Cape Town - One of the challenges to achieving increased levels of local manufacturing is the resolution of problems relating to black economic empowerment.
This is the view of Rob Davies, Minister of Trade and Industry.
On Tuesday he made preliminary comments on government's new industrial policy to the portfolio committee on trade and industry.
This policy will be tabled in parliament on Wednesday.
Davies says there is a need for much more industrial development through the government's infrastructure programme.
For that reason it is essential to restructure the process of state purchasing so that manufacturing can take place at a local level by, for instance, awarding contracts for the manufacture of capital goods and transport equipment on a long-term basis.
But to achieve this it's important for black economic empowerment to start functioning.
The impact to date has been slight, says Davies.
One of the big problems with black economic empowerment is that companies tendering for state contracts profess to be empowerment groups while they are not.
He says there are three types of malpractices.
One is where a company misrepresents itself as a black company in order to get contracts.
Another way is via the so-called tender entrepreneur. Davies explained that this type of company pursues tenders but, because the tender field is not its area of specialisation, white companies are contracted to do the actual work.
The other method is where an empowerment company applies for a tender and then imports the goods instead of manufacturing them locally.
For more business news in Afrikaans, go to Sake24.com.