Tag Archive | BRICS

US schedules AGOA trade checkups

Feature article sent to clients 10 March….. 

AGOA trade agreement qualified…….. 

For the first time in the case of all African countries, theusa sa logo AGOA trade rules under the agreement for South Africa will be subject to a regular “out of cycle review” by the US. Normally any such agreement holds for ten years without review but the US wishes to check regularly that in South Africa the “quid pro quo” is being adhered to.

Parliament has been the scene for a number of briefings both on trade and international relations in the last two weeks and AGOA has been top of the list.

Also to emerge is the fact that one of the driving factors behind South Africa’s insistence on partnering with Brazil, Russia, India, China to form the BRICS trading bloc appears to be a fear of become totally reliant on trade agreements with any one country and particularly USA, in the case of the AGOA agreement.

This is despite the fact that the EU remains South Africa’s main trading partner, followed by the US.

The full monty

nomaindia mfekethoIn a briefing to the Portfolio Committee on International Relations a full team appeared from the Department of International Relations (DIRCO) headed by Deputy Minister Noamindia Mefeketu, together with Dave Malcomson, Chief Director of Regional Organisations; Ms Yoliswa Maya, Deputy Director General, Americas, Europe and the Caribbean; and Mr Arnold Lyle, Counsellor for DIRCO on the USA on agreements with BRICS, China and Pacific Rim countries.

In attendance for some of the time was Minister of International Relations, Maite Nkoana-Matshabane and a broad picture emerged of South Africa’s international trade policy, particularly with reference to the AGOA and how South Africa arrived at what most consider a favourable outcome.

Too many strings

Nkoana MatshabaneMinister Nkoana-Matshabane prefaced the meeting by saying the developing world had been borrowers from the IMF and the World Bank with conditions attached to loans “so stringent that they would never be able to develop.” South Africa, she believed, “was part of a progressive movement to find alternative funding sources and different trading partners.”

Relationships with the USA have emerged time and time again and, when pushed at the end of the briefing, the Minister, when asked by Opposition members in the case of the AGOA who needed it most, she replied “Perhaps SA needed the trade with the US more than they needed SA’s trade”. However, she was insistent that the country needed at the same time to find other trading partners to avoid being pressurized.

“If the AGOA had lapsed it might have been terrible at first with the job losses and we would have gone through some very bad times. But we would have overcome this. As a result of this event, we have learnt that the threat in terms of our own priorities will always exist”, the Minister said. “South Africa must now see itself as the priority and therefore look for other opportunities”, she concluded.

Going the BRICS route

Starting with a briefing on BRICS, DIRCO’s Dave Malcomson said the BRICS agreementdave malcomson backed up
the African Union programme for “continental infrastructure programmes” and from a domestic dimension, “all participants faced similar developmental challenges which needed infrastructure build programmes.”

The New Development Bank (NDB) had been launched with headquarters in Shanghai for the moment, subject to Contingent Reserve Arrangement (CRA) funding which South Africa had contributed to, the CRA funding being referred to in Minister Gordhan’s Budget presentation. He asked parliamentarians to note that despite a bad start with all BRICS countries experiencing lower growth, the combined GDP of BRICS was “likely to exceed that of the US by 2020, if not sooner”.

The NDB was expected to approve its first projects in April 2016. Malcomson referred to a “Host Country Agreement” between SA and the NDB which would be finalised soon. He also said that in place was an equal shareholding agreement with other BRICS countries in the NDB.

There was also to be a board of governors for policy issues; a governance board of directors; and the NDB would have initially 100 positions – the first presidency being from India; the CEO coming from China; the CFO (ex-Minister Nene?…ed.) being from South Africa; and with Brazil handling the position of risk CEO.

