As the Department of Trade and Industry (DTI) works to develop a dedicated agroprocessing incentive to attract investment, Trade and Industry Minister Dr Rob Davies has reiterated the importance of diversifying South Africa’s economy.
The development and revitalisation of South Africa’s agroprocessing sector is one of the DTI’s focus areas to boost the sector’s contribution to South Africa’s gross domestic product (GDP), job creation and reindustrialisation of the country’s economy.
“This sector is critical because of its labour intensity across the value chain and its high economic multipliers, especially with respect to exports. The incentive will contain strong conditionalities . . . with respect to labour practices and empowerment,” Davies said in a statement on Tuesday.
He reiterated that the manufacturing sector and diversification of the economy were key drivers in achieving South Africa’s economic growth ambitions.
While the performance of the economy had stalled, the second-quarter GDP manufacturing statistics, boosted by the implementation of a transparent localisation policy, had “saved” the country during the quarter.
Statistics South Africa last month reported a 2.2% uptick year-on-year in manufacturing output for the month of August, following a 0.3% contraction in July.
“This result also demonstrates that manufacturing and the diversification of our economy is highly critical if we are to achieve our economic strategic objectives,” Davies explained.
He pointed to the revival of domestic boatbuilding capabilities after the introduction of stronger industrial financing instruments, with boats designated for local procurement.
"The sector is now witnessing the crowding-in of private-sector funding and capabilities to meet demand both locally and internationally. The success of Nautic Africa, now part of the Paramount group, and Damen are testament to what can be achieved," Davies added.
Further, the DTI has, over the past ten years, placed “a lot” of focused effort on the development of the clothing and textile clusters in the Western Cape, with significant targeted incentives deployed to companies in the province.