Pretoria: The launch of the Department of Trade and Industry‘s (dti) 7th iteration of the Industrial Policy Action Plan (IPAP) has highlighted the development of a specific support framework for black industrialists.
According to the IPAP 2015, the Black Industrialists Development Programme will be developed over the coming year. It will be aimed at promoting industrialisation, sustainable economic growth and transformation through the support of black owned entities in the mainstream of the South African manufacturing industry and related manufacturing sectors.
Briefing reporters at the Industrial Development Corporation (IDC) at the launch dti, Minister Rob Davies said that government will be focussing on the programme.
“If we are focussing on the manufacturing sector we need to ensure that the manufacturing sector becomes much more representative of the demographics of our people but more importantly that the manufacturing sector benefits from the available pool of talent from the country and the population as a whole,” the Minister told journalists.
In March, the dti said it will avail R1 billion in support for the programme with the initial aim being to support 100 black industrialists.
“Becoming an industrialist is not an easy task, it requires passion and a skills set and capabilities. What we are going to be doing is we are focussing on a particular programme which will identify and support black industrialists,” said the Minister.
According to the document, the programme envisages implementing key measures such as access to finance, access to markets, skills development, standards, quality and productivity improvements by black manufacturing companies.
Recommendations from commissions reporting back at the Black Industrialists Indaba held in March included that a committee comprising government, the private sector and co-opted experts be established to explore more ways to accelerate the implementation of the programme. It was also agreed that the Preferential Public Procurement Act be reviewed and that the setting of the black majority threshold be at 75% for companies qualifying for the programme.
Skills development will be placed at the core of the programme.
The IPAP said that in the 2015/16 year the programme will be designed, developed and structured.
According to the document the development of the programme will be overseen by the dti as the lead department with supporting agencies such as the IDC and the Development Bank of South Africa (DBSA).
Additionally, the Minister said the manufacturing sector plays an important role in South Africa’s economy.
“The manufacturing sector and value addition remain critical objectives of achieving the kinds of structural changes that are necessary to place our economy on a higher level of more inclusive growth,” said the Minister.
Minister Davies further added that history has shown that industrialisation is a necessity.
“The lessons that we’ve drawn and which is also the common understanding of the African continent is that industrialisation is necessary because if we don’t industrialise we are trapped in the most disadvantageous place in the global division of labour as producers and exporters of primary products and as importers of finished goods, that is the most disadvantageous position to be in because the real value in value chains lies in the parts that take place after the delivery of the primary materials,” said the Minister.
The Minister also said that one of the important sub themes that form part of radical economic transformation is that government is expected to increase the impact of industrial policy measures.
“This IPAP also represents our intent to progressively upscale our industrial policy. What is clear to all of us is that this economy has not had sufficiently fast inclusive economic growth, GDP growth has not been high enough and the growth that we’ve had has not been inclusive enough to place us in a position where we can see a significant dent in the levels of poverty, inequality and unemployment in our country,” explained the Minister.
He further added that the target in the Medium Term Strategic Framework is that by the end of this term in government, 5% of inclusive growth would have been delivered.
The IPAP as well as previous iterations indicate the actions that different government entities need to carry out in order to support industrialisation.
“What we are doing is that we are creating an environment, we are creating a support package of measures, we are creating a defensive framework that will allow manufacturing activities to flourish in South Africa, that’s what it’s about.”
The Minister further added that a total of 3 384 private sector enterprises across all provinces were provided with incentive and other support in 2014 to a value of R13.6 billion.
Chairman of the Manufacturing Circle Bruce Strong welcomed the IPAP, saying that South Africa’s growth is tied to the health of manufacturing.