DTI Minister Dr Rob Davies
Photo by: Duane Daws
While South Africa is not seeing a “big rush” of foreign direct investment (FDI) into its mining industry, neither is there a “general fall-off” in investments in other value-added sectors, Trade and Industry Minister Dr Rob Davies said on Tuesday.
On the contrary, figures from the Department of Trade and Industry’s (DTI’s) 2014/15 performance report, which was presented to Parliament on Tuesday, showed that FDI was still strong in the country.
“We are not seeing [big multinationals] telling us that everything is horrible and that they are now walking out,” he stated.
Latest FDI data showed that the country attracted over R140-billion in the 2013/14 financial year, but that it slowed during 2014, owing to many multinationals already operating here and that the country’s FDI stock was already high by international standards at 42%.
He added that, with the former main drivers of South Africa’s economy, including consumption-driven sectors and the mineral commodity supercycle, no longer available to drive growth in the future, the DTI would focus on other fields to create economic growth.
Director-general Lionel October noted that, through the DTI’s targeted incentive programmes, including the automotive, clothing, textile and footwear, film and business process outsourcing industries, there was still value to be added to the fiscus.
In the automotive industry, the country was now exporting over R100-billion worth of vehicles, with the industry employing about 100 000 people – 30 000 in assembly and 70 000 in components.
“We are seeing big investments in the original-equipment manufacturers, as well as expansions into new areas, such as truck manufacturing,” October highlighted.
Over the last five years, over R2.6-billion in incentives had also been distributed in the local textiles industry, while footwear manufacturing grew by 16.2% and domestic market share increased from 19% to 24%. Footwear exports grew by 18.3% by volume and 25% by value.
Meanwhile, October highlighted that, for the first time, the DTI would exhaust its budget in the film industry. “Sixty-one thousand people are employed in this industry,” he added.
“The real job now is to scale up these incentives, but also spread them to other sectors,” he noted.