DTI refuses to release list of black industrialist scheme beneficiaries for fear they will be ‘harassed’

23rd May 2017

By: Terence Creamer

Creamer Media Editor

     

Font size: - +

Trade and Industry Minister Dr Rob Davies showcased four recipients of government’s flagship Black Industrialist programme (BIP) during his Budget Vote on Tuesday, but astonishingly refused to release the names of all 46 recipients of the non-refundable government grants and concessional loans.

The Department of Trade and Industry (DTI) recently announced that the multibillion-rand programme would be accelerated and that 100 black industrialists would be supported by the end of March 2018, instead of the initial deadline of March 2019. Once the target had been met, the DTI would consider whether or not it could be extended or expanded.

The BIP was launched in 2016 and is funded through a R3.6-billion on-budget allocation to the department to support manufacturing investments. It is also backed by loan finance made available through development finance institutions, such as the Industrial Development Corporation (IDC), the Land Bank and the National Empowerment Fund. The IDC has revealed previously that it has set aside R20-billion to support black industrialists.

Davies reported in his address that more than R2-billion in financial support had been approved for the first 46 recipients, including R122-million in DTI grant funding. The funding would support investments worth R3.7-billion, which is projected to create more than 8 000 direct jobs and close to 12 000 indirect jobs.

The four beneficiary firms introduced to lawmakers included: electronics firm Yekani Manufacturing; copper and aluminium cables producer United Industrial Cable; valve guides and seats producer Micro Finish; and K9 Pet Foods.

Applications had been adjudicated by a “professional” funding forum, which Davies stressed included no politicians. “Those benefitting from this programme have passed through a rigorous test to ensure that they are genuine manufacturing entrepreneurs who have met the identified criteria of ownership and personal leadership and who have placed their own funds at risk in developing their businesses.”

However, Davies said the identities of the other companies would only be released in consultation with the individual recipients, arguing that a comprehensive list of beneficiaries could be abused by those with ulterior motives and could result in the beneficiaries being “harassed”.

“We do not as a matter of course just give the full list of names of the individuals who receive any of our incentives – it’s up to the company concerned whether they want to indicate that,” Davies said, noting that there had already been instances where companies had voluntarily hosted events to showcase the support received under the programme.

However, he also questioned the current heightened interest in discovering the identities of the BIP beneficiaries, suggesting that there might even be racist undertones.

Director-general Lionel October said the list of beneficiaries was audited and that the names of the recipients would be shared with the Portfolio Committee on Trade and Industry. “We do, from time to time, receive requests from the trade unions for all the lists of companies and then, obviously, those lists are used to campaign, or to mobilise, or to say: ‘you got a DTI incentive, why are you retrenching workers?”

Therefore, the DTI had decided to share the list with interested parties, but would not be making the list available for public broadcast, as “we don’t want it used for other purposes”.

October also questioned the sudden “very special interest” for the names of BIP beneficiaries, which he said seemed to be driven by those opposed to support for black entrepreneurs.

R1BN AGROPROCESSING INCENTIVE

Also announced by Davies in his Budget Vote was the creation of a R1-billion agroprocessing incentive to support both brownfield and greenfield investments, encourage investment in upstream and downstream support services and for the expansion of infrastructure to be used by farmers and agroprocessors.

The scheme forms part of the DTI transition away from generalised incentives, some of which will remain intact, towards sector-specific programmes. “I am confident that the agroprocessing incentive will make a positive difference by creating jobs and supporting smallholder farmers, amongst others,” Davies said, describing the sector as an important labour-intensive sector prioritised in the Industrial Policy Action Plan.

Manufacturing Circle executive director Philippa Rodseth welcomed the new incentive, arguing that the agroprocessing a sector had "rich potential for job creation, for rural development, and for exports".

"The Manufacturing Circle has been closely involved in consultations with the DTI, and we will continue this dialogue to ensure the maximum benefits will flow from the incentive," she said, adding that the lobby group was awaiting details on the proposed new incentive for the downstream metals sector.

Economic Development Minister Ebrahim Patel would unveil details of a similar sector-specific scheme for the downstream steel sector on May 25.

The DTI’s flagship sector-specific incentive, the Automotive Production Development Programme, was due to continue until 2020 and a consultative process was under way with stakeholders to develop an ‘Automotive Master Plan’, which would inform the country’s motor industry programme after 2020.

Davies expressed disappointment at the decision of General Motors (GM) to disinvest for South Africa, saying that the decision was presented to government as a “fait accompli”.

“At the time we met with GM, the discussions they had been having with Isuzu were not completed and, of course, we now welcome the fact that Isuzu is buying the plant,” Davies said, indicating that the DTI would engage with Isuzu to “mitigate” the job losses.

The GM decision was expected to result in the loss of 589 direct jobs. “We will try do what we can to see that Isuzu picks up some of the slack.”

The Minister also stressed the withdrawal was not a reflection of a “generalised trend” in the sector, where investments were still being undertake by original equipment manufacturers.

Davies pointed, in particular, to the multibillion-rand investment under way in the Eastern Cape by Beijing Automobile International Corporation, but also highlighted multibillion-rand brownfield investments by Toyota South Africa to produce the Fortuner and Hilux.

Edited by Creamer Media Reporter

Comments

The content you are trying to access is only available to subscribers.

If you are already a subscriber, you can Login Here.

If you are not a subscriber, you can subscribe now, by selecting one of the below options.

For more information or assistance, please contact us at subscriptions@creamermedia.co.za.

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION