BUSINESS

The plan to create jobs and boost South Africa’s economy – including a shift to local, and a focus on transformation

Neil Hall

To repair the damage of Covid-19 and reconstruct the economy to create more jobs, the country needs to think boldly and implement smartly, says Trade and Industry minister Ebrahim Patel.

Presenting his departmental budget speech in a virtual parliamentary meeting on Friday (24 July), Patel said that his department will focus on six priority programme areas ‘to save lives and protect livelihoods’.

“There can be no return to the ‘old normal’. And nor should there be. It was not fit for future purpose. Established industries, though critical in our economy, will not be able to create the millions of jobs required,” he said.

“To prepare for the post-Covid world, we will strengthen efforts around reconstruction and recovery, including broader pacts with workers and businesses, focused on saving as many firms and jobs; identifying new opportunities; embracing digital technologies to recover and change; addressing economic inclusion with greater urgency.”

These six points are outlined in more detail below.

Jobs master plan

To strengthen economic dynamism, Patel said that his department will complete two new ‘master plans’:

  • One for furniture which employs 65,000 people in South Africa with potential for many more small-scale artisans;
  • Another for the steel industry, the foundation of our industrialisation, employing nearly 250,000 people.

“But the Department’s mandate is not only to produce new master plans; more importantly is to ensure implementation, which will be the focus of master plans for autos, clothing, sugar and poultry,” said Patel.

Reducing reliance on imports

To help pivot the economy from its reliance on imports and to boost greater levels of local manufacture, Patel said his department will finalise at least three new agreements on localisation and supplier development, following discussions with CEOs at:

  • Fast food producers;
  • Hardware stores;
  • Grocery retailers;
  • Food and consumer goods manufacturers;
  • Clotting, textile, footwear and leather retailers and manufacturers.

Trade support

To provide trade support to local firms, both in the domestic market and for exports, Patel said the government will complete talks with the European Union on trade access and seek agreement to enable the AfCFTA to commence trade by the start of 2021.

He added that his department will strengthen the actions against illegal imports.

“Smugglers beware – we will crack down further on customs fraud on imported goods, building on early successes by SARS; and seek agreement to enable the AfCFTA to commence trade by the start of 2021.

“South Africa is well-positioned to become a major supplier of industrial goods and value-added services to the continent. A combined push from the IDC and ECIC can contribute to this.

“We will develop tangible targets to guide the work of South Africa’s Foreign Economic Representatives stationed at embassies, focused on export promotion and investment enhancement. Economic diplomacy is essential to building resilience.”

Investment

Patel said the government will focus on consolidating the presence of firms who have existing operations and help those who made investment pledges, to bring projects to fruition.

New areas for investment include deepening the production of PPEs, medical equipment and pharmaceuticals, he said.

Transformation

“Our efforts will go to providing non-financial support to black industrialists to complement the funding; and over the next five years, we will mobilise or commit very large sums in funding for black industrialists and firms,” he said.

“Women-empowered businesses and worker empowerment must become a stronger focus. Transformation includes addressing high levels of economic concentration and helping to build stronger, agile small and medium businesses.”

Improved governance

Patel said that national government will play a stronger role in improved governance, advocacy and mobilising investment.

“The special unit at the IDC and DBSA will assist provinces to use the R4 billion budget over the next three years more effectively on SEZs and industrial parks. We must nurture township and rural enterprises, and diversify the economic centres across our country,” he said.

“To improve the capacity of the state, we will review the performance of the 17 public entities falling under the DTIC, identify opportunities to consolidate and merge some entities, address underperformance and in the case of the NLC promote greater transparency and improved governance.”

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