the dtic Industrial Policy and Strategy Review Released Alongside R200 Million Investment by Citibank for Black Industrialists


The Minister of Trade, Industry and Competition, Mr Ebrahim Patel, has released the dtic’s Industrial Policy and Strategy Review in an event which took place yesterday at a manufacturing facility at the Tshwane Automotive Special Economic Zone (TASEZ) in Gauteng. Minister Patel was joined by Gauteng MEC for Economic Development, Ms Tasneem Motara; the Acting Director-General of the dtic, Malebo Mabitje-Thompson; and the Chair of TASEZ Board, Mr Lionel October, for the launch.

The Industrial Policy and Strategy Review maps the measures and action of the South African government over the past five years under the Reimagined Industrial Strategy laid out by President Ramaphosa; reflecting further on the evolution of policy actions during democratic period from 1994.

Commenting on the choice of TASEZ for the launch, Minister Patel noted:

“We chose to launch our policy and strategy review here at the Tshwane Automotive Special Economic Zone as an embodiment of the new approach to industrial policy and SEZ implementation adopted by Government as part of the Reimagined Industrial Strategy. Industrial policy during this period has been characterised by increased collaboration and partnership with social partners.

“Just five years ago, this was all veld. The SEZ was approved by Cabinet in October 2019 as the pilot of our new approach to SEZ development and management, with the dtic and national government playing a much stronger coordination role between the anchor investor – in this case the Ford Motor Company – and the three spheres of Government – local, provincial and national – in order to create a world-class facility ready to meet the needs of the industry.

“Today – less than five years after Cabinet approved the SEZ for construction – there are 11 component manufacturing facilities in full production at the Tshwane Automotive SEZ, employing more than 3 200 people, producing sophisticated components which will be part of the Ford Ranger and VW Amarok bakkies being exported around the world.”

In addition to the launch of the Industrial Policy and Strategy Review, attendants also witnessed the signing of an agreement between the multinational investment bank, Citibank, and the Industrial Development Corporation (IDC), which will see Citibank contributing R200 million into a fund to be managed by the IDC, providing grants to black industrialists in the Vaal Special Economic Zone. The investment by Citibank has been facilitated in terms of the Equity Equivalent Investment Programme (EEIP) under the Broad-Based Black Economic Empowerment (BBBEE) Act, which drives investment in BBBEE objectives in instances where multinational companies are unable to facilitate local ownership.

Commenting on the signing, Minister Patel remarked:

“In addition to industrial funding for black industrialists from Government, we are working with the private sector to mobilise additional funding and market access support that can further make the black industrialist programme a success. More than 1 700 black industrialists have already benefitted from the programme of the dtic and its agencies, employing more than 161 000 South Africans and generated in excess of R183 billion in turnover annually. This highlights the importance of this programme not simply as a matter of historic redress but as one which can accelerate growth and job creation.

“This R200 million investment from Citibank, which is part of a larger R1.37 billion investment, will be used to catalyse urban and commercial development in the Vaal area, and can stimulate another growth node in Gauteng. The support specifically for black industrialists will ensure the participation of black entrepreneurs in the SEZ, enabling more South Africans to drive economic growth.”

The case studies of industrial policy action with TASEZ and Citibank were accompanied by a series of live crossings to facilities and senior executives from across the country, highlighting the impact of the dtic and Government’s work. Live crossings, which showcased projects completed or in construction from companies which participated in the Investment Conferences, included:

  • Aspen Pharmacare, which recently invested R3.4 billion to expand vaccine production in Gqeberha, Eastern Cape;
  • Ardagh Glass Packaging (formerly Consol), which has invested R1.5 billion to increase glass manufacturing capacity in Nigel, Gauteng;
  • Defy appliance, which has invested nearly R1 billion on its washing machine and fridge manufacturing facilty in KwaZulu-Natal;
  • PG Bison, which has invested R1.8 billion in its Mkhondo, Mpumulanaga facility to increase medium-density fibre board capacity for the furniture and builing market;
  • Sappi, which invested R7.7 billion to increase pulp production for textiles in Umkomaas, KZN;
  • Scatec, which has invested R16 billion to construct 150 MW of dispatchable renewable energy in Kenhardt, Northern Cape;
  • Scaw Metal, which is investing R3 billion in a new flat-steel complex in Germiston, Gauteng;
  • Shatterprufe, which has expanded jobs and production from its automotive glass facility in Ga-Rankuwa, Gauteng; and
  • Unica Steel, which has invested R250 million to increase steel making capacity from its electric arc furnace facility in Babelegi, Gauteng.

The Industrial Policy & Strategy Review includes a series of such case studies from actions taken over the Sixth Administration, setting out the goal and purpose of industrial policy in South Africa; the history and context for policy setting; and discusses the way forward for industrial policy in the context of changing global and local conditions.

