Minister Parks Tau: Trade, Industry and Competition Dept Budget Vote 2024/25, NCOP

Thank you, House Chairperson,
Honourable Members,
Deputy Ministers Godlimpi and Whitfield,
The Acting Director-General and senior officials of the dtic,
Distinguished Guests, and
Ladies and Gentlemen.

Greetings to you all!

As we begin commemorating and celebrating Women’s Month, it is sincerely an honour to be here at the National Council of Provinces (NCOP). Undoubtedly, this is an important platform to promote, above all, the principles of cooperative government and intergovernmental relations.

As the Department of Trade, Industry and Competition (the dtic), we are focused in realising the objectives of the Government of National Unity (GNU). These objectives revolve around achieving inclusive growth to demonstrably meet the expectations of all of our citizens.

To meet these objectives, as a Ministry we are today tabling a budget vote of bold transformative actions.

Chairperson,
We have to work together to find each other! All three spheres of Government and the private-sector will have to plan and implement together. By the end of August 2024, we will convene a MINMEC in the spirit of cooperative governance, to coordinate government’s economic and transformation programmes.

This collective approach provides the new administration an opportunity to strengthen existing programmes and interventions aimed at creating investment attractions opportunities for the country.

Over the MTEF period, R30.1 billion has been allocated to the dtic family. Our biggest portion of the budget is allocated to the incentives programme receiving 48.7% of the budget. This is followed by the Sector programme and Transformation and Competition receiving almost 30% of the budget.

Alone we will not achieve our desired impact as outlined in the National Development Plan (NDP). Therefore, we call upon all sectors of society to partner with us. To this effect, we will use our budget to leverage existing resources, initiatives and programmes that will help the country to move forward

Expand and Improve SA Exports Today we convened a press briefing to present some of the major outcomes emanating from the two international engagements that we, as the dtic family, have participated in recently, namely: the 21st African Growth and Opportunity Act (AGOA) Forum in Washington, DC and the 14th BRICS+ Trade Ministers Meeting in Moscow, Russia. At the AGOA Forum, the dtic family was supported by a diverse South African delegation who engaged with the United States (US) stakeholders with a view to strengthen trade and investment relations.

Our mission was undertaken, guided by the GNU Statement of Intent that outlines key priorities for the 7th administration with a focus on achieving rapid, inclusive, and sustainable economic growth. Our key message was to reset and create partnerships with an emphasis on industrialization, building a capable state and job creation. As the dtic family, we regard the AGOA Forum as a crucial engagement reinforcing the strong economic ties between South Africa and the United States and our African continent.

Both the AGOA Forum and the BRICS Trade Ministers Meeting were fundamental in advancing international trade relations and economic cooperation. The outcomes emanating from the BRICS+ Meeting included, amongst others:

• The need for coordinated multilateral action on climate change and expressed concerns about unilateral measures like the Carbon Border Adjustment Mechanism (CBAM) impacting developing countries. Furthermore, they agreed to ensure climate measures respect WTO commitments and resist discriminatory practices.
• The potential of e-commerce to enhance market access and economic growth with calls for developing international rules and standards to address challenges such as cross-border taxation and data privacy.
• The role of SEZs in driving economic growth and investment was discussed, with a commitment to sharing best practices.

Chairperson,
In the spirit of transparency and in the hopes that we further improve the ease of doing business, we welcome the President’s ascension to the Companies Amendment Act. This Act will achieve the following:

1. First, it aims to improve the ease of doing business by ensuring that our Company Law is consistent with well-established principles that are not overburdensome on businesses.
2. Secondly, it aims to achieve equity between directors and senior management on the one hand, and shareholders and workers on the other hand as well as addressing public concerns regarding high levels of inequalities
   in society.
3. Thirdly, we are pleased with the signing into law of the Companies Amendment Act which will go a long way in ensuring adherence to sound corporate governance, accountability and transparency and that directors carry their duties with integrity and care.

House Chairperson,
We have to work together to find each other! All three spheres of Government and the private-sector will have to plan and implement together.

Spatial Equity
To achieve better spatial equity requires the strengthening of our Special Economic Zones (SEZ) programme. Fortunately, there are local success stories we can learn from to accelerate the SEZ models in other underserviced areas.

As you know, the Coega Industrial Development Zone is presently home to 63 firms, employing approximately 10,000 people and with cumulative investments of about R11.5 billion.

The much-celebrated Tshwane Automotive SEZ (TASEZ) suggests that we have found a much better and enhanced SEZ model. One major lesson learnt from the TASEZ is the importance of National, Provincial and Local Government to have an equitable share and responsibility in the SEZ. This model was tested in the TASEZ and has been proven to really work. National Government provided funding for the ‘top structures’ and the Province and the Metro supported the bulk infrastructure investments. This model will now be rolled out more wildly as we consider SEZ existing and new applications:

1. The Nkomazi SEZ in Mpumalanga
2. The Bojanala SEZ in North West
3. The Fetakgomo Tubatse SEZ in Limpopo
4. The Namakwa SEZ in the Northern Cape

This is an example of the District Development Model (DDM) at work!

