A total of R3.6-billion has been set aside in the 2014 Budget for special economic zones (SEZs), which government aims to establish in economically depressed areas to support job creation and bolster value-added exports.

The allocation, which is spread over a three-year period, is being supported by preparatory work designed to attract investors to the zones through tax incentives, infrastructure enhancements and other initiatives.

The SEZ support forms part of the Department of Trade and Industry’s broader support for productive sectors under the Industrial Policy Action Plan, which seeks to put the economy on a higher, more labour-intensive growth path.

In 2011, government established a R25-billion economic competitiveness and support package to counter the effects of the global economic downturn and, over the coming three years, R15.2-billion of this amount would be released to support various industries.

The Budget Review notes that R10.3-billion has been set aside for manufacturing development incentives over the period, through which government would support new investments, as well as initiatives that raise skills levels, firm-level competitiveness and energy efficiency.

Small, medium-sized and microenterprises will also receive support through the Small Enterprise Development Agency and the Small Enterprise Finance Agency.

Steel and Engineering Industries Federation of Southern Africa CEO Kaizer Nyatsumba welcomed the provisions in the Budget for manufacturing incentives and described as "significant" the amount for the establishment of SEZs.

Nyatsumba said that it was evident that government had finally recognised the strategic importance of business in growing the South African economy.

Manufacturing Circle executive director Coenraad Bezuidenhout said the organisation was supportive of industrial policy initiatives that are designed to help dynamic local manufacturers grow.

“We need the 5% of manufacturers that are responsible for 93% of our exports to invest in product innovation and for the many other manufacturers that export minuscule amounts to start exporting more,” he says, adding that the National Treasury’s support is vital to achieving that objective.

He remained concerned, though, about the toll being exacted on local manufacturers by rising power and other administered prices and has called for a fiscal review to ensure that government spending is more productive.

"It was disappointing that there would be no initiatives to drive down high administered costs, which undermine manufacturing competitiveness. A review of the funding, financing and recoupment of costs for infrastructure and benchmarking against competitor markets is needed but was not priorItise."

The Manufacturing Circle was also keen for government’s local-procurement rules to be enforced, as these could expand the market for domestically manufactured goods.

Bezuidenhout added that infrastructure investments and the promotion of capital expenditure would support competitiveness, provided government improved its implementation.

"Without better implementation we will never realise our potential as an exporting nation, despite the weak rand, leaving our trade deficit to widen. Whether government improves implementation therefore has direct bearing on whether we become more or less vulnerable to global economic vagaries going forward."

It was also announced in the Budget that an agricultural policy was being developed to support the National Development Plan’s target of creating a million agriculture jobs by 2030.

“Over R7-billion will be spent on conditional grants to provinces to support about 435 000 subsistence and 54 500 smallholder farmers, and to improve agricultural extension services,” the review said.

Finance Minister Pravin Gordhan listed the incentives for industry and farming, as well as the SEZ allocation, among the immediate initiatives being taken by government to place South Africa on a growth path that was “inclusive and rapidly promoted black economic development”.