JOBS FUND
PRESENTATION
Presenter: Mr Xolani Ndungane
Head : Project Origination
19th February 2013
PRESENTATION OUTLINE
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Background of the Jobs Fund
What the Jobs Fund tries to achieve
Jobs Fund focus areas
How the Jobs Fund windows help to overcome labour market
failures
The goals of the Jobs Fund
How the Jobs Fund differs from other initiatives
Strategic principles applied by the Jobs Fund
What the Jobs Fund will not fund
Targeted beneficiaries
Initial project assessment criteria
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BACKGROUND OF THE JOBS FUND
 The Fund was announced by the President during the State of the
Nation Address in Feb 2011
 The Jobs Fund is aimed at piloting and up scaling existing innovative
approaches to employment creation
 The Fund’s activities include planning, financing and oversight of
implementation of job creation projects
 The Minister of Finance appointed DBSA as an implementing agent
 The National Treasury has allocated R 9billion towards the Fund &
expects the Fund to leverage approximately R10 billion from the private
and public sector.
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WHAT THE JOBS FUND TRIES TO ACHIEVE
•To address the challenge of unemployment in a sustainable manner
•The Jobs Fund is not intended to tackle the long-term, structural
causes of low growth and unemployment.
•Other government policy initiatives are directed at these challenges
& JF does not aim to replicate or substitute these initiatives.
•The Jobs Fund presents an opportunity, rather, to complement
these efforts with a limited and targeted programme of support for
effective labour market interventions and promising job creation
projects.
•This does not, however, lessen the need to deal with structural
problems.
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WHAT THE JOBS FUND TRIES TO ACHIEVE
Without limiting the scope of possible projects to be supported, the Jobs Fund will
be used to explore approaches for overcoming five barriers that have been
identified.
•Opportunities for partnership between the private, public and NGO sectors
frequently face institutional hurdles that can be overcome through new incentives
or better collaboration mechanisms.
•Enterprises face risk and cost barriers when testing new models and projects.
•The kinds of low-cost infrastructure that provide shelter and security for local
trading opportunities and improve market access of informal and small
enterprises are frequently missing or inadequately maintained.
•There is a general mismatch between the skills set of unemployed work seekers
and available opportunities for employment.
•Many public institutions that could help to facilitate job creation have weak
expertise and poorly designed programmes.
THE JOBS FUND AIMS TO EXPLORE OPTIONS FOR TACKLING THESE FIVE BARRIERS
BY PROVIDING FUNDING THROUGH FOUR FUNDING “WINDOWS”.
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JOBS FUND FOCUS AREAS
Window 1 – Enterprise Development:
•This window co-finances innovative business development projects, or enterprise support
programmes, with potential to create sustainable jobs.
•The role of the window is to lower the cost and risk barriers that inhibit innovative, private
sector-led models, partnerships, ideas and projects that will directly enhance sustainable job
creation.
Window 2 – Infrastructure:
•The infrastructure window involves the co-financing of critical missing infrastructure which
either
–creates trading opportunities and enhances access to markets, or
–enhances the quality and security of work in established trading centres and light business
environment for small enterprises, or
–make the difference between employment-linked investment taking place or not.
•The window also lower the cost and risk barriers (relating to infrastructure) that inhibit
innovative, enterprise models, partnerships, ideas and projects that will directly enhance
sustainable job creation.
The goal of Windows 1 and 2 is to increase the demand for labour.
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JOBS FUND FOCUS AREAS
Window 3 – Support for work seekers:
•This window provides co-financing support to innovative initiatives and
programmes that directly link active work-seekers, especially young people, to
formal sector opportunities and employment placements.
Window 3’s goal is to improve the supply of labour.
Window 4 – Institutional capacity building:
•Funding from the institutional window aims to improve the capacity and
efficiency of public institutions responsible for facilitating job placement, job
creation and the functioning of the labour market.
