Trade and Industry Minister Mandisi Mpahlwa yesterday asked
Parliament to approve a budget of R3 076-million for his
department.
Speaking at the release of his Budget Vote, the Minister forecast economic growth of 4,3% for the year and said the DTI intended to support this growth through ten programmes similar in nature to the Motor Industry Development Programme (MIDP) - which government also intends to see continued.
In addition, Mpahlwa aims to lower the cost to downstream producers to encourage the value-add sector, and create labour-intensive jobs.
Mpahlwa will take the current strong economy and an increasing growth rate forward, by focusing on three key areas:
Increasing the rate of investment.
Improving levels of competitiveness.
Broadening economic participation.
This, he added, required that the microeconomic reform strategy be accelerated at the same time as emphasis is placed “on creating an enabling economic environment and lowering the cost of doing business”.
Highlighted in his speech was the importance of closing the gap between the first and second economies as well as encouraging business participation in the economy.
“An essential element of the microeconomic reform strategy is to reduce the cost of doing business and remove constraints to growth.”
Government, he says, will address private-sector pricing practices, as import-parity pricing is hampering growth of downstream sectors.
Department of Trade and Industry (DTI) research shows that domestic prices to downstream producers are, in some instances, between 30% and 50% above international prices.
“To address this and other market failures we will be reviewing our competition policy with a view to creating more competitive markets.”
He added that several options are being explored, including engaging upstream producers.
This should result in more beneficiation and labour-intensive work in South Africa, he says, citing the automotive industry as a success story.
In addition to desiring the continuation of the Motor Industry Development Programme, the department has ten other customised sector programmes that are at various stages of development - most of which have already been researched and analysed.
“Our intention is to have all customised sector programmes developed by end August 2005, and start the process of implementing high-impact projects by September 2005.” While new sectors are being developed, the government will also be developing strategies for distressed sectors that rely on a weak rand.
Consumer protection is also a priority for the department and amendments to credit law are en route, along with several other measures to protect consumers.
Economic inclusion will be improved, Mpahlwa emphasised, through the promotion of cooperatives as a form of enterprise in all sectors.
To be complete by the end of the week is a Cooperatives Bill, replacing the previous one that fell under the auspices of the Department of Agriculture.
Turning to the question of extending black economic empowerment, he said that the Codes of Good Practice should be finalised by May 2005, after which President Thabo Mbeki will announce the BEE Advisory Council.
Various incentives to assist BEE companies in financing themselves were also mentioned in the speech.
Trade is seen as important in developing economies and Mpahlwa noted that the government desires the abolishment of agricultural subsidies at the current Doha Round talks.
“In the next few months, we will pay attention to ensuring that the World Trade Organisation ministerial meeting in December 2005 in Hong Kong takes decisions that will bring the Doha negotiations to a successful conclusion as soon as possible.”
He added that growth on the continent will also be encouraged, as growth locally is inextricably linked to that on the continent.
“Today, the South African economy is stronger and more resilient than ever before.
“Our economy grew by 3,7% in 2004.
“We forecast that it will grow even more in 2005, by 4,3%.
“Our growth rate range has increased from between 2% and 3% a few years ago to between 3% and 4%.
“Our investment rate has increased from 14% to 17% of Gross Domestic Product.
“Business confidence is at record highs.
“We are making good progress towards a higher rate of economic growth, which brings us closer to our developmental goals, in particular addressing poverty eradication and unemployment.
Speaking at the release of his Budget Vote, the Minister forecast economic growth of 4,3% for the year and said the DTI intended to support this growth through ten programmes similar in nature to the Motor Industry Development Programme (MIDP) - which government also intends to see continued.
In addition, Mpahlwa aims to lower the cost to downstream producers to encourage the value-add sector, and create labour-intensive jobs.
Mpahlwa will take the current strong economy and an increasing growth rate forward, by focusing on three key areas:
Increasing the rate of investment.
Improving levels of competitiveness.
Broadening economic participation.
This, he added, required that the microeconomic reform strategy be accelerated at the same time as emphasis is placed “on creating an enabling economic environment and lowering the cost of doing business”.
Highlighted in his speech was the importance of closing the gap between the first and second economies as well as encouraging business participation in the economy.
“An essential element of the microeconomic reform strategy is to reduce the cost of doing business and remove constraints to growth.”
Government, he says, will address private-sector pricing practices, as import-parity pricing is hampering growth of downstream sectors.
Department of Trade and Industry (DTI) research shows that domestic prices to downstream producers are, in some instances, between 30% and 50% above international prices.
“To address this and other market failures we will be reviewing our competition policy with a view to creating more competitive markets.”
He added that several options are being explored, including engaging upstream producers.
This should result in more beneficiation and labour-intensive work in South Africa, he says, citing the automotive industry as a success story.
In addition to desiring the continuation of the Motor Industry Development Programme, the department has ten other customised sector programmes that are at various stages of development - most of which have already been researched and analysed.
“Our intention is to have all customised sector programmes developed by end August 2005, and start the process of implementing high-impact projects by September 2005.” While new sectors are being developed, the government will also be developing strategies for distressed sectors that rely on a weak rand.
Consumer protection is also a priority for the department and amendments to credit law are en route, along with several other measures to protect consumers.
Economic inclusion will be improved, Mpahlwa emphasised, through the promotion of cooperatives as a form of enterprise in all sectors.
To be complete by the end of the week is a Cooperatives Bill, replacing the previous one that fell under the auspices of the Department of Agriculture.
Turning to the question of extending black economic empowerment, he said that the Codes of Good Practice should be finalised by May 2005, after which President Thabo Mbeki will announce the BEE Advisory Council.
Various incentives to assist BEE companies in financing themselves were also mentioned in the speech.
Trade is seen as important in developing economies and Mpahlwa noted that the government desires the abolishment of agricultural subsidies at the current Doha Round talks.
“In the next few months, we will pay attention to ensuring that the World Trade Organisation ministerial meeting in December 2005 in Hong Kong takes decisions that will bring the Doha negotiations to a successful conclusion as soon as possible.”
He added that growth on the continent will also be encouraged, as growth locally is inextricably linked to that on the continent.
“Today, the South African economy is stronger and more resilient than ever before.
“Our economy grew by 3,7% in 2004.
“We forecast that it will grow even more in 2005, by 4,3%.
“Our growth rate range has increased from between 2% and 3% a few years ago to between 3% and 4%.
“Our investment rate has increased from 14% to 17% of Gross Domestic Product.
“Business confidence is at record highs.
“We are making good progress towards a higher rate of economic growth, which brings us closer to our developmental goals, in particular addressing poverty eradication and unemployment.
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