The Department of Trade and Industry approved more than R20-billion in industrial finance this year, creating 27,000 direct new jobs and about 108,000 new indirect jobs.
This emerged yesterday from a media briefing by the economic and employment cluster, chaired jointly by Rural Development and Land Reform Minister Gugile Nkwinti and Science and Technology Minister Naledi Pandor.
The department's incentive programme incorporates the clothing, automotives, film and business process outsourcing sectors, critical infrastructure as well as special economic zones and the manufacturing competitiveness enhancement programme.
This incentive expenditure is often criticised for being a waste of money but the World Bank recently noted in an update report on South Africa that the nation's investment tax incentives "have contained job destruction in industrial sectors" and "have encouraged additional investment in agriculture, construction, manufacturing, trade and other services".
The job multipliers of investment in manufacturing was another strong argument in favour of the incentives. The World Bank report also said that the additional investment generated by tax incentives exceeded the revenue foregone by government.
Briefing the trade and industry portfolio committee, officials noted that the 2017/18 budget allocated R5.5-billion for incentives with the total for the three years of the medium-term expenditure framework amounting to R16.9-billion.
Special economic zones have been allocated R605-million and manufacturing development R3.6-billion.
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