DTIC on status & implementation of Master Plans, with Minister & Deputy Minister

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Trade, Industry and Competition

27 October 2020
Chairperson: Mr S Mbuyane (ANC) (Acting)
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Meeting Summary

Master Plans

The Portfolio Committee on Trade and Industry met with the Minister of Trade, Industry and Competition on a virtual platform for a briefing on the implementation of the Master Plans to support South Africa's Economic Reconstruction and Recovery Plan. The Committee and the Minister acknowledged the life of Oliver Tambo for whom celebrations were being held as it was the date of his birth in 1917.

The Minister made a lengthy presentation on the Master Plans managed by the Department of Trade, Industry and Competition, focussing on implementation as, in presenting the Economic Reconstruction and Recovery Plan to Parliament, the President had placed the emphasis on implementation. Investment commitments to date for the Department’s Master Plans included R6.7 billion for Retail-Clothing, Textile, Footwear and Leather; R1.5 billion for Poultry; R60 billion in the Automotive industry; R1 billion in the Sugar industry. In addition, a draft Master Plan for the Steel industry had been developed and was the subject of consultations. The Furniture industry contributed 1% to manufacturing GDP in 2019 with the sector employing 68 223 people, so a Master Plan was being developed for the industry.

He explained that the Master Plans were industry social pacts, in which each partner was expected to contribute, shifting away from a state-centric approach to a partnership model. COVID-19 had demonstrated the fragility of global supply chains with unprecedented disruptions as result. While the disruptions had imposed immediate costs on the economy, they had also provided a stronger rationale for the localisation efforts. Government would sharpen its non-financial support and focus efforts on addressing illicit trade, including the use of trade measures to support domestic industry. The stabilisation of industries remained key in the efforts to protect jobs. In the next five months, the Department would finalise the Steel Master Plan and the Furniture Master Plan while working on the implementation (and monitoring of progress) of the Retail-CTLF, Automotive, Sugar and Poultry Masterplans, including deepening localisation efforts.

Members were largely supportive of the Master Plans and asked many questions. What happened to goods seized in actions against illegal imports? Were the goods destroyed and were the importers arrested and charged? Did government have a plan to deal with Brazil as a supplier of poultry to South Africa? What was being done about imports of sugar from eSwatini as some countries imported to South Africa via eSwatini? Would there be increased control at the border points to manage imports?  What impact would localisation have on existing bilateral agreements where goods were manufactured locally in place of imported goods? What plans were in place to reduce the under-invoicing of imported goods in the clothing and textile industry?  Had a target been set for local procurement and, if so, what was that target?

Why had less money been allocated to the rural communities? Would the state fund a black-owned sugar mill? What engagements had the Minister had with Eskom to make things easier for the industry and to guarantee an electrical supply? What was government’s plan to replace infrastructure that had been lost during Covid-19, such as the stripping of rail tracks? How could the steel industry work with government? What were the plans to involve the steel industry in the infrastructure spend? 

Members asked who was monitoring the localisation of the Master Plans and how far the awareness programme was in respect of implementation. How often would the Committee receive updates so that Members could keep their fingers on the pulse?

Meeting report

Opening Remarks
The Secretary informed the Committee that the Chairperson was attending the unveiling of the statute of O R Tambo at the O R Tambo Airport with the President. He hoped to be joining the meeting later. The Secretary confirmed that the meeting was quorate and Mr S Mbuyane (ANC) was elected Acting Chairperson.

Mr Mbuyane welcomed the Members and all others present in the meeting, including PMG that joined every meeting of the Committee.

The Secretary presented the agenda, which was adopted by the Committee.

Presentation on Master Plans by the Minister of Trade, Industry and Competition
Minister Ebrahim Patel, Minister of Trade, Industry and Competition, acknowledged the presence of Deputy Minister Nomalungelo Gina and presented apologies on behalf of Deputy Minister Fikile Majola. He recognised Mr Lionel October, Director-General (DG), Department of Trade and Industry (dtic), Stephen Hanival, Chief Economist at dtic and all the officials from dtic.

