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Structural change needed in SA economy

Industrial Policy

The South African economy needs to undergo a significant structural change if it is to create jobs and employment, Trade and Industry Minister Dr Rob Davies said on Monday.

The minister was speaking at the launch of the sixth iteration of the Industrial Policy Action Plan (IPAP) in Johannesburg.

“Most of the document is an action plan, not a vision document or some kind of wish list or statement. It’s a set of time bound actions and responsibilities. It’s a programme of the work of government,” said the minister.

In the past, said the minister, the South African economy emerged with the discovery of mining, with manufacturing quite fragile.

IPAP includes plans to promote industrial growth and reduce unemployment.

The plan’s overarching vision of growth with inclusivity is grounded in the imperative of smart re-industrialisation, with a focus on growing the country’s manufacturing sector.

The 2014/15 – 2016/17 document’s mission is to push the country’s potential for industrial step change to greater intensity with infrastructure development and localisation, beneficiation, a sharper focus on regional integration and enhanced industrial financing.

The IPAP’s central focus on manufacturing is derived from thorough analysis and has the highest economic and employment multipliers. The plan is central to South Africa’s export strategy and it plays a critical and indispensable role as a driver of innovation and productivity growth.

South Africa is faced with a challenge of unemployment, with the world now requiring post-school education for jobs.

“Industrialisation is critical to this. It’s not just critical to SA but critical to the future of the African continent.

“If Africa has enjoyed a growth spurt up to now, it is not going to sustain this, unless we move up the value chain and start producing value-added products,” Minister Davies said.

He said the production and manufacturing of value-added products was a significant generator of jobs – not just for the manufacturing sector itself, but also for up-streaming and down-streaming industries.

Growing industry

The country’s massive infrastructure programme is a critical tool to industrial development.

“The programme is fundamental and has to continue to be a major driver of industrial development … it also has to be a tool of industrial development,” Minister Davies said.

South Africa needed to create black industrialists, with the minister saying that there were far too few black industrialists.

“We need to draw more on the talents of our population,” he said.

Also speaking at the last IPAP launch, under the current administration, divisional executive at the Industrial Development Corporation Shakeel Meer said the core of the South African economy should be manufacturing. –

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