New policy action plan to create jobs: minister

The 2012/2013 Industrial Policy Action Plan (IPAP) unveiled on Monday would help create jobs, Trade Minister Rob Davies said.

"Government has deployed a range of complementary and integrated measures to grow the economy and create jobs. IPAP 2012/13 is one of the key pillars of this broader approach," he said in a speech prepared for delivery in Johannesburg.

The manufacturing competitiveness enhancement programme (MCEP), detailed in the IPAP for the first time, was supported by a R5.8 billion funding allocation from the finance department over three years.

"The MCEP will be deployed towards upgrading the competitiveness of relatively labour-intensive and value-adding manufacturing sectors impacted by the currency, the global economic crisis and electricity cost escalations," Davies said.

The aim of the programme was to encourage investment by manufacturers now, and reap the rewards later.

Another new addition to the IPAP was a section on special economic zones.

In the automotive industry, more than R15 billion in investment commitments had been secured from assemblers and component suppliers.

Most of the technical work to pave the way for the transition from the motor industry development programme to the automotive production and development programme next year, had been completed, Davies said. The industry had seen an increase in vehicle assembly volumes and localisation of components.

In the clothing, textile and footwear industry, the clothing textile competitiveness programme (CTCP) of 2009 brought retailers and manufacturers closer together.

"Despite the fact that implementation of the CTCP overlapped with the global economic crisis the programme managed to arrest employment losses in the sector by 2010, with a modest increase in employment seen in 2011," he said.

Better alignment between trade and industry policies allowed new sectors, particularly in environmentally friendly industrial initiatives, to grow, Davies said.

"Solar water heating manufacture and other significant industrial opportunities arising from requirements for higher energy efficiency in the economy will also be vigorously pursued."

IPAP had been implemented amidst turbulent economic times globally, which slowed demand from South Africa's key traditional export markets, namely Europe and the United States.

In addition, local producers had been subjected to electricity price increases over the last three years, and some of the world's highest port charges.

Davies said President Jacob Zuma's State of the Nation address and Finance Minister Pravin Gordhan's Budget contained much-needed interventions to support production, and especially manufacturing.

He also welcomed the National Energy Regulator's intervention, which reduced electricity tariff hikes from the proposed 25% to 16%, and the National Ports Regulator's announcement of port tariff rebates for manufacturers.