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Johannesburg - Treasury has allocated an additional R3.6bn to finance a new industrial action plan, but experts have misgivings about the industries being highlighted.
The aim of the new "high impact" action plan announced on Wednesday is to transform the economy into being more dynamic and labour-absorptive, said Finance Minister Pravin Gordhan.
Although the finer details of the plan are still shrouded in secrecy, the Budget speech makes it evident that this extra money would go to the motor and the clothing and textile industries over the next three years to boost production. These industries have for many years benefited from significant government assistance.
Mmatlou Kalaba, an industrial policy expert attached to the University of Pretoria (UP), says there is "no doubt" that South Africa has tremendous need for an industrial policy to promote job creation and productivity, but says the industries selected are "worrying".
He says that the motor industry receives a lot of support from government. Yes, this can improve production and exports, but its ability to create large-scale job opportunities is questionable. And for clothing and textiles the situation is even worse.
The motor industry has been enjoying state support for almost 20 years and is still unable to stand on its own feet, he points out. If government is taken out of the motor industry, it will simply cease to exist.
Dr Reyno Seymore, a lecturer in economics at UP, says South Africa will have to focus on industries in which it can compete with the rest of the world - and that is what government should be investigating.
According to research conducted by Seymore last year, agriculture and the processing of agricultural projects should at least be among the main industries for government to concentrate on as part of its industrial policy.
South Africa enjoys a comparative advantage - which means that it can be internationally competitive - in, for instance, certain agricultural products and base metals.
- Sake24.com
For more business news in Afrikaans, go to Sake24.com.