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Media Advisory 2015

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    Minister Patel marks Africa Day with a symposium on the significance of the African continent on the South African economy

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    MEDIA ADVISORY 22 May 2015

    Africa Day Symposium on 25 May 2015: Africa and the South African Economy

    African economic integration is a critical driver for shared economic prosperity and job creation.

    Recent xenophobic sentiments that are fuelled by fears of job losses and economic exclusion do not take account of the enormous benefits that South Africa (and our neighbours) derives from the growing integration of economies.

    The Symposium will take place on Africa Day, Monday, 25 May from 3 to 6pm, at the Sol Kerzner Hospitality Suite, Bunting Rd Campus, University of Johannesburg, to be followed by a reception and light buffet dinner.

    It is convened jointly by the University of Johannesburg, the Industrial Development Corporation and the Economic Development Department and I extend the invitation on behalf Minister Patel as well as that of Professor Rensburg, Vice Chancellor of UJ and Geoffrey Qhena, CEO of the IDC.

    The Symposium will identify and discuss the positive economic impact of Africa on the South African economy and ways in which this can be strengthened and better communicated to the broader South African public. This will look at trade flows, investment, tourism and infrastructure development, among others.

    We have invited a small number of people drawn from the business, labour, community, government and academic sectors.

    For more information please call Thembinkosi Gamlashe on 072 031 6870

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    Minister Patel's Budget Vote Announces R23bn funding for black industrialists, a retail sector inquiry and conditionalities for tariff support

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    Economic Development Minister Ebrahim Patel today announced a R23bn boost towards the development of black industrialists when he delivered his budget speech in Parliament. The budget speech contained a range of competition, trade and infrastructure announcements intended to drive deeper industrialisation and localisation.

    The Minister announced the establishment of an Independent Panel of steel-industry experts to advise on a more competitive steel price for downstream users and stimulate local demand for steel. He also stated that he will require reciprocal commitments from companies requesting future tariff support. The Competition Commission will be announcing an enquiry into the retail sector within four weeks.

    Minister Patel further identified areas of focus for the upcoming year included deepening the gains of the infrastructure programme, making measurable progress on the big-build programmes, advancing our growing economic integration with the continent and working with the local companies and sectors to address the slowdown in demand. The R23 bn funding commitment towards black industrialists forms part of the increased funding that the IDC has made to the South African economy and region. Over the five years to 2015 the IDC increased its level of funding by almost 57% to R61 billion. Minister Patel expects this investment to further increase and crowd in private sector investment:

    “To boost overall investment further, the IDC has earmarked R100 billion in the next five years for investment in the key jobs drivers and we expect a R200 billion of co-funding by IDC partners, bringing potentially R300 billion to the economy.

    I am pleased therefore to announce that the R100 billion committed for industrial development over the next five years by the IDC will include R23 billion set aside to support and facilitate the growth of black industrialists in the productive sectors and R4,5 billion each for women and youth empowered businesses."

    Minister Patel stated that the IDC will give a discount of 150 basis points on its pricing to black industrialists who own and control their operations. Further discounted pricing will also be possible for meeting targets related to jobs, localisation and regional development.

    In addition to financing to promote black industrialists, Minister Patel identified measures including set- asides in infrastructure and other products. Minister Patel also announced that the Competition Commission has completed its investigation into collusion by the biggest steel-maker and the Minister will be tackling steel pricing for down-stream users. He added: “The message is clear: we will act against practices that undermine the economy’s dynamism and ability to create jobs and drive industrialisation”. Minister Patel announced that he had appointed an independent panel of steel-industry experts:
    “We are examining ways to enable a more competitive steel price for downstream users to stimulate local demand for steel. I have appointed an independent panel of steel-industry experts to offer advice on options and modalities”.

    The Minister also stated that he will be issuing a trade directive to ITAC to ensure that tariff changes at the request of industry are accompanied by reciprocal commitments by manufacturers to invest more, create more jobs, improve their products and productivity. He stated that “To promote inclusive growth and industrialisation, our trade policies have been more supportive of domestic manufacturers. Indeed, over the past year, thirteen products received stronger trade protection or rebates, from paper and batteries to barbed wire and chicken. Yet if we simply rely on tariffs without improved investment and productivity, we will not become competitive.”

