Pretoria – The better than expected Gross Domestic Product (GDP) of 3.3% in the second quarter of 2016 is evidence that South Africa remains a sound investment destination that offers potential investors lucrative opportunities, the Economic Cluster said on Tuesday.
Briefing the media on the Economic Sectors, Employment and Infrastructure Development Cluster, Science and Technology Minister Naledi Pandor said the GDP figure released by Statistics South Africa raised the cluster’s expectation of a full-year growth for the country.
“South Africa remains a sound investment destination, it offers potential investors lucrative investment opportunities. The country is a gateway to Africa, it possesses advanced technologies and manufacturing capabilities,” said Minister Pandor.
Updating the media on the Medium-Term Strategic Framework (MTSF) first quarter progress report, the Minister said government’s investment incentives have leveraged substantial private-sector investments in the quarter under review.
Some of the investments of R15.4 billion are from leading automotive assemblers such as Toyota and Ford and a number of other projects approved for the 12i Tax Allowance Incentive.
“This demonstrates the measure of confidence that global manufacturers have in the South African economy. The announced investments will result in the creation of 4 675 new jobs.”
At the same time government, under the auspices of the Inter Ministerial Committee (IMC) on investment, has identified 40 priority investment projects in critical sectors such as agro-processing and agri-parks, energy and infrastructure, manufacturing and services and have the ability to crowd-in further investment.
In addition, government has begun to accelerate the implementation of ten of these projects to release massive benefits in job creation, skills development, better public infrastructure and economic opportunities.
The cluster is stimulating the country’s labour-intensive sectors through various incentive programmes that attract investors and businesses that will have a higher impact on jobs.
Industrial Development Corporation
The Industrial Development Corporation (IDC) approved R700 million to fund the job drivers.
Through the IDC’s support, 441 jobs were created across the automotive and transport equipment; clothing and textiles; heavy manufacturing; and machinery and equipment sectors.
The IDC funding approvals for 2015/16 totalled R14.5 billion.
The funding approvals for black empowered companies including black industrialists were R4.9 billion, while funds to youth empowered enterprises were R970 billion. The jobs supported through IDC funding was 15 272 in the 2015/2016 financial year.
Black Industrialists programme
The cluster said the Black Industrialists Programme, which falls under the Department of Trade and Industry, has approved four applications.
“The programme, which aims to create 100 black industrialists over the medium term, approved four applications valued at R500 million in the agro-processing, plastic and pharmaceuticals, electrical equipment and metals sector,” said the cluster.
In addition, stakeholder campaigns have been rolled out to inform potential applicants of the programme and provide support in the development of their business plans.
Support for the steel industry
For the first quarter, measures were introduced to support the steel industry through the challenging global conditions.
“The initiatives include an increase in customs duties across a range of steel products. The rebate for applications for flat rolled steel for corrugated roofing and flat rolled steel for appliances are in progress.”
In addition, the pricing methodology for flat steel will be implemented and monitored by the Steel Committee under the auspices of the International Trade Administration Commission.