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Jobs Stimulus Fund gets extra R75m from Eastern Cape Treasury

The Eastern Cape Jobs Stimulus Fund received a shot in the arm this week with an additional R75m from provincial Treasury to help Covid-19 distressed companies.

The Eastern Cape Jobs Stimulus Fund received a shot in the arm this week with an additional R75m from provincial Treasury to help Covid-19 distressed companies.

Initially set at R17.4m at the start of the financial year (April 1) the Eastern Cape Development Corporation (ECDC), which is the fund’s administrator, is now able to help Covid-19 distressed companies with working capital as well as wages.

Up until this week, qualifying companies could only claim R10,000 per job saved or retained.

The minimum limit was 10 jobs saved or retained, but this has now dropped to five.

Companies that have received payments may reapply for working capital, provided they meet the under R20m turnover criteria.

ECDC head of development finance and business support Tandeka Rozani said: “The review of the Jobs Stimulus Fund policy and the additional R75m commitment is a response to the pandemic. “Additional funding had been made available to mitigate its impact on the provincial economy.

“Businesses operating in the following targeted sectors will be prioritised for participation: agro-processing and beneficiation, green economy, tourism and hospitality, manufacturing, capital goods producers and construction.

“Companies in the services sector may be considered to participate in the programme if the economic and social impact due to prevalent job losses is significant.”

The additional assistance will cover three months’ working capital to cover rental, salaries and other key operational expenditure. Applicants need to provide a detailed cost breakdown and motivation for the working capital.

“This additional working capital incentive will only apply to business with an annual turnover of R20m and below. “It will supplement the existing one-off R10,000 per job allocation. Businesses with an annual turnover above R20m will only be entitled to apply for the R10,000 per job saved or retained.

“Already applications from distressed businesses have been approved to the value of R5.81m, from the initial R17.4m, which translates to 581 jobs being saved or retained.

A large number of applications are in the pipeline for consideration as from August, due to the high demand for Covid-19 relief support,” Rozani said.

While not essential, companies with the following credentials will go to the head of the queue:

• A 100% SA shareholding;

• Can, or have, saved or retained five jobs;

• Employees must be permanent or with a two-year fixed-term contract;

• Total employees must be 70% South African; and

• Companies must be compliant with tax and legislation with entities such as Sars and the UIF.

She said companies applying for distress relief and the retention of jobs were required to submit two years of signed financial statements by a registered accountant, or creditor accounts or management accounts indicating the company was “distressed”.

In addition, companies must submit a distress project execution plan, 12 months’ cash-flow projections including estimations for the incentive, key financial indicators for the current and past two years in the form of revenue, net profit, labour expenses (wage bill), net assets, net current assets, current and total liabilities.

They will also be required to submit operating costs, as well as a list of creditors, inclusive of debt and relevant arrangements for “distressed” companies.

Issued by the Eastern Cape Development Corporation

For media enquiries contact:

Nobulali Myataza ECDC Spokesperson Email: Tel: 043 704 5610 Cell: 064 850 8655


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