New IPAP to help government raise the bar

Monday, May 14, 2018

Trade and Industry Minister, Dr Rob Davies, says the department will use the lessons learned over the past few years as a game changer for the Industrial Policy Action Plan (IPAP). 

This will help government in its bid to reindustrialise the economy and double exports. 

Minister Davies on Monday briefed the media on the launch of the 10th iteration of IPAP at the Imbizo Centre in Parliament. He used the briefing to highlight the challenges and successes of IPAP 2018/19, which is the 10th iteration of a rolling annual action plan. 

“Under the promising conditions that we see lying ahead, we expect to continue to draw on these lessons, build on the platform of this first decade of IPAP and raise the game... 

“This is the basis of the new IPAP. The new IPAP focuses on transversal and also specific sectorial programmes,” he said.  

The Minister said IPAP was first launched just after the global economic meltdown, where South Africa’s economy lost about one million jobs amid continuous threats of deindustrialisation globally. 

He said what IPAP did was to reindustrialise the economy and also helped the country to survive the headwinds that came with the global meltdown, effects of which can still be felt today.       

 Successes under government industrial policy plan 

Minister Davies spent some time unpacking a Legacy Review, which provides a high level summary of the achievements of industrial policy over nine years. 

He said under the sectorial support, the automotive sector, which contributes 33% to manufacturing GDP and about 6% to the overall GDP produces approximately 600 000 vehicles and supports 113 000 jobs annually. 

Exports have doubled over the review period, which has also seen R45 billion worth of investment by the majority of the world’s leading global vehicle manufacturers. 

The clothing, textiles, leather and footwear sector, which currently contributes 8% to the manufacturing GDP and 2.9% to the overall GDP, is one of the sectors that suffered the most during the economic meltdown. With the conditional support measures offered under the Clothing and Textile Competitiveness Programme, the sector now employs 95 000 workers. 

Minister Davies said similar successes were recorded in other sectors, including metal fabrication, capital and rail transport equipment sector; mining capital equipment sector; agro-processing; plastics and cosmetics sector and the plastics and cosmetics sector, among others. 

He said, however, that these successes were recorded during challenging times, both locally and globally. 

South Africa was not immune to the effects of the global crisis. Domestically, policy uncertainty, weakened intergovernmental coordination and sub-optimal performance of certain State-owned entities, among others, has meant that the successes “are but an appetizer of what could be better achieved under more favourable conditions”, Minister Davies said. 

The Minister said the latest iteration of IPAP puts emphasis on stronger interventions to support transformation, led by the flagship Black Industrialists Programme, which is inclusive of a bouquet of new and creative incentive measures set out in the incentive section. 

The plan also outlines a stronger emphasis on a stronger export effort, focusing on existing lead and dynamic national export champions and new, especially black owned entrants. 

IPAP 2018 also includes new, significant interventions to gear up and respond to the challenges and opportunities posed by the Digital Industrial Revolution. 

Minister Davies said procurement reform and rolling-out incentive offerings that can help attract more investment will be among some of the cross-cutting focus areas going forward. –