Edited by: BuaNews, SA government news service | 28 March | Engineering News
The department of Trade and Industry (DTI) will next week launch the fifth iteration of the Industrial Policy Action Plan (Ipap) which will outline government’s plans to industrialise the South African economy.
The fifth iteration of the plan is expected to be launched by Minister Rob Davies next Thursday.
In January 2007, Cabinet adopted the National Industrial Policy Framework (NIPF) which set out government’s broad approach to industrialisation with some core objectives such as diversification beyond the reliance on traditional commodities and non-tradable services. This requires the promotion of increased value-addition.
It also involved the movement towards a knowledge economy and the promotion of a more labour-absorbing industrialisation path with a particular emphasis on tradable labour-absorbing goods and services and economic linkages.
It also includes the promotion of a broader-based industrialisation under the guidance of the NIPF the implementation of industrial policy was set out in the Ipap.
In August 2007, Cabinet approved the first 2007/8 IPAP which reflected chiefly ‘easy-to-do’ actions and was largely implemented. Some of its highlights were the strengthening of the Competition Act to introduce stronger investigative powers and personal liability as well as the lowering of input costs through the removal or lowering of a range of imports tariffs.
However it has been recognised that industrial policy needs to be scaled up from ‘easy-to-do’ actions to interventions that we ‘need-to-do’ to generate a structurally new path of industrialisation.
IPAP2 was launched in February 2010 following a process of intensive consultation led by the department which resulted in the revised document.
This time however it was revised for the 2010/11 – 2012/13 financial years as it was recognised that an Ipap spanning one year was too short a period and that future IPAPs will be for a three year rolling period, updated annually and with a 10-year outlook on desired economic outcomes.
The 2010/11 – 2012/13 IPAP represents a significant step forward in industrial policy efforts. At the launch of the new version of Ipap 2 in April 2011, Minister Davies said the plan played a critical component to the New Growth Path (NGP).
The NGP, which is an economic framework for 2010-2020, with the overriding objective of creating employment was released by the Department of Economic Development.
The IPAP identified constraints such as an over-valued and volatile exchange rate, a weak skills system and failure to exploit domestic supply opportunities.
To address these issues, the dti put in place key action plans to address issues in the various sectors.
Presenting the department’s Budget Vote in Parliament in May last year, Davies said the IPAP2 had stabilised the clothing sector, turned around the automotive sector, added jobs in the business process services sector and had introduced procurement designation to boost local production.
At a media briefing following Cabinet’s fortnightly meeting earlier this month Acting Cabinet spokesperson Phumla Williams said that Cabinet has approved the new Ipap to be launched by the minister.
“The plan builds on successive iterations of IPAP and reflects continuous improvements and strengthening of concrete industrial development interventions.
Ipap 2013/14-2015/16 is the fifth iteration of the plan and it covers the last full financial year (2011/2012),” said Williams.
In January, the dti announced that local producers of electrical and telecommunication cables, as well as components of solar water heaters were set for a major boost.
The department announced the further designation of electrical valves, manual and pneumatic actuators, electrical and telecommunication cables as well as components of solar water heaters for local production and content in the public sector procurement system.
These are the latest products to be added to the sectors that are already designated for local production.
Public procurement forms part of the department’s industrial levers in the IPAP.
Sectors already designated for local production, with minimum local content thresholds, are rail rolling stock, power pylons, bus bodies, canned/processed vegetables, certain pharmaceutical products, furniture products and the textile, clothing, leather and footwear sector.
The department added that Davies has signed the necessary authorisation in terms of his powers under the Amended Regulations of the Preferential Procurement Policy Finance Act (PPPFA).
The revised PPPFA regulations – which came into effect on 7 December 2011 – empower the minister to designate industries, sectors and sub-sectors for local procurement at specified levels of local content.