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Government keen to build a strong export culture among manufacturers

Panellists discuss South Africa’s export sector at the inaugural Manufacturing Indaba, in Ekurhuleni last month. Camerawork: Nicholas Boyd. Editing: Shane Williams. Recorded: 19.05.14

6th June 2014

By: Sashnee Moodley

Senior Deputy Editor Polity and Multimedia

  

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South Africa’s export culture remains weak, Department of Trade and Industry (DTI) deputy director-general Pumla Ncapayi lamented at the recent Manufacturing Indaba held in Gauteng, adding that it was important to find ways to enhance and diversify the country’s export performance.

The department is particularly keen to foster greater diversification and is, thus, focusing not only on volumes, but also the quality of such exports. It is particularly keen on a greater integration of South African-made value-added inputs into global supply chains.

The DTI is also exploring various methods embedded in the Industrial Policy Action Plan (Ipap) and key among those is South Africa’s participation in regional integration.

Ncapayi noted that regional integration could offer continuous opportunities for South African companies.

“We are looking at the benefits that can be derived from regional integration, with a particular focus on global value chains, as well as what can be achieved in terms of other cross-border measures. South Africa is well known for its competencies in infrastructure and we want to see what benefits can be accrued from this to the advantage of local companies,” she stated.

T

he DTI has also undertaken a study to identify new high-growth markets in Africa, Asia and South America, from which South Africa’s exports could benefit.

The DTI is promoting the National Exporter Development Programme, which aims to enhance the export culture by retaining existing exports, attracting new entrants, expanding the number of current roleplayers and assisting companies in exploring markets to which they are not accustomed.

“As a developing State, South Africa continues to pursue measures and policies that are aimed at enhancing economic growth, and among those are the National Development Plan, which envisions increased exports of 6% by 2030 and advocates for increased exports from nonmineral manufactures and services,” said Ncapayi.

She added that, in addition to the Ipap, the DTI had considered several measures aimed at further industrialising the economy, including a National Export Strategy,

will be launched during the course of the year.

“Our National Export Strategy will be a national tool and not a DTI tool. There is a temptation to call it an Integrated National Export Strategy, which will ensure that there is input from all relevant players in this arena. We have considered the diversification of markets, suppliers and producers functioning within the strategy,” she stated.

The DTI was investigating several best practices and benchmarking exercises to determine what could benefit the South African economy, she added.

There should be continued engagement in addressing the issues that would ensure that South Africa enhanced its competitiveness in exports and that it was a role-player in its own economy, stated Ncapayi.

Also speaking at the Indaba was the Steel and Engineering Industries Federation of South Africa chief economist Henk Langenhoven, who noted that the metal and energy sector exported 60% of its production.

Langenhoven said inappropriate policies and infrastructure inefficiencies were among the issues constraining South Africa’s ability to export and compete in international markets. This, he added, should start at the research and development stage and continue through to investment, productivity and the security of supply of basic services.

“We have opened up our economy after 1994, but the uncertainty around the supply of water and electricity is an issue. Hopefully, the special economic zones will solve these issues,” he added.

Consulting and implementation services company Rifle-Shot Performance Holdings CFO Guy Imbert noted that larger companies were the leaders in exporting.

However, he stated that South Africa had islands of excellence that included small and medium-sized enterprises.

Imbert said successful small companies operated in specific niches and that managing a small niche was one of the keys to success.

South African Institute of International Affairs senior research fellow Peter Draper agreed with Langenhoven on South Africa’s needing to ensure that its water, electricity and human resources services were more efficient and that is was competitive in the international market.

While South Africa’s value-added exports were valuable in the African space, it struggled to compete in the manufacturing space on the continent.

Draper suggested that South Africa investigate where in the global or regional value-added chairs it could get involved, specifically with regard to particular niches.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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