Current Edition >> Archives Section >> Leading Stories >> 16-31 Aug 2005

New economic growth strategy for South Africa

• Editorial staff

Exciting aspects of a new economic growth strategy for South Africa currently being formulated by the national government, is emerging step by step. Cognizance of this needs clearly to be taken, especially in the Free State as one of the economically lagging provinces in the country.
As part of Asgisa (the Accelerated Growth Initiative for SA) announced by the government in 2005, the new strategy consists of inter alia the following components:
A new package of industrial incentives is to be unveiled in the coming months as various existing schemes near the end of their lives and those deemed by the Department of Trade and Industry (DTI) not to be meeting their objectives, are to be discontinued. A far-reaching review of the incentive system has just been completed as part of the department's efforts to articulate a new industrial-policy framework for the country. The new incentive package will seek to embody a “minimum scale”, which could either mean substantial growth in the amount of money set aside for industrial financing, or the roll-out of fewer, but more substantial, schemes.
The Department of Trade and Industry (DTI) has revealed that it intends supporting five so-called “flagship” industrial and services sectors aimed at sharpening the industrial-policy framework. The main thrust of the policy is to reaffirm the centrality of manufacturing to South Africa's economy, while broadening the policy framework to include new job-intensive services industries. To date, while the DTI has had broad sector plans, only two sectors, the automotive and the clothing and textile industries, have been operating within tailor-made frameworks. Now, other flagship sectors likely to be singled out for special assistance are tourism and business process outsourcing. Another sector likely to form part of the flagship project, is that of biofuels. The flagship sectors are to be selected organically, but the DTI will remain alert to opportunities in other sectors.
Efforts by government to empower emerging business operators are to be stepped up with the national launch of the Active Labour Market Strategy (ALMS) programme in Bloemfontein earlier this month. This venture, a joint initiative by the Department of Labour and the German Technological Cooperation (GTZ) forms part of government's effort to promote sustainable livelihood by linking skills development with self employment, specifically among emerging entrepreneurs in the second economy.
The new economic strategy for the country has largely been endorsed by an eminent group of Harvard economists who have recently reviewed South Africa's industrial policy and financing frameworks. It has also been confirmed at a recent cabinet lekgotla.
Another pointer is the appointment of a new director-general for the DTI, Mr. Tshediso Matona, with indications that it could be part of a new wind blowing in that engine room.
More information could be obtained from the DTI's website at www.dti.gov.za or from the website of the weekly magazine Engineering News at www.engineeringnews.co.za.