Sino summit

On Chinese relationships, following a successful summit staged in Johannesburg by South Africa in December last year with 48 heads of state attending, the Forum on China-Africa Cooperation (FOCAC) established a line for R60bn for development in Africa. Trade discussions between SA and China were extensively being built upon, said DIRCO’s Arnold Lyle.

iora logoAs far Indian Ocean Rim Association (IORA) was concerned, this was heavily linked to Operation Phakisa and the development of oceanic trade possibilities. IORA was focused on fisheries and aquaculture; renewable ocean energy; seaport and shipping development; seabed exploration and minerals, marine biotechnology and research and development. Tourism was also included.

IORA was primarily led by India, Australia, Indonesia and South Africa, with countries such as the UAE also involved. South Africa would lead IORA for 2017- 2019, strategic objectives being the “blue economy” and maritime peace and security sustainable development. There were considerable synergies, Malcomson said, and he quoted skills training of artisans in ship building as an example.

In answer to questions, he said the main difference between FOCAC and BRICS was that FOCAC was focused as a unit on the African continent whereas in the case of BRICS, South Africa was the representative for the African continent.

AGOA specifically

motor vehicle plantMeanwhile, the importance of AGOA was still evident and emphasised when a summation of was made to MPs by Yoliswa Maya of DIRCO. She pointed to the fact that the AGOA created over 62,000 jobs in SA and 100,000 jobs in the US. In 2014, 21% of SA’s exports to the US were exported under AGOA whilst 16% was under the EU’s “Generalised Scheme of Preferences” (GSP), which allows developing country exporters to pay sometimes less or sometimes no duties on their exports to the EU.

SA’s exports classified as purely under the AGOA amounted to $1.75bn whilst the country exported over R23bn worth of vehicles to the US in 2014, which supported some 30 000 jobs in Port Elizabeth and the Gauteng Province. SA also exported agricultural products to the US worth $175m, which represented 2.1% of SA’s total exports to the US. For the period January to November 2015, SA enjoyed a trade surplus of R2.3bn. Ms Maya did not compare figures with the EU or individual EU countries.

Debate

Responses from the Chairperson of the International Relations Committee Moses Masango and othermoses masango 2 ANC MPs seemed to be “playing to the gallery” of Ministers throughout the meeting. At one point Chair Masango said that the ANC-led government and the DIRCO team should be congratulated for making the BRICS and NDP bank “a reality” bearing in mind that, in his opinion, the International Monetary Fund and the World Bank mainly funded infrastructure projects “to keep colonialism alive in Africa”.

This seemed to reflect a growing belief amongst ANC members that the USA was interfering in SA political affairs and Masango remarked that “like the Roman and the British Empires, the American Empire hoped to achieve the same economically”. He said the question had to be asked what China, India and the US actually wanted in Africa. He said that South Africa had to be cautious.

The standard of debate was uplifted when the implications for SA were elaborated upon by Ms Maya of DIRCO when she said as far as the AGOA agreement was concerned, President Barack Obama issued a notice of suspension on the 11 January 2016 and a deadline of 15 March 2016 was set for imports of US poultry to be duty free into otherwise duty free access for South African agricultural products was to happen.

The rest of the story was well known, she said, and chicken products were about the go into the retail trade with meat products still to arrive. President Obama’s concurrence appeared to be a formality.

Between the lines

However, Deputy Minister Mfeketu said the US was “increasingly advocating for a post-AGOA trade relationship with Africa as a whole on a Free Trade Agreement basis” and US trade representatives were to submit a report to the US Congress in June 2016 regarding future trade relationships between Africa and the US.

The Deputy Minister said that South Africa was not short of poultry, had not asked for it and said the US appeared to have decided that if conditions were not met regarding poultry and certain meats, any other benefits would cease.

Other responses

Santos Kalyan of the DA said DIRCO were in fact saying that “that the US was beating SA with a big stick”. However, she pointed out that the Minister of Trade and Industry, Mr Rob Davies, had signed the

courtesy iol

courtesy iol

agreement and therefore South Africa had entered into the agreement willingly in its own overall interests.