Commenting on the implementation of industrial policy in the Sixth Administration, Minister Patel remarked:

“We set off with rapid speed at the start of the administration in 2019. In just 9 months, leading up to COVID-19 pandemic, we finalized masterplans in key sectors—poultry, sugar, clothing/textiles, and automobiles. At the same time we commenced institutionalisation of the goal of the single African market, establishing support infrastructure under the oversight of an AfCFTA Council of Ministers that was established in this period. Competition reforms, which commenced with implementation in July 2019, drove inquiries in grocery,  retail, and data, resulting in major telecoms reducing prices with a R20.5 billion benefit to consumers. A new Special Economic Zones policy framework was approved, piloted with Tshwane SEZ. The 2nd SA Investment Conference in 2019 secured R363 billion in new pledges, signaling growing business confidence.

“We further implemented targeted tariff adjustments to support industries like poultry and washing machines, along with anti-dumping duties on glass, PET products, wheelbarrows, and soda ash to spur investment. We concluded a Free Trade Agreement with the UK post-Brexit to enhance market access; launched the BizPortal for streamlined online business services; and introduced a R6 billion support plan for black automotive entrepreneurs.

“However this pathway on implementation was dirupted by six shocks, which changed our priorities and the way we needed to work to achieve the industrial outcomes we wanted. The economy faced challenges from March 2020 with severe COVID-19 lockdowns, followed by the worst civil unrest in post-apartheid history in July 2021. The conflict in Ukraine from February 2022 led to soaring fuel and food prices. Durban floods in April 2022 and ongoing load shedding and strained logistics further constrained industry operations. It’s estimated that between 2020 and the third quarter of 2023, the economy lost as much as R850 billion in GDP as a result of these shocks, resulting in GDP of between 3% and  5% lower today than it may have been.

“Still, we continued to implement with purpose in the wake of these shocks, bringing together an increasingly innovative and collaborative toolkit of masterplans, trade policy, competition policy, industrial funding, transformation efforts, and investment facilitation in order to increase output and jobs, while greening the economy and weathering adversity.

“We have seen the dividends of this action over the Administration. For example, South African manufactured goods exports exceeded R1.1 trillion in 2023, the highest since 2014 and second highest in the democratic period (in real terms). African manufactured exports also rose significantly, cementing Africa as the largest market for our manufactured goods. Foreign direct investment reached R1.1 trillion from 2019 to 2023 (in 2023 rands), 3.5 times the previous five-year period (in real terms). We have extended worker ownership in the economy to now cover more than 551 000 workers. And 1 in 8 South African workers (totalling 1,28 million) in the private formal sector are now covered under programmes of support  or partnership actioned by the dtic.”

The Minister also reflected on the new forces which will shape industrial policy choices for the period ahead:

“Global geopolitical tensions, fueled by economic slowdowns and conflict around the world, will continue to challenge South Africa’s economic growth. Rising protectionism in the global north will require careful navigation to ensure that markets remain open for South African exporters. Climate adaptation and digital transformation require substantial investment, reshaping industries and skills. Mineral beneficiation sees increased demand for critical minerals, offering an opportunity  to leverage these for African industrialisation, and avoid Africa simply being a supplier of raw materials.

“In this changing context, agility is essential amid the turbulence; and rigid plans risk obsolescence. Our policies will need to adapt to external changes. Practical partnerships and flexible collaboration are needed. State alignment, both horizontal and vertical, will be crucial for effective response and sustained growth; and scaling up successful pilots – like the Tshwane Automotive SEZ – is key to inclusive industrialization.”

The document outlines key aspects of a future agenda and sources of growith in the South African economy.

Growth could be catalysed though high infrastructure investment of at least half a trillion rand a year, drawing on public and private investment; productive sector investment aligned to securing commitments of R2 trillion over 5 years; green industrialisation to refocus sources of energy, green component manufacturing and greener industrial and consumer products; and a pivot to an African-led growth drive off the back of the African Continental Free Trade Area (AfCFTA).

Six priorities are identified, namely deeper economic and other policy coordination, better alignment at institutional level, addressing energy security, strengthening skills development in a number of identified areas, developing the capacity to respond to a changing global and technological environment, improved policy innovation; and scaling up actions that have proven successful such as the sector masterplans.

The review proposes that industrial policy be integrated into a broader economic policy synchronised with other policies such as foreign policy initiatives and education and skills development strategies and to establish an Industrial Policy Coordination Council, chaired by the President, to enable an all-of-government focus on growing the industrial sectors, enable a shift up the industrial value-chain and help create jobs in South Africa.

Please find below, the link to the Industrial Policy and Strategy Review:

http://www.thedtic.gov.za/wp-content/uploads/dtic-industrial-policy-review.pdf

Enquiries:
Bongani Lukhele – Director: Media Relations
Tel: (012) 394 1643
Mobile: 079 5083 457
WhatsApp: 074 2998 512
E-mail: BLukhele@thedtic.gov.za
Issued by: The Department of Trade, Industry and Competition (the dtic)
Follow us on X: @the_dtic

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