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Industrial Development
 

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Industrial Development

The National Industrial Policy Framework (NIPF) articulates South Africa's overarching approach to industrial development, providing a strong basis for the policy certainty that must underpin it. IPAP 2015/16 - 2017/18 - the seventh iteration of the Industrial Policy Action Plan - further reinforces the policy certainty that has been painstakingly crafted over the past seven years. It also provides a working outline of the National Programme of Action that has been put in place to implement our industrial policy objectives.

IPAP is a product of the Economic Cluster of Government. It is published annually as a way of openly sharing with all stakeholders the thinking processes that underpin the ongoing adjustment and strengthening of government plans and the modification of its focus areas and instruments. This is a necessarily flexible process, since it must take into account the dynamic nature of the global and local economy, whilst at the same time reflecting the implementation lessons learned over each successive IPAP period.

Building on previous iterations, the key focus areas of IPAP 2015/16 - 2017/18 are as follows:

  • Public and private procurement

  • Given the depressed and volatile global environment, it is vital that we optimise the impact of government, State Owned Enterprises (SOEs) and private procurement on our manufacturing sector. In the forthcoming period the IPAP 2015/16 - 2017/18 presents a three-pronged strategy to achieve this objective.

  • Leveraging South Africa's Resource endowment

  • The mining sector remains a core part of the South African economy, responsible for around 9% of GDP and 38% of exports. It remains critical that we maximise the opportunities provided by the linkages and multipliers that exist between mining and manufacturing in order to extract full value from South Africa's enormous resource endowment. IPAP 2015/16 - 2017/18 therefore sets particular store on continuing efforts to build working relationships with large mining companies that can potentially contribute to the realisation of our industrial ambitions. The revised empowerment codes, which unambiguously provide incentives for both small business and supplier development, create a foundation for working with mining companies towards building world-class engineering companies in the mining supply chain. This includes collaboration between government and mining companies on the development of new technologies to beneficiate our mineral wealth inside South Africa.

  • Support for manufactured exports

  • The IPAP 2015/16 - 2017/18 puts a special emphasis on building world-class manufactured product exporters, by working with and supporting leading and dynamic companies with a proven track record as winners in their respective sectors. The emphasis on ramping up export competitiveness will increasingly be achieved through the implementation of a range of carefully considered strategies; as follows:

    • Working with OEMS

      Global Original Equipment Manufacturers (OEMs) have a core competence in identifying and nurturing high potential companies to become part of their supply chains. OEMs are able to introduce experts from their global network to assist ambitious South African companies to enhance their capability and competitiveness. the dti will be focused on partnering with committed OEMs (for example in the automotive sector) to expand the number of South African exporters.
    • Industrial financing and support

      Work is well advanced to build and strengthen a system of industrial financing, incentives and other assistance measures to 'support winners' in the manufacturing sector. In this regard support for domestic OEMs is also vital since these dynamic South African companies provide a base-load of demand for component manufacturers located in South Africa - and are consequently critical to South Africa's export effort. The IPAP 2015/16 - 2017/18 will thus be energetically helping existing and aspirant South African OEMs to develop products specifically tailored for our priority export markets.
    • Exports and African regional integration

      Growing South African exports to the Africa region have somewhat offset declining exports to traditional trading partners. Expectations of growth in many African countries remain high, powered by resource exploitation, infrastructure investment and a growing middle class. In keeping with previous iterations, IPAP 2015/16 - 2017/18 sets out some of the work being undertaken to drive regional industrial integration both within the formal multilateral institutions as well as through government-led research and policy development.
    • Support for black industrialists

      Also highlighted in IPAP 2015/16 - 2017/18 is a special section on support for black industrialists, which sets out the first practical steps towards realising government's commitment to transformation and empowerment in the manufacturing sector
  IPAP in brief a User's Guide
     
  Industrial Policy Action Plan 2015