The Department of Trade and Industry (DTI) in South Africa is working on introducing a dedicated agro-processing incentive aimed at attracting investment, DTI Minister Rob Davies says.
“This sector is critical because of its labour intensity across the value chain and its high economic multipliers, especially with respect to exports. The incentive will contain strong conditionalities, including with respect to labour practices and empowerment,” says Minister Davies.
The Minister addressed the Manufacturing Indaba in the Western Cape, South Africa. The indaba brings together the country’s industrial movers and shakers with the intent of focusing on and boosting the growth potential of key industry sectors including automotive, construction, forestry and paper and packaging, among others.
Davies says the manufacturing sector and diversification of the economy is a key driver to attaining South Africa’s economic growth objectives.
“We all know that the performance of our economy has been flat, but we were saved by the second-quarter gross domestic product manufacturing statistics. That was mainly through the implementation of a transparent localisation policy that we have developed and this result also demonstrates that manufacturing and diversification of our economy is highly critical if we are to achieve our economic strategic objectives,” says the Minister.
Minister Davies says the largest parts of international trade were mainly focused on intermediate products.
“By the early 2000s, domestic boatbuilding capabilities had hollowed out, with the exception of the luxury yachting sector. Government introduced a stronger industrial financing instrument and boats were designated for local procurement. The sector is now witnessing the crowding-in of private sector funding and capabilities to meet demand both locally and internationally.”
The success of Nautic Africa (a shipbuilder and maritime services provider) now part of the Paramount group and Damen are testament to what can be achieved, Minister Davies said, adding that effort has also gone into the clothing and textile clusters in the last decade in the Cape.
“National government has deployed significant incentives to support, among others, companies in this sector in the province. We have injected R2bn incentives over the last five years to support the industry and successfully raise productivity and competitiveness,” says the Minister.
The MEC responsible for Economic Development and Tourism in the Western Cape, Alan Winde, said the conference focused specifically on agro-processing and oil and gas as they had demonstrated themselves to be key drivers that promote manufacturing.
“We have given ourselves a target of enabling 60,000 jobs in oil and gas at Saldanha Bay Industrial Development Zone. We are also doing work on skills, energy and for the removing of administrative red tape that hampers the flow of business,” said MEC Winde.
He said the Western Cape had set itself a target of producing 32,500 apprentices in the next three-years to work in the energy space and pleaded with delegates to make use of the unit established in his office to remove red tape.