In a landmark announcement during his 2025 State of the Nation Address, President Cyril Ramaphosa revealed plans for the government to establish a R20 billion annual Transformation Fund designed to empower Black-owned businesses across South Africa. The initiative, set to unfold over the next five years, is a key part of the government’s broader commitment to addressing the historical wrongs that have disproportionately affected Black South Africans.
The Transformation Fund will be under the leadership of Minister of Trade, Industry and Competition, Parks Tau. Ramaphosa’s announcement marks a significant move towards fostering greater equality in the business world and ensuring that Black entrepreneurs have the financial backing they need to thrive. The president emphasized the importance of such initiatives in creating a future where all South Africans have equal access to opportunities and are not held back by their historical context.
“We want a nation where no one goes hungry,” Ramaphosa stated, highlighting the direct link between economic empowerment and food security. The president also noted that addressing investment challenges faced by Black individuals will be a critical part of the government’s ongoing efforts to level the playing field. “We must be a country where men and women get equal pay for equal work,” he added, reiterating the importance of fair and equal treatment in the workforce.
With an annual commitment of R20 billion, the Transformation Fund will be directed at helping Black businesses overcome the investment barriers that have long hindered their growth. This, according to Ramaphosa, is not only a step towards addressing the disparities of the past but a way to unlock the true economic potential of South Africa. “Empowering these businesses will unleash the potential of our economy,” he explained.
Furthermore, the president underscored the need for the economic growth generated by such initiatives to result in job creation, particularly for youths, who have historically faced the highest levels of unemployment in South Africa. “Growth must create jobs for all, especially young people,” Ramaphosa said, signaling that youth unemployment is a priority area in the government’s economic planning.
However, opposition parties, particularly the Democratic Alliance (DA), have raised strong objections to the fund. The DA, which is part of the Government of National Unity (GNU), has criticized the initiative as a move that undermines Cabinet cohesion and bypasses the essential approval process required for such significant policy decisions. They argue that the fund should have been subject to thorough Cabinet discussions before being publicly announced.
In a statement, the DA condemned the fund, calling it a “deeply problematic” policy that could have long-lasting negative consequences. DA MP Toby Chance went as far as to call the fund’s announcement “irresponsible” and stated that the DA would “not support this madness.” The criticism centers around the fact that the fund’s implementation appears to have bypassed the necessary Cabinet approvals, a crucial step for any substantial government policy initiative.
Despite the opposition’s concerns, Ramaphosa remains resolute, emphasizing that the Transformation Fund is a necessary tool for correcting historical injustices. With South Africa’s economic landscape still shaped by decades of inequality, the president’s call for businesses, both large and small, to embrace transformation comes at a crucial moment in the nation’s development.
The success or failure of the R20 billion Transformation Fund will likely have far-reaching implications for South Africa’s economic future. Will it provide the much-needed push for Black businesses, or will it be bogged down by political infighting and a lack of cohesion within the government? Only time will tell, but for now, Ramaphosa’s message remains clear: a prosperous South Africa can only be built on a foundation of equality and opportunity for all.
