SUMMARY: The brief looks at funding opportunities available for South Africa’s key manufacturing sectors. Particularly, it highlights the different dynamics and constraints in the financing spectrum of these sectors and offers recommendations on how SA can address challenges such as employment and job creation. The brief also proposes ways in which DFIs can secure additional funding, for example through taxation from individuals and large corporations. It further highlights the risks associated with sourcing additional funding through tax and offers possible risk-mitigation strategies
KEY FINDING / RECOMMENDATIONS: Because of their high-risk nature and low short-term profit opportunities labour-intensive manufacturing sectors in South Africa suffer from inadequate financial support. Current funding models limit the ability of DFIs to fully fulfil developmental mandates. The Industrial Development Corporation (IDC) and Development Bank of Southern Africa (DBSA) need government guarantees and stable, low-cost sources of funding. South Africa needs to create an export-import (EXIM) bank to boost the competitiveness of exported goods and services. The IDC needs to be redirected to target labour-intensive, high value-added sectors, rather than sectors that are already commercially viable and have private bank financing.