Window 4’s goal is to improve the operation of the labour market.
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HOW THE JOBS FUND WINDOWS HELP TO OVERCOME
LABOUR MARKET FAILURES
Window 1
Enterprise
Development
Window 2
Infrastructure
Increase
demand
for
labour
Improves
quality of
supply of
labour
Improves
functionality
of labour
market
Window 4
Institutional capacity
building
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Window 3
Support for work
seekers
THE GOALS OF THE JOBS FUND
•The ultimate goal of the Jobs Fund is to identify and learn from
effective interventions and programmes that will contribute to
accelerated job creation and a better functioning labour market.
•The specific goal of the Jobs Fund is to provide a mechanism that
can identify and fund creative solutions to overcome identified
barriers to job creation and active labour markets.
•In the process, the Jobs Fund aims to create a minimum of 150 000
sustainable jobs in South Africa over a five-year period. A
“sustainable” job in the context means a new, full-time equivalent
job that is self-sustaining beyond the lifetime of the initial grant.
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THE GOALS OF THE JOBS FUND
The Jobs Fund will be judged a success by four outcomes:
• The establishment of a portfolio of sustainable employment initiatives
across all the funding windows, which together yield 150,000
sustainable jobs in three years.
• The uncovering, development and operation of innovative models,
partnerships and initiatives in a number of sectors from which valuable
lessons are derived which inform longer term approaches to
employment creation.
• The transformative improvement of the prospects of unemployed
people involved in Jobs Fund initiatives.
• The effective implementation of the Fund within the time-scale and
budget defined for it.
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HOW THE JOBS FUND DIFFERS FROM OTHER INITIATIVES
A Challenge Fund:
•The Jobs Fund has been designed as a Challenge Fund. The effectiveness of Challenge Funds
lies in two features:
–Open competition: Challenge funding is allocated to projects on open, competitive basis.
Public requests for proposals are issued to the private, public and NGO sectors. The Fund is
open to applications across all sectors and from all geographic regions. The open
architecture ensures that, as long as the overarching objective of creating sustainable
employment is met, all good ideas are eligible to compete for funding, and the best ideas
rise to the top. This ensures a pipeline of applicants and projects far richer than
conventional funding intermediaries can typically achieve. Open competition directly spurs
innovation, drawing on the ‘wisdom of many’ as opposed to the handful of mandated
institutions that follow conventional approaches to development funding.
–The once-off, limited duration of the grant along with the requirement for matched
funding by the applicant. The applicant must put forward a matched funding contribution.
This limits the scope for distortionary subsidies which can inhibit economic activity;
undermine incentives and which can lead to dependency on the state. It also ensures the
applicant has some “skin in the game: - put simply, a good incentive to ensure the project is
successful.
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HOW THE JOBS FUND DIFFERS FROM OTHER INITIATIVES
Emphasis on innovation:
•The Jobs Fund is intended to provide pilot-funding for innovative approaches
that unearth new job creation ideas that can be replicated at scale.
•The emphasis on innovation necessarily encourages the funding of projects
associated with higher risk. This would ordinarily make them less attractive to
traditional funders.
•Mitigating this risk with well-placed and strategic public funding allows
innovation to be tested (and then replicated).
Partnership approach:
•The Jobs Fund recognizes the inherent role of the private sector as the largest
holder and creator of employment.
•The project is effectively a partnership between the financial resources of the
state and existing private and public sector business expertise.
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HOW THE JOBS FUND DIFFERS FROM OTHER INITIATIVES
Rigorous evaluation of success and dissemination of learning:
•The number and nature of the jobs created by the Fund will be
professionally monitored and measured.
•The idea is to take the guesswork out of state employment funding by
testing what works, knowing what works, and disseminating the
learning quickly.
•Lessons from successful and unsuccessful projects will be fed into
future application rounds to guide pipeline development and the
decisions of the Jobs Fund Investment Committee.
