The Department of Trade, Industry and Competition (dtic) has released a new Industrial Development Strategy (IDS) “anchored” by the so-called ‘3Ds’ of decarbonisation, diversification and digitalisation, but which also includes actions geared towards stemming the ongoing tide of deindustrialisation in traditional sectors.

The 44-page strategy was published on the department’s website on June 8, following its approval by Cabinet on June 3.

The IDS is positioned as government’s “strategic response” to a rapidly changing economic environment that includes rising geopolitical and trade tensions, a reconfiguration of supply chains and declining industrial capacity, backlogs in infrastructure, climate change, and a progressive digitalisation of the economy.

The strategy has been structured primarily around what the dtic terms three mutually reinforcing strategic pathways, including a decarbonisation pathway that seeks to transition industrial production toward low‑carbon technologies, cleaner energy systems, and climate-resilient processes.

In so doing, the IDS aims to safeguard export competitiveness, reduce vulnerability to carbon border measures, and unlock new green industrial opportunities.

The strategy places particular emphasis on scaling-up renewable energy and transmission infrastructure, alongside the gas and nuclear investments it says are needed to secure energy supply, reduce production costs, and enable industrial expansion.

In addition, the IDS aims to position South Africa within global value chains linked to critical minerals, batteries, green hydrogen, and clean technologies through beneficiation and exploration support, while reforming automotive incentives to support localisation and the transition to new‑energy vehicles.

The decarbonisation pathway has also been directly linked to stabilising and upgrading the steel and metals value chain through coordinated demand‑side, trade, and technology interventions.

The diversification pathway, meanwhile, seeks to expand the productive base beyond traditional resource‑intensive activities by deepening value addition, fostering new industrial sectors, strengthening agro‑processing, services, and regional value chains, and diversifying export destinations.

The digitalisation pathway will be pursued, the documents states, so as to embed digital technologies across industries to raise productivity, enable innovation, improve scale and coordination, and position South Africa competitively in digital services and knowledge‑intensive activities.

In an annexure marked ‘Implementation Plan for Immediate Priorities’, the IDS identifies actions that can be regarded as supportive of the 3Ds.

Other actions, however, bear all the hallmarks of a rearguard fight against ongoing deindustrialisation, including:

• a plan to finalise the takeover of ArcelorMittal South Africa, which is currently trading under a cautionary linked to talks with the Industrial Development Corporation, so as to “restructure and optimise” its performance;
• a move to designate steel as a strategic commodity to bolster local demand;
• a proposal to introduce of an export tax and quota in the chrome industry in addition to the introduction of concessional electricity tariffs to retain local ferrochrome production;
• an intention to extend discounted electricity tariffs to other energy-intensive sectors;
• the extension of preferential allocations of mining rights and licences with local beneficiation conditionalities; and
• a policy proposal to review the ad valorem tax for motor vehicles while increasing the number of vehicle manufacturers engaged in completely knocked down production.

The implementation plan also includes various initiatives to stimulate green industrialisation through incentives, accelerate grid investment through private sector participation, and encourage both domestic software development and the implementation of an electronic travel authorisation system to increase tourism.

Also envisaged is the operationalisation of a critical minerals strategy and accelerated minerals exploration, a scaling up of oil and gas exploration and the creation of a specialised court to deal with litigation in the sector, as well as moves to expand pharmaceuticals and defence industry manufacturing.

Besides specific industrial financing and incentives, the dtic also aims to reduce red tape and attract investment into new and established special economic zones (SEZs), with plans to designate new SEZs domestically, as well as possible cross-border SEZs.

The IDS also explicitly seeks to link industrial development and investment with job creation and retention, as well as with transformation.

“The expansion of such investments in South Africa provides opportunities for the training and development of employees.

“Linked to that is the opportunity to deepen transformation through supplier development programmes, preferential procurement policies, and the broadening of ownership and participation initiatives targeted at black-owned companies,” the document reads.