South African Finance Minister Pravin Gordhan has unveiled a R25-billion support package over the next six years to boost industrial development, assist entrepreneurs and accelerate job creation in the country.
Delivering his Medium-Term Budget Policy Speech in Parliament on Tuesday, Gordhan said the central thrust of South Africa’s economic policy challenge was “to support competitiveness and promote the kinds of structural change that will lead to more rapid, inclusive growth.
“This means that we need a reserve of funds, and a capacity to direct these resources effectively,” Gordhan told parliamentarians in Cape Town.
Gordhan said the package would include temporary mechanisms to bolster productivity and innovation in industries that had demonstrated long-term competitive potential.
The R25-billion would include R8-billion in tax incentives for recently approved projects in the area of industrial development, technology support and training.
Gordhan pointed out that there were also “improved incentives for investment in industrial development zones, particularly where there is potential to participate in global supply chains and to develop competitive logistics hubs”.
The government had also introduced regulatory and administrative reforms to facilitate small business development, including bringing on board support mechanisms such as preferential procurement and finance facilities.
He renewed the call for export diversification, including new trade partnerships with fast-growing emerging economies, as well as regional integration within sub-Saharan Africa, including investment in a north-south transport corridor and administrative reform of trade arrangements
Gordhan added that there was a need to “align trade, investment and energy policies to support the transition to a ‘green’ economy, including private sector participation in [South Africa’s] renewable energy production programme”.
During a media briefing held ahead of the speech, the minister said the details of the package would soon be revealed by Trade and Industry Minister Rob Davies.