THE Minister of Trade, Industry and Competition, Parks Tau says through the Automotive Production and Development Programme (APDP), the department has provided critical incentives and policy frameworks to help drive investment, innovation, and job creation in the automotive sector. Tau was speaking at the SA Autoweek in Cape Town on 17 October.
According to Tau, this has enabled South Africa to remain competitive on the global stage. He said since its inception in 2011, the Automotive Investment Scheme (AIS) disbursed R20.7 billion to Component Manufacturers (CMs) and Original Equipment Manufacturers (OEMs).
“AIS funding to over 150 projects has resulted in investment of over R76 billion from the 2016/17 financial year to September 2024, generating a simple investment multiplier of five. This means that for every R1 of incentive spending, R5 of investment was spent by the project. Over this period, the average grant disbursed was 20% of the total investment generated by the project,” said Tau.
On transforming the sector, Tau pointed out that out of the R15.2 billion disbursed from the AIS, 50% was payments to projects outside of the five main metros showing the substantial reach of AIS to generate spatial transformation.
“In terms of ownership, R227 million, which is one percent of AIS funding, was accessed by black-owned projects, and two percent amounting, to R242 million, was accessed by Small Medium Micro Enterprises. R3 million by youth-owned, and R7.9 million by women-owned projects. This shows that a more deliberate approach to transformation is required in the sector. We are, however, aware that we can do more,” he said.
Tau added that the recent announcement of the extended APDP Phase 2 until 2035 is a clear signal of the government’s long-term commitment to the sector.
Speaking as a panel member on infrastructure investment at the same event, the Deputy Minister of Trade, Industry and Competition, Andrew Whitfield said the statement of intent of the 2024 Government of National Unity (GNU) listed infrastructure development as a key priority.
“The fact that we have the Presidential National Logistics Crisis Committee (NLCC), established by the South African Government to address the country’s transport and logistics indicates and recognises that we have a crisis of infrastructure in the country. South Africa has the skills and talent to resolve these challenges, but the skills and talent cannot exist in silos. We all need to work together to unlock these challenges,” said Whitfield.
Whitfield added that the Department of Trade, Industry and Competition’s (DTIC) core mission through the GNU was going to make it easier for businesses to grow so that they can create jobs, and that people can keep those jobs. We also need to heed President Ramaphosa’s instruction to cut red tape and produce key performance indicators that will drive the plan to make it easier for businesses to do business, grow and create jobs.
Whitfield added that there was nothing more urgent than the unemployment crisis that South Africa faces, and that there was an urgent need towards unlocking the infrastructure potential that the country has.
