United NationsDepartment of Economic and Social Affairs Sustainable Development

South Africa

Theme: Accelerating industrial development for poverty eradication
04 May 2006
Government?s core economic objective is to halve poverty and reduce
unemployment to below 15% by 2014. Measures are being implemented to
accelerate sustainable and shared growth through government, labour and
private sector partnerships. Prevailing inequalities need to be considerably
reduced to achieve the desired 5% rate of growth. Our vision is an inclusive
economy where production and consumption patterns are more sustainable,
and unemployment is reduced.
In pursuit of this growth our sustainable development objective is that of
improved resource efficiency, building cohesive sustainable communities and
improving our performance through better integration and long term planning.
In the short to medium term the focus will be on overcoming so-called binding
constraints that impair growth, including:
National Constraints
- Backlogs in investment for transport, telecommunications and energy
- Market structures that do not encourage competition, downstream
production and development of service industries ;
- Shortage of suitably skilled labour and the concentration of skilled labour in
a few centres of economy activity in the country
- Regulatory burdens on small medium and micro enterprises (SMME); and
- Lack of economic planning capacity at local government level.
Global Constraints
- An increasingly highly competitive global market;
- The increase in technical barriers to trade
- Difficulties in attracting foreign direct investment.
- Proliferation of bilateral free trade agreements that may impact negatively
on multilateral trade arrangements
- A lack of ?Standards, Quality, Accreditation and Measurement? (SQAM)
infrastructure in Africa
- Minimal input from developing countries in international SQAM network
Government has learned that targeted infrastructure investments have a
profound catalytic effect on creation of small businesses, especially in the
manufacturing sector, as well as creating various employment opportunities
and thus reducing poverty levels.
In this regard government will invest R372 billion over the next three years in
various infrastructure development projects in order to enhance industrial
productivity and competitiveness. These include the upgrading of transport
and energy infrastructure and the expansion and modernization of the
country's telecommunication infrastructure. The public sector will also
accelerate infrastructure investment in the underdeveloped urban and rural
areas of the country.
A National Industrial Policy framework is in the final stages of preparation.
Customized sector approaches will be developed for business process
outsourcing; tourism; chemicals; bio -fuels; metals and metallurgy; wood, pulp
and paper; agriculture; the creative industries; and clothing and textiles. The
industrial Policy advocates the promotion and support of diversification and
the facilitation of progression up the value chain in order to foster growth in
labour intensive sectors of the economy. Improved incentives and
interventions focused on job-creating investment and growth will be
Government will also focus on SMME development for income generating
employment. The following sub-sectors were identified for priority attention:
business process outsourcing, tourism and bio-fuels. These industries are
labour intensive, rapidly growing, suited to South African circumstances and
open to opportunities for Broad Based Black Economic Empowerment
(BBBEE) and small business development.
Interventions will be made to address deep-seated inequalities and to bridge
the gap between the first and second economies, ultimately eliminating the
second economy. Interventions will streamline access to finance and support
Preferential Procurement and promotion of sectors that are labour intensive.
Regulations that negatively impact on labour intensive sectors will be
reviewed. The state owned Enterprise Procurement Forum is codifying and
spreading best practices for affirmative procurement by public enterprises. In
addition, a procedure is being developed through which 10 products will be
set aside for affirmative government procurement.
Government will intensify its engagement with the Financial Services Charter
signatories to help generate the necessary resources for the development of
the SMME Government will also improve the regulatory climate to facilitate the
expansion of this sector.
Government has identified the need to grow the medium and high-level
technology manufacturing sector. In terms of the Integrated Manufacturing
Strategy government identified the need to increase knowledge intensive
goods and services. An advanced manufacturing strategy guides our efforts
towards a knowledge-based economy. Specific focal areas include the
aerospace industry, biotechnology and nanotechnology. The strategy aims to
facilitate the flow of technological resources to industry through new
knowledge networks that foster innovation.
The efforts to accelerate industrial development for poverty eradication will
require special attention to scarce skills specific to the country's growth
objectives. More resources will be allocated to research and innovation.
Measures to increase the pool of young researchers will include an intensive
campaign to link up over 60 000 registered unemployed graduates with
companies around the country.
At the international level measures are required to increase and maintain
market access and a constant flow of FDI, Donor programmes should inter
alia focus on removing and / or overcoming technical barriers to trade (TBT)
and to provide financial support for transfer of cleaner technologies. In terms
of the Johannesburg Plan of Implementation (JPOI) a global 10-year
framework needs to be developed to accelerate the shift to sustainable
consumption and production, An increase is required in the investment in
cleaner production and eco-efficiency, and corporate re sponsibility and
accountability need to be enhanced.
The following key considerations are suggested for the policy session
· Continued commitment to a fair and equitable global trade regime
· Promoting regional industrial integration of the African continent within the
NEPAD framework.
· Improving the integration of best practice and new technologies to make
production and consumption patterns more efficient.
· Developing the small business sector with a particular focus on access to
capital, entrepreneurial training, assistance with marketing and the
development of cooperatives. It is also important to ensure the
sustainability of small business through capacity building.
· Accelerated high-impact investment in developing countries to enhance
sustainable industrial development
· Capacity building and training programmes with particular attention to
women, previously disadvantaged and less privileged groups
· Promoting and growing South-South trade and facilitating exchange of
information and best practice on efforts to accelerate industrial
· Enhancing the role of women and other disadvantage groups in economic
decision making, ensuring access to finance and significant participation in
· Strengthening partnerships aimed at implementing sustainable industrial
· Promoting ?aid for trade? to assist developing countries to diversify their
· Strengthening the SQAM infrastructure in NEPAD.
· Ensuring developing country input into international SQAM activities such
as the International Standards Organisation (ISO), International Electrical
Commission(IEC), International Laboratory Accreditation Cooperation
(ILAC) etc.