Trade and Industry Minister Dr Rob Davies says that a three-year investment pipeline worth R115-billion has arisen as a result of government’s targeted efforts to promote foreign direct investment (FDI) from China, India, Russia, Brazil, Japan, Spain, Germany, France, the UK, the US and the Middle East.

He told lawmakers on Wednesday that FDI valued at R28-billion had already been secured, which had the potential to create 13 000 jobs.

He provided no specifics, but noted that during 2010/11, automotive assemblers and component suppliers announced investment commitments of R13-billion.

“Of particular significance is the expansion in local component sourcing by the original-equipment manufactures, which is important because most of the job creation in the automotive sector will emerge from smaller companies producing components,” he said.

The Minister also reported that the initial sectors from which departments and State-owned enterprises would have to buy locally produced goods and services would be “designated” by the time the reformulated preferential procurement regulations came into effect on December 7, 2011.

The regulations, which were published by Finance Minister Pravin Gordhan in the Government Gazette of June 6, has been revised partly to support “localisation”, as well as to ensure better alignment with South Africa’s black economic-empowerment codes of good practice.

They were also broadened to include State-owned enterprises and agencies under the ambit of government’s overall procurement rules.

The DTI was in the process of identifying a number of industries that were considered critical and/or strategic.

Once officially designated, government tenders would stipulate that only locally manufactured products could be considered. Alternatively, the tenders would state that only locally manufactured products with a prescribed minimum threshold for local content could be procured.

Davies said that, by the time the regulations came into effect, his department would be ready with a number of designations to ensure that as the country’s “infrastructure investment programmes advance, they will act as a catalyst to local industrial development”.

Work was also being done in a bid to leverage more from the balance sheet of the Industrial Development Corporation, which Davies said had already unlocked between R70-billion and R100-billion in finance for new initiatives.

“We anticipate finalising our work to identify a new model of developmental financing for industrial development that we hope can result in an increasing quantum of funding being available at cheaper rates.”