•Success stories will be disseminated widely to allow good models to be
copied.
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STRATEGIC PRINCIPLES APPLIED BY THE JOBS FUND
PARTNERSHIP WITH INTERMEDIARIES
•The Jobs Fund is a pool of capital designed for large-scale impact, not an institution with
administrative capacity to deal with a large number of small projects.
•The initiatives pursued by the Fund should therefore target large, “game-changing” initiatives
which themselves have the capacity work with larger numbers of small-scale enterprises or
initiatives.
•This implies an approach geared towards finding and funding a limited number of big,
partnership-based projects, rather than a proliferation of small, atomistic initiatives.
PLACE A STRONG EMPHASIS ON INNOVATION AND SYSTEMIC IMPACT
•The Jobs Fund seeks to prioritize projects that demonstrate job creation potential combined with
“doing something differently”.
•This might include new business or training models, production techniques, developing new
products, or establishing new markets.
•Innovation and systematic change must actively be pursued. This means that most funded
initiatives should, either directly or through a catalytic effect, be explicitly oriented towards
addressing the underlying causes of unemployment and its persistence, and not merely to pursue
individual projects.
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STRATEGIC PRINCIPLES APPLIED BY THE JOBS FUND
FOCUS ON HIGH-POTENTIAL SECTORS
•The Jobs Fund is explicitly open to interesting employment initiatives from all sectors and
geographies across South Africa.
•Moreover, the scale of the fund, at R9 billion, implies that it should necessarily have a broader
lens, catalising ideas from across the economic spectrum.
•However, recent experience from the implementation of similar instruments across Africa
indicates that stimulating innovation, impact and learning requires a degree of focus on high
potential sectors.
•Thus, the challenge is to balance openness with priority sectors, players and partnerships which
offer the most potential impact.
•While the Fund is open to applications from all sectors, it proactively targets high labourintensive sectors, especially those absorbing unskilled and semi-skilled labour, youths and women.
•Some of the sectors which conform to these characteristics are agriculture and agro-processing,
tourism, construction, and retails services.
•The Fund is however, forward looking and is happy to explore emerging industries with a global
competitive advantage.
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WHAT THE JOBS FUND WILL NOT FUND
 Bail out of distressed companies,
 Start-up companies and initiatives with no track record or proven
capacity to implement,
 Training activities that are not linked to job placement,
 Initiatives with huge capital investment but minimal job creation
potential,
 Loans or Advances of cash,
 Double Dipping Funding
government coffers
(projects
16
wholly
funded
through