She asked DIRCO whether in their view the US was having problems with South Africa’s trade policies and international policies. Ms Maya admitted that the US was also in disagreement with Private Security Industry Bill and Intellectual Property Bills and said that the US also “had some problems with BBBEE”.

Mr D Bergman (DA said “ The truth of the matter was that if SA lost the AGOA because of this issue then SA would lose out.” Deputy Minister Mfeketu conceded that DIRCO agreed that South Africa needed to trade with the US more than the other way around. She repeated the fact that South Africa had accordingly to look for other opportunities.

Free trade agreements

DIRCO concluded that during a meeting of the African Ministers of Trade at the Africa-US AGOAFlorizelleLiser Conference in August last year, Department of Trade and Industry (DTI) had indicated that SA is not ready to enter into a Free Trade Agreement (FTA) yet with the USA and will consult with business and labour before formulating. Already the Assistant US Trade Representative for Africa, Ms Florizelle Liser, has visited SA to consult with the DTI and various other stakeholders on this view.

Previous articles on category subject
Plenty in the way of AGOA agreement – ParlyReportSA
EU and AGOA still important to SA, says govt – ParlyReportSA
AGOA : Parliament this week 3 Nov 2015 – ParlyReportSA
Private Security Industry Bill comes closer – ParlyReportSA
SACU trade split is EU bullying, says Minister Davies – ParlyReport

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Minister Joemat-Pettersson clams up on nuclear

Nuclear deals cannot be transparent

(published to clients 25 Sept)

In a meeting to explain intergovernmental agreements so far made by South Africa on the nuclear New tina-joemattBuild programme, Department of Energy DOE and DDG of Nuclear, Zizamele Mbambo, was completely overshadowed by the requests by Minister of Energy, Tina Joemat-Pettersson, to preface the entire presentation with her own comments. She also was to speak first in answer to the many direct and pertinent questions from Opposition MPs directed at DOE.

In both cases it became less and less clear how much the nuclear programme was going to cost the country.  Also it became unclear what stage the Cabinet had reached as far as decision making was concerned, causing the chairperson of the committee, Fikile Majola (ANC), to remind the Minister that Parliament was supposed to provide oversight on financial commitments to other countries and certainly must be consulted before any such agreements were signed.

Russia dominating events

p van dalenIn an acrimonious exchange between P Van Dalen (DA) in summarising the areas of co-operation between South Africa and the Russian Federation, France, China, South Korea and the USA, Van Dalen remarked to the Minister that the whole picture looked like “Russia versus the Rest”. He wanted to know why the Russian co-operation areas were more informed and more extensive. He gave the example of the Russian agreement offered naming the actual location sites in South Africa for three possible structures.

Minister Joemat-Pettersson responded that the “areas of co-operation still had to be finalised” with Japan, to which country she had yet to visit, and Canada. The Russian Federation had done a particularly good job, she noted. Little information was given for Chinese involvement, it being assumed that President Jacob Zuma’s visit to that country would result in an update. Media reports state that Japan is teaming with Westinghouse.

 Just to keep some happy

 The Minister complained that Opposition members were making the Ministry’s life untenable by constantly demanding information on the extent, the cost and the timing of the New Build nuclear programme when too much information given out would compromise the bidding process. She denied there was any preferred bidder in the process.

She said DOE was supplying information to the meeting, “going as far as they could without compromising the whole exercise” because the Opposition parties had been very demanding. But it was still too early to make all documents available.

No sense

Gordon McKay demanded to know how it was then that Minister of Finance Nene had, in a mediagordon mackay DA briefing recently, stated that the “country could not afford a nuclear build programme” and how it was to be paid for?      If nobody knew the cost, what was Minister Nene talking about, he asked.   He said that Parliament was having “to rely on second hand information from the media” and this was wrong because it represented non-disclosure.