The Minister joined the Chairperson of the Committee as well as the President and millions of South Africans in celebrating the life of a truly extraordinary South African. Oliver Reginald Tambo was born on 27 October 1917 and during a difficult dark time in SA history helped many South Africans to keep the faith and focussed the attention of the international community on the troubles and struggles of SA. What an extraordinary life!  Today marked the birthday of that really, really eminent South African.

The Minister greeted officials of Parliament and other attendees. He appreciated the opportunity to present to the Committee.

He wanted to take the Committee into his confidence with some of the details of the Master Plans. He was not going into the formulation of the Master Plans but was going into some detail on the implementation of the Master Plans.

The Minister began with the Economic Reconstruction and Recovery Plan. On 15 October 2020, President Ramaphosa had tabled the Economic Reconstruction and Recovery Plan at a joint sitting of Parliament. The Plan was the culmination of work that had been undertaken by government, but not alone by the public sector; the Plan was also the result of very significant engagement with the business community, trade unions and community structures represented at NEDLAC. The Plan was strongly focussed on the network industries which included a secure, sufficient, reliable and affordable supply of energy, as well as the network industry dealing with transportation, logistics, communication, data supply, etc. The Plan looked at increases in investment, data costs and so on. The increased localisation was critical in the development and growth industry. If the words of the President could be summed up, there would be implementation, implementation, implementation!

The Minister said his presentation would be focussing on the Department’s implementation of the Master Plans.

The Master Plans were not only being developed by the dtic; other departments were also developing Master Plans. The dtic Master Plans already completed covered more than 500 000 direct workers and two of the Plans dealt with food security and rural development: Sugar and Poultry. One Plan dealt with a labour-intensive sector with predominantly women workers and entrepreneurs: Retail-Clothing, Textile, Footwear and Leather. The fourth Master Plan dealt with a major earner of foreign exchange for South Africa and a platform for advanced manufacturing: Car manufacturing. Reciprocal commitments for all stakeholders was a critical issue for successful implementation of the Master Plans, including a focus on localisation and development of SMEs and the informal economy. Implementation of those Plans was well underway.

Investment commitments to date included R6.7 billion for Retail-Clothing, Textile, Footwear and Leather (CTFL); R1.5 billion for Poultry; R60 billion in the Automotive industry; R1 billion in the Sugar industry.

The Minister discussed the four Master Plans in detail, emphasising the investments made in the sectors and implementation that was taking place or was planned. He expressed his enthusiasm for the work taking place.

In addition, a draft Master Plan for the Steel industry had been developed and was the subject of consultations. The Furniture industry contributed 1% to the manufacturing GDP in 2019 with the sector employing 68 223 people so a Master Plan was being developed for the industry.

Master Plans were industry social pacts in which each partner was expected to contribute, shifting away from a state-centric approach to a partnership model. COVID-19 had demonstrated the fragility of global supply chains with unprecedented disruptions as result of that fragility. While the disruptions had imposed immediate costs on the economy, they had also provided a stronger rationale for the localisation efforts. Government would sharpen its non-financial support and focus efforts on addressing illicit trade, including the use of trade measures to support domestic industry. The stabilisation of industries remained key in the efforts to protect jobs. In the next five months, dtic would finalize the Steel Master Plan and the Furniture Master Plan while working on the implementation (and monitoring of progress) of the Retail-CTLF, Automotive, Sugar and Poultry Masterplans, including deepening localisation efforts.

The Minister thanked the Portfolio Committee for providing the Department with the opportunity to report. He thanked the industries and also the officials who had put so much work into the Plans.

(See Presentation)

Discussion
The Acting Chairperson thanked the Minister for a detailed and powerful presentation. He invited the Members to ask questions or make comments.

Mr F Mulder (FF+) asked what happened to goods seized in actions against illegal imports. Were the goods destroyed and were the importers arrested and charged? Secondly, he asked about the influence of localisation on existing bilateral agreements where goods were manufactured locally in place of imported goods as that would have an impact on the existing trade agreements.

His party welcomed the localisation process. The Freedom Front Plus was known for the fact that it stood for self-determination of SA, especially as far as economics was concerned, so that the country was less dependent on the world. That was the situation forced on SA pre-1994 following sanctions. Ironically, the country was once again forced to manufacture locally but under a totally different set of circumstances.  So, he welcomed localisation.

