Government to back black industrialists
The state was planning to support a further 100 black industrialists as part of its black industrialist programme, Trade and Industry Minister Rob Davies has announced.
The government is planning to support a further 100 black industrialists as part of its black industrialist programme, Trade and Industry Minister Rob Davies announced on Tuesday.
So far 102 black industrialists have been provided with financial support by the department under the programme, and 48 companies have received market access support.
The programme, which will run over two years, will be finetuned and differentiated to tackle the different levels of development of the participants.
The support for the 102 industrialists amounts to R2.2bn in commitments. It has leveraged R8bn in investment and has created and retained more than 18,484 jobs.
During his budget speech, Davies also said a new R500m incentive scheme for the metal and engineering sector would mitigate the negative effect of tariffs imposed on steel imports.
It would be introduced to protect ArcelorMittal, SA’s major steel producer. The tariffs were necessary to defend the steel giant against cheap imports.
If SA’s biggest steel producer had closed down, this would have had knock-on effects on the downstream sector and resulted in job losses.
Davies conceded that the tariffs had harmed the downstream industry, which has been hit by electricity price hikes and slower mining demand.
The department is concerned about the decline of foundries, which, if allowed to continue, would result in deindustrialisation. Therefore, it wants to stabilise the sector.
The incentive will be matched against investments and will aim at enhancing competitiveness in the value chain. It will be tied to supplier development in certain cases.
“As we have shown with our clothing and textiles programme, judicious use of incentives and other industrial policy tools can stabilise sectors in distress and position these for growth,” Davies said.
In terms of the industrialists programme, the minister said he would convene a dialogue with all approved black industrialists who had finalised the first phase of their investments to discuss further areas of collaboration.
“In consultation with shareholder departments, we will set targets for state-owned companies for procurement of locally manufactured goods from black industrialists. In addition, we will expand designations in value chains where black industrialists participate,” Davies said. “We will use the equity equivalent programmes more strategically to support industrialists with technical assistance and market access.”