There will never be another Luminance

There will probably never be another Luminance financed with public funds.

A new directive to all agencies owned by the department of trade and industry practically bans financing that will be used to import finished goods – even if it also satisfies other policy goals.

After the public furore over the National Empowerment Fund (NEF) lending R34 million to help set up the luxury boutique in Hyde Park, Minister of Trade and Industry Rob Davies demanded a report.

And and On Friday last week, he presented his findings to Parliament, where he also revealed the new directive.

While clearing the deal as “within the NEF’s mandate”, his directive strongly indicates it really shouldn’t be.

“Our resources and incentives ought not to be deployed to support the import of finished products, as distinct from capital equipment or intermediate goods,” reads the directive.

When imports form an “integral part of a business plan” that does support core objectives, “the presumption ought to be that we decline to deploy our resources to purchase imported finished goods”, it continues.

When the officials involved “feel that there is a compelling case to deviate from this principle, they must obtain the concurrence of the department’s accounting officer and executive authority”, it says.

These are director-general Lionel October and Minister Davies themselves.

The directive calls for a “clear focus on the productive sectors of the economy”, which it lists as “agriculture, mining, manufacturing and value-added services such as tourism, business process services and the creative industries”.

Retail is conspicuously absent from the list, while some of the NEF’s largest projects have been in this sector.

Among the recent ones are a R34 million loan to Zulimar Trading to build the Qumbu shopping centre in the Eastern Cape.

There was also a R40 million loan last year to the Mavundla Square shopping mall – 51% owned by Philani Mavundla, ANC mayor of Greytown.

The post There will never be another Luminance appeared first on City Press.

Powered by WPeMatico

This entry was posted in Business. Bookmark the permalink.

Comments are closed.