One of the greatest gifts was not to give a man a fish, but to teach him how to fish. One of the greatest assets of any community was that it should be a self-respecting community, taking as many decisions as possible about its own affairs at grassroots level. He asked the Minister if there should not be more programmes in future on getting communities self-sufficient because the reality was that SA was a community of communities, and if communities could become more self-sustainable, that would have an impact on the economy of the country.

Ms N Motaung (ANC) complimented the Minister on the presentation and applauded the good work of the Department but asked why less money had been allocated to the rural communities, i.e. in the Sugar and Poultry Master Plans.

Ms R Moatshe (ANC) asked who was monitoring the localisation of the Master Plans and how far the awareness programme was in respect of implementation.

Ms Y Yako (EFF) asked if there were any plans to deal with Brazil as a supplier of poultry to SA. Black millers were a favourite topic of hers. Her idea of a proper Master Plan would be the state saying that it wanted to fund a black-owned mill. That was lacking. Were the black farmers benefitting from the Master Plan? She supported state-owned companies. The dtic should focus on a state-owned company that would focus on beneficiation and upskill young unemployed people and build capacity, so that SA could have its own PPE state-owned company.

Mr M Cuthbert (DA) said that he had listened intently to the part of the presentation on the steel industry. The DA was opposed to the export taxes and now government was touting an additional tax on ferrochrome. The Minerals Council had said that Government was using a blunt instrument to deal with a problem that was more in the inceptional phase, i.e. the supply and cost of electricity. What engagements had the Minister had with Eskom to make things easier for the industry and to guarantee an electrical supply? What was government’s plan to replace infrastructure that had been lost during Covid-19, e.g. stripping of rail tracks? How could the steel industry work with government? What was the Minister’s plan regarding the steel industry? What were the plans to involve the steel industry in the infrastructure spend? 

Ms T Mantashe (ANC) said she extended her support for the export tax on steel as the export of commodities from SA was an export of jobs from the country. SA had to start to localise if SA wanted to localise the economy. Regarding the steel industry, she welcomed the high export taxes as it would stop some of the exports. She wondered if it had been discussed with the local industry.

Ms Mantashe applauded the Department for the sugar and poultry Master Plans. There was a traceability policy on poultry imports. What about something similar with sugar so that consumers knew where their sugar came from? She was pleased with the actions taken against deep sea imports but what was being done about imports of sugar from eSwatini as some countries imported to SA via eSwatini?

Ms Mantashe welcomed the R1 billion for transformation by the South African Sugar Association (SASA) but was it being monitored and was it for real transformation? The Committee wished to be appraised on the implementation of the Master Plans programme. The Committee wanted to see if there was delivery. Would there be increased control at the border points to manage import control? There were policies but the biggest problem always lay with implementation, which was why she would like to be appraised of progress in respect of delivery. The biggest problems were at the borders. She asked if the staff shortage would improve so that the borders became water tight. Counterfeit goods had to be kept away from SA.

Mr W Thring (ACDP) appreciated the work done by the Department to establish the Master Plans and he looked forward to the completion of those currently being developed. The Master Plans had the potential to create more jobs in SA and to grow the economy as the President had suggested in his speech on the reconstruction of the SA economy.

He asked what plans were in place to reduce the under-invoicing of imported goods in the clothing and textile industry. The Minister had referred to Brazil, in particular, as a country that engaged in under-invoicing. Was there a target for local procurement by retail stores? He would like to see 100% local procurement, if not ninety-something percent. Had a target been set for local procurement and, if so, what was that target?

Mr Thring noted that the hard lockdown had cost 2 to 3 million jobs; some said 5 million jobs. The Economic Reconstruction and Recovery programme proposed some 800 000 jobs. The 800 000 jobs promised paled in comparison with the 2 million to 5 million jobs lost. If there were another hard lockdown, and some people were speculating that a hard lockdown might be on the cards, it would make the hard work on the Master Plans become almost irrelevant. Was SA going to move in the direction that other countries had moved? When there are health risks, the government did everything to protect the economy while working on saving lives. SA had to have a parallel approach of saving lives and livelihoods.