He also wanted to know who it was in South Africa that was “qualified enough to make a judgment call on both selection of the of the winning bidder and also be satisfied on the cost to the taxpayer.”

It was at this point that a surprising fact emerged.     Despite the Minister’s stated inability to answer on total project costs, it was admitted by her that an “independent consultant” had not only completed and supplied a project modelling report but a financial model as well.

All will be revealed

koebergNo further information could be supplied, the Minister said, either on who this was and estimated costs but she promised that the Committee would be briefed once the vendor bidding process was complete. A date at the end of 2015 was promised for further information to be supplied to Parliament on costs, plus the independent modelling reports “in due course”.

The Minister stated that again and again that “transparency was her target as far as Parliament was concerned” but said that she was constrained by the nature of the bidding at this stage. She however confirmed that a nuclear contribution “probably greater than originally expected” had to be part of the energy mix if South Africa was to meet its COP 15 environmental targets agreed to internationally.

DOE has a schedule

Z MbamboDDG of DOE, Nuclear, Zizamele Mbambo in his presentation, confirmed to Parliamentarians that the department was at the stage of the completion of pre-procurement processes and that commencement of procurement would start in the second quarter of 2016, with finalisation of partners by the end of the calendar year.

The intergovernmental agreements at present being concluded were displayed and covered the technology to be selected and construction: research reactor technology and construction; financing and commercial matters; manufacturing, industrialisation and localisation; human resources and skills development; public awareness programmes; safety liability and licensing; nuclear siting and permitting; the nature of both front and back ends of the fuel cycle itself and non-proliferation matters.

 Waste disposal issues

Opposition members wanted to know why waste disposal was not raised as a requirement and DDG Mbambo explained that South Africa had already enacted legislation to adequately cater for this issue and was deeply involved in waste disposal, quoting the Koeberg model.
However, it was notable that France and the USA contained “waste management areas of co-operation” in this regard, whereas the Russian contribution referred to enhancing support for the current legislative and regulatory environment, once again indicating a clearer knowledge of local conditions.

The DOE presentation went no further than just enumerating on a comparative basis each bidder’sbrics partners technological and commercial contributions in broad terms. However, it was notable that the Russian proposals went further than others on the degrees of localisation in the form of manufacture of components and skills training. It also included the “joint marketing and promotion of produced products to third country markets.” A considerable number of South Africans were already in Russian training exercises as they were in China.

Uranium in Karoo

The South Korean proposals were noticeably different in the area of contributing towards desalination of salt water projects and support in various aspects of nuclear research and the exploration and mining of uranium. At this stage the Chines contributions were limited for reasons stated but, again, noticeable in China’s paper was the expression “the development of new technology for civil nuclear energy for the (SA new) build programme and Republic of China and other third world countries.”
Other articles in this category or as background
Nuclear partner details awaited – ParlyReportSA
Nuclear and gas workshop meeting – ParlyReportSA
Nuclear goes ahead: maybe “strategic partner” – ParlyReportSA
National nuclear control centre now in place – ParlyReportSA

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Parliament circulates Russian technology agreement

 

Partnership in techno between SA and Russia…

russian flagThe agreement between the Republic of South Africa and the Russian Federation on scientific and technological cooperation has now been tabled in Parliament, according to a notice published recently. It includes an annex between the same parties, the point being made strongly that both Russia and South Africa are part of BRICS which includes Brazil, India and China and indicating similar agreements. After much to-ing and fro-ing in 2014 between Moscow and Pretoria by minister of energy Tina Joemat-Pettersson and a separate visit by President Zuma for personal reasons it seems but who met President Vladimir Putin, a Russian Federation delegation was reported as having visited Tuynhuis in the Parliamentary precinct in early December last year, meeting Speaker of the House, Baleka Mbete.

