The Department of Trade, Industry and Competition (DTIC) indicated on Monday that a significant portion of its industrial-financing resources were likely to be redirected to firms and industries that were now in distress as a result of the country’s efforts to combat the Covid-19 pandemic.

Speaking during a virtual joint meeting of the portfolio and select committees on trade and industry, director-general Lionel October said the department’s priority was to sustain the country’s industrial base so that it was in a position to participate in any post-pandemic economic recovery.

The meeting itself was delayed for over an hour after the Democratic Alliance objected to it proceeding at all, on the basis that the plans being presented would have to be entirely overhauled in light of an upcoming adjustments Budget in June or July that took account of government’s Covid-19 response.

When it eventually resumed October reported that discussions were under way with the National Treasury to secure additional funding for companies in distress as part of the economic recovery package.

As things stand, a R500-billion economic package has been announced that includes various support arrangements for enterprises, the largest being a R200-billion credit guarantee scheme, whereby banks could extend soft loans backed by a government guarantee.

“We must ensure that we maintain our industrial base during the Covid-19 pandemic. That is going to be our absolute priority and we must then assist companies that are going to take massive hits with regard to the loss of domestic markets and foreign markets,” October said.

For its part, the DTIC  aimed to reposition its industrial financing division, which administers its incentives schemes, to ensure that firms did not close during the period.

Under the department’s current plan, drafted ahead of the pandemic, the unit was aiming to assist 600 firms and support the creation of 10 000 jobs through the distribution of incentives valued at R6-billion a year.

“Obviously, a lot of this money will now have to be redirected into distressed funding to save our enterprises,” October said.

Earlier Trade, Industry and Competition Minister Ebrahim Patel told committee members that the country was “in the middle of a storm” and that industries would need to be repaired and repositioned for new risks and opportunities that would arise as a result of the health crisis.

“Covid-19 has already shown how important it is to have a local supply chain for critical medicines and medical products,” Patel said.

It had also reaffirmed the “wisdom” of sustaining a strong local industry to support food security. “While we will import from time to time, we must be able to produce locally enough food to feed the nation.”

Patel said the crisis would impact every aspect of government’s Medium-Term Strategic Framework and would necessitate a major revision to the DTIC’s own annual performance plan, which was the subject of the meeting.

Nevertheless, Parliamentary Speaker Thandi Modise had instructed committees to continue deliberating on departmental plans based on the Budget presented by Finance Minister Tito Mboweni on February 26 in order for that Budget to be adopted so as to facilitate an adjustments Budget that is aligned with government’s Covid-19 response.

It is currently anticipated that Mboweni will present that adjustments Budget in either June or July. Thereafter, departmental strategic plans and annual performance plans would be revised and presented to lawmakers again.

“I commit that, as we make the adjustments that Covid-19 requires us to make and as we finalise those, I will come back to these two committees and I will lay before them the changes that we believe are prudent and the direction that we need to take,” Patel said.