50.

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Pric

ing

In

fluen

ced

by E

mpo

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men

t Div

iden

d or

Dev

elop

men

t Im

pact

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t lin

ked

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rate

and

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ity b

ased

on

targ

et IR

R

Term

s of

In

vest

men

t an

d ot

her

term

s

Typ

ica

l in

ve

stm

en

t

ho

rizo

n o

f 4

to

7 y

ea

rs

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ica

l in

ve

stm

en

t

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rizo

n o

f 5

to

10

ye

ars

.

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l in

ve

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f 4

to

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l in

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ica

l in

ve

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f 4

to

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ea

s

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ica

l in

ve

stm

en

t

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n o

f u

p t

o 1

0

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ars

on

se

nio

r

de

bt

an

d u

p t

o 1

5

ye

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me

zza

nin

e d

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t

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d e

qu

ity

instr

um

en

ts

Natio

nalEmpo

wermen

tFun

d

Annu

alPerform

ancePlanfor2

017/18

-20

54

Performanceindicatorsandperformancetargetsperprogramme

Out

com

e O

utpu

t Pe

rfor

man

ce

Indi

cato

r/mea

sure

A

udite

d A

ctua

l Pe

rfor

man

ce

Estim

ated

Pe

rfor

man

ce

(exc

l WEF

co

ntrib

utio

n)

Med

ium

Ter

m T

arge

ts

2015

/16

2016

/17

2017

/18

2018

/19

2019

/20

Incre

ase

the

nu

mb

er

of

bu

sin

esse

s

ow

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d a

nd

ma

na

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uity f

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alPerform

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017/18

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55

Quarterlymilestones

Out

com

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man

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Indi

cato

r/mea

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asel

ine

2015

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2017

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Qua

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nalEmpo

wermen

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alPerform

ancePlanfor2

017/18

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56

14.2Program

me2:StrategicProjectsFund

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d

Annu

alPerform

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017/18

-20

57

¥M

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nalEmpo

wermen

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d

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017/18

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58


Out

com

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cato

r/mea

sure

A

udite

d A

ctua

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rfor

man

ce

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l WEF

co

ntrib

utio

n)

Med

ium

Ter

m T

arge

ts

2015

/16

2016

/17

2017

/18

2018

/19

2019

/20

Incre

ase

the

nu

mb

er

of

bu

sin

esse

s

ow

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d a

nd

ma

na

ge

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lack

pe

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nalEmpo

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Annu

alPerform

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017/18

-20

59

Quarterlymilestones

Out

com

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utpu

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rfor

man

ce

Indi

cato

r/mea

sure

B

asel

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2015

/16

2017

/18

Ann

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Targ

et

Cum

ulat

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Qua

rter

ly M

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1st Q

uart

er2nd

Qua

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60

14.3Program

me3:iMbew

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Contract

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Fo

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m T

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2016

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2017

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2018

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2019

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nu

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63

Quarterlymilestones

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017/18

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64

14.4Program

me4:Rural&

Com

munityDevelopmentFund


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66


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Ter

m T

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2016

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2017

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Incre

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nu

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Annu

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017/18

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67

Quarterlymilestones

Out

com

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Du

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017/18

-20

68

14.5Program

me5:Wom

enEmpow

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017/18

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69


Out

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Pe

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man

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m T

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2019

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Incre

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017/18

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70

Quarterlymilestones

Out

com

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2017

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Ann

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Targ

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e t

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y t

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ag

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d c

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en

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ancePlanfor2

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71

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017/18

-20

72

14.6Program

me6:EntrepreneurshipDevelopment


Ap

plica

nts

fo

r fu

nd

ing

ma

y b

e e

xce

lle

nt

en

tre

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, b

ut

oft

en

str

ug

gle

to

na

vig

ate

th

e n

ece

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pp

lica

tio

n p

roce

du

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to

ma

na

ge

th

eir

bu

sin

esse

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nd

th

is i

s o

fte

n e

vid

en

t d

uri

ng

th

e i

nitia

l a

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ssm

en

t o

f th

e f

un

din

g a

pp

lica

tio

n.

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e N

EF

’s P

re-I

nve

stm

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PIU

) th

ere

fore

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ts w

ith

fu

nd

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ad

vic

e,

bu

sin

ess p

lan

nin

g a

nd

ge

ne

ral

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tan

ce

to

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lp e

nsu

re t

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t a

pp

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tio

ns a

re o

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ien

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ua

lity

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mp

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nta

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re t

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dra

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tify

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t w

ill q

ua

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dvis

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s.

Natio

nalEmpo

wermen

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d

Annu

alPerform

ancePlanfor2

017/18

-20

73

EntrepreneurshipDevelopmentStrategy

By 2

01

0 th

e N

EF

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rou

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nd

Ma

na

ge

me

nt D

ivis

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fa

ce

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ng

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de

live

rin

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n its

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nd

ate

. T

he

se

ch

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clu

de

d:

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he

nu

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er

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plica

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ece

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er

mo

nth

.

¥T

he

qu

ality

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se

ap

plica

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ns,

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vid

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ce

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n a

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l ra

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n 3

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ece

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he

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ph

istica

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e t

arg

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o p

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ess p

lan

s.

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he

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ark

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in t

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s o

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ce

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str

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pa

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atio

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atio

na

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or

this

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ate

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as t

o t

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r to

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itig

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cia

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sk fo

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ss t

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uri

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ve

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to p

rovid

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ve

stm

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larl

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th

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ase

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E’s

wh

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inta

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ou

nd

in

ve

stm

en

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eth

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gie

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AR

T c

ap

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nalEmpo

wermen

tFun

d

Annu

alPerform

ancePlanfor2

017/18

-20

74

¥E

xp

lore

ad

ditio

na

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cia

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terv

en

tio

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ntr

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eu

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nh

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ce

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ica

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dly

with

fo

cu

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n F

ina

ncia

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n-F

ina

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l S

up

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rt a

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we

ll a

s a

dvo

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es p

ert

ain

ing

to

en

tre

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urs

hip

;

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nve

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as i

mp

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n b

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cu

ba

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.

Natio

nalEmpo

wermen

tFun

d

Annu

alPerform

ancePlanfor2

017/18

-20

75


Goa

l/ O

utco

me

Out

put

Perf

orm

ance

In

dica

tor/m

easu

re

Aud

ited

Act

ual

Perf

orm

ance

Es

timat

ed

Perf

orm

ance

2015

/16

2016

/17

2017

/18

2018

/19

2019

/20

In

ve

stm

en

ts

ma

de

by t

he

NE

F r

esu

lt

in

su

sta

ina

ble

bla

ck-o

wn

ed

bu

sin

esse

s.

Th

e p

rovis

ion

of

no

n-

fin

an

cia

l su

pp

ort

an

d

tra

inin

g f

or

bla

ck-o

wn

ed

bu

sin

esse

s a

nd

en

tre

pre

ne

urs

.

6.1

. N

um

be

r o

f B

usin

ess

To

da

y T

rain

ing

se

ssio

ns

pro

vid

ed

26

tra

inin

g

se

ssio

ns p

er

ye

ar,

with

an

ave

rag

e

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re o

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asse

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se

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inin

g

asse

ssm

en

t

18

tra

inin

g

se

ssio

ns p

er

ye

ar,

with

an

ave

rag

e s

co

re o

f

60

% r

eq

uir

ed

in

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po

st-

tra

inin

g

asse

ssm

en

t

18

tra

inin

g

se

ssio

ns p

er

ye

ar,

with

an

ave

rag

e s

co

re o

f

60

% r

eq

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ed

in

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po

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tra

inin

g

asse

ssm

en

t

18

tra

inin

g

se

ssio

ns p

er

ye

ar,

with

an

ave

rag

e

sco

re o

f 6

0%

req

uir

ed

in

th

e

po

st-

tra

inin

g

asse

ssm

en

t

6.2

. N

um

be

r o

f

en

tre

pre

ne

urs

re

ferr

ed

fo

r

bu

sin

ess in

cu

ba

tio

n;

an

d

nu

mb

er

of

en

tre

pre

ne

urs

wh

o s

ucce

ssfu

lly c

om

ple

te

bu

sin

ess in

cu

ba

tio

n

36 e

ntre

pren

eurs

ha

ve m

ade

it to

the

final

incu

batio

n st

age

75

en

tre

pre

ne

urs

refe

rre

d f

or

incu

ba

tio

n;

an

d 1

5

en

tre

pre

ne

urs

in

the

fin

al

incu

ba

tio

n s

tag

e.

75

en

tre

pre

ne

urs

refe

rre

d f

or

incu

ba

tio

n;

15

en

tre

pre

ne

urs

in

the

fin

al

incu

ba

tio

n s

tag

e.

75

en

tre

pre

ne

urs

refe

rre

d f

or

incu

ba

tio

n;

15

en

tre

pre

ne

urs

in

the

fin

al

incu

ba

tio

n s

tag

e.

75

en

tre

pre

ne

urs

refe

rre

d f

or

incu

ba

tio

n;

15

en

tre

pre

ne

urs

in

the

fin

al

incu

ba

tio

n s

tag

e.

6.3

. N

um

be

r o

f S

ocia

l

Fa

cilita

tio

n S

essio

ns f

or

NE

F in

ve

ste

es

25 S

ocia

l Fac

ilita

tion

sess

ions

for t

he y

ear t

o da

te

18

So

cia

l

Fa

cilita

tio

n

Se

ssio

ns

18

So

cia

l

Fa

cilita

tio

n

Se

ssio

ns

18

So

cia

l

Fa

cilita

tio

n

Se

ssio

ns

18

So

cia

l

Fa

cilita

tio

n

Se

ssio

ns

Natio

nalEmpo

wermen

tFun

d

Annu

alPerform

ancePlanfor2

017/18

-20

76

Quarterlymilestones

Goa

l/

Out

com

e

Out

put

Perf

orm

ance

In

dica

tor/m

easu

re

Bas

elin

e

2015

/16

2017

/18

Ann

ual

Targ

et

Cum

ulat

ive

Qua

rter

ly M

ilest

ones

1st Q

uart

er

2nd Q

uart

er

3rd Q

uart

er

4th Q

uart

er

In

ve

stm

en

ts

ma

de

by t

he

NE

F r

esu

lt

in

su

sta

ina

ble

bla

ck-o

wn

ed

bu

sin

esse

s.

