The new Jobs Fund grant scheme: too good to be true?

We have received many an excited enquiry about the Jobs Fund, the new initiative by the Department of Finance, which opened during June 2011.

The Jobs fund offers a non-repayable upfront capital grant of 50% for project proposals with the potential to create large numbers of jobs in innovative ways. The fund works in cycles or rounds of three months. The idea is that in each new three month round new focus areas would be announced. The applications received during the three months of one round, would then be processed and finalised during the three months of the next round.

In the first round, the focus areas were, enterprise development, infrastructure development, support for work seekers and institutional capacity building. The fund is administered by the Development Bank of Southern Africa.

The Jobs Fund has no rulebook, just a few criteria. This, in our opinion, is quite clever, as it does not limit the support to a few economic areas selected by government officials. It accommodates every possible proposal with potential, be it in manufacturing, services, education or whatever else. It also avoids setting all kinds of bureaucratic requirements that might disqualify projects despite their potential. However, I suspect the first round has proven that the administration of applications in a scheme without rules can be a nightmare, as applicants tend to ignore or misinterpret the criteria, or simply struggle to understand whether they are eligible or not. People submit applications just in case luck is on their side. This makes the Fund a bit of a lottery, especially as the reward for the lucky few is so high. A 50% capital grant is very, very attractive indeed.

A report on the progress of the fund appeared in Engineering News during the past week. According to that, the fund received more than 2600 applications in round one, of which about 1600 were rejected out of hand and another 1000 still had to be processed. Seven projects with a promise of 115,000 job opportunities had been approved thus far and R350 million has been set aside for them. That is an average of R50 million per project.

The first round of the Jobs fund opened during June 2011 and closed on 31 July 2011. It did not open for the second round and is still closed.

Did I hear someone say, if it sounds too good to be true, it probably is...? Well, considering that those seven approved applications promise to create work at a cost of only R3000 a job, I'd say it is a most useful exercise, even if it works a bit like a lottery!


Theo Meintjes
Managing Director
Dectra

 

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