Trade.Information

SA Seeks to Boost the Industry's Competitiveness by Decreasing Production Costs

South Africa has reviewed and removed import duties on key inputs for manufacturers, as it seeks to boost the industry's competitiveness by reducing production costs, President Thabo Mbeki said.

Addressing the media on the outcomes of the Cabinet Lekgotla meeting, Mbeki said import duties on carbon steel and stainless steel had been scrapped, and that a review of import duties in aluminium products would be completed by the end of the year.

The import duty on upstream chemical products has also been finalised and was ready to be implemented. An announcement would be made by year-end, he said.

The review of duties formed part of a drive to improve the local manufacturing industry's competitiveness, which was key to the rebuild of the country's value-added export capacity, which has fallen in recent years.

Mbeki expressed his concern over the country's growing current account deficit, which was driven by lower-than-required exports, describing the deficit, along with higher inflation, as "worrying".

Mbeki also warned that the country faced the risk of negative investor sentiment.

The key challenge was to ensure that the economy was more productive, and to ensure rapid growth at sustainable current-account level, he told journalists in Pretoria.

"South Africa has strong domestic sectors, however, we need to grow and strengthen our exports."

Strengthening the local manufacturing industry through the ‘Industrial Policy Action Plan' (IPAP) was one of the ‘24-apex priorities', which Mbeki said would be a key focus area.

IPAP focused on four main areas, namely metal fabrication, capital and transport equipment; automotives and components; chemicals, plastics, pharmaceuticals; and wood, paper and furniture.

"In these last remaining months, the task of government will be to focus particularly on the implementation of Apex priorities," he said.

Other apex priorities included, among others, setting up an investment call centre, speeding up information communication technology interventions to provide cheaper platforms, implementing an intensive campaign on energy security and resolving organisational issues on skills development.

RISING FOOD COSTS
Meanwhile, Mbeki also said that South Africa was considering setting up a food control agency as a way of dealing with rising food costs.

The draft framework for the implementation of the agency had been completed, and it was now ready for consultation, he said.

The agency would be an institutionalised way to respond to the rising costs of food on a continuous basis.

"Given the current impact of high food prices, and its global, it is clear that you are faced with a systematic challenge, some structural challenge affecting the whole world. Therefore, you need an agency which is more permanent, less ad hoc, with greater capacity, to look at the entirety of the food system...so that we respond to this, bearing in mind what seems like a long-term feature," he told journalists. The agency would study rising food costs "continuously" and would make recommendations to the government.