FAKE NEWS ALERT: Govt won’t only help black firms
- A viral social media post claimed that government will only assist companies that are 51% black owned.
- Minister of Small Business Development Khumbudzo Ntshavheni has slammed this as false news.
- For more stories, go to Business Insider's home page.
Minister of Small Business Development Khumbudzo Ntshavheni has slammed a document claiming that government will only give funding to companies who are at least 51% black owned.
The document went viral on social media, with AfriForum threatening to take urgent court action to have the supposed requirement declared unconstitutional. AfriForum CEO Kallie Kriel claimed it was part of government’s “unremitting attack” on white people.
But at a media briefing on Tuesday morning, Ntshavheni said the document was “fake news”.
While companies must be 100% South African owned and must have 70% South African workers, there will be no requirement for black ownership. The department will make sure that it will have a “demographic spread” in its assistance of companies, and priority will be given to companies that benefit women, young people, and people with disabilities, Ntshavheni said.
Government is establishing a fund – with help from the R2 billion donated by the Oppenheimer and Rupert families - to assist small businesses that are threatened by the coronavirus crisis.
Companies will get financing at an interest rate at prime minus five percentage points, which currently means an interest rate of 3.75% per year. But those who try to take advantage of the crisis will be punished with interest rates of prime plus 10 percentage points, Ntshavheni said. That means chancers caught out will pay 18.75% in interest.
A reference to South African owned spaza shops has been removed as Business Insider awaits clarity from government.
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