Robust industrial capacity, dynamism needed for SA firms to grow

Friday, May 20, 2022

South Africa can play a more prominent role in the world of regional production hubs by focusing on improving the dynamism and capacity of its industrial base, says Trade, Industry and Competition Minister, Ebrahim Patel.

Presenting the department’s 2022/23 budget vote in Parliament on Friday, the Minister said the country needs to intensify industrialisation by spearheading transformation to build an inclusive economy, which will create opportunities for firms to grow.

“[To] build a capable State to execute our strategy, we set out in the annual plan about 150 specific actions and indicators,” he said.

Patel said the DTIC’s pursuit of industrialisation sought to expand the level of local output, to secure parts of the local market lost imports and to boost value added exports.

He said to be labor absorbing, the country needed jobs or providers of critical public goods, healthcare or significant earners of foreign exchange.

Patel said the work of the Department of Trade, Industry and Competition (dtic) on spearheading transformation seeks to create opportunities for all South Africans.

“This involves the concentrating of our economy [by] opening up exclusive product and service markets to participation by all. It is also about our enduring commitment to support the black industrialists and workers who were previously denied access to opportunities for economic ownership and participation.”

Furthermore, he said it is also about ensuring a spatial strategy that informs how the country builds and supports a new model of Special Economic Zones and industrial parks in secondary towns in co-hubs.

“It is informed by the principle of trying to expand industrial activity beyond its concentration in the urban metropolitan areas. Transformation is about building an economy that works well where people are.”

Economic recovery and deepening industrialisation 

Patel said the dtic’s entities will collectively offer R22 billion in customer support packages to companies over the next 12 months.

“This will be complemented by strategic support to deepen implementation of our master plans, including the launch of the new R400 million furniture growth funding partnerships with manufacturers and retailers,” said Patel.

To support its localisation efforts, the DTIC will aim to achieve a R40 billion increase in the production of targeted local industrial output.

He said this will bring the department closer to its five-year target of R200 billion.

"Our investment facilitation and promotion activities will aim to unlock at least R120 billion in investment from the private sector in the next 12 months," he said.

On the DTIC's first steps to embrace opportunities in green industrialisation through the Green Hydrogen and Electric Vehicle Roadmaps, Patel said the department has made "considerable progress" in researching practical options.

In the last financial year, the department identified possible funding. It published a draft green paper and received feedback from stakeholders on this.

"We will now table our draft Green Hydrogen Commercialisation Strategy in Cabinet for consideration and guidance by the end of August, and our electric vehicles roadmap by the end of October.

“Over the next year, officials from DTIC entities will work hard to secure at least R600 billion in manufacturing exports with a package of support to grow and diversify South African exports and secure trading future in Africa,” he said.

Competition Commission 

Patel said the Competition Commission is conducting a market inquiry into online services like e-commerce, tourism, accommodation, food and other online delivery platforms to be completed during this year.

It will also launch a new inquiry into fresh produce markets, which is hoped will bring insights and relief to consumers in the face of high and rising food bills.


Patel said government will commence the next phase of the AfCFTA negotiations by developing draft protocols on competition, intellectual property and investment.

Work in these important areas, he said, will enable firms to manage their expansion into the rest of Africa.

"We will also make available a multibillion rand facility in risk cover to strategic exports through the Export Credit Insurance Corporation. This facility will complement our efforts to launch more export networks with entrepreneurs to share knowledge and coordinate government support among exporters," he said –

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