THE WHITE HOUSE
Office of the Press Secretary
PRESIDENT CLINTON ANNOUNCES SOUTHERN AFRICA DEVELOPMENT FUND
The Southern African Enterprise Development Fund (SAEDF) announced by President Clinton at the White House Wednesday, October 5, is designed to provide funding to promote and stimulate indigenous business development in the southern Africa region, including the Republic of South Africa. The U.S. Agency for International Development (USAID) will provide the U.S. Government funding to the SAEDF as part of its three year assistance package to South Africa.
South Africa will receive half of the $100 million allocated to the SAEDF. The SAEDF will create a sustainable mechanism to support the growth of indigenous and disadvantaged small and medium enterprises (SMEs) in Southern Africa. These groups have traditionally lacked access to capital, especially long-term risk capital for start-up investments and business expansion.
The enterprise fund will be organized as a non- profit U.S. corporation managed by a Board of Directors, chaired by former Mayor of Atlanta and former U.S. Ambassador to the United Nations, Andrew Young, and includes leaders from the financial, business and venture capital communities. A list of the board of directors follows.
The expansion of the indigenous and disadvantaged SMEs will create jobs and increase incomes for poor population groups. The enterprise fund will provide the opportunity for small business to grow, creating new jobs and new wealth among the populations who were disadvantaged under apartheid. The estimates indicate the SAEDF will create about 200,000 new jobs, and generate $20-40 million annually in additional income over the next 20 years.
The SAEDF will invest its resources through intermediaries (financial institutions, NGOs and PVOs, and indigenous entrepreneurs or owner-operators) and directly in individual firms. All SME entrepreneurs and intermediaries will invest their own capital along with SAEDF resources. -more- Southern African
Assistance will include long-term equity financing, loans, guarantees, financial advisory and technical services to both intermediaries and individual firms.
The Fund will work with financial intermediaries to reach the target group under a variety of instruments and mechanisms. The range of mechanisms include:
Equity Investment. The Fund may inject equity into the intermediary through the purchase of shares -- common or preferred -- of the intermediary. Credit. The Fund may provide debt finance to the intermediary through the purchase of notes or bonds, or make a direct loan. Managed funds. The SAEDF may place funds to be managed by intermediaries with the terms of conditions of use spelled out under an investment management contract. Other financial services. The SAEDF could provide other services for a fee to the intermediary, such as a loan portfolio guarantee program. Countries in the southern Africa region include: Angola, Botswana,
Lesotho, Malawi, Mozambique, Namibia, South Africa, Swaziland, Tanzania, Zambia, and Zimbabwe.
Southern African Enterprise Development Fund (SAEDF) Board Members
Andrew Young, Chairman
Former Mayor of Atlanta and Former United States Ambassador to the United Nations
Alison Leland Brisco
Leon Tempelsman & Co.
New York, NY
The Reverend Leon Sullivan
President, International Foundation for Education and Self-Help Phoenix, AZ
Chairman, President, CEO, United Bank of Philadelphia Philadelphia, PA
Terry L. Jones
Syndicated Communications (SYNCOM)
Chairman, CEO, Peachtree Asset Management Division Atlanta, GA
President, Coca-Cola International's Africa Group Atlanta, GA
Chairman, First Growth Group
Georgetown Law Center