Extra Boost for South African Manufacturing

South Africa manufacturing
Manufacturing in South Africa

AFRICANGLOBE – South Africa’s Department of Trade and Industry (DTI) has given local Manufacturers a further boost, with new additions to the list of products requiring minimum levels of local production and content in order to qualify for procurement by the state.

On Tuesday, the DTI added electrical valves, manual and pneumatic actuators, electrical and telecommunication cables, and components of solar water heaters to the list of products designated under the amended regulations of the Preferential Procurement Policy Finance Act.

Products already designated are rail rolling stock, power pylons, bus bodies, canned/processed vegetables, certain pharmaceutical products, furniture products, and textiles, clothing, leather and footwear.

‘Raising the Competitiveness of Local Manufacturing’

“In the year ahead, the DTI will significantly scale up designations and other procurement policy levers in support of domestic manufacturing,” Trade and Industry Minister Rob Davies said in a statement.

“This will be done at the same time as the DTI deploys a range of other supportive and inter-locking instruments to raise the competitiveness of South Africa’s manufacturers. This will be done in close collaboration with business and labour.”

The designation policy, part of the government’s Industrial Policy Action Plan, is one of a suite of policy levers designed to support domestic manufacturing.

The others are the Competitive Supplier Development Programme – which is led by the Department of Public Enterprises and governs the procurement programmes of state owned companies – and the National Industrial Participation Programme (NIPP).

The NIPP obliges foreign companies that win local tenders worth more than US$10-million, to provide “offset” obligations through investments in the domestic economy.

At the end of 2012, the Cabinet signed off on a set of policies which tighten the NIPP framework, close existing loopholes and align the policy with other public procurement instruments.

The DTI said details of these provisions would be made public when the new regulations were signed off by Davies.

Further details of these measures will be set out in the 2013 Industrial Policy Action Plan, which will be launched in April.

The National Treasury will at a later stage also circulate the instruction notes which will regulate the environment within which government departments and public entities may procure designated products. The instruction notes will include minimum local content thresholds.