The “R” in BRICs

The actual agreement was signed by the chairperson of the National Council of Provinces, Thandi Modise, who appears to have hosted the event. It was also signed by the deputy chairperson of the council of the Federation of the Federal Assembly of the Russian Federation, Ilyas Magomed-Salamovich Umakhanov. In a statement issued at the time in Cape Town, it was announced that “the two Parliaments had agreed to strengthen ties and cooperation through exchange programmes and to encourage freer movement of people between the two countries.”

Not just science

Education, agriculture, economic cooperation and coordination in the global arena were also identified as key areas for closer cooperation. “This memorandum of understanding is testimony to the historical, present and future ties between our countries,” Ms Modise said.   With regard to the use of the word “historical”, President Zuma mentioned in his recent SONA address that the bodies of “two veterans of the apartheid struggle” were to be repatriated and re-buried in South Africa. The statement issued at the time by Ms Modise stated, “Members of Parliament should not be left behind in developments taking place at executive level between their countries.” Other articles in this category or as background Nuclear goes ahead: maybe “strategic partner” – ParlyReportSA Nuclear and gas workshop meeting – ParlyReportSA National nuclear control centre now in place – ParlyReportSA

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EU and AGOA still important to SA, says govt

portsharboursWhite Paper on AGOA and EU trade still applies….

In describing both the need to continue trade in terms of the African Growth and Opportunity Act (AGOA) and the importance of trade with the EU, the department of international relations and co-operation (DIRCO) said clearly some new terminology had been necessary to add to what was basically a 2012 document, the White Paper on Foreign Relations,.

DIRCO was briefing parliamentarians in the international and foreign relations portfolio committee on South Africa’s updated foreign trade policy.

New Bill from International Relations expected

New trading policies needed to be entrenched in the wording, they said, in what was clearly a roundabout way of introducing the idea of new legislation to establish a South African Council on International Relations and beef up the Consultative Forum on International Relations.

DIRCO officials talked at length on how BRICS had changed the scenario of South African foreign relations. However, positioning with the western trading world since the White Paper was first published had not changed much for South Africa, they said.    DIRCO expressed the need for continued good trade relations with the EU, which officials said was still an enormous contributor to overall trade relations with SA. They added that there remained an important need for AGOA to stay in place with the USA to beef up export figures.

Ubuntu the answer

The key concept behind all South African foreign relations was the concept of the “diplomacy of ubuntu”, they said, describing this as a policy of “collaboration, cooperation and partnership rather than conflict and competition”.

When asked by MPs as to whether DIRCO had considered the competitive nature of Nigeria and whether South Africa should really be the leader on the continent, DIRCO officials explained that South Africa’s stance was to “collaborate not compete” and this ethic applied to all relationships, particularly as far as trade was concerned. This was part of the “ubuntu” philosophy, they said.

On key foreign policies, the usual pattern as described in the White Paper were emphasized on the quest for “unity and economic, political and social renewal of Africa” but a number of times the expression “South-South solidarity” did emerge in answers.

Shift in partners

Emphasis was laid on the development of the South African Development Partnership Agency (SADPA) to pursue bilateral co-operation with international partners in support of African development but again it was noted the growth of BRICS in prominence in international affairs and the shift in global economic centre of gravity from North-West to South and East.

South Africa, DIRCO officials told parliamentarians would continue to support the development of larger markets in South Africa but Asia had become of increasing importance to South Africa, in fact Africa as a whole, with China and India increasing their global influence.

As far as the Middle East was concerned, the Levant was mentioned as providing excellent export opportunities but the area remained important in order to access sovereign wealth funds to finance infrastructure.

USA stays globally dominant

DIRCO finally acknowledged that the USA and Canada will remain dominant global and regional political and economic players with significant potential for tourism. DIRCO was conscious however of its own internal changes and policy directions on labour and civil society and incorporated this into their diplomatic training academy courses, which all appointments overseas were enrolled into.

Little could be drawn from DIRCO by MPs present on SADC, Zimbabwe and AU relationships, other than DIRCO intended stepping up its AU relationships, again with the principle of “ubuntu” at the forefront.

