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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.Foskor had a torrid year, losing about six weeks of production due to mine flooding that led to two fatalities, a situation that was worsened by the closure of the Strait of Hormuz, which led to prices of sulphur and ammonia surging, making the resumption of production commercially unviable.This poor performance did not stop the IDC disbursing R17bn in development funding and mobilising a further R27.9bn from co-funders.Trade, industry & competition minister Parks Tau said the IDC had played a critical role in containing deindustrialisation and preserving South Africa’s productive capacity by supporting the recovery of strategically significant but distressed industries.However, he said the financial results deserved attention.“While the IDC’s developmental achievements are commendable, its performance over the past year also points to areas requiring sharper focus,” Tau wrote in the company’s annual report published on Thursday. “The pipeline was weighted towards large, complex transactions that offered limited short-term developmental returns, contributing to uneven progress against key impact indicators.“This highlights the need for the IDC to continue managing a careful balance between maintaining the quality and sustainability of its portfolio and responding to opportunities that preserve jobs, support strategically important distressed enterprises, and protect critical industrial capacity.”The results come as the IDC weighs a deal to bail out steelmaker ArcelorMittal South Africa, having already ploughed more than R2bn into the stricken steelmaker.In addition, the IDC recently staved off the liquidation of sugar producer Tongaat Hulett.IDC chair Gloria Serobe reflected on these transactions, arguing that as a development finance institution, the company’s performance cannot be separated from the health of the economy.“In the steel sector, the board supported a targeted approach to stabilising critical upstream capacity while prioritising downstream competitiveness, including continued engagement with ArcelorMittal,” she said.“The conclusion of the Tongaat Hulett transaction reflected the board’s insistence that such investments be judged not by a single product but by the full value chain they can unlock, from agro-processing to energy.“In agriculture, where South Africa’s standing as a global exporter continues to grow, and in critical minerals and the emerging green, digital and defence-related sectors, the board encouraged a more focused, partnership-led approach that draws in the expertise and capital the IDC cannot provide alone.”Business Day
