The pursuit of increased value addition of natural and mineral resources is critical for the sustainable growth of South Africa, the Portfolio Committee on Trade and Industry heard yesterday.
 
The Committee received a briefing on beneficiation and the role of industrial financing to unlock the potential of the productive sectors, like manufacturing, of the economy. The Department of Trade and Industry informed the Committee that, historically, the mining industry formed the backbone of the economy, so mechanisms had been put in place to support downstream value addition.  Committee Chairperson, Ms Joanmariae Fubbs, said: “There is a need to recapture this type of government support to advance the economy and ensure that South Africa benefits from its resources. This drive should lock in both upstream (mining inputs) and downstream (manufacturers of value-added products) domestic production, particularly for black industrialists.”
 
The Committee also heard that the biggest challenge remains the lack of access to concessional funding for industrialists, particularly emerging black industrialists, which is more readily available in the other BRICS countries.
“This calls for a concerted effort to increase government support to development finance institutions (DFIs) tasked with supporting industrialisation and black empowerment such as the Industrial Development Corporation and the National Empowerment Fund,” said Ms Fubbs.
 
The Department emphasised the importance of the mix between foreign direct and local investment. While local investment is supported, foreign direct investment should also be encouraged as this provides South Africa access to global opportunities. The mix of incentives provided is available for both local and foreign direct investments. The Committee encourages the value addition drive and acknowledges the need for additional government support for DFIs.