Document: Industrial Development Corporation (IDC) - Annual Report 2010

Our performance has shown not only that the IDC plays an important role in developing businesses and entrepreneurs in South Africa and Africa, but that we have the potential to create much-needed jobs and to find ways to overcome some of the spatial and regional inequalities that persist in South Africa.

 

The economic conditions over the past year were unlike anything the IDC has experienced during its existence. The South African economy did not escape  the effects of the global downturn, with the recession triggering a decrease in aggregate demand not seen since the Great Depression. Data from Statistics South Africa reveals that approximately 833 000 jobs have been shed over the 12 months to March 2010 and for the first time in 17 years GDP growth in the domestic economy was negative. 

 

During this time, the IDC allocated R6,1 billion in distress funding to help dif erent sectors of the economy weather the storm. In addition to making funds available, the IDC participated in the Presidential Task Team, engaged those sectors that showed signs of serious cyclical strain and initiated discussions with industry roleplayers, banks and financiers. The IDC was actively involved in assisting sectors in long-term decline due to reduced competitiveness, for example, by participating in the launch of the Clothing and Textiles Industry Competitiveness Scheme. 

 

The South African economy appears to be emerging from the recessionary phase of the business cycle, albeit slowly. In the third quarter of 2009 the economy registered a positive growth rate of 0,9% quarter on quarter, which technically brought the recessionary phase to an end. The economy gained further momentum in the i nal quarter of 2009 and the opening quarter of 2010. However, the rate of recovery remains uncertain and the IDC will continue to play a crucial and positive role as development financier.

 

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