The Industrial Development Corporation (IDC) is realigning its strategy to adequately fulfil its foundational mandate of driving growth and job creation, particularly in under-served economies.
This ambitious plan was outlined by chairman Gloria Serobe in the IDC’s annual report for the 2025/26 financial year, released on Thursday.
Serobe emphasised that the board has committed to a vision of growth that prioritises not only job creation but also the strengthening of local value chains. “This translated into deliberate oversight of the Corporation’s most consequential interventions,” she stated, adding that the focus on stabilising critical upstream capacities, such as at Arcelor Mittal South Africa, while enhancing downstream competitiveness was instrumental in sectors like steel.
In light of recent developments, including the conclusion of a strategic transaction with Tongaat Hulett, the board has advocated for a broader view of investments that go beyond individual products to consider entire value chains, from agro-processing to energy integration.
“In agriculture, where South Africa’s standing as a global exporter continues to grow and in critical minerals and burgeoning sectors such as green technologies, the board pushed for partnerships that harness expertise and capital,” Serobe noted.
Financially, the IDC showed resilience despite the challenges posed during the year. CEO Mmakgoshi Lekhethe reported the IDC made a profit of R2.3 billion at the company level. However, the broader group faced difficulties, resulting in a R4.7bn loss from industrial subsidiaries amid tough trading conditions. Positive fluctuations in investment value culminated in a total comprehensive income of R5bn for the period.
“The 2025/26 financial year unfolded against an intricate backdrop,” said Lekethe, pointing to global trade tensions and domestic structural constraints as factors that dampened investment enthusiasm.
Weak domestic demand and a less favourable external climate have shifted funding requirements toward more resilient investments in areas like embedded generation and energy efficiency.
Addressing the international dynamics, Serobe highlighted the IDC’s enhanced role on the continent, particularly during South Africa’s hosting of the G20 and its involvement in the Business 20 (B20). Through this engagement, the IDC has successfully drawn African economies into important conversations about trade and investment.
Some progressive economic shifts during the year included South Africa’s removal from the Financial Action Task Force’s grey list and improved sovereign credit ratings. These developments have started to foster a more positive business and consumer sentiment, although their impact on private fixed investment still lags.
The IDC funds its operations primarily through borrowings, divestments from mature equity investments, and revenue generated from lending. This strategy aims to support the aspirations of South Africa’s development objectives. “We also strive to strengthen our balance sheet through interest and capital payments, allowing us to further enhance our future funding capabilities,” Lekhethe explained.
Future forecasts for industrialisation projects present an encouraging picture. The IDC’s Industry Planning Unit for instance, is paving the way for integrated planning and coordination, which includes the operationalisation of Green Hydrogen and New Energy Vehicle programmes, along with advancements in critical mineral and battery value chains.
Furthermore, IDC's Partnership Programmes Unit plays a vital role by managing blended and dedicated funds that attract third-party capital to de-risk transactions.
Social-economy instruments like the Spatial Intervention and Social Enterprise Funds have also made significant impacts: R83 million allocated to 18 businesses resulted in over 1,800 jobs, while the Social Employment Fund created nearly 50,000 participant opportunities.
Looking beyond South Africa, commitments in the rest of Africa increased, showcasing active deployments and a targeted approach to regional development, with disbursements rising notably. The SME support framework continues to evolve, with substantial financial input aimed at fostering innovation and business growth.
In a world marked by uncertainty, the IDC's management said the Corporation remains committed to being a catalyst for industrial development in South Africa and beyond.
edward.west@inl.co.za
The NATIONAL