Ms J Hermans (ANC) complimented the Master Plans and appreciated the positive comments of the Portfolio Committee Members. Implementation, implementation, implementation – that was the key. It was business unusual. How often would the Committee receive updates so that Members could keep their fingers on the pulse? Master Plans also had a cross-cutting nature and her point related to one of the cross-cutting issues.
Everyone knew that SA was one of the richest countries in respect of mineral deposits but SA was the greatest exporter of minerals. Beneficiation could unlock some great opportunities but the Minister would inform her if that was a Trade and Industry matter or whether that was the responsibility of Minerals and Energy.

The Minister thanked Members for their warm comments. He really appreciated it as it was a common effort to build the SA economy.

In responding to Mr Mulder’s question on the seizure of illegal goods, the Minister stated that if such goods were sold on, they damaged the economy of the legitimate SA market. The SA Revenue Service (SARS) now shredded the goods seized and the shredded fabric to provide stuffing for mattresses and shredded cloths were also used for cleaning. Government was working with the national cleaning sector to ensure that there was a green angle to it. One of the partners was the United Nations Agency for the Circular Economy to ensure that illegal products have a use.

He told Mr Mulder that SA was not bound to any procurement undertaking so the state was free to purchase local products. Some countries had bound their procurement, but SA had not bound its procurement. Most of the localisation drive was by industry, labour and communities and they were not bound by WTO regulations. Having taken a careful look at the situation, he was sure that none of the measures fell foul of the country’s legal obligations.

The Minister informed Mr Mulder that community self-sufficiency was a tricky issue. On the one hand, government would like to see economic activity in every district municipality and a big part of the focus was to find opportunities for communities to be involved in infrastructure and industry, but, on the other hand, both from a constitutionally and from an economic logic point of view, SA was a single market and a national market. If SA had ventilator factories in various communities across the country, the ventilators would lose the competitiveness gained from economies of scale. The localisation programme was designed to provide SA with local goods.

He appreciated the FF+’s welcoming of localisation but explained that SA was a unitary state and not a federal republic. However, within the unitary state, the government was obliged to support local communities and municipalities to find economic opportunity. The localisation programme was designed to enable SA companies to produce goods and to compete internationally, while at the same time, finding opportunities for young people and for women and local communities within that framework. It did mean that not everything could be produced in every municipality.

The Minister appreciated the fact all political parties supported the localisation programme. He agreed that one should teach people to fish. As an amateur fisherman who never got time to fish, he could say that the modern version was: “Teach a man to fish and you can sell him a ton of accessories”.

The DG would respond to the question on the budget.

Mr October stated that in terms of dtic’s overall budget, the Department had a fair mix because the dtic had allocated various amounts to the Master Plans in different sectors, but in the broader programme of dtic, such as industrial parks, the Special Economic Zones and the support for the district development model, one would find that that budget had been slanted to support rural provinces. One should not look only at the specific allocation for programmes, but also look at the penetration of some of the sectors, such as sugar, and the textile, clothing and footwear sectors, into the rural areas and take that into account.

The Minister informed Ms Motaung that the investment amounts of R1.6 billion for poultry and R1 billion for sugar were private investments in new productive capacity and not within the budget of the Department.

The Minister said that to monitor the Master Plans, dtic had an executive oversight committees of CEOs of the large companies, the smaller players, unions and government etc. The Committee was chaired by the ministry and at the meeting, companies were required to provide information regarding localisation. Given that there was a localisation agreement through the NEDLAC process, companies, organisations and institutions would be required to provide information on localisation in their annual reports.