DIRCO said the updated 2012 White Paper on Foreign Relations is available on request.

Previous articles in this subject

http://parlyreportsa.co.za//energy/doe-energy-overview/

http://parlyreportsa.co.za//finance-economic/intellectual-property-laws-amendment-act-law/

 

 

 

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Manufacturing fighting to survive in SA, MPs told

Manufactured goods industries struggling with rising costs.

Manufacturing Circle, CEO, Bruce Strong, told parliament that with electricity costs increasing 170% in five years but other BRICS countries decreasing such as Brazil by 28%, the SA purchasing managers index was at a three year low with a volatile rand exchange rate bring uncertainty to any investment plans. Electricity charges had to have a more gradual cost increase trajectory, he said, or there was serious trouble ahead.

Worse, municipal charges had no relation to Eskom charges and this had to be attended to, Strong added.

His statements came in hearings on the department of trade’s (DTI) industrial policy action plan (IPAP) and Strong added his voice to that of MPs that the National Energy Regulator of South Africa (NERSA) should interrogate Eskom price increases more harshly; that municipal mark-ups should be investigated and that electricity discounts had to be considered if manufacturers were to survive.

On the first day, much of the debate surrounding the progress report by DTI on IPAP progress to date. The debate  surrounded not only the usual discourse on tariffs, government departmental policy on preferential procurement (PPPFA) but on re-orientating South African exports away from traditional markets to high growth countries.

A noticeable shift to open discussion on South Africa’s port and harbour problems was very much discernible, other than the expected focus on electricity charges.

DTI’s acting deputy DDG for industrial development, Garth Strachan, told parliamentarians that the need to maintain lower port handling fees was at the moment much countered by high financing costs of port infrastructure development, particularly in the area of rail. Transnet could not disassociate its charges from the urgent need to re-equip in areas of dockside upgrading and rail facilities.

He admitted that South African port charges were amongst the highest in the world, well above global norms particularly on manufactured goods but nevertheless port pricing on iron ore and coal was below the global average. Transnet was deeply involved in increasing flow with new rolling stock which fact was welcomed by opposition members

DTI in their presentation pointed specifically to the renewable energy independent power producer procurement (REIPPP) programme where two rounds of renewable energy generation bids had been awarded with minimum levels of local content ranging from 25% to 45%.

“Green industry achievements included the IDC approval of funding of solar water heater manufacturing and the launch of the energy efficiency programme, DTI said.

Clothing, textiles, leather and footwear, canned vegetables, set top boxes and pharmaceutical products had been the subject of PPPFA revision, it was noted, and new designations for school and office furniture and cables and other capital equipment was in the pipeline. Strachan said the industrial participation programme (NIPP) was just about to be re-formulated which would “help the shift to direct offsets in key IPAP sectors” now that the NIPP policy review had been completed.

On financing, Strachan said IDC was also going to lower the cost of funding for businesses, by sourcing an additional R2 billion from the UIF for funding more labour intensive businesses and so far, IDC had claimed that jobs created or saved through funding approvals from 2009 to this year was well over 111,000.

Looking ahead with the protracted recession and slow demand for South Africa’s exports, the challenge was the exchange rate overvaluation and volatility with high relative real interest rates. Strachan said that the “user pay” principle for funding electricity build programmes was inducing massive economic shocks to the manufacturing sector.

There was also the challenge of pricing by monopolies in primary industry and supply of intermediate inputs into manufacturing. In response to questioning on breaking this control up, Strachan responded by stating that the role of large companies in manufacturing in terms of demand and supply in a relatively small to medium economy was significant and that small enterprises in most cases benefitted from the value chain.

This was bearing in mind that the capital costs of such projects were so huge that it was an unlikely small and medium businesses would proliferate under these conditions.