Th

e p

rovis

ion

of

no

n-

fin

an

cia

l

su

pp

ort

an

d

tra

inin

g f

or

bla

ck-o

wn

ed

bu

sin

esse

s

an

d

en

tre

pre

ne

urs

.

Nu

mb

er

of

Bu

sin

ess

To

da

y T

rain

ing

se

ssio

ns p

rovid

ed

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tra

inin

g

se

ssio

ns p

er

ye

ar,

with

an

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rag

e

sco

re o

f 7

1%

req

uir

ed

in

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e

po

st-

tra

inin

g

asse

ssm

en

t

18

tra

inin

g

se

ssio

ns p

er

ye

ar,

with

an

ave

rag

e s

co

re

of

60

%

req

uir

ed

in

th

e

po

st-

tra

inin

g

asse

ssm

en

t

5 t

rain

ing

se

ssio

ns w

ith

an

ave

rag

e

sco

re o

f 6

0%

req

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ed

in

po

st-

tra

inin

g

asse

ssm

en

t

10

tra

inin

g

se

ssio

ns w

ith

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rag

e

sco

re o

f 6

0%

req

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ed

in

po

st-

tra

inin

g

asse

ssm

en

t

15

tra

inin

g

se

ssio

ns w

ith

an

ave

rag

e

sco

re o

f 6

0%

req

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in

po

st-

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inin

g

asse

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en

t

18

tra

inin

g

se

ssio

ns w

ith

an

ave

rag

e

sco

re o

f 6

0%

req

uir

ed

in

po

st-

tra

inin

g

asse

ssm

en

t

Nu

mb

er

of

en

tre

pre

ne

urs

re

ferr

ed

for

bu

sin

ess

incu

ba

tio

n;

an

d

nu

mb

er

of

en

tre

pre

ne

urs

wh

o

su

cce

ssfu

lly c

om

ple

te

bu

sin

ess in

cu

ba

tio

n

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ntre

pren

eurs

hav

e m

ade

it to

the

final

in

cuba

tion

stag

e

Re

fer

75

en

tre

pre

ne

urs

for

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ba

tio

n;

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en

tre

pre

ne

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in t

he

fin

al

incu

ba

tio

n

sta

ge

.

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fer

30

en

tre

pre

ne

urs

for

incu

ba

tio

n;

an

d 2

en

tre

pre

ne

urs

in t

he

fin

al

incu

ba

tio

n

sta

ge

.

Re

fer

45

en

tre

pre

ne

urs

for

incu

ba

tio

n;

an

d 4

en

tre

pre

ne

urs

in t

he

fin

al

incu

ba

tio

n

sta

ge

.

Re

fer

60

en

tre

pre

ne

urs

for

incu

ba

tio

n;

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d 7

en

tre

pre

ne

urs

in t

he

fin

al

incu

ba

tio

n

sta

ge

.

Re

fer

75

en

tre

pre

ne

urs

for

incu

ba

tio

n;

an

d 1

5

en

tre

pre

ne

urs

in t

he

fin

al

incu

ba

tio

n

sta

ge

.

Nu

mb

er

of

So

cia

l

Fa

cilita

tio

n S

essio

ns

for

NE

F in

ve

ste

es

25 S

ocia

l Fac

ilita

tion

sess

ions

for t

he y

ear

to d

ate

18

So

cia

l

Fa

cilita

tio

n

Se

ssio

ns

5 S

ocia

l

Fa

cilita

tio

n

Se

ssio

ns

10

So

cia

l

Fa

cilita

tio

n

Se

ssio

ns

15

So

cia

l

Fa

cilita

tio

n

Se

ssio

ns

18

So

cia

l

Fa

cilita

tio

n

Se

ssio

ns

FinancialPlan(ExpenditureestimatesforProgramme6:EntrepreneurshipDevelopment)

Du

e t

o t

he

wa

y t

he

NE

F m

an

ag

es its

bu

sin

ess,

mo

st

ad

min

istr

ative

an

d c

ap

ita

l e

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en

se

s a

re c

en

tra

lise

d.

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are

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ere

fore

no

t in

a p

ositio

n t

o

pro

vid

e t

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re

qu

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ost

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lit

pe

r p

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ram

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esa

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men

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nalEmpo

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alPerform

ancePlanfor2

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-20

78

14.7Program

me7:AssetManagem

ent(InvestorEducation)

Purp

ose

of th

e pr

ogra

mm

e

Th

is p

rog

ram

me

is in

dir

ect

fulfilm

en

t o

f th

e m

an

da

te o

f th

e N

EF

wh

ich

is a

ime

d a

t p

rom

otin

g a

cu

ltu

re o

f sa

vin

gs a

nd

in

ve

stm

en

t a

mo

ng

bla

ck

pe

op

le

Des

crip

tion

of th

e pr

ogra

mm

e

Th

e N

EF

’s I

nve

sto

r E

du

ca

tio

n c

am

pa

ign

is p

lan

ne

d t

o r

ea

ch

lo

ca

litie

s a

cro

ss t

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co

un

try,

pro

vid

ing

in

form

atio

n n

ece

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ry to

m

ake

p

rud

en

t

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vin

gs a

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in

ve

stm

en

t d

ecis

ion

s.

Natio

nalEmpo

wermen

tFun

d

Annu

alPerform

ancePlanfor2

017/18

-20

79


Goa

l/ O

utco

me

Out

put

Perf

orm

ance

In

dica

tor/m

easu

re

Aud

ited

Act

ual

Perf

orm

ance

Estim

ated

Pe

rfor

man

ce

Med

ium

Ter

m T

arge

ts

2015

/16

2016

/17

2017

/18

2018

/19

2019

/20

Incre

ase

d

un

de

rsta

nd

ing

of

eq

uity

ow

ne

rsh

ip

am

on

g b

lack

pe

op

le a

nd

incre

ase

d

activity in

sa

vin

gs a

nd

inve

stm

en

ts b

y

bla

ck p

eo

ple

.

Co

nd

uct

inve

sto

r e

du

ca

tio

n

se

min

ars

in

pro

vin

cia

l to

wn

s a

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incre

ase

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rsta

nd

ing

by

pa

rtic

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nts

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mb

er

of

se

min

ars

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ld

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ss t

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try

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essi

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plet

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ars

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80

Quarterlymilestones

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rter

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2nd Q

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er

3rd Q

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4th Q

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un

de

rsta

nd

ing

of

eq

uity

ow

ne

rsh

ip

am

on

g b

lack

pe

op

le a

nd

incre

ase

d

activity in

sa

vin

gs a

nd

inve

stm

en

ts b

y

bla

ck p

eo

ple

.

Co

nd

uct

inve

sto

r

ed

uca

tio

n

se

min

ars

in

pro

vin

cia

l to

wn

s

an

d in

cre

ase

un

de

rsta

nd

ing

by

pa

rtic

ipa

nts

.

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mb

er

of

se

min

ars

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ld

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ss t

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try

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essi

ons

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plet

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of 3

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ars

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tres

)

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ve

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uca

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se

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se

min

ars

16

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ve

sto

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Ed

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n

se

min

ars

24

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ve

sto

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se

min

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ve

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Ed

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se

min

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Fina

ncia

l Pla

n (E

xpen

ditu

re e

stim

ates

for P

rogr

amm

e 7:

Inve

stor

Edu

catio

n)

Du

e t

o t

he

wa

y t

he

NE

F m

an

ag

es its

bu

sin

ess,

mo

st

ad

min

istr

ative

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d c

ap

ita

l e

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en

se

s a

re c

en

tra

lise

d.

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are

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fore

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t in

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15.

Perform

ancePlanMatrices

15.1ConsolidatedPerform

ancePlanMatrix2017/18–20

Stra

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by

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as a

t 31

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A

DVA

NC

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BB

BEE

1.

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vid

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ina

nce

to b

usin

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en

ture

s

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ed

an

d

ma

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ge

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y b

lack

pe

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ase

th

e

nu

mb

er

of

bu

sin

esse

s o

wn

ed

an

d m

an

ag

ed

by

bla

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ple

in

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.

Pro

vid

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bla

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mp

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d

bu

sin

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stin

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fun

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targ

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se

,

SM

Es,

co

rpo

rate

fin

an

ce

an

d

ve

ntu

re c

ap

ita

l.

1.1

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alu

e o

f

de

als

ap

pro

ve

d b

y

the

NE

F (

R

millio

n)

R1

24

8 b

illio

n

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m

illio

n

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50

millio

n

R1

04

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n

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33

1 m

illio

n

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alu

e o

f n

ew

Co

mm

itm

en

ts

(R m

illio

n)

R1

02

8 m

illio

n

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21

millio

n

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45

m

illio

n

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39

millio

n

R1

06

5 m

illio

n

1.3

. V

alu

e o

f

Dis

bu

rse

me

nts

(R m

illio

n)

R8

19

millio

n

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53

millio

n

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60

millio

n

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millio

n

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5 m

illio

n

MA

XIM

ISIN

G T

HE

EMPO

WER

MEN

T D

IVID

END

2.

In

ve

st

in b

lack

em

po

we

red

bu

sin

esse

s t

ha

t

ha

ve

hig

h

em

plo

ym

en

t

cre

atin

g

op

po

rtu

nitie

s.

