IDC considers private investors for first time in 86 years

The Industrial Development Corporation (IDC) aims to introduce private shareholding for the first time in its 86-year history to shore up its coffers and enable it to play a bigger role in the bid to re-industrialise South Africa’s economy.

While still Africa’s most industrialised economy, South Africa has over the past two decades lost significant manufacturing capabilities, with imports overrunning many domestic companies.

IDC CEO Mmakgoshi Lekhethe told Business Day the state-owned development finance institution had put all its cards on the table in a bid to seek a significant recapitalisation, including inviting private sector investors as equity partners.

“We are looking at all options to beef up the capacity of the IDC to take on its developmental role. We are also exploring various ways to recapitalise the business,” Lekhethe said.

“We are looking at how we use our shareholding structures to bring in other shareholders as well that might not necessarily be the state, but without the state losing its strategic importance. Our capital mobilisation programme is very much ongoing, and we are looking at various options.”

Another option under consideration is securing an explicit guarantee from the government to attract concessional funding and enable it to shield its balance sheet against nonperforming loans.

“The minister of trade, industry & competition is having a conversation with his national treasury counterpart to explore options of supporting the IDC for taking on more of a developmental role,” Lekhethe said.

“Playing a defensive role in the economy, particularly in transactions that nobody else wants to invest in, means the state ought to come in in some way to help us,” she said.

“An application for tax exemption has been filed. We have had engagements with the National Treasury as well.”

The IDC has played a vital role in South Africa’s industrialisation, with its mandate giving rise to industries such as steel and synthetic fuels.

Lekhethe, who took over the helm of the IDC last year, is no stranger to the weighty issues at the National Treasury; her previous job was deputy director-general, responsible for asset and liability management at the department of finance.

She was speaking to Business Day after the release of the IDC’s 2026 results, which showed a sharp contrast between its consolidated group results and its core company results.

While the core company remained highly profitable, underperforming subsidiaries and heavy tax bills dragged the overall group into an R4.7bn loss for the year ended March from a profit of just over R300m in the prior year.

The losses were mainly centred on the IDC’s majority stake in fertiliser producer Foskor, which reported a R2.8bn loss for the year, and the Mozal smelter in Mozambique, which was placed on care and maintenance earlier this year after failing to seal a favourable deal for electricity.