He said that the President had lifted the localisation storyline with his speech to Parliament on the Economic Reconstruction and Recovery Plan. 400 Members of Parliament would be talking about it in their constituencies, his ministry and government in general, would be talking about localisation, in many cases highlighting the successes but also pointing to some of the challenges. The key was to make South Africans proud of the product. He pointed to the example that SA was the world’s second biggest citrus exporter. If the European Union had not unfairly used “black spot” to prohibit the export of citrus fruits from certain parts of SA to Europe, SA would be the largest citrus exporter in the world.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

The Minister informed Ms Yako that she had correctly pointed to the challenge with imports from Brazil. Both government and the private sector were working on the issue. Government was working on the declarations that had been made in relation to the imported goods and SARS was aware of the problem. SARS had found a problem with the macro-data from Brazil and was looking at the micro-data in an attempt to find which were the particular companies and importers and take the action that legislation permitted. The private sector was reviewing the trade rules relating to Brazil. Ms Yako’s point on Brazil was spot-on. He would ensure that the Committee was cited when that process was finalised.

On the question of state funding for a black-owned sugar mill, he made the point that Gledhow Sugar Mill was 60% black-owned and 65% of the shares were held by the Small Farmers Trust. He agreed that there was a need for more black-owned mills and that was in the Master Plan as that area needed to open up. Regarding state-owned enterprises manufacturing personal protection equipment (PPEs), he informed Ms Yako that the Council of Scientific and Industrial Research (CSIR) was producing 18 000 of the 20 000 ventilators used locally.

The Minister responded to Ms Yako’s question as to why there was not a state-owned steel company. He explained that steel was a complicated industry. Technology in the industry was changing rapidly. There was currently an oversupply in the global market and the competition was fierce. Years ago, SCAW Metals, a South African company that manufactured steel was in the market and there were fears that company would be bought and dismembered so the Industrial Development Corporation (IDC), a state-owned corporation had stepped in to stabilise the company. The IDC was the majority stakeholder but could not afford modernisation and the necessary skills so one section had been sold, with the IDC retaining some holding in the company. The remaining state-owned parts of the company were still running at a loss because steel was a market was not a commodity but driven by innovation and niche products. The state was currently looking for public and private partnerships. The state was currently invested in steel but it was not easy for the fiscus to take on the employment of workers as that could become a burden on the state. The current approach was to look at a mixed economy, i.e. a strong role for the private sector and a strong role for the state to manage standards, etc. The state simply needed to have a stake in key areas of the economy.

The Minister acknowledged the opposition of the DA to the export tax on scrap metal and that in a democracy each party was entitled to their own views. He believed Mr Cuthbert would support him in the light of the fact that the manifesto of the ANC in 2019, when it was campaigning for votes for the elections, had included a promise to institute an export tax on scrap metal, and, having been elected, the ANC was fulfilling its election promises.

The ferrochrome matter was one on which Minister Mantashe and the dtic had done quite a bit of work. Mr Cuthbert was correct that the energy crisis represented one significant challenge to the ferrochrome industry but the complexity of the industry was such that it had been deemed appropriate to do interventions across a range of fronts and discussions were taking place across government about dispensations for large users of energy that would enable SA to beneficiate more of its own products.

The Minister said that Mr Thring would be delighted to know that SA exported 70% of chrome which went as feedstock into ferrochrome. The question was whether SA should export raw material where value addition took place elsewhere in the world or whether SA should find a way to do beneficiation in the country in a sustainable manner.  Export taxes were frequently used by other countries. He pointed out that China had become the world’s largest producer of ferrochrome and had a really large number of export taxes on all raw materials. A recent OECD (Organisation for Economic Co-operation and Development) study had confirmed that. SA was a large producer of mineral resources but had never really used export taxes in a significant way, except for a small tax on diamonds and the tax on scrap metal that was currently going through various processes. He confirmed that government was engaging with Eskom on pricing.

Regarding the replacement of infrastructure that had been depleted during lockdown, the Minister noted that there was an interesting relationship between a large scrap metal market, which there was, particularly in Asia as it was used as feedstock by steel mini-mills, it led to people ripping out cabling and steel from the metro train, etc. As long as there was large market, there would be pressure on such infrastructure. The law enforcement agencies were looking at how to deal with the issue. One of the effects of the export tax was to provide information about the collection of scrap metal and the extent to which it was being exported. The goal of government was to utilise more of the scrap metal in SA to create jobs. When one used iron ore for smelting, more energy was used than when scrap metal was smelted. It was a complex storyline and government was looking at further measures.
                                                         
Regarding infrastructure, he stated that there had been engagement between the dtic and the InfrastructureSA Office around localisation. He had also met with his counterpart Minister and they had identified products that could be produced locally and used in the infrastructure programme. One big set of products was steel and steel-derivative products. There was a large number of them that were being looked at and the other possibility was another set of materials that could be linked to the infrastructure drive was cement and clay products. There was also an opportunity for water meters, etc.