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e s

ign

ific

an

t

cre

atio

n a

nd

su

pp

ort

of

ne

w

an

d e

xis

tin

g jo

b

op

po

rtu

nitie

s

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ve

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or

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gra

mm

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2.1

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um

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b

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po

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nitie

s

exp

ecte

d t

o b

e

su

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4 9

38

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f

wh

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3 3

77

are

ne

w)

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Natio

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017/18

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82

Stra

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3.

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pp

ort

th

e

pa

rtic

ipa

tio

n o

f b

lack

wo

me

n in

th

e

eco

no

my.

Incre

ase

d n

um

be

r

of

bu

sin

esse

s

ow

ne

d a

nd

ma

na

ge

d b

y b

lack

wo

me

n

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urc

e in

ve

stm

en

t

op

po

rtu

nitie

s f

or

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Fu

nd

ing

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gra

mm

es t

ha

t

are

ow

ne

d a

nd

ma

na

ge

d b

y b

lack

wo

me

n.

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erc

en

tag

e o

f

po

rtfo

lio

dis

bu

rse

d

ow

ne

d b

y b

lack

wo

me

n

29

% (

on

an

nu

al

dis

bu

rse

me

nts

)

40

%

(o

n

an

nu

al

dis

bu

rse

me

nts

)

40

%

(on

an

nu

al

dis

bu

rse

me

nts

)

40

%

(on

a

nn

ua

l

dis

bu

rse

me

nts

)

40

%

(on

an

nu

al

dis

bu

rse

me

nts

)

4.

Fa

cilita

te

inve

stm

en

t a

cro

ss

all p

rovin

ce

s in

So

uth

Afr

ica

Incre

ase

th

e

ove

rall c

olle

ctive

va

lue

of

the

po

rtfo

lio

in

ve

ste

d

in N

ort

he

rn C

ap

e,

Fre

e S

tate

,

Lim

po

po

,

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um

ala

ng

a,

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ste

rn C

ap

e a

nd

No

rth

-We

st.

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ase

d s

ha

re o

f

po

rtfo

lio

in

un

de

r-

rep

rese

nte

d

pro

vin

ce

s

4.1

. 2

5%

of

dis

bu

rse

me

nt

to

be

in

ve

ste

d in

No

rth

ern

Ca

pe

,

Fre

e S

tate

,

Lim

po

po

,

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um

ala

ng

a,

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ste

rn C

ap

e a

nd

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rth

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st.

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ar-

to-d

ate

, a

to

tal

of

75

de

als

wo

rth

R3

67

m is in

ve

ste

d

as f

ollo

ws:

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: 6

wo

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R3

1 m

FS

: 8

wo

rth

R2

4 m

LP

: 1

6 w

ort

h R

96

m

MP

: 2

0 w

ort

h R

87

m

NW

:7 w

ort

h R

76

m

EC

: 1

8 w

ort

h R

53

m

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is r

ep

rese

nts

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%

of

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YT

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dis

bu

rse

me

nts

25

% o

f

dis

bu

rse

me

nts

to b

e in

ve

ste

d

in N

ort

he

rn

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pe

, F

ree

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te,

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po

po

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um

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ste

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ap

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an

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st.

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% o

f

dis

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rse

me

nts

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rth

ern

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pe

, F

ree

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te,

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po

po

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um

ala

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a,

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ste

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ap

e a

nd

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rth

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st.

25

% o

f

dis

bu

rse

me

nts

to b

e in

ve

ste

d in

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rth

ern

Ca

pe

,

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e S

tate

,

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po

po

,

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um

ala

ng

a,

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ste

rn C

ap

e

an

d N

ort

h-W

est.

25

% o

f

dis

bu

rse

me

nts

to b

e in

ve

ste

d in

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rth

ern

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pe

,

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e S

tate

,

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po

po

,

Mp

um

ala

ng

a,

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ste

rn C

ap

e

an

d N

ort

h-W

est.

OPT

IMIS

ING

NO

N-F

INA

NC

IAL

SUPP

OR

T

5.

En

co

ura

ge

&

pro

mo

te s

avin

gs,

inve

stm

en

t &

me

an

ing

ful

eco

no

mic

pa

rtic

ipa

tio

n b

y

bla

ck p

eo

ple

Incre

ase

d

un

de

rsta

nd

ing

of

eq

uity o

wn

ers

hip

am

on

g b

lack

pe

op

le a

nd

incre

ase

d a

ctivity

in s

avin

gs a

nd

inve

stm

en

ts b

y

bla

ck p

eo

ple

.

Co

nd

uct

inve

sto

r

ed

uca

tio

n

se

min

ars

in

pro

vin

cia

l to

wn

s

an

d in

cre

ase

un

de

rsta

nd

ing

by

pa

rtic

ipa

nts

.

5.1

. N

um

be

r o

f

se

min

ars

he

ld

acro

ss t

he

co

un

try.

44

Se

ssio

ns

co

mp

lete

d,

(ma

de

up

of

36

se

min

ars

an

d 8

In

du

str

ial

Th

ea

tre

s)

32

In

ve

sto

r

Ed

uca

tio

n

se

min

ars

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ye

ar

32

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ve

sto

r

Ed

uca

tio

n s

em

ina

rs

pe

r ye

ar

32

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ve

sto

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Ed

uca

tio

n

se

min

ars

pe

r

ye

ar

32

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r

Ed

uca

tio

n

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min

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Stra

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rent

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0

6.

Bla

ck e

co

no

mic

em

po

we

rme

nt

is

ad

va

nce

d t

hro

ug

h

co

mm

erc

ially

su

sta

ina

ble

en

terp

rise

.

Inve

stm

en

ts m

ad

e

by t

he

NE

F r

esu

lt

in s

usta

ina

ble

bla

ck-o

wn

ed

bu

sin

esse

s.

Th

e p

rovis

ion

of

no

n-f

ina

ncia

l

su

pp

ort

an

d

tra

inin

g f

or

bla

ck-

ow

ne

d b

usin

esse

s

an

d

en

tre

pre

ne

urs

.

6.1

. N

um

be

r o

f

Bu

sin

ess T

od

ay

Tra

inin

g s

essio

ns

pro

vid

ed

A t

ota

l o

f 2

6 t

rain

ing

se

ssio

ns h

ave

be

en

co

nd

ucte

d,

with

an

ave

rag

e s

co

re o

f

71

%

18

tra

inin

g

se

ssio

ns p

er

ye

ar,

with

an

ave

rag

e s

co

re

of

60

% r

eq

uir

ed

in t

he

po

st-

tra

inin

g

asse

ssm

en

t

18

tra

inin

g s

essio

ns

pe

r ye

ar,

with

an

ave

rag

e s

co

re o

f

60

% r

eq

uir

ed

in

th

e

po

st-

tra

inin

g

asse

ssm

en

t

18

tra

inin

g

se

ssio

ns p

er

ye

ar,

with

an

ave

rag

e s

co

re o

f

60

% r

eq

uir

ed

in

the

po

st-

tra

inin

g

asse

ssm

en

t

18

tra

inin

g

se

ssio

ns p

er

ye

ar,

with

an

ave

rag

e s

co

re o

f

60

% r

eq

uir

ed

in

the

po

st-

tra

inin

g

asse

ssm

en

t

6.2

. N

um

be

r o

f

en

tre

pre

ne

urs

refe

rre

d f

or

bu

sin

ess

incu

ba

tio

n;

an

d

nu

mb

er

of

en

tre

pre

ne

urs

wh

o

su

cce

ssfu

lly

co

mp

lete

bu

sin

ess

incu

ba

tio

n.

36

en

tre

pre

ne

urs

ha

ve

ma

de

it

to t

he

fin

al in

cu

ba

tio

n

sta

ge

Re

fer

75

en

tre

pre

ne

urs

for

incu

ba

tio

n;

an

d 1

5

en

tre

pre

ne

urs

in t

he

fin

al

incu

ba

tio

n

sta

ge

.

Re

fer

75

en

tre

pre

ne

urs

fo

r

incu

ba

tio

n;

an

d 1

5

en

tre

pre

ne

urs

in

th

e

fin

al in

cu

ba

tio

n

sta

ge

.

Re

fer

75

en

tre

pre

ne

urs

for

incu

ba

tio

n;

an

d 1

5

en

tre

pre

ne

urs

in

the

fin

al

incu

ba

tio

n s

tag

e.

Re

fer

75

en

tre

pre

ne

urs

for

incu

ba

tio

n;

an

d 1

5

en

tre

pre

ne

urs

in

the

fin

al

incu

ba

tio

n

sta

ge

.

6.3

. N

um

be

r o

f

So

cia

l F

acilita

tio

n

se

ssio

ns f

or

NE

F

inve

ste

es

25

So

cia

l F

acilita

tio

n

se

ssio

ns f

or

the

ye

ar

to d

ate

18

So

cia

l

Fa

cilita

tio

n

se

ssio

ns

18

So

cia

l

Fa

cilita

tio

n s

essio

ns

18

So

cia

l

Fa

cilita

tio

n

se

ssio

ns

18

So

cia

l

Fa

cilita

tio

n

se

ssio

ns

7.

Esta

blish

th

e

NE

F in

th

e S

ou

th

Afr

ica

n e

co

no

my a

s

a c

red

ible

an

d

me

an

ing

ful

de

ve

lop

me

nt

fin

an

ce

in

stitu

tio

n.

Incre

ase

th

e

utilisa

tio

n o

f th

e

NE

F's

se

rvic

es

an

d f

ina

ncin

g

pro

du

cts

.

Incre

ase

po

sitiv

e

bra

nd

aw

are

ne

ss

of

the

NE

F.

