South Africa's state-owned Industrial Development Corporation (IDC) will invest R102-billion over the next five years to boost the industrial sector, Economic Development Minister Ebrahim Patel said on Tuesday.
Patel said during a budget vote speech in Parliament that he expected the IDC would also consider setting up a distressed sector fund to help shield South African companies from the strong rand – which has rallied almost 30% against the dollar since the start of 2009.
"The IDC will substantially increase the level of industrial funding and will make available R102-billion over the next five years for investment in New Growth Path priorities," Patel said.
The New Growth Path is the government's flagship job creation programme, which is aimed at creating five-million jobs in Africa's largest economy over the next 10 years.
The R102-billion investment by IDC represents a 160% increase over actual approvals in the last five years, and was revised up from R66-billion in IDC's current five-year projections, Patel said of the development finance body.
Green energy industries and the mining and manufacturing sectors will receive the lion's share of the funds with each receiving about R20-billion over the next five years. Money will also be set aside for agriculture and tourism.
"The past 18 months of GDP recovery and, at the end of 2010, the increase in employment point to the realism of our objective," Patel said.
He said South Africa planned to approach local and foreign institutional investors to promote investment in key sectors of the economy and said the country planned to hold an investment roadshow in the United States later this year to promote investment.
South Africa has been recovering from a recession in 2009 but official unemployment has remained stubbornly high with 25% of the 17,3-million workforce jobless.
Edited by: Reuters
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