South Africa is making a big push to industrialise its economy, and R23-billion has been set aside over the next five years to fund new players in the sector.
Economic Development Minister Ebrahim Patel said the fund would contribute towards job creation, industrialisation and transformation and go a long way in eradicating inequality and poverty. He was tabling his department’s budget vote in parliament on 12 May.
“The Industrial Development Corporation [IDC] is committing R100-billion over five years to industrial development. What is new, and what is significant, is that we are setting aside R23-billion to promote black industrialists.
“This is a five-year programme that is intended to support those companies where black South Africans are both owning and controlling the enterprises in the productive sectors of the economy and is intended to bring more South Africans into the economic mainstream,” Patel said.
The decision to set aside the funding was meant to promote the transformation of the economy as well as boost economic growth by unlocking its potential and talent. He said South Africa needed to achieve sustainable and inclusive growth, and that the funding would be made available on concessional terms.
“Aside from black industrialists, there is, of course, a compelling need to bring more black South Africans into the economy. There are also targeted groups – young people, women – they have not been sufficiently brought into the productive activities. So the IDC will make available R9-billion in total – R4.5-billion for women, R4.5-billion for youth.”
Funding would be distributed in the form of loans or equities.
Relationship with Africa
Following attacks on foreign nationals in April, Patel said he would convene a symposium of investors, workers, intellectuals and public officials with Wits University and the IDC on will on 25 May. The African Union has declared that day Africa Day, an annual celebration of the continent.
The symposium would look at the economic impact of South Africa’s relationship with the rest of the continent. He would also go on a road show to different parts of the country to communicate one message, Patel said, that South Africa’s prosperity was intimately tied to economic relations with the rest of the continent.
South Africa’s efforts towards economic integration with the rest of the continent were yielding success. In 2014, the country exported R300-billion worth of goods to the rest of Africa, an increase of R36-billion.
“Aside from the damage that the [attacks on foreign nationals] do to our humanity, we cannot unscramble ourselves from Africa, our continent, without serious economic damage. Our total manufacturing, mining and agricultural exports to the rest of Africa sustained 244 000 direct jobs in South Africa, of these, 169 000 are manufacturing.
“Africa is now more important for growth in manufacturing exports than Europe, the United States or China,” Patel said.
Turning to small business, he said the Competition Commission would undertake an inquiry to see how smaller businesses in the formal and informal economy could be supported so that they were able to compete in the retail sector.
The inquiry, to be carried out in this financial year, would also seek to find ways in which smaller players could be incorporated into the lucrative sector. “The Competition Commission will be launching a market inquiry into the retail sector, looking at how we can bring more black South Africans, more small businesses into the retail sector.
“It will examine, amongst others, tenancy arrangements in shopping malls, the growth of township enterprises, small shops, spaza shops and so on, and it is intended to ensure that we have got a competitive but also inclusive retail sector.”
Another inquiry into the health care industry, which he announced in 2014, would conduct its public hearings during the current financial year, Patel said. That inquiry was established with the aim of addressing several concerns about the industry, including the cost of health care in South Africa.
Source : SouthAfrica.info