7.1

. B

ran

d a

ud

it

su

rve

y f

ind

ing

s

N/A

Su

rve

y

pe

rfo

rme

d e

ve

ry

se

co

nd

ye

ar

Incre

ase

bra

nd

aw

are

ne

ss t

o

70

%

N/A

Su

rve

y

pe

rfo

rme

d e

ve

ry

se

co

nd

ye

ar

Incre

ase

bra

nd

aw

are

ne

ss t

o

75

%

N/A

Su

rve

y

pe

rfo

rme

d e

ve

ry

se

co

nd

ye

ar

Natio

nalEmpo

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0

FIN

AN

CIA

L EF

FIC

IEN

CY

& S

UST

AIN

AB

ILIT

Y

8.

Esta

blish

th

e

NE

F a

s a

su

sta

ina

ble

DF

I.

Inve

st

in

tra

nsa

ctio

ns t

ha

t

ha

ve

a h

igh

le

ve

l

of

su

cce

ss a

nd

min

imis

e b

usin

ess

failu

res

Ob

tain

an

ove

rall

rea

l re

turn

on

fu

nd

inve

stm

en

ts

thro

ug

h e

qu

ity

retu

rns,

inte

rest

on

loa

ns a

nd

in

tere

st

on

ca

sh

ba

lan

ce

s

with

min

imis

ed

imp

air

me

nts

an

d

wri

te-o

ffs.

8.1

. P

erc

en

tag

e

of

po

rtfo

lio

imp

air

ed

24

%

18

%

18

%

18

%

18

%

8.2

. T

arg

et

RO

I

be

fore

imp

air

me

nts

(to

be

revie

we

d a

nn

ua

lly)

9.5

%

9%

- 1

0%

9

% -

10

%

9%

- 1

0%

9

% -

10

%

8.3

. C

olle

ctio

ns

ratio

s

97

%

80

%

80

%

80

%

80

%

Natio

nalEmpo

wermen

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15.2Perform

ancePlanMatrix–QuarterlyMilestones2017/18

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or

20

17

/18

ha

ve

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en

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we

d b

ase

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n d

iscu

ssio

ns a

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an

ag

em

en

t, E

xe

cu

tive

an

d B

oa

rd le

ve

l. Q

ua

rte

rly t

arg

ets

ha

ve

be

en

up

da

ted

to

alig

n w

ith

th

e a

nn

ua

l ta

rge

ts a

s o

utlin

ed

in

th

e P

erf

orm

an

ce

Pla

n a

bo

ve

.

Stra

tegi

c O

bjec

tive

Perf

orm

ance

In

dica

tor/

Mea

sure

by

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ing

Prog

ram

me

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rfor

man

ce

as a

t 31

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ch

2016

2016

/17

Cur

rent

Yea

r 20

17/1

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Cum

ulat

ive

Qua

rter

ly M

ilest

ones

1st

2nd

3rd

4th

A

DVA

NC

ING

BB

BEE

1.

Pro

vid

e

fin

an

ce

to

bu

sin

ess v

en

ture

s

esta

blish

ed

an

d

ma

na

ge

d b

y b

lack

pe

op

le.

1.1

. V

alu

e o

f

de

als

ap

pro

ve

d

by t

he

NE

F (

R

millio

n)

R1

24

8 b

illio

n

R7

50

m

illio

n

R9

50

millio

n

R1

51

millio

n

R4

53

millio

n

R7

36

millio

n

R9

50

millio

n

1.2

. V

alu

e o

f

ne

w

Co

mm

itm

en

ts

(R m

illio

n)

R1

02

8 m

illio

n

R6

21

millio

n

R 7

45

m

illio

n

R1

00

millio

n

R3

08

millio

n

R5

44

millio

n

R7

45

millio

n

1.3

. V

alu

e o

f

Dis

bu

rse

me

nts

(R m

illio

n)

R8

19

millio

n

R5

53

millio

n

R6

60

millio

n

R6

3 m

illio

n

R2

80

millio

n

R4

75

millio

n

R6

60

millio

n

MA

XIM

ISIN

G T

HE

EMPO

WER

MEN

T D

IVID

END

2.

In

ve

st

in b

lack

em

po

we

red

bu

sin

esse

s t

ha

t

ha

ve

hig

h

em

plo

ym

en

t

cre

atin

g

op

po

rtu

nitie

s.

2.1

. N

um

be

r o

f

job

op

po

rtu

nitie

s

exp

ecte

d t

o b

e

su

pp

ort

ed

or

cre

ate

d.

Su

pp

ort

4 9

38

(o

f

wh

ich

3 3

77

are

ne

w)

Su

pp

ort

3 4

03

ne

w o

r e

xis

tin

g

job

op

po

rtu

nitie

s

Su

pp

ort

4 0

64

ne

w o

r e

xis

tin

g

job

op

po

rtu

nitie

s

Su

pp

ort

39

0 n

ew

or

exis

tin

g jo

b

op

po

rtu

nitie

s

Su

pp

ort

1 7

24

ne

w o

r e

xis

tin

g

job

op

po

rtu

nitie

s

Su

pp

ort

2 9

25

ne

w o

r e

xis

tin

g

job

op

po

rtu

nitie

s

Su

pp

ort

4 0

64

ne

w o

r e

xis

tin

g

job

op

po

rtu

nitie

s

Natio

nalEmpo

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ancePlanfor2

017/18

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c O

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tor/

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by

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me

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rfor

man

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ch

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2016

/17

Cur

rent

Yea

r 20

17/1

8

Cum

ulat

ive

Qua

rter

ly M

ilest

ones

1st

2nd

3rd

4th

3.

Su

pp

ort

th

e

pa

rtic

ipa

tio

n o

f

bla

ck w

om

en

in

the

eco

no

my.

3.1

.

Pe

rce

nta

ge

of

po

rtfo

lio

dis

bu

rse

d

ow

ne

d b

y b

lack

wo

me

n

29

% (

on

an

nu

al

dis

bu

rse

me

nts

)

40

%

(o

n

an

nu

al

dis

bu

rse

me

nts

)

40

%

(on

an

nu

al

dis

bu

rse

me

nts

)

40

%

(o

n

dis

bu

rse

me

nts

)

40

%

(o

n

dis

bu

rse

me

nts

)

40

%

(o

n

dis

bu

rse

me

nts

)

40

%

(o

n

an

nu

al

dis

bu

rse

me

nts

)

4.

Fa

cilita

te

inve

stm

en

t a

cro

ss

all p

rovin

ce

s in

So

uth

Afr

ica

4.1

. 2

5%

of

dis

bu

rse

me

nt

to b

e in

ve

ste

d

in N

ort

he

rn

Ca

pe

, F

ree

Sta

te,

Lim

po

po

,

Mp

um

ala

ng

a,

Ea

ste

rn C

ap

e

an

d N

ort

h-

We

st.

Ye

ar-

to-d

ate

, a

tota

l o

f 7

5 d

ea

ls

wo

rth

R3

67

m is

inve

ste

d a

s

follo

ws:

NC

: 6

wo

rth

R3

1

m

FS

: 8

wo

rth

R2

4

m

LP

: 1

6 w

ort

h R

96

m

MP

: 2

0 w

ort

h

R8

7 m

NW

:7 w

ort

h R

76

m

EC

: 1

8 w

ort

h R

53

m

Th

is r

ep

rese

nts

45

% o

f th

e Y

TD

dis

bu

rse

me

nts

25

% o

f

dis

bu

rse

me

nts

to b

e in

ve

ste

d

in N

ort

he

rn

Ca

pe

, F

ree

Sta

te,

Lim

po

po

,

Mp

um

ala

ng

a,

Ea

ste

rn C

ap

e

an

d N

ort

h-

We

st.

25

% o

f

dis

bu

rse

me

nts

to

be

in

ve

ste

d in

No

rth

ern

Ca

pe

,

Fre

e S

tate

,

Lim

po

po

,

Mp

um

ala

ng

a,

Ea

ste

rn C

ap

e

an

d N

ort

h-W

est.

25

% o

f

dis

bu

rse

me

nts

to

be

in

ve

ste

d in

No

rth

ern

Ca

pe

,

Fre

e S

tate

,

Lim

po

po

,

Mp

um

ala

ng

a,

Ea

ste

rn C

ap

e

an

d N

ort

h-W

est.

25

% o

f

dis

bu

rse

me

nts

to b

e in

ve

ste

d

in N

ort

he

rn

Ca

pe

, F

ree

Sta

te,

Lim

po

po

,

Mp

um

ala

ng

a,

Ea

ste

rn C

ap

e

an

d N

ort

h-

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st.

25

% o

f

dis

bu

rse

me

nts

to b

e in

ve

ste

d

in N

ort

he

rn

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pe

, F

ree

Sta

te,

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po

po

,

Mp

um

ala

ng

a,

Ea

ste

rn C

ap

e

an

d N

ort

h-

We

st.

25

% o

f

dis

bu

rse

me

nts

to b

e in

ve

ste

d in

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rth

ern

Ca

pe

,

Fre

e S

tate

,

Lim

po

po

,

Mp

um

ala

ng

a,

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ste

rn C

ap

e

an

d N

ort

h-W

est.

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ancePlanfor2

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rent

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ulat

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rter

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ones

1st

2nd

3rd

4th

OPT

IMIS

ING

NO

N-F

INA

NC

IAL

SUPP

OR

T

5.

En

co

ura

ge

&

pro

mo

te s

avin

gs,

inve

stm

en

t &

me

an

ing

ful

eco

no

mic

pa

rtic

ipa

tio

n b

y

bla

ck p

eo

ple

5.1

. N

um

be

r o

f

se

min

ars

he

ld

acro

ss t

he

co

un

try.