INITIAL PROJECT ASSESMENT CRITERIA
Eligibility
Impact
 Due diligence (e.g. Tax Clearance
Certificate)
 Track record
 Private sector led/linkages
 Commercial basis
 No outstanding legal decisions
 Matched funding
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
Potential for job creation
Innovation
Additionality
Sustainability
Capacity to implement
Contribution to economic
development
 Value for money
 Systemic change
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CLIENT SPLIT OF APPROVALS: 1ST & 2ND CFP
JF Projects
Approved
Grant
Amount
(R'm)
Matched
Funding
(R'm)
Co-funding
ratio
Projected
No of
Permanent
Jobs
PUBLIC (17)
1,394.2
968.7
1:0.69
10,443
25,960
38,298
64,910
NGO/NPO (32)
812.4
730.4
1:0.90
66,330
24,575
8,937
16,971
PRIVATE (16)
1,219.2
1,423.2
1:1.17
20,480
13,395
35,992
78,006
Total Grant Approvals
(65)
3,425.8
3,122.3
1:0.91
97,253
63,930
21,254
40,625
Projected
No of
Placements
JF Avg
Project Avg Cost
Cost per
per
Job/Placement Job/Placement
‘R’
‘R’
R1,219.2m or 35.6%
R1,394.2m or 40.7%
PUBLIC (17)
NGO/NPO (32)
PRIVATE (16)
R812.4m or 23.7%
•
Some NGOs are part co-funded by government departments and agencies
10
PARTNERSHIP SPLIT OF APPROVALS: 1ST & 2ND CFP
% of TT
Grant
Approved
Matched
Funding
(R'm)
Cofunding
ratio
Projected
No of
Permanent
Jobs
JF Avg
Project Avg
Cost per
Cost per
Projected
No of
Job/Placement Job/Placement
‘R’
‘R’
Placements
No. of
Projects
JF Projects
Approved
Grant
Amount
(R'm)
3
PUBLIC-PUBLIC
35.9
1.0%
8.2
1:0.23
1,225
300
23,569
28,970
14
PUBLIC-PRIVATE
1,705.3
49.8%
1,555.6
1:0.91
11,468
15,724
62,712
119,920
6
NGO-PUBLIC
224.9
6.6%
50.9
1:0.23
3,444
12,036
14,529
17,814
1
NGO-NGO
40.0
1.2%
40.0
1:1.00
575
69,565
139,130
25
NGO-PRIVATE
631.5
18.4%
654.9
1:1.04
62,381
21,346
7,542
15,363
752.8
22.0%
787.1
1:1.05
17,510
13,119
24,579
50,279
35.3
1.0%
25.6
1:0.73
650
1,405
17,198
29,679
3,425.8
100.0%
63,930
21,254
40,625
11
5
65
PRIVATEPRIVATE
NO
PARTNERSHIP
TOTAL
3,122.3
1:0.91
97,253
Partnership Distribution
5
3
PUBLIC-PUBLIC (3)
PUBLIC-PRIVATE (14)
14
11
NGO-PUBLIC (6)
NGO-NGO (1)
6
NGO-PRIVATE (25)
PRIVATE-PRIVATE (11)
25
1
11
NO PARTNERSHIPS (5)
5. FUNDING WINDOW SPLIT OF APPROVALS (R’M) &
MATCHED FUNDING: 1ST & 2ND CFPS
• Total grant approval of R3,425.8m matched by R3,122.3m applicant funding translates into a matched funding
2,389
2,500
2,245
2,000
JF Funding
1,110
1,279
1,000
956
779
997
1,500
1,735
1,248
Window
No. of
Projects
Avg Grant
amount
‘Rand’
ED
27
46,231,684
INFRA
7
111,311,510
SWS
26
49,191,615
ICB
5
23,872,000
TOTAL
65
52,704,277
Matched Funding
Total Project Cost
60
500
119
Millions
ratio of 1:0.91
0
ED
INFRA
SWS
ICB
4
179
11. CLIENT SPLIT OF APPROVALS: 1ST & 2ND CFP
JF Projects
Approved
Grant
Amount
(R'm)
Matched
Funding
(R'm)
Co-funding
ratio
Projected
No of
Permanent
Jobs
PUBLIC (17)
1,394.2
968.7
1:0.69
10,443
25,960
38,298
64,910
NGO/NPO (32)
812.4
730.4
1:0.90
66,330
24,575
8,937
16,971
PRIVATE (16)
1,219.2
1,423.2
1:1.17
20,480
13,395
35,992
78,006
Total Grant Approvals
(65)
3,425.8
3,122.3
1:0.91
97,253
63,930
21,254
