Boosting and transforming the economy is lagging, despite government sectoral master plans, various departments have told a Parliamentary committee. They were giving an update on the poultry and automotive sector, which they said had not transformed much to give black people more opportunities to access the markets.
The Select Committee on Trade and Industry, Economic Development, Small Business, Tourism, Employment and Labour met representatives from the Trade, Industry and Competition Department, and the Agriculture, Land Reform and Rural Development Department to get an update on the two master plans. The key issues that emerged were localisation and transformation.
While the Automotive Masterplan was signed in 2018, there were still some hindrances concerning policy adaptation. Mkhululi Mushi, chief director of the automotive unit at Trade and Industry, said the industry was showing signs of recovery from the Covid-19 pandemic and lockdown. He said localisation was being pursued, while the state was trying to enhance initiatives to build competition.
“Regarding localisation, preferential procurement of light motor vehicles by the state was required to create demand. It is quite a complicated process, but it is being explored,” he said. “However, preferential procurement of buses is already in place and 80% of bus bodies have to be locally procured.”
Committee member Mosimanegare Mmoiemang said that the impact of structural limitations in the country had limited economic growth and localisation. “There might be a need for the master plan to have a targeted approach to confronting the automotive industry with a view to procure from local industry and to support growth,” he said. “There were opportunities for businesses that located themselves in the Special Economic Zones (SEZs). The challenge was that small suppliers did not have access to the advantages of SEZs.”
The department’s chief director of its agro-processing unit, Ncumisa Mcata-Mhlauli, admitted that there were no black players in the chicken feed industry. However, she said, black players could enter the space especially given that the Industrial Development Corporation was willing to lend the necessary support.
Mcata-Mhlauli said there was some work underway to address the monopolies in the industry, by promoting black players.
“One action is to look at the B-BBEE status of the industry. The big players had already provided information about where there are opportunities; The DTIC is not taking this work lightly, as a great deal of work is still needed on vertical integration in the industry,” she said. Mcata-Mhlauli also revealed that 80% of the R1.5 billion set aside for the process had been spent by big players, but they had to provide opportunities for small businesses.
Black players are able to benefit from their inclusion in retail markets, but their empowerment still had to be worked on. “The intention is not for black farmers to be only growers, but (that) by 2030 the entire industry should be completely transformed,” she said. “R200-million has been set aside for the transformation of the industry, as well as up and downstream business, and that would break the monopolies as transformation is a journey.”