44

Se

ssio

ns

co

mp

lete

d,

(ma

de

up

of

36

se

min

ars

an

d 8

Ind

ustr

ial

Th

ea

tre

s)

32

In

ve

sto

r

Ed

uca

tio

n

se

min

ars

pe

r

ye

ar

32

In

ve

sto

r

Ed

uca

tio

n

se

min

ars

pe

r

ye

ar

8 I

nve

sto

r

Ed

uca

tio

n

se

min

ars

16

In

ve

sto

r

Ed

uca

tio

n

se

min

ars

24

In

ve

sto

r

Ed

uca

tio

n

se

min

ars

32

In

ve

sto

r

Ed

uca

tio

n

se

min

ars

6.

Bla

ck

eco

no

mic

em

po

we

rme

nt

is

ad

va

nce

d t

hro

ug

h

co

mm

erc

ially

su

sta

ina

ble

en

terp

rise

.

6.1

. N

um

be

r o

f

Bu

sin

ess

To

da

y T

rain

ing

se

ssio

ns

pro

vid

ed

A t

ota

l o

f 2

6

tra

inin

g s

essio

ns

ha

ve

be

en

co

nd

ucte

d,

with

an

ave

rag

e s

co

re

of

71

%

18

tra

inin

g

se

ssio

ns p

er

ye

ar,

with

an

ave

rag

e s

co

re

of

60

%

req

uir

ed

in

th

e

po

st-

tra

inin

g

asse

ssm

en

t

18

tra

inin

g

se

ssio

ns p

er

ye

ar,

with

an

ave

rag

e s

co

re o

f

60

% r

eq

uir

ed

in

the

po

st-

tra

inin

g

asse

ssm

en

t

5 t

rain

ing

se

ssio

ns

10

tra

inin

g

se

ssio

ns

15

tra

inin

g

se

ssio

ns

18

tra

inin

g

se

ssio

ns

6.2

. N

um

be

r o

f

en

tre

pre

ne

urs

refe

rre

d f

or

bu

sin

ess

incu

ba

tio

n;

an

d

nu

mb

er

of

en

tre

pre

ne

urs

wh

o

su

cce

ssfu

lly

co

mp

lete

bu

sin

ess

incu

ba

tio

n.

36

en

tre

pre

ne

urs

ha

ve

ma

de

it

to

the

fin

al

incu

ba

tio

n s

tag

e

Re

fer

75

en

tre

pre

ne

urs

for

incu

ba

tio

n;

an

d 1

5

en

tre

pre

ne

urs

in t

he

fin

al

incu

ba

tio

n

sta

ge

.

Re

fer

75

en

tre

pre

ne

urs

for

incu

ba

tio

n;

an

d 1

5

en

tre

pre

ne

urs

in

the

fin

al

incu

ba

tio

n s

tag

e.

Re

fer

30

en

tre

pre

ne

urs

for

incu

ba

tio

n;

an

d 2

en

tre

pre

ne

urs

in

the

fin

al

incu

ba

tio

n s

tag

e.

Re

fer

45

en

tre

pre

ne

urs

for

incu

ba

tio

n;

an

d 4

en

tre

pre

ne

urs

in t

he

fin

al

incu

ba

tio

n

sta

ge

.

Re

fer

60

en

tre

pre

ne

urs

for

incu

ba

tio

n;

an

d 7

en

tre

pre

ne

urs

in t

he

fin

al

incu

ba

tio

n

sta

ge

.

Re

fer

75

en

tre

pre

ne

urs

for

incu

ba

tio

n;

an

d 1

5

en

tre

pre

ne

urs

in

the

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PartC:

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AnnualPerformancePlan2017/18-20 90

16. AssetManagementPlan

The NEF is currently engaged in a recapitalisation exercise with its Shareholder Ministry,

Government and other relevant stakeholders. One of the aims of this engagement is

securing the transfer of equity in other state owned entities to the NEF. These are entities

in which the NEF was allocated shares by the Government but the shares were never

actually transferred to the NEF (e.g. Safcol). We have requested intervention by our

Shareholder Ministry in our quest to secure the transfer of the equity to the NEF.

The NEF has been allocated equity in state owned or previously state owned entities which

were subsequently privatised as part of the initial capitalisation of the NEF. To date, the

NEF received shares in MTN (1.5%), Connex Travel (now trading as BCD Travel) (10%),

Ithuba (15%) and Gidani (10%). The plan of the NEF is to retain such equity and where

possible, participate in board, shareholder and other structures of such entities in order to

ensure that the interests of the NEF in such assets are looked after. From time to time, the

NEF will create opportunities for Black People to acquire interests in entities by making

some of the equity held in various entities available to them through retail BEE offers

similar to the Asonge Retail Share Scheme. This will be done once the NEF believes that

sufficient value has been created in the assets and that it will make commercial sense to

introduce such offers in the market. This will be determined by the market conditions,

position and performance of the relevant business.

From time to time, The NEF acquires equity in investee companies as part of its equity

funding instruments. The Post Investment Unit manages those assets as part of the Post

Investment Monitoring function of the NEF. The NEF has a Portfolio Management

Committee which sits monthly to consider reports on such investments and makes

recommendations on plans to maintain, enhance or dispose of the assets and the same

committee regularly monitors progress on implementation of such plans.



17. InformationTechnologyPlan

The purpose of Information Systems and Technology (IST) at the National Empowerment

Fund (NEF) is to strategically improve, maintain and align information systems’ capabilities

and strategies with NEF’s organisational strategy.

The NEF is using the Master System Plan under the guidance of its governing structures to

identify and prioritize key IT projects for implementation over the next three years.

Implementation plans per IT project consider funding, risks, deliverables, resource and scope.

NEF’s IST Strategy is comprised of two key focus areas: Infrastructure and Applications. A

strong foundation for information technology is critical and we will continue focusing on

governance, risk management, security, and flexibility to forge our success. Performance

metrics have been established for accomplishing the strategic imperatives and the IST

Department reports on the progress of the imperatives. The Cloud Backup and Disaster

Recovery project was completed in 2015/2016.

The Master Systems Plan includes IT initiatives that are prioritised through the IST Steering

Committee to achieve IT- Business- Alignment. These IT initiatives will be implemented over

three years through allocation of funds and shall be monitored by the IST Steering Committee.

17.1 TheISTStrategicprinciples

The NEF is in the process of embedding COBIT Framework with the aim of standardizing our

development, implementation, monitoring and improving IT governance and management

practices. Six IST Strategic principles to guide the use of IT within the organisation have been

identified, together with the benefits associated with working in accordance with these

principles:-



Standardised, repeatable and reliable service delivery processes

IST service provision should follow standardised, documented procedures, which will provide

for a stable support environment, which complies with good governance requirements.

Managing information as an asset

NEF’s projects depend on its need to manage information as a corporate asset. Technology

is not to be employed as an end in itself, but rather to enable the extraction of greater value

from information. Applications and infrastructure need to be secured against both internal and

external unauthorised attempts to access and tamper with information.

Utilizing IST architecture as a basis for effective management of IST

Standardisation and scalability considerations must determine technology acquisitions, in

order to ensure that the acquisition of new technology enables effective use of existing

compatible IST assets.

Ensuring the integrity of data, applications and infrastructure

Improve IT solutions integration with minimal IT Infrastructure redundancy.

Developing IST competency in end users and IST support staff

Capacity development of both internal IST end users and IST support staff in terms of their

effective utilisation and management of IST environment contributes towards staff confidence

and plays a role in creating a high performing team culture.



Developing flexible, collaborative and interoperable systems

Thepurchase, implementationanddevelopmentof interoperable, flexibleandprovensystemsare

necessarytofacilitateeffectiveutilisationofeverchangingtechnology.

Collaborative systems enable more effective harnessing of the collective abilities of NEF’s human

resources,whilstalsocontributingtocapacitybuilding,throughexposuretotheknowledge,skillsand

approachtoworkingofotherteammembers.

17.2 EmergingTrends

A Master Systems Plan is largely influenced by emerging trends in the technology space and

must therefore keep ‘in touch’ with external market trends. This presents a challenge for an

organisation like NEF because advances in technology continue to outpace the ability of most

organisations to adjust their processes to take advantage of new technologies. Thus it is

important for NEF to continue to explore and be aware of emerging technology trends that can

be leveraged to improve service to the NEF. The NEF has identified the following emerging

technologies as focal points of this Master Systems Plan:

Cloud –based technologies

The NEF will explore this emerging technology trend to lower overhead costs by reducing the

need for onsite infrastructure. Cloud technologies can provide offsite redundancy to provide

backup in the event that NEF’s data center is unavailable. The NEF already has piloted

Office 365’s Document Management functionality as a cloud service; for the Legal Services

and Strategic Projects Fund. The Electronic BoardPack is also a cloud based technology

which is being rolled out to various committees within the NEF.



Mobile Device Management

The staff complement in the Funds is a mobile workforce and require access to ‘anywhere,

anytime’ access to information. The use of mobile devices such as smartphones and tablets

is anticipated to grow, especially to demand integration into NEF’s infrastructure and

applications. With this growth and complexity; controlling access to sensitive and confidential

data will require increased attention to security.

Information Security

The continued rapid development of information systems, globalisation and increase in data

volumes impacts on data networks. The main threat of cybercrime and its growth is reflected

by the significant development of hackers’ skills. The focus on information security for the

NEF over the next three years will be to manage threats and attacks by enhancing its

combination of effective technologies, such as anti-malware and firewalls.

Unified Communications

Unified communications will enable the NEF to remotely communicate to and from virtually

any location. This emerging technology can improve flexibility by co –existing with mobile

devices. As voice, video, wireless and data merge into ‘unified communications’, the NEF’s

network will need upgrading to provide the necessary services supporting this emerging

technology.



18. RiskManagementandFraudPreventionPlan

18.1 RiskManagementProcess

Risk Management Framework

The NEF’s Risk Management Framework is based on COSO, Institute of Risk Management

Standards of South Africa (IRMSA) Code of Practice and PFMA & Treasury regulations.