40,625
Projected
No of
Placements
JF Avg
Project Avg Cost
Cost per
per
Job/Placement Job/Placement
‘R’
‘R’
R1,219.2m or 35.6%
R1,394.2m or 40.7%
PUBLIC (17)
NGO/NPO (32)
PRIVATE (16)
R812.4m or 23.7%
•
Some NGOs are part co-funded by government departments and agencies
10
13. PROVINCIAL SPLIT OF APPROVALS: 1st & 2nd CFP
Approved Projects by Region and Funding Window
Infra
Total JF
Grant
(R’m)
Matched
Funding
(R’m)
Co
funding
Ratio
Projected
New
Permanent
Jobs
1
-
1,486.3
1,574.1
1:1.06
46,460
31,441
19,079
39,285
5
2
2
424.8
312.0
1:0.73
29,073
3,439
13,067
22,664
4
3
-
2
374.7
272.8
1:0.73
4,466
3,764
45,533
78,680
Gauteng
4
2
-
2
670.2
719.5
1:1.07
10,200
182
64,551
133,857
8
KwaZulu Natal
4
2
2
-
147.6
46.6
1:0.32
3,064
325
43,550
57,307
1
Limpopo
1
-
-
-
6.8
1.7
1:0.25
2,100
-
3,227
4,034
1
Mpumalanga
1
-
-
-
14.6
3.5
1:0.24
424
-
34,339
42,700
1
Northern Cape
1
-
-
-
18.3
24.8
1:1.36
320
-
57,031
134,563
1
North West
-
1
-
-
40.0
42.8
1:1.07
-
10,512
3,806
7,873
7
Western Cape
1
5
-
1
242.6
124.5
1:0.51
1,146
14,267
15,739
23,816
65
Totals
27
26
5
7
3,425.8
3,122.3
1:0.91
97,253
63,930
21,254
40,625
No. of
Projects
Region
ED
SWS
ICB
15
National**
6
8
14
Multiple*
5
9
Eastern Cape
8
**Projects that operate in all nine provinces of South Africa.
*Projects that operate in more than one, but not all nine provinces.
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JF Avg Cost
Project Avg
Projected
per
Cost per
New
Job/Placement Job/Placement
Placements
‘R
‘R
313
31
23
17
Services/EcoTourism
40
Services/Hospitality
410
Services/Health
400
Services/Finance
800
Services
Green economy
100
Services/Mining
320
Services/Automotive
Services/Real Estate
Manufacturing
Services/ICT
600
Agri & Forestry
SECTOR SPLIT OF APPROVALS: 1ST & 2ND CFP
Sector (R'm)
900
796
700
537
500
381
327
300
200
207
46
0
SECTOR SPLIT OF APPROVALS: 1st & 2nd CFP (CONT’D)
No
Sector
Grant
Amount
(R'm)
% of TT Grant
Approved
Matched
Funding
(R'm)
Cofunding
ratio
Projected
No of
JF Avg
Cost per
Permanent
Project Avg Cost
Jobs/Placemen Job/Placemen per Job/Placement
t (R)
ts
(R)
18
Agri & Forestry
536.9
9.9%
308.2
0.57
42,996
12,488
19,655
3
Services/ICT
320.0
10.2%
320.0
1.00
9,226
34,685
69,369
4
Manufacturing
207.2
9.2%
287.0
1.39
3,171
65,330
155,850
2
Services/Real Estate
409.9
17.9%
560.3
1.37
2,015
203,414
481,489
4
Services/Automotive
313.4
10.1%
314.6
1.00
6,014
52,119
104,424
1
Services/Mining
40.0
1.4%
42.8
1.07
10,512
3,806
7,873
2
Green economy
31.4
0.4%
11.6
0.37
528
59,470
81,439
20
Services
796.5
18.8%
586.6
0.74
55,300
14,403
25,011
4
Services/Finance
380.8
10.0%
312.6
0.82
28,979
13,141
23,928
2
Services/Health
16.7
0.4%
11.7
0.70
290
57,426
97,645
1
Services/Hospitality
46.1
9.0%
282.0
6.12
1,150
40,082
285,338
4
Services/EcoTourism
326.9
2.7%
85.0
0.26
1,002
326,270
411,054
100.0%
3,122.3
0.91
161,183
21,254
40,625
•
65
Bulk of projects
sector
Total in the services
3,425.8
13
Thank You
086 100 32 72
Info@jobsfund.org.za
Web: www.jobsfund.org.za
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