IPAP is critical to radical economic transformation – Minister Davies – DTI


Rob Davies - [] Rob Davies - []

The Minister of Trade and Industry, Dr Rob Davies says the Industrial Policy Action Plan (IPAP) is critical to achieving RadicalEconomic Transformation. Minister Davies was speaking at the launch of the ninth iteration of IPAP which took place in Sandton today.

IPAP is firmly entrenched in government’s overall policy and plans to address the key challenges of economic and industrial growth and race based poverty, inequality and unemployment The plan, which is a key component of the Nine Point Plan, aims to develop a more competitive and diversified economy with a higher global share of products.

Emphasising the importance that government attaches to Radical Economic Transformation and inclusive growth for the SA economy, Minister Davies outlined new initiatives that are part of concerted efforts to shift the productive base of the economy in order to create decent and sustainable jobs.

“In the simplest terms, Radical Economic Transformation means putting coherent initiatives together that can begin to shift the productive base of our economy away from the inherited colonial division of labour and create decent sustainable jobs - particularly for the most marginalised and vulnerable groups in our society. It means unequivocal and urgent support for programmes such as the Black Industrialists Programme, which are increasingly being strengthened and deepened, to ensure that ownership, management and control of the economy is increasingly in the hands of black people,” said Minister Davies. 

He added unless South Africa secured the necessary steps towards structural change in the economy and secure much higher levels of investment in the productive sectors of the economy, Radical Economic Transformation may become a hollow phrase and a moveable feast for any manner of ill-considered economic recipes.

“Radical Economic Transformation is essential. But it is not about quick fixes and big bangs. It is hard, painstaking work. It needs pragmatism. It requires dialogue. It requires policy certainty and programme alignment. It requires a collaborative effort with the private sector. It needs a willingness to accept trade-offs and sacrifices that can deliver social consent and stability,” said MinisterDavies.

He identified Radical Economic Transformation as one of the focus areas and key priorities of IPAP 2017/18-2019/20. This will comprise of upscaled efforts to secure shared and inclusive growth with respect to transformation of ownership and management control; empowerment through decent jobs, especially in labour-intensive sectors.

Minister Davies also stressed the need for a step-change to secure a higher impact, lazer-focussed industrial strategy which can secure much higher levels of investment, especially in manufacturing, to lead the country’s economy out of its current trajectory and to address poverty, unemployment and inequality.

He added that IPAP 2017/18-2019/20 will focus on the following key themes which inform the work both of the Department of Trade and Industry (the dti) and act as a roadmap in general for the industrial effort:

  • Growing the economy by working closely with the private sector to secure and support investment in a modernised and competitive manufacturing and export sector.

  • Strengthening efforts to raise aggregate domestic demand, mainly through localisation of public procurement and intensified efforts to persuade the private sector to support localisation and local supplier development.  

  • Stepping up South Africa’s export effort, with a focus on key existing exporters, emerging export-ready firms and strong support for new black industrial entrepreneurs.

  • Strengthening ongoing efforts to build a less concentrated, more competitive economic and manufacturing structure in which barriers to entry for new entrants are lowered.  

  • Pressing ahead with technology-intensive, value-adding beneficiation projects which fully leverage SA’s comparative resource endowment advantage into a global competitive advantage.  

  • Optimising technology transfer and diffusion and a greater effort, working closely with the Department of Science and Technology to commercialise ‘home-grown’ R&D in key sectors.     

  • Supporting the further strengthening of energy-efficient production and carbon mitigation efforts and measures in a manner that allows for sustainable adaptation by all the energy-intensive sectors of the economy.  

  • Ensuring that the foreseeable effects of the Fourth Industrial Revolution and emergent disruptive technologies are understood, and adapt SA’s productive and services sectors to meet the challenges, including those relating to employment displacement.

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