The Minister thanked Ms Mantashe for her support on the export tax. Traceability for sugar was a challenge as traceability standards were introduced where it was necessary to ensure health and safety standards. With sugar per se, there was not a health and safety issue, although there was nothing to stop SA requiring that a label of origin be put in place. He reminded Members that there were five countries in the SA Customs Union, which meant that those countries did not put any tariffs on goods that traded between the countries. While it was true that significant amounts of eSwatini sugar was coming into SA, it was also true that a significant number of SA manufactured goods were sold in eSwatini. SA was not looking at a formal duty but, as part of localisation, the government had spoken to eSwatini about the speed with which imports of sugar were arriving and how that had the potential to disrupt the local industry. He hoped that, with the support of players in SA, it would be possible to deepen the sugar industry in SA and there were signs of that happening.

On clothing, textiles, footwear and leather, he stated that, as he had indicated, monitoring was done through an executive oversight committee. He had met with the retail sector and their association was working on a simple and robust system to be able to see at a glance how the sector was doing. At the moment, monitoring was done on the basis of companies, but the new system would give greater depth and flexibility to monitoring and oversight. He stated that over the past year, there had been an enormous effort by SARS and the SARS Commissioner to stamp out illegal imports. The Commissioner had met with Minister Patel and the dtic, as well as a number of industries, in his campaign to stamp out illegal imports. The dtic supported efforts to enhance the capacity of SARS. NEDLAC also supported efforts to create greater capacity in SARS. Ms Mantashe was correct that capacity at the borders had to be beefed up, but it was not just about the people employed; the huge containers required IT systems to track illegal goods. SARS was setting up more sophisticated IT systems.

He thanked Mr Thring for the positive comments and added that SARS was detaining the huge containers of illegal products. Previously, what had happened was that when SARS had raised a query, the importer would put pressure on SARS and the containment would be released while SARS continued the investigation on paper. Importers had taken advantage of that system and the goods had disappeared and been sold by the time the investigation was complete.
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The previous year, a Chinese company, Dragon Freight, had brought a large quantity of goods into SA, but when SARS checked the prices of goods, the cost of the items was absolutely absurd and unrealistically low. SARS had contacted China and compared the export price to the import price in SA. The big importers had taken SARS to court on the matter, hoping that the threat of court action would cause SARS to return the goods. SARS was currently taking the high court judgement on review.  A second case was coming up in November and the ministry of Trade, Industry and Competition was joining in the court case to be able to provide evidence. The retailers had stated that they would work with SARS to stamp out illegal imports.

In response to Mr Thring’s question on Brazil, the Minister stated that he had responded to the question when he had dealt with the poultry matter but he assured Mr Thring that government was looking at some additional measures to deal with problem but, until final decisions had been taken, he would not be putting the measures in the public domain. He had gone to Brazil the previous year and had explained to his Brazilian counterpart the extent of the problem for SA and that SA would take measures to protect the domestic industry.

Regarding a target for localisation in the clothing, textile, footwear and leather industry, the Minister informed Mr Thring that the goal had been set at 65%. He would love to set a 95% target but the target was moving from the current 44% localisation to 65% and that would create tens of thousands of jobs. The focus currently was on implementation of the Master Plan.

He noted that Mr Thring had raised the economic effects of lockdown and had stated that government should save lives and protect livelihoods. He began with the question of the number of jobs. The 800 000 jobs that the President had referred to was the number of jobs to be created in the public sector and for which the workers would be paid a stipend. However, all the work being done with the Master Plans and other areas should help to create jobs over and above the 800 000 government-funded jobs. He added that SA was becoming an increasingly popular destination for global business services, i.e. call centres. The dtic had an incentive scheme for global business services. Currently, there were about 270 000 jobs in the industry in SA. Even during lockdown, SA had enabled some of the call centres to continue with their business, resulting in an increase in numbers. The dtic had been voted by the business processes industry as having the second most attractive business environment. He hoped that those employed in the government’s mass job scheme would ultimately find jobs in the productive sector.

