IAFEI Quarterly - 32nd Issue

Press, Journal Article

inTernATiOnAl

Textile, Clothing and Leather;

White Consumer Goods;

Boatbuilding and associated

services industry; Pulp, Paper

and Furniture; Automotives

and Components; Green Eco-

nomy Industries; Advanced

Manufacturing: Advanced

Manufacturing - Laser techno-

logy; Advanced Manufactu-

ring - Advanced Robotics; Bio-

manufacturing; Tourism;

Chemicals, Plastic Fabrication

and Pharmaceuticals; Creative

and Design Industry; Infras-

tructure Development; and Oil

and Gas.

Nimrod Zalk, Industrial Deve-

lopment Policy and Strategy

Advisor at the Department of

Trade and Industry wrote that

manufacturing plays an irre-

placeable role in driving

growth and economic develop-

ment. South African manufac-

turing continues to be heavily

dominated by resource-proces-

sing sectors that are capital-

and energy- intensive. A struc-

tural shift towards higher

growth in more value-adding

and higher labour absorbing

manufacturing sectors is es-

sential for South Africa to shift

to a development path which

generates more growth and

higher levels of employment.

In conclusion, it is in all these

areas that the need for a robust

and quality designation for

CFOs is so important. Michael

Sass, the former Accountant

General of South Africa and

current SAIBA board member

and CFO(SA) believes a crucial

aspect that will drive the suc-

cess of all the infrastructure

development plans is the qua-

lification and competence of

public sector CFOs. That is why

South Africa adopted a new

skills framework for CFOs wor-

king for state departments or

companies. They are also re-

quired by law to become a

member of professional bodies

such as SAIBA and the desi-

gnation CFO(SA).

to clarify the standard of pro-

tection that an investor may

expect in the Republic, and to

promote all types of invest-

ments by creating a predictable

business environment that is

readily understandable to an

investor. The Bill guarantees

the rights of investors in accor-

dance with the Constitution.

In addition to this, the Bill

contains international invest-

ment law concepts such as

national treatment, physical

security of investment, legal

protection of investment and

transfer of funds in line with

constitutional principles and

applicable norms. This is aimed

at re-assuring investors that

South Africa is, and will re-

main, open to FDI and will

continue to provide strong pro-

tection to investors.

“In developing the Bill, we

have taken into account all the

concerns raised. Our aim is to

modernize South Africa’s po-

licy approach to foreign invest-

ment in view of national, re-

g i o n a l a n d g l o b a l

developments,” said Davies.

He said the current pipeline

of potential investment pro-

jects that the department is

monitoring and facilitating

includes ZAR 25.3 bn from

foreign and ZAR18.5 bn from

domestic sources. Aggregating

funding from both sources, it

is expected that upcoming in-

vestments will likely be distri-

buted as follows: ZAR28.8 bn

for the g reen economy;

ZAR7.96 bn for advanced

manufacturing and ZAR5.74

bn for mainstream manufac-

turing.

He said the department has

identified five key pillars of in-

dustrial development, namely:

• Infrastructure-driven indus-

trialization;

• Resource-driven industriali-

zation aimed at leveraging the

mineral resources endowment

to support higher levels of

downstream beneficiation and

value addition, whilst systema-

tically building both the de-

mand and competitive advan-

tages South Africa enjoys in

the upstream mining, trans-

port and capital goods sectors;

• Advanced manufacturing-

driven industrialization which

focuses on key sectors of the

manufacturing economy

which upgrade the capabilities

of the economy as a whole.

We need to engage particu-

larly intensively with global

OEM’s in these sectors and

develop robust conditionality

for public sector support so

that growth of the sector

achieves our developmental

objectives. It also includes on-

going work, not yet completed,

to build an integrated system

of industrial financing, incen-

tives and export support with

a special focus on lead and

dynamic companies that can

compete effectively in export

markets; and, finally, it encom-

passes a strong commitment

to support emerging black in-

dustrial entrepreneurs.

• Procurement, focusing on

strengthening the localization

of public procurement; and

• Regional economic integra-

tion which centres on maximi-

zing the opportunities pres-

ented to the domestic economy

by a growing market on the

African continent, driven by

high growth in the region,

strong consumer demand, in-

frastructure development and

resource exploitation.

“The opportunities are signi-

ficant, and must be energeti-

cally leveraged by unblocking

obstacles to expanded regional

economic trade and crafting

clearly-defined programmes of

complementary regional in-

dustrial development and va-

lue chain integration,” said

Davies.

After the Industrial Develop-

ment Corporation recently

hosted a conference themed:

“Driving South Africa’s Com-

petitiveness through Industrial

Development”, Ms Chichi Ma-

ponya, Brand South Africa

Chairman, wrote on Sanews.

gov.za

that there are significant

opportunities for South Afri-

can manufacturers, particu-

larly within the African region

which has seen growth rates

exceeding those in the deve-

loped world – at an average of

between 4 and 5% between

2002 and 2014.

“African countries provide

investors with abundant pros-

pects to access the growing

consumer demand. In April

2015, Manufacturing Circle

executive director, Coenraad

Bezuidenhout, pointed out

that the relative ease of access

to sub-Saharan Africa and

beyond, and an understanding

of the region, South African

manufacturers can get ahead

of other investors looking to

Africa for new opportunities.

“With an estimated 800 mil-

lion people urbanizing on the

continent in the past decade,

there are huge opportunities in

terms of fast-moving and du-

rable consumer goods for ma-

nufacturers. The current eco-

nomic conditions in Africa

make it the prime investment

destination and present a fa-

vourable time for South Afri-

can manufacturers to intro-

duce their products to the

African market, particularly

fast-moving consumer goods.”

She says South Africa has the

most diversified economy on

the continent and plays an

integral role in Africa’s advan-

cement. It is also in a great lo-

cation for growing businesses

in other parts of the African

continent.

According to the Department

of Trade and Industry, some of

the sectors in South Africa

which have high growth and

investment potential, include:

Agro-Processing; Business

Process Outsourcing and IT-

Enabled Services; Capital /

Transport equipment; Metals

& electrical machinery and

apparatus; Electro-Technical;

Finance & gestion

MARS 2016

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