DTI launches R750m enterprise incentive scheme
Components|Industrial|Industrial Development Corporation|Projects|Automotive|Chemicals|Equipment|Manufacturing|Pharmaceuticals|Transport|Transport Equipment|Department Of Trade And Industry|Fabrication|Infrastructure|Mandisi Mpahlwa|Koss R-200 Consumer Headphones|Ricoh Caplio R30 Digital Camera
© Reuse this
The Department of Trade and Industry (DTI) on Thursday unveiled the long awaited Enterprise Incentive Programme (EIP), which focuses on the sectors of manufacturing and tourism, and succeeds the Small and Medium Enterprise Development Programme (SMEDP) that came to an end in 2006.
DTI Enterprise Organisation DDG Tumelo Chipfuma explained that the EIP had a budget of R750-million over the next year, and indicated that as the programme advanced, the budget would likely grow, and be adjusted to reflect the demand.
Trade and Industry Minister Mandisi Mpahlwa added that “the base at which we [the DTI] are addressing industrial financing, we think is a lot better. We have a coherent industrial policy framework, and we have a clear idea of the things that need to be done. We have benefited from a review of the entire incentive dispensation.”
He stated that the lessons learned from the SMEDP and other incentive schemes, made it easier for conversations between the DTI and the National Treasury, concerning how and when incentives were provided.
“It is an ongoing conversation and I am confident it is going to assist us in ways that make it possible to put at disposal appropriate instruments to support industry,” he added.
The EIP grant scale offer had doubled since the SMEDP, and the DTI was offering incentives for new enterprises, or expanding enterprises making investments of up to R200-million. The DTI was offering up to 30% funding.
The grant ceiling for investments under R5-million, was 30% or R1,5-million, the grant ceiling for investments between R5-million and R30-million was between 30% and 15%, or R4,5-million, and the grant ceiling for investments up to R200-million was 15%, or up to R30-million.
In the Manufacturing Investment Programme (MIP), investment projects within priority sectors would also score higher and get preference, and these priority sectors were capital or transport equipment and metals fabrication, chemicals, plastic fabrication and pharmaceuticals, furniture, and automotive and components.
It would hope that investments in these areas could benefit from procurement from government following its massive infrastructure spend over the next four years.
Grants would go towards investment in plant, machinery and equipment and customised vehicles required for establishing new or expanding existing production facilities, or upgrading production capability in existing clothing and textile operations.
The Tourism Support Programme (TSP) would focus on job creation and a minimum requirement would be that a company seeking a grant created eight jobs, or for a black-owned business, a minimum of four jobs should be created. Tourism entities outside of the metropolitan areas would also have priority.
The DTI said it also took to heart feedback from various quarters and had tried to significantly simplify the application process. Applications would be submitted electronically, and the enterprise organisation had an IT intensive administration and management programme, which it hoped would simplify things. The organisation would also train people to assist enterprises with all information required.
Chipfuma said many processes had been simplified, which the department hoped would lower access barriers and reduce reliance on consultants, some of whom had abused the incentive schemes to their advantage.
Applications would available on the department's website and would be accepted from July 21, 2008, and the DTI said it aimed at implementing a turnaround time of six weeks, from receipt of application, to grant approval.
Importantly, the DTI hoped that the EIP would encourage the private sector financial institutions to grant loans and supply funding to small and medium-sized enterprises.
Consultation workshops on the EIP had been held to ensure policy coherence and alignment of activities of provincial economic development departments, and their investment agencies, the Industrial Development Corporation, the National Empowerment Fund, Khula, as well as commercial banks, entrepreneurs and industry associations and export councils.
Mpahlwa also indicated that the DTI was in ongoing discussions regarding the R5-billion tax incentives scheme previously mentioned in the budget, and said that a public announcement would likely be made in the second half of the year.
Edited by: Mariaan Webb
© Reuse this
Comment Guidelines (150 word limit)
Other Video News
Western Cape Minister of Economic Opportunities Alan Winde
The Western Cape Department of Agriculture on Tuesday launched a dedicated research fund, with an allocation of R3-million for the current financial year, aimed at boosting exports and bolstering land reform in relation to the province’s alternative crops....
Metropolitans have consistently underspent their public transport infrastructure grants nearly every year since 2010, Transport Minister Dipuo Peters has revealed in a Parliamentary reply. The Department of Transport’s (DoT’s) effort to roll-out quality public...
A new report by a leading South African banking group confirms that the middle class has expanded materially in 11 key sub-Saharan African countries over the past 14 years to around 15-million households, from less than 5-million in 2000.
But it also cautions that by...
Recent Research Reports
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
Real Economy Insight: Road and Rail 2014 (PDF Report)
This six-page brief covers key developments in the road and rail industries over the past 12 months, including details of South Africa’s road and rail network and prospects for both sectors.
This Week's Magazine
The Built Environment unit at the Council for Scientific and Industrial Research (CSIR) has developed a cost-competitive ultrathin concrete pavement surface that, for the upgrading of unpaved roads to paved roads, is more durable than many other pavement alternatives...
The Southern African Large Telescope (SALT), based at Sutherland in the Karoo region in the Northern Cape province, is promising to become an important instrument for research into dark matter. "SALT is shaping up to be very important for answering questions about...
TDM supports broader industrial activity that has a multiplier-effect on the potential to beneficiate raw materials in many industries
The South African tool, die and mouldmaking (TDM) industry is being revitalised to locally produce the tools, dies, moulds and fixtures required by the manufacturing sector. Local TDM capability is key to enable the manufacturing industry to remain competitive, says...
Misfortune often finds its roots in the smallest of things. Such as a centimetre or two. Or is that in inch? Perhaps a foot? Swedish or Dutch? The French had reason to blush in May as it became apparent that national rail operator SNCF had ordered 2 000 trains that...
The repositioning of the Fibre Processing & Manufacturing Sector Education and Training Authority (FP&M Seta) and its business processes will ensure improved performance in reaching strategic targets and in providing customer service.