Transformation Transformation
Transformation remains a key imperative – as required by our Constitution – and the dtic family will continue to guide and monitor B-BBEE progress to ensure that designated groups benefit directly from SA’s growing economy. As part of this priority
we will work explore, working with stakeholders, how to more efficiently aggregate enterprise-level spending on B-BBEE components such as Enterprise and Supplier Development, Skills Development and Socio-Economic Development.

South Africa has over 200 industrial parks which are often located in or adjacent to our townships. Many of these industrial parks provide jobs and incomes to people from the surrounding townships.

If we are to unshackle our township entrepreneurs, then fixing SA’s industrial parks is an essential policy intervention. We therefore call upon all three spheres of government to support the revitalisation and growth of industrial parks. We also call
upon all three spheres of government to improve operations and facilities including through encouraging private-sector participation.

At National and Provincial level, we know that many departments fund SMME support agencies, incubators, regional offices, outreach centres and so forth. Some if not many of these could be located within professionally-run, accessible industrial parks and thereby improving community access, providing stable income for the industrial park, and potentially lowering the cost of government providing services to citizens and stakeholders.

House Chairperson,
We have to work together to find each other even in our beloved continent! For the dtic family, this is being done through inclusive economic diplomacy.

Overarching Industry Policy
As indicated during our Budget Vote Speech to the National Assembly, the dtic group’s smart industrial policy and programmes, are being implemented through strong coordination across the three spheres of government. Our smart industrial policy and programmes are being implemented through partnerships with both state departments or agencies and the private sector and organised labour.

Green Industrialisation
Two weeks ago, at the Opening of Parliament debate, we made mention of the sage counsel of Wangari Maathai when she emphasised the balancing of the needs of the economy and the demands of the environment. She is on record in saying:

“the environment and the economy are really both two sides of the same coin. If you cannot sustain the environment, we cannot sustain ourselves.”

The corollary in this context also holds true, that “if we cannot sustain ourselves, we cannot sustain the environment!”

This context allows us as South Africans to celebrate the signing of the Climate Change Bill by the President came at an opportune moment. Fortunately, as the Department we had already taken significant steps towards identifying opportunities
in industrial decarbonisation and manufacturing of green products for both local and export markets.

The Bill makes provision for a role for provinces and municipalities in coordinating our climate change responses as well as setting emissions targets for manufacturing and related sectors. In this regard, the Department has developed the Green Hydrogen Commercialisation Strategy, which will be implemented.

In the next few weeks, as the Ministry we will be meeting with provinces and SALGA to map out these further and ensure that we all channel our energies towards building a greener and climate-resilient South African economy.

Honourable House Chair,
We have to work together to find each other! All three spheres of Government and the private-sector will have to plan and implement together.

Manufacturing-led Growth
We have to ensure that industrial opportunities resulting from policy, regulatory and private-sector decisions are maximised to enable manufacturing-led growth. Why the explicit focus on manufacturing?

Quite simply, manufacturing induces or catalyses growth and jobs in upstream and downstream sectors. These jobs are typically permanent, pay relatively decent wages and provide workers with sustainable careers. And as you would agree, these jobs offer a sense of dignity to our citizens and communities.

Crucially also, manufacturing is not dependent on mineral resource endowments or the perfect climate for agriculture. The manufacturing sector is generally able to operate in any environment that has basic municipal economic infrastructure.

This is why -– as we pursue inclusive growth – the manufacturing sector will be prioritised to bring growth to our underdeveloped Provinces, rural areas and township spaces. We have seen the impact of the migration of our people to urban and metro areas primarily because, we have not been able to create sufficient jobs closer to where people live.

House Chairperson,
Illicit Economy
One of the more significant threats to the economy and job creation, that undermines our industrialisation efforts is the illicit economy. Some importers under-declare the value of their goods or make false declarations of the goods they are trading in.

Others misuse certain rebates created to support local manufacturing by allowing duty-free importation of certain inputs to support local value-adding manufacturing. This makes it difficult for many local manufacturers to compete with such low-priced or illegal imports, resulting in adverse impact on the creation and retention of jobs and sustaining livelihoods.

It is against this background that we have formed an Inter-Agency Working Group comprising the dtic, ITAC, National Treasury and SARS to combat the illicit economy, with an immediate focus on illicit trade in scrap metal, gold and clothing, textiles, footwear, and leather (CTFL).

House Chairperson,
Stabilizing the administration and good governance We are currently reviewing the organisational structure to ensure that it is aligned and optimised to support the Department’s mandate and prioritised programmes.

It is envisaged that the proposed structure will promote a value chain approach to integrate the work of the Department and its entities and thereby eliminate silos, duplication and inefficiencies.

We have prioritised the filling of key leadership positions in the department and our agencies to strengthen the department’s capacity to execute on its mandate.

Honourable Chairperson and NCOP Members, as I conclude, I would like to remind us that the electorate expects political parties of the GNU to work together constructively to the benefit of all South Africans.

I wish to thank the Select Committee on Small Business, Trade Industry and Competition on their contribution during our engagement on the 2024/25 Annual Performance Plan Briefing.

I hereby table vote 39.
I thank you.