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DTI industrialisation goal boosted by R57bn in private-sector investment

20th April 2016

By: Ilan Solomons

Creamer Media Staff Writer

  

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The Department of Trade and Industry (DTI) is leveraging R57.1-billion in private-sector investment, through various incentive schemes, to support local industrialisation efforts, said Trade and Industry Minister Dr Rob Davies, who delivered his Budget Vote on Wednesday.

The Minister noted that the DTI provided R10-billion in incentive support in the past financial year, R4-billion of which was on budget, plus an additional R6-billion in 12i tax allowances.

“This support is provided to a wide range of local and domestic companies - 1 770 in the past financial year to be exact. Put differently, the DTI approved support to about seven new or established firms every single working day in 2015,” Davies enthused.

He said that though these achievements were significant, the industrial sector in South Africa remained characterised by far too few black entrepreneurs.

“It is impossible to build an inclusive and stable society when some sectors and industries remain largely untransformed and where established sectors are perceived as monopolising access to government resources,” he said, adding that this was why the DTI’s Black Industrialist Programme was such an important initiative.

“We are harnessing the resources both on the supply and the demand-side across government and its agencies to support black industrialists who have the potential to grow, invest and create jobs,” stated Davies. 

The Minister announced that in the coming year, the DTI would focus on supporting qualifying black industrialists through access to funding, incentives, soft loans, market access, procurement opportunities, training and capacity building, matchmaking and information sharing, research and innovation, assistance with meeting quality standards, productivity enhancement support, and economic infrastructure.

This support would be provided through collaboration with development finance institutions, State-owned companies, the Council for Scientific and Industrial Research, the South African Bureau of Standards and other private and public institutions.

Davies pointed out that about 50 applications had already been received and were being considered by the department, covering sectors including agroprocessing, chemicals, cosmetics, pharmaceuticals, mineral beneficiating sectors, oil and gas, automotive, rail, clothing and textiles, green energy, capital equipment and information communication technology.

“We are grateful for the many messages of support we are receiving from the private sector and increasingly firm offers are being made to collaborate and partner with government to make the Black Industrialist Programme a success,” he stated.

The Minister noted that the DTI had itself invested R1.5-billion in the programme, while over R27-billion had been pledged by the industry towards supporting the project over the next five years.

Meanwhile, in terms of the new broad-based black economic-empowerment (BBBEE) framework, Davies said there was a “trumping provision” in the BBBEE Amendment Act of 2013, which stated that all the industry sector charters had to be aligned with the overall BBBEE framework.

“Some industries are of the view that they are already in line with the new framework and are just checking with the DTI that this is in fact correct; others are in the process of aligning their codes. There are also some industries that have not amended their industry charters and the department has informed them that these codes have, therefore been superseded by the new BBBEE framework.”

Davies would not be drawn on the issue of black ownership and its relation to the concept of “once-empowered, always empowered”, as the matter is currently before the courts.

Edited by Samantha Herbst
Creamer Media Deputy Editor

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