Govt’s plan to boost SA’s economy: Investments, localisation, transformation

Image credit: Twitter/The Presidency of the Republic of South Africa

Trade, Industry and Competition (DTIC) Minister Ebrahim Patel says the government will adopt various strategies to boost South Africa’s post-COVID-19 economy, including promoting greater investments, localisation and transformation.

Addressing Parliament during DTIC’s budget vote debate on Friday, Patel said SA cannot afford to go back to the “old normal” that existed before the pandemic struck.

He said, “President [Cyril] Ramaphosa spoke about the wider economic recovery and reconstruction plan that is being developed, within which the DTIC will play its role.   

“This wider plan includes investment in infrastructure-driven growth, through building of bridges and roads and clinics and renewable energy plants will bring more young people into jobs; and greater use of locally-made inputs of steel, cement and machinery can enable that infrastructure investment stimulates the growth of manufacturing. Township and rural enterprises must be scaled up.”

Patel outlined six “priority programme areas” that DTIC will recalibrate to “save lives and livelihoods.”

Master plans

Patel said the DTIC will finalise two new master plans to strengthen economic dynamism – one for furniture, which employs 65,000 people in SA, and one for the steel industry, which employs around 250,000 people.

Localisation

“Second, to help pivot the economy from its reliance on imports to greater levels of local manufacture, we will finalise at least three new agreements on localisation and supplier development,” the Minister added.

These agreements will follow discussions with CEOs in various sectors, including fast food producers, hardware stores, grocery retailers, food and consumer goods manufacturers.

Trade

To further support local firms, DTIC will conclude an agreement with the European Union on trade access, crack down on illegal imports and lobby for the commencement of Africa Continental Free Trade Area (AfCFTA) trade by start of 2021.

Investments

“We will focus on consolidating the presence of firms who have existing operations and help those who made investment pledges to bring projects to fruition. New areas for investment include deepening our production of PPEs, medical equipment and pharmaceuticals,” Patel said.

Transformation

DTIC will provide further “non-financial support to black industrialists to complement the funding,” the Minister added.

He said, “Over the next five years, we will mobilise or commit very large sums in funding for black industrialists and firms. Women-empowered businesses and worker empowerment must become a stronger focus.

“Transformation includes addressing high levels of economic concentration and helping to build stronger, agile small and medium businesses.”

Special economic zones (SEZs)

Patel said the Industrial Development Corporation (IDC) and Development Bank of SA have a specialised unit that will “assist provinces to use the R4 billion budget over the next three years more effectively on SEZs and industrial parks.”

He noted that the government launched the Tshwane SEZ with commitments by 9 manufacturers in November 2019. “The projected investment amounts to approximately R3.6 billion, with a potential 6,700 direct jobs,” he added.

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