    Minister Patel noted South’s Africa’s increasing economic integration with the rest of the continent citing that during last year, exports to the rest of Africa grew by R36 billion, or 14% to R300 billion. Total manufacturing, mining and agriculture exports to the rest of Africa sustain 244 000 direct jobs in South Africa. Of these, 169 000 are manufacturing jobs.

    “Aside from the damage xenophobic attacks do to our humanity, we cannot unscramble ourselves from Africa, our continent, without serious economic damage” Minister Patel emphasised. “The gas that powers South Africa’s largest industrial company, SASOL, comes from Mozambique. Every second glass of water consumed in Gauteng every day, comes from Lesotho. This biggest export market for South African plastic products is Zimbabwe, for televisions it is Zambia and for clothing it is Mozambique.”
    Minister Patel headlined a market inquiry on the retail sector that will be undertaken by the Competition Commission this year involving big supermarket chains, grocery stores and small retail outlets. The terms of the enquiry will be announced by the Competition Commission within the next four weeks. In addition the healthcare enquiry, under the chairpersonship of ex-Chief Justice Sandile Ngcobo will commence public hearings into the cost of medical care in this year.

    “Infrastructure development has boosted the economy and is one of the key reasons why we avoided another recession” said Minister Patel. He highlighted the PICC projects’ employment of about 220 000 workers, the installation of more than half a million solar water heaters, the establishment of 39 renewable projects adding more than 1 800 MW to the grid, and the boost for South African manufacturing as practical examples of South Africa’s broader economic benefits from the infrastructure programme. Pointing to the role of infrastructure and industrialisation, Minister Patel tabled the results of recent localisation programmes:

    “From importing public transport vehicles previously, we now have factories that have built more than 670 buses locally and assembled more than 32 000 taxis locally.

    I am pleased to say that two weeks ago, Toyota produced the first taxi that now uses almost double the level of locally-manufactured components and materials, a big step-up for government’s programme” the Minister said.

    Minister Patel noted that in January this year, the African Union Heads of State Summit designated South Africa as the champion to develop the manufacturing of train engines, coaches and wagons on the continent. “We have substantial investments in local train manufacturing, through Transnet, Prasa and the IDC and we will build on this very welcome decision, which can deepen our industrialisation efforts” he added.

    While the Minister pointed to a number of schools, clinics, renewable energy plants and other infrastructure projects being completed this year, he stressed that the focus would be making measurable progress on the big build programmes of Medupi, Kusile and Ingula power stations whose delays are severely constraining the electricity grid. The PICC’s work this year will also focus on concerted action against cable and metal theft. Working closely with the Minister of Justice, amendments to various pieces of legislation have been drafted and will be tabled in parliament shortly. They will expand the powers of the state to act against cable and metal theft. “We cannot and will not accept the effective sabotage of our infrastructure systems for the profit of syndicates” said Minister Patel.

    Issued by the Ministry of Economic Development

    Enquiries: Tanya van Meelis 072 640 9340 This e-mail address is being protected from spambots. You need JavaScript enabled to view it

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    Minister Patel to brief the Portforlio Committee on Economic Development on the Department's Strategic Plan

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    Economic Development Minister Ebrahim Patel, will tomorrow, (14 April 2015), present the Portfolio Committee on Economic Development with details of the Department's 2015/16 - 2019/20 Strategic Plan.

    The details are as follows:

    Date: 14 April 2015.

    Venue: Old Assembly Building, Committee Room V454, Parliament, Cape Town.

    Time: 9h30 - 13h00.

    For more information, please contact Thembinkosi Gamlashe, on 072 031 6870.

    Issued by the Economic Development Department.

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    Opening of major new solar energy plant near Pofadder

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    MEDIA RELEASE 02 March 2015

    A new 100 Megawatt concentrated solar power (CSP) station was opened near Pofadder in the Northern Cape today by the Minister of Economic Development. It is the first CSP plant to be opened in South Africa and the largest CSP plant in the southern hemisphere.

