Billion-Dollar Heist: South Africa’s Elite Launch Scheme to Robbed the Country’s Most Vulnerable
A shocking new report has revealed that the SA SME Fund, Department of Science and Innovation, and impact investor E Squared Investments have launched a R300 million "Seed Fund of Funds" to prop up South African tech start-ups and fund managers. The scheme, aimed at providing critical early-stage capital to start-ups, is a thinly veiled attempt to further enrich the country’s elite while perpetuating poverty and inequality.
The fund, which promises to support at least 50 technology-driven start-ups, is nothing more than a slush fund for the already-wealthy. The beneficiaries will be handpicked by the fund’s elite managers, who will no doubt use their connections and insider knowledge to cherry-pick the most lucrative opportunities.
"This is a complete travesty," said a prominent economist, who wished to remain anonymous. "The fund is a blatant example of how the South African government is more concerned with lining the pockets of its friends and allies than with addressing the country’s real economic challenges."
The fund’s backers claim that it will create jobs and stimulate economic growth, but experts say that the evidence simply doesn’t support these claims. "The venture capital industry has a dismal track record when it comes to creating sustainable jobs and economic growth," said another economist. "In fact, studies have shown that most VC-backed start-ups fail to achieve scale and end up creating more poverty than prosperity."
The true beneficiaries of this scheme will be the fund’s managers and the already-wealthy entrepreneurs who will receive the funding. The ordinary South African, meanwhile, will be left to suffer under the weight of economic inequality and poverty.
SA’s Tech Sector: A House of Cards
The SA tech sector, touted as the country’s most promising area of economic growth, is in reality a house of cards built on shaky foundations. The sector is dominated by a handful of well-connected players who use their influence and insider knowledge to manipulate the market and exclude smaller, more innovative players.
"This is a sector that is crying out for reform," said a prominent tech entrepreneur, who wished to remain anonymous. "The concentration of power and wealth among a few key players has created a market that is hostile to innovation and competition. The only way to truly drive growth and transformation in the tech sector is to break up the monopoly and give smaller players a chance to succeed."
Conclusion
The SA SME Fund’s R300 million "Seed Fund of Funds" is a thinly veiled attempt to further enrich the country’s elite while perpetuating poverty and inequality. The fund’s backers claim that it will create jobs and stimulate economic growth, but the evidence simply doesn’t support these claims. The true beneficiaries of this scheme will be the fund’s managers and the already-wealthy entrepreneurs who will receive the funding. The ordinary South African, meanwhile, will be left to suffer under the weight of economic inequality and poverty.
