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State intervention is working: Davies

Mar 07 2013 19:10 Sapa

Rob Davies (File)

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Cape Town - Strong state intervention in selected manufacturing sectors has created jobs and investment, Trade and Industry Minister Rob Davies said on Thursday.

"Experience in South Africa, along with experience in other countries, is showing us that industrial policy can and does succeed," Davies told reporters in Cape Town.

Davies said the pre-conditions were that it was well thought-out, supported across departments and agencies, and informed by dialogue between all stakeholders.

"Where we have done that, where we have intervened strongly, there are successes and those successes are measurable in a number of industries."

He listed the automotive, clothing and textile, footwear, business process services and agro-processing as those where government intervention had prompted an upswing.

The automotive industry had seen R15bn in new investment and an increase in component exports, as well as new players entering the market, Davies said.

He said government had brought "a degree of stability" to the clothing, textile and footwear sectors by removing the duty-credit certificate programme and replacing it with a production incentive programme.

"I am pleased to note that a substantial part of the industry has now accessed this facility and we've had a R148m's worth of approvals under the clothing and textile competitiveness programme which is supporting 123 companies - which represents nearly half the total employment in the sector - 49 000."

Davies said footwear and leather had become a growing sub-sector with 32 000 employees, after a period where it was assumed to be dying.

State incentives had also led to investments of R3.7bn in the food-processing sector.

"This has supported the retention of 14 000 jobs and the creation of 7 000 new jobs."

Davies said he expected the state's infrastructure programme - which promises to disburse R827bn over the next three years - would help to stabilise the metals fabrication sector.


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