Minister Patel said that Mr Thring rightly made the point that the lockdown came with enormous costs on society. South Africans needed to redouble their efforts and maintain social distancing, wear masks and use hand sanitiser to prevent an overwhelming spike. France alone was experiencing 100 000 new cases per day. All European Union countries had also tightened measures and Chancellor Merkel of Germany had called for an urgent meeting as Germany was very concerned and warned that the country was being overwhelmed. Italians had been advised against trips out of the country.

SA was doing everything to intensify the soft levels. Level 1 did not mean that the virus had gone away. There had been a lot of slippage and people needed to do more to contain the virus and to prevent SA’s healthcare from being overwhelmed. The government was working hard to avoid a hard lockdown.

Finally, he agreed with Ms Hermans and commented that she had put it very well. It was definitely about implementation. His intention was not to produce large numbers of lengthy documents. The intention was to draft a very focused document that could be changed if something did not work but could be scaled up where something worked well. It had to be a living document. The intention was not to burden officials with reporting and other obligations to such a degree that they became unable to assist the private sector and unblock blockages, which was what public servants were there for.

Minister Patel explained that, in working on the Pretoria Special Economic Zone, DG October had not focused on reports but on being hands-on in solving problems. Progress would be reported to the Committee on a regular basis but the reports would be slimmed down. The dtic would not report on meetings that had happened. The reports would be on outcomes and impact.

The Minister explained to Ms Hermans that the main problem with beneficiation was the amount of energy required, the cost and reliability of energy. The procurement of renewable energy announced by Minister Mantashe and the work being done by Minister Gordhan to fix Eskom and to get Eskom to take maintenance more seriously, was work being done by colleagues that would help the dtic with the beneficiation programme. Ms Hermans had ended off with a message of hope which he wished to echo.

He stated that SA imported more than a R1 trillion of non-oil products. Imported edible oils for cooking equalled R8 billion. If SA could produce half of the cooking oil, it would add R4 billion to the GDP because part of calculating GDP was to subtract the amount that a country imported from its total production. Localisation was a critical driver of growth and it would be complemented by the African Continental Free Trade Agreement. Every R1 that Members of Parliament spent on SA-manufactured products over Christmas would add R1 to GDP and create jobs.

Minister Patel appreciated the warm support from the Committee. The dtic would report regularly. He reminded Members that the Department would not get everything right because the officials would have to break the mould and try new approaches. But he reminded them that, after the second world war, all economically successful countries developed a strong manufacturing economy. He thanked the Committee Members for the engagement. He hoped to have many more success stories to tell.

Concluding remarks.
The Acting Chairperson stated that the Committee welcomed the reports. While the Committee acknowledged the impact of Covid-19 on the Automotive Master Plan, there was a need to support the local industry. Transformation should remain central to the implementation of the Master Plans. The Committee also welcomed the progress made in the development of Steel and Furniture Master Plans and looked forward to seeing the Plans completed in the current year.

The Acting Chairperson called for a monitoring tool to monitor localisation in all departments and a localisation awareness programme. Localisation, localisation, localisation!

The Minister emphasised that over the Christmas period, South Africans spend a lot more than at any other time of the year, so the Department would be launching a localisation promotion: buy local, eat local, travel local and even sing local.

He stated that it had been great honour to speak on creating jobs on the birthday of the great South African, Oliver Reginald Tambo.

The Acting Chairperson thanked Members for attending the meeting, including Member Jacobs, the media and PMG. The Committee appreciated the support given to Trade and Industry which cut across all departments.

The next meeting was the following day -  a briefing on the status of the ferrochrome and cement industries.

The Acting Chairperson thanked the Committee for giving him the opportunity to chair the meeting. He expressed his appreciation for the life and work of Oliver Tambo.

The meeting was adjourned.

 

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