Today we are tabling before Parliament and also making public, the 2010/11 – 2012/13 Industrial Policy Action Plan (IPAP). IPAP2, as it has become known, builds on the National Industrial Policy Framework (NIPF) and the 2007/8 IPAP. It represents a significant step forward in scaling up our efforts to promote long term industrialisation and industrial diversification beyond our current reliance on traditional commodities and non-tradable services. Its purpose is to expand production in value-added sectors with high employment and growth multipliers that compete in export markets as well as compete in the domestic market against imports. In so doing, the Action Plan also places emphasis on more labour absorbing production and services sectors, the
increased participation of historically disadvantaged people and regions in our economy and will facilitate, in the medium term, SA’s contribution to industrial development in the African region. As a country, South Africa has no alternative to the course of action we propose. Manufacturing and other productive sectors of the economy, are the engines of long-term sustainable growth and job creation in developing countries such as our own. However, SA’s recent growth was driven to too great an extent by unsustainable growth in consumption, fuelled by credit extension. Between 1994 and 2008 consumption driven sectors grew by 7.7% annually, compared with the productive sectors of the economy which grew by only 2.9% annually. This has meant that even at the peak of our average annual growth – 5.1% between 2005 and 2007 – unemployment did not fall below 22.8%.
Manufacturing – which constitutes a sizeable chunk of our value added production – has not enjoyed sufficient dynamism. This is mainly because the relative profitability of manufacturing has been low as a result of a number of factors.
2010/11 – 2012/13 Industrial Policy Action Plan
National Assembly Statement on IPAP2 by Dr Rob Davies
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