The ERM (Enterprise-wide risk management) methodology of the NEF consists of the

following interrelated components: internal environment, objective setting, risk identification,

risk assessment, risk control and response, risk monitoring and reporting, and risk

performance measurement. These components are derived from best practice with respect

to ERM governance.

The Framework is continuously benchmarked against best practice such as the International

standard on Risk Management (ISO 31000) and KING III; and where required, relevant

changes are made to the Framework.

The Risk assessment process results in the output of the risk universe, allowing key risks to

be identified. The Risk assessment exercise is completed on an annual basis and divisional

risk registers are updated on a quarterly basis to identify any emerging risks and track

progress.

Risk Strategy (Risk Register)

The realisation of the strategic objectives presented by the NEF may be affected by the

following key risks:



1. Sustainability Risk: The risk that the NEF will not be financially sustainable due

to erosion of the capital base and the NEF not having adequate capital to fund

planned programs and meet medium term cash requirements.

The NEF was not allocated capital via the recent budget process and was required to sustain

itself over the strategic planning period (three years) out of current capital and internally

generated portfolio returns.

This risk will materialise should the current capital not be prudently managed and the

investment portfolio becomes significantly impaired in the absence of future funding being

allocated to the NEF or the NEF not being able to source additional capital.

The NEF Board & Exco have revised targets for the 2016/2017 financial year. An application

to revise targets was submitted to the dti and approved by the minister. The level of approvals

are being closely monitored to ensure that transactions are not approved for which there is no

available cash. Should bridging finance not be obtained in the short term, the NEF runs a risk

of having to freeze funding on new applications due to cash limitations. This will have a

negative impact of the reputation of the NEF and may also lead to staff resignations.

The current funding instruments (i.e. Equity, Shareholders loans etc.) used to structure

transactions and the use of moratoriums is also negatively impacting on the NEF’s cash-flows.

The actions implemented to mitigate against the recapitalisation and sustainability risks

include:

¥ Close monitoring of unencumbered cash and regularly performing going-concern cash

analysis.

¥ Close monitoring of the portfolio by the Post Investments Unit in collaboration with the

Finance Division.

¥ Intervention by the Restructure and Turnaround Unit for businesses that are in distress.



¥ Focussing on exiting transactions wherever possible.

¥ Engagements with the dti and National Treasury regarding funding requirements.

¥ Engagements with various Public entities such as IDC, PIC etc. to secure interim

funding to enable the NEF to continue with its activities.

2. Recapitalisation Risk: The risk that the NEF will not be able to raise sufficient

capital to fund the NEF’s short to medium-term investment and operating

activities.

Without an injection of new capital in the next few months, the NEF will run out of capital to

finance new transactions going forward. The lack of adequate capital will also negatively

impact on the NEF’s ability to follow through on participation interest or equity options for

transactions within the NEF’s Strategic Projects Fund. This will have a negative impact on the

achievement of the NEF’s mandate and the ability to transform the economy.

The NEF has obtained approval by the shareholder ministry to become an Arms-length

subsidiary of the IDC. The delay in implementing the Business combination process is

negatively impacting on the NEF’s ability to continue implementing its mandate. Various

initiatives are underway regarding resolving the issue relating to the recapitalisation of the

NEF. Engagements are being held with stakeholder as well as other public entities such as

IDC and PIC to secure funding for the NEF. NEF is also undertaking fundraising initiatives for

the Special Projects Fund transactions.



3. Credit Risk: The risk of exposure to high credit risk investments and poor quality

of the invested portfolio

The NEF is mandated to intervene in the economy through the provision of funding to black

owned enterprises which, due to past economic imbalances, may be of a higher credit risk.

This risk is exacerbated by the current tough economic climate that may impact on funded

businesses and their cash flows leading to the inability to honour loan repayments and

possible defaults on loans to the NEF. Due to the high risk mandate of the NEF, this risk is

rated as one of critical exposures facing the NEF.

Internally, the risk that the assessment processes of the NEF may not be able to inform

appropriate investment decisions does exist, as does the risk of not collecting on amounts due

and not being able to timeously identify distressed investments which may be able to be

rescued. The risk of funding the wrong “jockey’s” impacting on the performance of investments

and the portfolio also exists.

Inadequate controls mitigating this risk may negatively impact on the performance and quality

of the portfolio.

The controls introduced to attempt to mitigate this risk include:

¥ Appointment of skilled fund management teams.

¥ Due diligence investigation processes which include background checks.

¥ Adequately constituted and efficient approval structures.

¥ Portfolio management, monitoring and reporting processe.

¥ Use of pricing models according to a pricing policy which compels consideration of

credit risk.

¥ An independent credit risk assessment process by the Risk Division.

¥ Credit collection process managed by collaboration between the Post Investment Unit

and the Finance Division.



¥ Adequate turnaround workout and restructuring process.

4. Business/Market Risk: The risk that changes in external market conditions have

a negative impact on the viability of funded transactions

The investment portfolio of the NEF consists of businesses in the commercial environment

that are susceptible to normal business risks of in an economic environment, fluctuations in

commodity prices and foreign exchange rates amongst other variables. The current volatile

local and international economic environment has led to significantly lower GDP growth rates.

In addition household personal finances are under financial strain due to an increase in living

costs. This is negatively impacting on business conditions and has placed strain on some of

the clients in the portfolio.

The NEF portfolio is arguably more susceptible to these variations given the nature of the

businesses being supported i.e. early stage business, inexperienced entrepreneurs, geared

balance sheets and hence not as able to absorb the impact of these fluctuations as well as

more established businesses.

In evaluating transactions, market conditions are considered, due diligence investigations,

modelling and structuring of transactions by the deal teams. In addition, a regular micro and

macro economy sensitivity is undertaken by our Post Investment Unit and NEF appointed

mentors are used to promptly advise NEF investees on appropriate course of action. The

increasing interest rate cycle also placing additional strain on businesses funded by the NEF,

as repayments are generally linked to prime. Increases in prime will lead to monthly

repayments increasing for client. The post investment unit motivated for certain clients interest

rates to be fixed and this has been implemented.



5. Mandate Risk

The mandate of the NEF is clearly set out within the NEF Act. The risk does however exist

that in executing the mandate, the NEF does not achieve the desired impact in advancing

B-BBEE.

This risk is mitigated through the development of funding strategies and products which are in

constant development to address market failures and acceleration of the execution of the

mandate. An example is a strategy referred to as the SME strategy where high volume and

low value applications in the form of franchise, procurement invoice discounting, contact and

bridging facilities. In addition, a credit committee has been established to approve the SME

strategy loan applications as a rapid loan approval solution.

Furthermore, transactions are currently being assessed against a measure of impact termed

the NEF Empowerment Dividend. The NEF Empowerment Dividend leads to a discount in the

pricing of the transactions to encourage entrepreneurs to consider ventures with opportunities

of high employment, women empowerment and across all South African provinces.

Inability to secure future funding will negatively impact on the ability of the NEF to implement

its mandate. Various actions, as indicated in item 1 above, are being implemented to deal with

the future funding requirements of the NEF.

6. People Risk

The risk that the NEF does not have adequate capacity and skills to deliver on its mandate as

well as the risk of staff not performing per expectations. The NEF has an established Human

resource function that has processes to ensure that staff with relevant skills are recruited. The

NEF also has a performance management process in place to ensure that staff performance

is managed.



There is a risk of loss of key personnel due to the uncertainty regarding the outcome of the

recapitalisation process. The NEF ensures constant information dissemination to all personnel

regarding recapitalisation.

18.2 FraudPreventionPlan

The Fraud Prevention Plan is the responsibility of all staff and management at the NEF. This

plan is a dynamic document and is updated regularly to reflect changes in the business

operations and circumstances of the NEF.

The NEF has developed and implemented a Fraud Prevention Strategy and Fraud Prevention

Plan to guide behaviour and to combat any fraudulent activities. Key aspects of the Fraud

Prevention Strategy and Plan are listed below.

Anti-Fraud Policy Statement

As a first step towards implementing an anti-fraud strategy, the NEF adopts and

publishes an Anti-Fraud Policy statement along the following lines:

The NEF recognises the possibility of fraud and corruption occurring in its operations. As such

it is the policy and mission of the NEF to strive for the protection of its employees and its other

stakeholders (such as applicants, investees, suppliers etc.) through the implementation of an

effective and efficient Fraud Prevention Strategy.

We believe that there is only one effective way of fighting fraud and other corrupt practices

and that is by instilling the reality amongst employees and other stakeholders, (such as clients

(investees), suppliers of goods and services, public,) that fraud and corruption do not pay and

will be detected and dealt with severely.

Therefore, the NEF’s view on fraud and corruption is one of zero tolerance, and as such the

NEF is committed to:

¥ Aggressively detecting incidents of fraud and corruption;



¥ The investigation of all allegations of misconduct by employees, clients and

suppliers, said to be occasioned by fraud and corruption; and

¥ The prosecution of all offenders criminally and, where necessary, the institution of

civil and disciplinary action against them.

Anti-Fraud Charter

In implementing the Fraud Prevention Policy of the NEF has adopted the following principles:

¥ We have a zero-tolerance attitude to fraud

¥ We understand and manage our risks

¥ We are proactive in defending our assets

¥ We react swiftly when a crime is uncovered

Fraud Risk Management strategy

The key objectives of the NEF’s Fraud Risk Management Strategy are:

¥ To establish the necessary preventative, control and monitoring mechanisms/ systems

to minimise the defrauding of the NEF funds, resources, assets and services by any

persons/organizations.

¥ To ensure that adequate measure are in place to protect the NEF from internal as well

as external fraud (i.e. supplier, potential applicants, clients, syndicates targeting NEF

i.e. false applications etc.).

¥ To ensure that adequate measures are in place to report fraud (whistle blowing policy

and hotline).

¥ To ensure that all reported matters are investigated.

