DTI secures R28bn in investments for SA

Tuesday, April 19, 2011

Cape Town - The Department of Trade and Industry has helped to conclude a total of R28 billion in investments in the South African economy and aims to help facilitate R115 billion in investments in the next few years, the Minister of Trade and Industry Rob Davies said today. 

The R115 billion target falls under Davies's performance agreement that he signed last year with President Jacob Zuma.

Briefing media in Parliament following his Budget Vote speech this morning, Davies said of the R28 billion which has already been committed, R13 billion was in the automotive sector, with much of the remainder in business-process services.

There had also been plenty of interest in infrastructure projects and green industries, he said.

He said Trade Investment South Africa (Tisa) had offices across the world, which helped to facilitate investment deals and in some cases, Davies himself meets with potential investors.

"When we go abroad with these state visits, we convey to investors from other countries we are visiting information about the investment climate in South Africa," he said.

The Industrial Development Corporation (IDC) as well as the National Empowerment Fund (NEF) played a critical role in investments, he said, both financially and in terms of their partnership value.

Davies said the department and the President's Black Economic Empowerment (BEE) advisory council were also debating how to strengthen links between small and big businesses by overhauling the enterprise development element.

Under the BEE scorecard, businesses that assist black-empowered or black-owned enterprises with mentoring or business support, grants or interest-free loans or early payment, can score BEE points.

Davies said the current debate was whether to take away points from the overall scorecard for not supporting black businesses.

He said the private sector needed to be more actively involved in supporting black entrepreneurs, rather than handing money over to a fund or incubator that then carried out a support intervention on their behalf, while the company scored BEE points.

"In Asia, you find that small and big businesses have a symbiotic relationship and big businesses get a lot of input from small businesses and then you don't want a lot of bad inputs so you actually work to ensure that your suppliers are able to improve their capacity, their technology..." said Davies.

In his Budget Vote speech, Davies said the department had set up an advisory group to help improve the government's small business support (SMME) programmes. 

He said the ramping up of incubation programmes had already been identified as one move that will benefit small enterprises, but he said partnerships would have to be cemented.

"We will accordingly be seeking more active partnerships with business and are looking at ways to tweak BBBEE programmes, as well as direct SMME programmes to develop the necessary synergies."

He said the Small Enterprise Development Agency (Seda) was planning to roll out support for 250 incubation schemes over the next five years, as the first phase towards a target of 1 000 small business incubators

Davies also said things were hotting up for the Doha Developmental Trade Round, with new reports expected to be released on Thursday. The needs and interests of developing countries need to remain central and were still very far apart from those of developed nations.

"We've been told that something like 55 percent of global growth will come from a list of countries that starts with China and includes us, of advanced developing countries, and therefore we must collapse the distinction between developing and developed countries and we say no," said a defiant Davies. 

He said even though some developing countries were growing faster, these countries per capita gross domestic product (GDP) income remained very low - pointing out that 130 million people in China were still living on less than US80c a day.

However, he pointed out that the days of multi-lateral trade may be over, adding that new alternatives for fairer trade between developing nations were opening up - such as the Bric groupings. 

But, he said, while the world may not lose much from the stalled Doha round of trade talks, the world would lose out if countries failed to reach a legally-binding outcome on the Cop17 talks to be held in Durban in November. - BuaNews

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