29/01/2026
R55 million every day for 5 years
President Cyril Ramaphosa promoted the controversial R100 billion Transformation Fund during his State of the Nation Address.
“We will set up a transformation fund worth R20 billion a year over the next five years to fund black-owned and small enterprises,” he said.
This means the government wants to give qualifying black businesses R55 million every day for five years.
If the amount is calculated over working days, the government must provide these businesses with R80 million per day.
It is tremendously complicated to administer such a large amount of money, even for highly skilled business incubators.
Many people sounded the alarm, considering the government’s track record of capital allocation, mismanagement, and corruption.
Toby Chance, DA spokesperson on trade, industry, and competition, said it could become a slush fund and is open to abuse by connected politicians.
He likened it to South Africa’s R500 billion coronavirus funding, rife with corruption, fraud, and looting.
Tau’s promises of good governance structures, accountability, transparency, and efficiency did little to calm concerns.
Despite lofty promises regarding good governance and accountability, the government has a track record of widespread corruption and looting.
For example, in April 2020, Ramaphosa promised South Africans that the R500 billion in Covid funds were safe from corruption and mismanagement.
However, a significant proportion was lost to corruption. The looting was so severe that Ramaphosa had to threaten perpetrators with “very, very severe consequences.”
However, the country’s weak law enforcement means that the president’s promises of severe consequences never materialised for most perpetrators.
The lure of a R100 billion fund, which needs to process R80 million per day, will be seen as easy pickings for connected individuals.
Chance said the fund will not address the root causes of South Africa’s economic problems and will perpetuate the same cycle of mismanagement that has led to poor economic growth.
“A R100 billion fund, built on this flawed framework, will likely lead to further financial waste and political cronyism rather than true economic empowerment,” he said.