DTI to fast track plans to address economic challenges

Pretoria - While interventions to get the South African economy to grow is working, rapid movement is required to address challenges in the economy, says Trade and Industry Minister, Dr Rob Davies.

Briefing reporters following the Department of Trade and Industry’s (dti) presentation of its 2014/15 report to the Portfolio Committee of Trade and Industry, Minister Davies said that while the department’s programmes have made a positive contribution, this needs to be fast tracked.

“Our conclusion is that this requires our programmes to move us up the value chain, the 9 point plan which is a combination of addressing short term constraints that we have in the South African economy and also making longer term adjustments in the structural base of our economy that this programme remains important. What is required is that we move faster to implement,” the Minister said on Tuesday.

The Minister made reference to the fact that the current economic climate in China is having a knock on impact on mining economies around the world.

“We’ve seen dramatic falls in prices of iron ore and platinum such that 40% of the platinum mines in South Africa are not profitable at this moment, while 30% of gold mines are not profitable. That’s the reality that has struck us, I think that our key message of course we have to respond to that.

“We have to mitigate the effects of this, we have to address much more urgently than we have done before. Things that are domestic impediments to us achieving economic growth like the energy challenge that we’ve had as a factor up to now,” explained the Minister.

He further added that this reinforces the idea that government needs to move more rapidly in order to change the country’s place in the global division of labour and to move up the value chain.

South Africa, he said, needs to move to a place where it is not only the producer and exporter of primary mineral commodities but to also be a producer and exporter of value added products.

“Our economy is entering some very choppy waters right now,” he said, adding that where the department acted with decisiveness and also interacted with industry players, the department’s programmes have made a positive difference to the performance of those sectors.

Adding to the Minister’s sentiments, Director General Lionel October said that positives had been identified in the four sectors that the dti has targeted incentive programmes namely the automotive industry; clothing, textile and footwear; film industry and the business process outsourcing.

“In the four sectors we are seeing significant investments and exports. In all sectors there’s detail of investment,” he said of the report that covers the financial year that ended in March this year plus the first quarter in the current financial year.

Automotive industry

In the automotive industry South Africa is currently exporting over R100 billions of automotive vehicles.

“The employment in this is a hundred thousand in assembly and seventy thousand in components.

“We are seeing big investments in the Original equipment manufacturer (OEM’s) like Mercedes Benz but we are also seeing expansion in new areas, Toyota not only produces vehicles but they’ve gone to truck manufacturing also,” said October.

He said that China is also investing in the South African automotive sector, while the clothing and textile sector which had in previous years experienced massive job losses is now also performing better.

The sector, October said, has up to now received over R2.6 billion in incentives.


On the issue of whether South Africa will plunge into a recession following recent Gross Domestic Product figures that showed that the economy contracted by 1.3% in the second quarter, Minister Davies said that this shows that the country faces a challenge.

“Things are becoming more difficult than before… we have to increase the impact of our interventions,” said Minister Davies.

- SAnews.gov.za