The NEF’s structure allows for 195 employees. By the end of the 2012/13 financial year, 168 employees were employed. This number results in a relatively high vacancy rate. However, according to the NEF, it is still able to perform its functions.

### Table 8: NEF Employment Profile

Total posts	195
Total Employment	168
New employees (employed during the financial year)	29
Vacancies (13.8% vacancy rate)	27
% of Female employees	60%

Source: NEF (2013: 62-63)

- 6.4.3.2. 2013/14 Financial Year

No 2013/14 information was available.

- 6.4.3.3. 2014/15 MTEF financial allocations

The NEF faced the risk that it would be unable to follow through on its equity options secured in early stage projects if it was not recapitalised. In this instance, it would have to sell its equities to continue its strategic initiative. Furthermore, this will also impact on its sustainability over the MTEF based on its current capital and internally-generated cash flows. The NEF, with the support of the DTI, has been engaging the National Treasury to allow it to be rescheduled from a Schedule 3A entity to a Schedule 2 entity to allow it to leverage its capital. This would allow it to access possible funding from the Industrial Development Corporation of approximately R1 billion. In addition, it has sought recapitalisation over the last two years through the MTEF process.

- 6.4.4. Key issues raised by the committee

In numerous engagements with the committee, the NEF informed the committee that in order to fulfil its mandate that of promoting and facilitating the participation of black people in economic activities it should be recapitalised. The NEF had considered two options available to raise the necessary funds, namely (i) reclassification to a Schedule 2 entity and (ii) requesting funds from the fiscus. The DTI informed the committee that the NEF had raised the matter in 2011. The initial focus of the engagement with the National Treasury was with respect to the reclassification from a Schedule 3A to a Schedule 2 entity. This process is ongoing. The DTI also supported the NEF’s request for recapitalisation. The committee enquired whether the NEF would be able to fulfil its mandate given its current financial position and the fact that it has suspended further investment and financing decisions. The NEF informed the committee that it is solvent, but had reassessed its financial position. After a number of engagements between the Board and the Executive and with government, the NEF concluded that additional time was required to raise the necessary capital. The NEF then took a decision to suspend financing and investment decisions which will enable the NEF to honour its existing commitments. This would provide the necessary space for the NEF to renegotiate with the fiscus with regard to recapitalisation. In response to the NEF listing on the JSE to raise the necessary funds, the NEF informed the committee that it would not be financially prudent to do so at this stage, as its underlying investments required time to mature. Securing funds from the fiscus and also using funds generated by the MTN share scheme to fund the operations and investments of the NEF would be more desirable. Another option for the NEF was first to seek finances from South African development finance institutions (DFIs) before it goes to the international market.