South Africa’s Industrial Development Corporation (IDC) has set a target of disbursing R51.5-billion in funding over the coming three financial years having aligned its corporate plan to government’s new industrial strategy.

In a presentation this week to Parliament’s Select Committee on Economic Development and Trade, acting COO David Jarvis reported that the State-owned development financier would continue to support established industries while seeking to catalyse future-focused value chains identified in the Industrial Development Strategy (IDS) of 2026.

The IDS was unveiled by Trade, Industry and Competition Minister Parks Tau earlier this year and has been anchored on industrialisation pathways associated with decarbonisation, diversification and digitalisation.

The IDC indicated that it is gearing up to support growth in critical minerals and battery value chains, green and circular-economy industries, tourism and services, digital and blue-economy activities, agro-industrial expansion, and the industrial infrastructure needed to support higher levels of productivity. It will also invest in regional industrial value chains, but do so in partnership and as a minority shareholder.

The corporate plan envisages disbursements of R16.3-billion in the 2026/27 financial year, R17.4-billion in 2027/28 and R17.8-billion in 2028/29, with the primary funding source being internally generated cash, with limited borrowings.

It is envisaged that R17.4-billion will be directed towards manufacturing, especially machinery, equipment and electronics, followed by energy and infrastructure (R11.7-billion), mining and metals (R5.8-billion), agro-processing (R4.5-billion) and tourism and services (R2-billion).

Jarvis reported that the group would also seek to implement structural savings of R1.6-billion over the period.

The presentation was made while Parliament’s Portfolio Committee on Trade, Industry and Competition was hosting a separate colloquium on the IDS, which also proposes various support measures for existing industries facing cost and import pressures, including steel, smelters and automotives.

Interventions under consideration range from special electricity pricing deals and higher import tariff protection to tax incentives, with the goal of stabilising manufacturing, whose contribution to GDP has fallen to about 13% from 21% in 1994.

In a presentation to the committee, the Department of Trade, Industry and Competition (dtic) suggested that consideration be given to exempting the IDC from corporate income tax “in order to facilitate industrial development”.

In addition, the dtic proposed that South Africa should consider enabling the IDC and the Development Bank of Southern Africa to play a greater role in the ownership and financing of strategic sectors under the ownership of the government, making specific reference to Foskor and ArcelorMittal South Africa (AMSA).

AMSA is currently trading under a cautionary relating to its ongoing talks with the IDC over a possible transaction, while Foskor, which is a fertiliser producer, is already an IDC subsidiary.

The IDC made no reference to the possible AMSA transaction in its presentation.

In response to questions, it confirmed that Foskor was facing fresh financial pressures following recent improvements that had arisen from the implementation of a turnaround strategy.

These new difficulties were attributed largely to an increase in the price of key inputs such as sulphur and ammonia, which had surged as a result of disruptions to shipping in the Strait of Hormuz.