¥ To account to the Board, via the Audit Committee on all fraudulent activity within the

NEF.

¥ To take the necessary action against all parties involved in fraudulent activities against

the NEF and to punish and deter any fraudulent actions from continuing or recurring.



The focus of such a strategy is the formalisation and implementation within the NEF of a

culture of zero tolerance for fraud and corruption, a high level of fraud awareness, and a

management and control environment that makes it as difficult as reasonably possible to

misappropriate assets or to succumb to corruption.

From the perspective of the NEF, good governance as it pertains to fraud prevention includes:

a. Continuing the present focus on governance

b. A robust control environment

c. A strong and independent Internal Audit function

d. A relevant and well-communicated Code of Conduct

e. A whistleblowing policy and mechanism (fraud hotline) to report suspected fraud or

corruption

From a fraud prevention point of view it is important that:

¥ When management considers the strategy and direction that the organisation is taking,

they take into account the environmental factors relating to fraud and that they insist

that a suitably comprehensive fraud prevention strategy be put in place to address

such risks, this is done via the organisational risk assessment process.

¥ Each manager brings his or her specialised industry knowledge or technical

background to bear when considering how fraud risks are to be avoided.

¥ Regular monitoring of performance against pre-set objectives should take place.

¥ Individual operational units are held accountable for their actions.

¥ Constant pressure for improvement is exercised as this has a powerful impact on

reducing fraudulent activity. This is done via the implementation of internal and external

auditor’s recommendation, which is tracked.

¥ The management team’s awareness of the possibility of fraud is monitored, as this is

also an active manner in which managers can encourage defensive strategies.



¥ Regular monitoring of the internal control environment takes place to ensure that it

remains of sufficiently high standard.



19. Subsidiaries

19.1 NationalEmpowermentFundCorporation(SOC)Ltd

In 2002, the NEF established an entity in which it has 100% interest. The NEF has obtained

permission from the National Treasury under section 54 of the PFMA that the Trust may utilise

this entity in any of its future Asset Management retail activities. This company remained

dormant since inception until the 2014/15 financial year when a strategic acquisition of the

land and property on which Goseame business is conducted was facilitated through the

provision of a long term loan granted by the NEF. The transfer of the property has been

finalised and lease income being received from the tenant.

19.2 ZastrovectInvestment(Pty)Ltd

At times the NEF exercises pledges and cessions of shares in securities which were obtained

as part of the security package from investees at initial approval and funding. This happens in

instances where there are unresolved defaults by investees. In such instances the NEF

becomes a de facto shareholder in the place of such defaulting shareholders of the investee

companies. The intention in such instances is that the NEF holds the equity whilst a suitable

third party entity is being identified to acquire the shares and possibly take over the operational

control of the business. If required the NEF will also implement turnaround measures during

this time to remedy any operational, financial, governance or other issues that may have led

to the underperformance and default.

A case in point is a Zastrovect Investment Proprietary Limited (trading as Goseame Fresh

Produce Market) which is located on Polokwane. In this instance, the NEF has acquired 100%

equity in the business and obtained approval from National Treasury on 18 August 2014 to do

so as required by section 54 of the PFMA. The NEF was further granted a section 92

exemption for this entity to be PFMA compliant. As per agreement contained in the approval

the NEF is required to reduce its equity holding within a period of three years from date of



approval. The NEF has been implementing a turnaround plan for the business to deal with

areas that were mismanaged by the managing shareholders and to restore value for the

business. The NEF is finalising a strategy to exit the business which will involve the disposal

of the asset fully or partially to a third party who will be identified through a process which is

aligned to the procurement policies of the NEF. There are current endeavours in place to

reduce the NEF equity.

19.3 Delswa

In April 2013, the NEF invested in Delswa, a textile manufacturing entity in the Northern Cape,

regrettably in December 2013 the business went into financial distress. The challenges the

entity faced were due to various reasons which included working capital management mainly

caused by ineffective decisions made by management. The NEF exercised its rights in terms

of the shareholder agreement and stepped in to run the company since January 2016 in an

effort to stabilise the business and save the jobs that were at risk, especially in one of the most

impoverished part of our country. In July 2016, the Minister of Finance granted a section 92

PFMA compliance exemption of this entity for a period of 3 years. The NEF is however in

advanced stages of negotiating an exit from this investment.



20. ServiceDeliveryImprovementPlan

The NEF’s Pre-Investment Unit (PIU) and Regional Offices have always sought to find creative

ways to improve customer experience in relation to Product Advisory and Applications

Administration services. To this end, a number of support technologies are in the process of

being acquired, such as the call centre telephone system that will monitor client calls.

Furthermore, a process is underway to merge the Pre-Investment function that is responsible

for screening and assessing applications into the funds. By deploying relevant Pre-Investment

staff to the various funds for an integrated deal assessment process the NEF aims to enhance

application screening capabilities and processes. Pre-Investment activities will then focus on

product advisory and entrepreneurial training.

The NEF is also engaged in the Business Process Re-engineering (BPR) exercise to improve

end-to-end customer experience. This will ensure that the turnaround times for applications

that go through the front-end to the Funds are further reduced. For instance, the application

process from receipt to screening decision has been reduced from three weeks to about half

of that time, which is in line with the previous target of ten days. There is therefore still room

for further improvement and it is envisaged that the BPR exercise will make this goal

achievable once it has been finalised and implemented. The BPR process is an organisation-

wide initiative that will link processes across all the departments and hence allow NEF to

provide seamless customer service.

Some of the initiatives within the PIU that have been undertaken and implemented, with

specific measurements for the current and next three financial periods are:

¥ The waiting times in our walk-in centres is still deemed reasonable, however, with the

increasing demand for product advisory services, we have identified interventions

which are aimed at improving this and telephony services as mentioned above:

Ø Customer feedback sheets at all service centres.



Ø Integrated telephone system between Pre-Investment and the Regional

Offices. These are aimed at ensuring increased efficiencies in the use of

resources and further improve telephone response times.

Ø An NEF owned online business planning tool, as opposed to the current one

which is outsourced to a third party, is currently in a process of being

implemented. The aim of the tool is to assist applicants in building a business

plan through a series of questions they will be required to respond to when they

access the application.

¥ A complaints register is maintained on all complaints received. We are also in the

process of linking the complaints register to the IT platform within the CRM system.

Any complaints that are emailed will automatically be logged onto CRM. This will

ensure that the complaints and relevant responses are easily monitored by more than

one person. We aim to provide responses to complaints within 12 hours of receipt.

Most of the complaints relate to declined applications, and to a large extent these

cannot be entirely avoided. We have, however, ensured that the decision letters

provide as much detail as possible in an endeavour to provide clarity, specifically in

relation to decline decisions.

¥ The PIU team also engages in Business Development activities, primarily in outlying

areas. We have observed an increase in the number of enquiries and application

activities from Provinces which were previously relatively dormant. Additionally, these

sessions are instrumental in ensuring that our targeted clients are aware of all the

service touch points and gain access to relevant information on the NEF’s funding and

non-funding solutions.



21. IndicatorProfiles

PerformanceIndicator1.1:ValueofdealsapprovedbytheNEF

1. Indicator title Value of deals approved by the NEF

2. Short definition Total value of deals approved by the NEF

3. Purpose/importance Indicates the level of financial support approved by the NEF’s investment committees

4. Source/collection of

data

Funds; CRM system

5. Lead/ coordinating

agency

Funds

6. Method of calculation The information is captured on the CRM information. The final values and reports are reviewed and signed off by Fund Managers and Divisional Executives

7. Calculation type Cumulative – for the year

8. Baseline

(for the year ended 31 March 2016)

R1248 million

9. Data limitations Reflects the total value of funds committed by the NEF to investees. In some instances, deals may not make it to actual funding stages due to negotiations, conditions precedent not being met or lapsed facilities.

10. Quality assurance

strategy

Review by Fund, Finance department and Strategy & Planning unit

11. Indicator responsibility Fund Managers



PerformanceIndicator1.2:ValueofCommitments

1. Indicator title Value of Commitments made by the NEF

2. Short definition Total value of Commitments

3. Purpose/importance Indicates the total cash which the NEF has agreed to advance to investees in legal agreements signed


data

Legal department


agency

Funds

6. Method of calculation The information is collated by the Legal Department and signed off by the Legal Manager


8. Baseline


R1028 million

9. Data limitations No known limitations.


strategy

Submitted and reviewed by the Legal Department

11. Indicator responsibility Legal Manager



PerformanceIndicator1.3:ValueofDisbursements

1. Indicator title Value of Disbursement made by the NEF

2. Short definition Disbursements

3. Purpose/importance Indicates the total cash which the NEF has advanced to investees


data

Finance department; Funds


agency

Funds

6. Method of calculation The information is recorded by the Funds and Finance department as part of the financial management processes


8. Baseline


R819 million

9. Data limitations No known limitations.


strategy

Review by Funds and Finance department

11. Indicator responsibility Finance Manager



PerformanceIndicator2.1:Numberofjobopportunitiessupportedorcreated

1. Indicator title Number of job opportunities supported or created

2. Short definition Number of job opportunities supported

3. Purpose/importance Reflects the approximate number of job opportunities supported i.e. new and existing job opportunities, according to funds committed to investees by the NEF


data

Funds


agency

Funds

6. Method of calculation The information is captured on the CRM information. The final values and reports are reviewed and signed off by Fund Managers and Divisional Executives


8. Baseline


Funding approvals are projected to support 4 938 job opportunities (3 377 new and 1 561 existing)

9. Data limitations Job opportunities are recorded during due diligence phase and actual number of job opportunities supported may vary depending on business requirements post the disbursement process


strategy

Review by Fund Managers




PerformanceIndicator3.1:Percentageofannualdisbursementsownedbyblackwomen.

