Trade and Industry Minister Rob Davies on Monday launched the eighth iteration of the Industrial Policy Action Plan (IPAP), which he says is a continuous action plan that is meant to reindustrialise the South African economy and stresses the need for structural change.
“IPAP 2016 again stresses the pressing need for structural change in the economy. It underlines the point that if South Africa was unable to optimise the opportunity to effect structural changes that the commodity boom provided, then doing so now is an even tougher ask,” Minister Davies said.
He further added that the severe and negative domestic impact of the global recession and ensuing commodity slump only serve to underline the urgency for structural change and that the challenges now have to be met under much more adverse circumstances. These circumstances include very tight fiscal conditions which constrain the extent to which support for the manufacturing sector can be leveraged.
Government and society, he said, has moved beyond debate about whether or not an industrial policy is needed. The question, he said, is rather in which way can South Africa achieve a higher impact industrial policy and can the country achieve stronger policy coherence and programme alignment across government departments and agencies.
For the first time the launch of the IPAP -- which is a product of the Economic Cluster of government -- took place at Guestro Naledi Inhlanganiso Group Foundry, in Benoni.
The group produces castings for the rail, energy and mining markets and is in the process of constructing a world class steel forge wheel manufacturing plant. With this venture the company will supply 34 inch wagon wheels to Transnet’s 1064 locomotive project.
The launch of the IPAP at Guestro emphasises the importance government attaches to developing close cooperation with cutting edge local industrial companies.
Focusing his attention on the rail sector, Minister Davies said government has taken steps to rebuild the rail sector industrial capabilities.
“At the present time, the supply chain supports 14 000 jobs, and many supply companies have not only rebuilt their fabrication capabilities but developed niche capabilities in high value and complex systems such as traction and propulsion motors and bogie systems,” he said.
According to Minister Davies, IPAP presents realistic time bound action programmes.
“You will find that IPAP again presents a set of realistic, achievable, time-bound action programmes, with precise milestones, assigned to a range of departments and agencies. They are both cross-cutting and sector specific in their focus, and their impact is incremental,” said Minister Davies.
This year’s IPAP sets out certain new themes to focus the work over the next year and into the outer years, all aligned to the Medium Term Expenditure Framework.
The IPAP will focus on the implementation of the Black Industrialists programme, as well as more carefully targeted industrial financing and incentive support.
“This is why IPAP 2016 includes a section of work to design sector-specific incentives for the agro- processing and rail components sectors.”
These are of importance because of ongoing efforts to support labour-intensive sectors of the economy.
While it is common knowledge that the country’s exports to its traditional trading partners have taken a hard knock in the wake of the global recession, this has been offset to some extent by rising exports to the African continent.
This, the Minister said, shows that there can be no doubt that the country must “very significantly up its game with respect to exports” – this a major theme of IPAP 2016.
South Africa’s automotives sector has performed well with R7.8 billion in government incentives having yielded R28.5 billion worth of investments by OEMs.
The Minister added that the Department of Trade and Industry has established a team of technical experts to develop a post-2020 Automotives Master Plan.
The mandate of the team is to examine the entire automotive sector and not just the existing Automotive Policy Development Plan (APDP).
“The purpose of this work will be to ensure that in the context of long term policy certainty a post 2020 Master plan will create a framework to secure even higher levels of investment and production and job creation among others.”
The Minister highlighted that government is committed to providing a more development-friendly business and investment environment.
This, he said, is another key theme to the IPAP and is demonstrated by the establishment of an Inter-Ministerial Committee to tighten up the intra-governmental coordination required to underpin the new One-Stop Investment Centres.
This is also demonstrated by a rapidly expanding partnership between the Companies and Intellectual Property Commission and all the major banks to provide official company registration facilities both within their branches and online.
The Minister, together with Economic Development Minister Ebrahim Patel, also toured the plant. - SAnews.gov.za