Over the following two days, hearings on the IPAP were conducted and interesting comment was received from the Manufacturing Circle, made up of a number of South Africa’s major medium to large manufacturing companies from a wide range of industries, some of them exporters.

Bruce Strong, CEO of Manufacturing Circle told parliamentarians that for a sector that employed some 1.7m people and accounted for 15% of GDP it was not good that the sector was stagnant and had lost 300 000 jobs because of the recession.

Municipal electricity charges did not reflect the Eskom’s price increases and it was required that NERSA had to be more aggressive on Eskom price increases. Control was required on municipal electricity price increases in particular. Generally he said, the resources of independent regulators had to be upgraded and a benchmarking analysis of their abilities looked at.

Strong called for a national “fiscal review” on the funding of public infrastructure projects. His circle of companies had responded to various of DTI’s incentive programmes but no successful application by manufacturers to the jobs fund had been reported.

There was a crisis in manufacturing, Strong said.

The Competition Commission in their submission, added IPAP did not seem to support the establishment of a sufficient number of small and medium businesses and the problem as they saw it was that “large firms or monopolies ‘owned’ their customers and spawned low levels of investment as there was no need to invest because there was no rivalry.  MPs added the point that legislated monopolies seemed to be shutting down the economy.

DTI responded  that indeed the “ bunched up” escalation in electricity price increases was hurting the manufacturing sector. But the emphasis on the supply side and Eskom’s build programme that had led to the original Multi Year Price Determinations of a 27% increase, with municipal customers being subjected to tariff loading had led to triple digit non-tariff surcharges.

Some municipalities appeared to be using electricity tariffs to generate revenue, Strachan said and Strong noted that places in Mpumalanga that were served by Eskom had electricity 20% cheaper than those served by the majors. MPs added the point that in some cases, for example Johannesburg and Tshwane, a charge of 700% above Eskom’s prices was made.

DTI recommended that an intra-governmental task team examine the impact of escalating electricity tariff increases; short term measures be applied to vulnerable sectors; there was a need for one national set of tariffs; there should be single digit price increases; carbon taxes be approached with caution in the current climate; and companies be supported in recapitalising with energy efficient technologies.

MPs commented at this stage that it appeared that radical responses were needed to be done or IPAP would become a welfare system for failed businesses and pointed again to “ridiculous” electricity surcharges imposed by some by municipalities. Such a discourse by DTI was needed.

DTI’s main platform however on the issue of a deteriorating situation was the economic situation resulting from the global recession, rather pointing to the fact that although government automotive investment programmes had been successful, the production of cars had been seriously affected by the international failing markets. Exports to the European Union remained negatively affected and there had been an increase in vehicle imports at the same time.

Strachan said that 80% of the bodies of medium and heavy commercial vehicles now have to be assembled in South Africa, with the drive train and engines to be shortly included.   DTI was extending investment support for the assembly of semi knocked down vehicles, he said, and was working with IDC on finance programmes trucks and buses but the market was, nevertheless, small.

The department said the clothing and textiles sector accounted for 120 000 jobs and 11% of manufacturing employment. The sector had a turnover of R35bn which was 2.8% of GDP and there were 2 000 active companies in the sector. While the production in clothing had declined, there had been an increase in the production of footwear.

DTI pointed to the fact that many of the MPs questions and answers in the business hearings were outside of DTI”s function or core business but it could see the danger it posed and recalled that there had been the stalled REDs initiative to secure efficient distribution of electricity.

Looking ahead, Strachan said shale gas whilst not in DTI’s sphere, it seemed quite obvious that the east and west coasts of Africa contained enormous opportunities for the oil and gas industries and also South Africa had a competitive advantage because of its mining history. South Africa should focus on localization and the lifting of constraints at ports accordingly, it was noted.

Strachan noted that there was an opportunity for Saldanha to be an oil and gas hub but progress had been slow. If shale gas became a reality it would double the potential of Saldanha.

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