1. Indicator title Percentage of annual disbursements owned by black women

2. Short definition Percentage of the portfolio disbursed in a year owned by black women

3. Purpose/importance To maximise the participation of black women in the economy


data

Funds

5. Funds Funds

6. Method of calculation The information is captured by the Funds and stored on the CRM system

7. Calculation type Based on annual disbursements

8. Baseline


29%

9. Data limitations This represents value of the portfolio disbursed that is owned by women


strategy

The information is checked and submitted by the Funds onto CRM

11. Indicator responsibility Funds



PerformanceIndicator4.1:25%ofdisbursementstobeinvestedinNorthernCape,FreeState,Limpopo,Mpumalanga,EasternCapeandNorth-West

1. Indicator title 25% of disbursements to be invested in Northern Cape, Free State, Limpopo, Mpumalanga, Eastern Cape and North-West

2. Short definition Increase portfolio size in under-represented provinces

3. Purpose/importance To facilitate investment across all provinces of South Africa


data

Fund managers


agency

Funds

6. Method of calculation Provincial data is captured and stored on the CRM system which can be tracked per fund and for the NEF.

7. Calculation type Cumulative

8. Baseline


A total of 75 deals worth R367 million was invested in Northern Cape, Free State, Limpopo, Mpumalanga, Eastern Cape and North-West. This represents 45% of disbursements made in the year

9. Data limitations None


strategy

Information is captured and verified by funds.




PerformanceIndicator5.1:Numberofinvestoreducationseminarsheldacrossthecountry

1. Indicator title Number of investor education seminars held across the country

2. Short definition Number of seminars held

3. Purpose/importance To increase the understanding of equity ownership among black people and increased activity in savings and investment by black people


data

SEDU


agency

SEDU

6. Method of calculation Total number of seminars held per province. Record is kept of the seminars held and this is reported on by the Project Manager


8. Baseline


44 Sessions completed, (made up of 36 seminars and 8

Industrial Theatres)

9. Data limitations No specific limitations


strategy

Seminars are managed and attended by NEF. The number of seminars and the number of attendees are counted

11. Indicator responsibility Asset Management Project Manager



PerformanceIndicator6.1:NumberofBusinessTodayTrainingSessionsprovided

1. Indicator title Providing Business Skills (Business Today and Bootcamp) Training

2. Short definition Business Skills Training

3. Purpose/importance Provision of training to black-owned businesses and entrepreneurs


data

Pre-Investment Unit


agency

Pre-Investment Unit

6. Method of calculation A record is kept of the training sessions held together with the towns in which training hosted


8. Baseline


A total of 26 training sessions have been conducted, with an

average score of 71%



strategy

A record is kept of the training sessions held together with the towns in which training hosted. This can be verified by Supply Chain and Finance department, based on orders and invoices raised.

11. Indicator responsibility Pre-Investment Unit Manager



PerformanceIndicator6.2:Numberofentrepreneursreferredforbusinessincubation;andnumberofentrepreneurswhosuccessfullycompletebusinessincubation

1. Indicator title Number of entrepreneurs referred for business incubation; and number of entrepreneurs who successfully complete business incubation

2. Short definition Business Incubation

3. Purpose/importance Focus on tracking progress of those referred to the business incubation programmes


data

Pre-Investment Unit


agency

Pre-Investment Unit

6. Method of calculation Count of the number of entrepreneurs who have been referred for business incubation; and those who have reached the final stage of the Incubation Programme


8. Baseline


36 entrepreneurs have made it to the final incubation stage

9. Data limitations The NEF has in the last year focused on counting the number of business that successfully make it to the final incubation stage. The focus, going forward, will revert back to prior years to include the number of businesses referred for incubation


strategy

A list of entrepreneurs referred to the incubation programme is kept by Pre-Investment. Progress of referrals will be verified with the Incubation Programme itself

11. Indicator responsibility Pre-Investment Unit Manager



PerformanceIndicator6.3:NumberofSocialFacilitationSessionsprovided

1. Indicator title Number of Social Facilitation sessions provided

2. Short definition Number of Social Facilitation sessions provided to investees

3. Purpose/importance Provision of corporate governance training to black-owned businesses and entrepreneurs


data

Socio-Economic Development Unit


agency

Socio-Economic Development Unit

6. Method of calculation A record is kept of the training sessions held together with the towns in which training hosted


8. Baseline


25 Social Facilitation sessions for the year to date



strategy

A record is kept of the training sessions held together with the towns in which training hosted. This can be verified by Supply Chain and Finance department, based on orders and invoices raised.

11. Indicator responsibility Socio-Economic Development Unit



PerformanceIndicator7.1.:BrandAuditSurveyfindings

1. Indicator title Brand Audit Survey findings

2. Short definition The findings of the Brand Audit Survey

3. Purpose/importance To track brand awareness of the NEF in order to drive the utilisation of the NEF’s services and financing products


data

Marketing & Communications has outsourced this function to a media agency


agency

Marketing & Communications

6. Method of calculation A survey is performed every second year

7. Calculation type Non-cumulative

8. Baseline


N/A



strategy

Checked and verified by the media agency

11. Indicator responsibility Marketing & Communications Manager



PerformanceIndicator8.1:PercentageofPortfolioImpaired

1. Indicator title Percentage of the portfolio impaired

2. Short definition The total percentage of the value invested in investees that is valued at less than the original valuation, and that may have to be written off in future

3. Purpose/importance The level of impairment is an indication of the sustainability of the fund


data

Finance Department


agency

Finance Department

6. Method of calculation Valuations are performed on the portfolio based on the current performance of investee’s businesses

7. Calculation type Non-cumulative

8. Baseline

(as at 31 March 2016) The provisional impairment is 24%



strategy

The valuations are performed by an independent consultant together with the Post Investment Unit and the Finance Department




PerformanceIndicator8.2:TargetROIbeforeimpairments

1. Indicator title Target return on investment before impairments

2. Short definition Annual return earned by the total portfolio i.e. loans and preference share portfolio before impairments

3. Purpose/importance The ability to generate a healthy return improves the ability of the fund to be sustainable


data

Finance Department


agency

Finance Department

6. Method of calculation Returns are calculated based on actual collections received from investees

7. Calculation type Cumulative

8. Baseline

(as at 31 March 2016) The ROI for the is 9.5%



strategy

Calculations are performed by the Finance Manager and audited by the external auditors

11. Indicator responsibility Fund Manager, Post Investment Unit Manager, Chief Financial Officer



PerformanceIndicator8.3:Collectionsratio

1. Indicator title Improve collections ratios

2. Short definition The NEF seeks to improve the percentage of monies collected from investees based on the total amount invoiced

3. Purpose/importance To ensure sustainability of the fund


data

Finance Department, Post Investment Unit


agency

Finance Department

6. Method of calculation Percentage of funds received based on the total amount invoiced


8. Baseline


97%



strategy

Invoicing is performed by Finance Department, and audited as part of the annual audit exercise


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CashflowStatement

STOP Fraud, Corruption and Theft Contact Tip-Offs Anonymous on 0800 212 705 or email [email protected]

National Empowerment Fund Trust (established by Act 105 of 1998) IT: 10145/00www.nefcorp.co.za | www.nefbusinessplanner.co.za

How To Reach The National Empowerment Fund

Head Office Gauteng ProvinceWest Block, 187 Rivonia Road, Morningside 2057, PO Box 31, Melrose Arch, Melrose North 2076 Tel: +27 (11) 305 8000 | Fax: +27 (11) 305 8001 | Call Centre: 0861 843 633 | 0861 (THE NEF) [email protected] (Funding) | [email protected] (General Enquiries)

Eastern Cape Province7b Derby Road, Berea, East London 5241 Tel: (043) 783 4200 | 0861 NEF ECP (0861 633 327) | Fax: 0861 ECP NEF (0861 327 633) [email protected]

Free State Province34 Fountain Towers, Corner Zastron and Markgraaf Street, Westdene, Bloemfontein, 9300 Tel: (051) 407 6360 | 0861 NEF FSP (0861 633 377) | Fax: 0861 FSP NE F (0861 377 633) [email protected]

KwaZulu-Natal ProvinceSmart X - Change Building, 5 Walnut Road, Durban, 4001 Tel: (031) 301 1960 | 0861 NEF KZN (0861 633 596) | Fax: 0861 KZN NEF (0861 596 633) | [email protected]

Limpopo ProvinceSuite 8, Biccard Park, 43 Biccard Street, Polokwane 0699 Tel: (015) 294 9200 | 0861 NEF LIM (0861 633 546) | Fax: 0861 LIM NEF (0861 546 633) | [email protected]

Mpumalanga ProvinceTrust Building, 16 Brander Street, Nelspruit, 1200 Tel: (013) 754 9860 | 0861 NEF MPU (0861 633 678) | 013 754 9860 Fax: 0861 MPU NEF (0861 678 633) | [email protected]

northern cape ProvinceBlock Three, Ground Floor, The Montrio Corporate Park, 10 Oliver Road, Monument Heights, Kimberley Tel: 0861 NEF NCP (0861 633 627) | Fax: 0861 NCP NEF (0861 627 633) | [email protected]

North West Province 32B Heystek Street, Sunetco Office Park, Ground Floor, Rustenburg, 0299 Tel: (014) 523 9220 | 0861 NEF NWP (0861 633 697) | Fax: 0861 NWP NEF (0861 697 633) [email protected]

Western Cape ProvinceSuite 2818, 28th Floor, ABSA Centre, 2 Riebeek Street, Cape Town 8001 Tel: (021) 431 4760 | 0861 NEF WCP (0861 633 927) Fax: 0861 WCP NEF (0861 927 633) | [email protected]

www.nefcorp.co.za

ISBN: 978-0-621-42810-0 RP160/2014

Northern Cape

KwaZulu-NatalFree State

Gauteng

Western Cape

Eastern Cape

Limpopo

Mpumalanga

North West

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