Structural change needed in SA economy

Rob Davies says that structural change, with a focus on job creation, is needed in SA's economy. Image: GCIS

The minister was speaking at the launch of the sixth iteration of the Industrial Policy Action Plan (IPAP) in Johannesburg.

"Most of the document is an action plan, not a vision, some kind of wish list or statement. It's a set of time bound actions and responsibilities. It's a programme of the work of government," said the minister.

In the past, said the minister, the South African economy emerged with the discovery of mining, while its manufacturing remained quite fragile.

He said that IPAP includes plans to promote industrial growth and reduce unemployment, adding that the plan's overarching vision of growth with inclusivity is grounded in the imperative of smart re-industrialisation, with a focus on growing the country's manufacturing sector.

The 2014/15 and 2016/17 document's mission is to push the country's potential for industrial change act as a step towards to greater infrastructure development, localisation and beneficiation. "It will have a sharper focus on regional integration and enhanced industrial financing," he said.

According to Davis IPAP's central focus on manufacturing is derived from thorough analysis and has the highest economic and employment multipliers. "The plan is central to South Africa's export strategy and plays a critical and indispensable role as a driver of innovation and productivity growth," he said.

"Industrialisation is critical for this. It's not just critical to SA but critical for the future of the African continent. If Africa has enjoyed a growth spurt up to now, it is not going to sustain it, unless we move up the value chain and start producing value-added products," Davies said.

He said the production and manufacturing of value-added products represented job creation opportunities - not just for the manufacturing but for all industry.

"The country's infrastructure programme is a fundamental part of this and has to be a major driver and tool for industrial development," Davies said.