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Africa must ramp up scale of industrialisation

africa trade

The African continent can no longer be the producer and exporter of primary materials, but should ramp up its scale of industrialisation if jobs are to be created, says Trade and Industry Minister Dr Rob Davies.

“We cannot any longer hope to continue to live, proposer, create jobs and the sustainable livelihood of our people if we remain entrapped in the global division of labour as producers and exporters of primary products and raw materials, and importers of value added products,” said Minister Davies.

He was speaking at the National Localisation Indaba hosted by the Durban Automotive Cluster (DAC) on Thursday.

“As long as we stay there, we will be battling over the distribution of resource rents and we will not be taking our productive economy forward. The entire African continent is coming rapidly to the conclusion that the next phase of development should involve industrialisation,” he said.

The Department of Trade and Industry’s Automotive Incentive Scheme (AIS) has incentivised 193 projects with a total investment value of R22.5 billion since its inception in 2009.

The Motor Industry Development Programme (MIDP) — which has been in existence since 1995 and came to an end when it was replaced by the Automotive Production and Development Programme (APDP) in January 2013 — have been successful in transforming the South African automotive industry.

“The assembly industry was predominantly a fragmented low-volume producer of many platforms, in a high tariff environment, mainly for white middle class consumers, to one that is now globally competitive and with greater economies of scale in production, producing vehicles for both international markets as well as South Africa’s growing middle class, black and white,” explained Minister Davies.

According to Minister Davies, government’s sound economic policies and support for manufacturing helped avert South Africa slipping into major de-industrialisation.

“It was investment by Original Equipment Manufacturers (OEMs) and component manufacturers, supported by the dti’s AIS, which ensured that significant levels of the country’s manufacturing and employment base were retained.”

The Indaba, which showcases South African supplier capability, concludes on Friday.

Chile investment mission

Meanwhile, the department’s 27-member business delegation to Chile will today conclude its Outward Trade and Investment Mission (OTIM).

The OTIM, which kicked off this week in Peru, provides businesspeople with opportunities to engage with other businesses in Latin American country.

Ambassador of South Africa to Chile, Dr Hilton Fisher, told the businesspeople that Chile was not an easy place to do business and that only hard work can lead to success.

“The embassy can facilitate the business environment. However, it is up to you as businesspeople to ensure that you build relationships and make them work for you,” said Fisher.

Total trade between South Africa and Chile registered an average growth rate of about 1.4% from 2009 to 2013. South Africa’s exports to Chile are more diversified than the imports from Chile and are mostly manufactured or value added products.

South Africa remains one of the largest foreign investors in the Chilean mining sector.

The delegation is made up of businesses in the agro-processing, engineering and construction, defences systems and mining sector. – SAnews.gov.za

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