    The plant, named KaXu Solar One, is now generating energy equivalent to the household consumption of 80 000 families, or 400 000 energy users. The project is a joint venture between a large Spanish investor, Abengoa and the Industrial Development Corporation.

    Officially opening the R8 billion plant today, Minister Patel said that it is one of 33 renewable energy plants that have opened over the past 15 months, which together with planned plant openings during March 2015 would bring 1865 megawatts of installed energy to the grid by the end of the month.

    He said that the installed energy capacity from the KaXu solar plant was;

    • equivalent to the annual electricity household consumption of Mosselbay, Outshoorn, Knysna and Swellendam combined or
    • more than the installed energy capacity of either Lesotho or Swaziland.

    Minister Patel noted that the total installed energy capacity of the renewable energy plants that have been completed over the past 15 months was about 87% of the capacity of the Koeberg Nuclear Power plant.

    “Of course the nuclear plant can generate electricity 24 hours a day and is not dependent on sun, wind or river yield, but nonetheless it shows the scale of our renewable programme,” he said.

    “The plant opened today uses the concentrated solar power technology, which has been designed to permit two-and-a-half hours of storage of energy that can be fed into the grid after sunset, to enable use of energy during peak consumption periods,” he said.

    Abengoa, a Spanish renewable energy corporation is the lead investor in the plant, with the Industrial Development Corporation (IDC) as an equity partner together with a community trust for local residents.

    “In 2010, before we had any solar power plants, government mandated the IDC to focus funding in the development of the green economy, which we identified as a jobs driver in the New Growth Path. The IDC actively pursued this mandate and today is involved in 22 renewable energy projects. It has contributed R13,5 billion in investment in green energy,” Minister Patel said.

    The green energy programme is part of the National Infrastructure Plan that is being coordinated by the Presidential Infrastructure Coordinating Commission (PICC), a body chaired by President Zuma and composed of Cabinet Members, Premiers and Mayors of metros and local government leaders.

    “We now have the largest green energy programme on the African continent and in fact is one of the largest programmes of all developing countries. It shows that we take our climate commitments seriously but we must also leverage more green industrialization opportunities for a technology that will become increasingly important in economies globally in the decades ahead. We must position South Africa as a leader and innovator, not simply a consumer,” he said.

    He called for greater levels of localisation in the manufacture of components used in the green energy programme.

    “One of the key lessons from the current programme is that we need to reduce cost of the renewable energy that we buy from the producers, increase localisation of component manufacturing and use more local labour across the full set of skills required. We have not always got all of this right in the first phase of the programme but we now need to focus more on these areas, a view that the Minister of Energy shares. Investors can see we are serious about renewable energy and they can in turn make longer-term decisions that will enhance the economic development benefit of the renewable energy programme for South Africa,” he said.

    Note to editors:

    1. Tomorrow (Tuesday 3 Marc h 2015), government will join investors to open a hydro-electric facility on the Orange River near Kakamas. It will bring 10 megawatts of installed energy capacity onto the grid.

    2. The renewable energy programme is contained in Strategic Integrated Project 8 of the National Infrastructure Plan of the PICC and the SIP is chaired by the Minister of Energy, Tina Joemat Pettersson, who coordinates the green energy programme.

    3. The IDC is the continent’s largest national development finance institution. It makes industrial funding available to enterprises that can drive growth, employment creation and overall development.

    Issued by Siphokazi Shoba, Ministry of Economic Development, Phone +27823362688.

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Scam Alert
All Service Providers and Businesses

The Economic Development Department wishes to advise members of the public, particularly those in business, to be alert to a scam utilizing the logo of the Economic Development Department. The fraudsters involved send unsuspecting business operators a Request for Quotations for the provision of Solar Panels.

As the Economic Development Department, we wish to state that we do not have such a project, and therefore beware that the Request for Quotation is not from the Economic Development Department.

Please confirm any request you receive with our Supply Chain Management division on these details 012 394 3579. Report these fraudulent activities to the SAPS or call the Anti Corruption hotline 0800 701 701 or SMS to 39772 or send an email to fraud@economic.gov.za.


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