Industrial Development

Government has deployed a range of complementary and integrated measures to grow the economy and create jobs. The upscaled Industrial Policy Action Plan (IPAP) 2012/13 - 2014/15, which was released by the Department of Trade and Industry (the dti) in April 2012, is one of the key pillars of this broader approach. It builds on the National Industrial Policy Framework (NIPF) and represents the fourth annual iteration of the first IPAP launched in the 2007/08 financial year. Each year, the dti launches a revised three-year rolling IPAP with a 10-year outlook in a context of rapid economic change and significant global uncertainty. This has proved to be a robust formula, which allows continual scaling up of interventions and sufficient flexibility to respond to change. Implementation of successive versions of IPAP has resulted in significant achievements and ongoing scaling up of interventions to retain, grow and diversify South Africa's industrial base. Key achievements registered to date in sectors such as Automotives, Clothing, Textiles, Leather and Footwear, and Business Process Services demonstrate that well-designed industrial policy interventions can and do work for South Africa. The policy includes significant interventions in three clusters of sectors. Firstly, sectors including metals fabrication, capital and transport equipment, green and energy-saving industries and agro-processing, are qualitatively new areas of focus of the Action Plan. Secondly, the upscaled IPAP builds on and broadens interventions in sectors which were identified in the first IPAP, namely automotives and components; medium and heavy vehicles; plastics, pharmaceuticals and chemicals; clothing, textiles, footwear and leather; bio-fuels; forestry, paper, pulp and furniture; creative and cultural industries; and Business Process Services. The third cluster focuses on sectors in which South Africa has the potential to develop long-term advanced capabilities, namely nuclear, advanced materials, aerospace and defence, and electrotechnical and ICT sectors. The new Manufacturing Competitiveness Enhancement Programme (MCEP) is set out in the IPAP 2012/13 - 2014/15 for the first time. The Minister of Finance has indicated that a sum of R5,8 billion will be made available over the three-year MTEF period for this programme. The MCEP seeks to generate much greater confidence among manufacturers to invest now to see out the current period of significant economic uncertainty and emerge much more competitively out of it. The MCEP will be deployed towards upgrading the competitiveness of relatively labour-intensive and value-adding manufacturing sectors impacted by the currency, the global economic crisis and electricity cost escalations. The IPAP contains a new section on Special Economic Zones (SEZs). Draft legislation for SEZs sets the basis for a broader range of industrial parks and economic infrastructure provision for effective clustering of value-adding and employment enhancing manufacturers. A new section on Regional Integration contains a range of programmes that give effect to Government's commitment to support regional economic development and integration in the Southern African region and beyond. IPAP is fundamentally a policy and action plan designed to help build South Africa's industrial base in critical sectors of production and value-added manufacturing. It is therefore designed to address the decline in South Africa's industrial and manufacturing capacity and contribute to the reduction of chronic unemployment. For more information, please refer to the full-length IPAP 2012/13 -2014/15 report [PDF]. http://www.thedti.gov.za/industrial_development/industrial_development.jsp