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DTI ramps up incentives to small businesses

July 24, 2013

The Department of Trade and Industry (dti) has significantly ramped up grant incentives to small businesses in the last year, which will help these firms acquire new technology and machinery, and to put in place various measures to help them improve their competitiveness and grow employment.

Briefing the National Assembly’s portfolio committee on trade and industry, Tumelo Chipfupa, the department’s Deputy Director-General of The Enterprise Organisation, said grant approvals under the Black Business Supplier Development Programme (BBSDP) had increased fourfold over 2011/12.

Approvals moved from 306, valued at R96.6 million in 2011/12, to 1 213, valued at R451.2 million in 2012/13.

The BBSDP provides cost-sharing grants to black-owned small enterprises for technology and business support services.

In addition, the number of grants approved under the Co-operative Incentive Scheme (CIS) increased by more than 70% to 182 approvals valued at R85 million, while grants under the Export Marketing and Investment Assistance (Emia) scheme increased by 17% to 1 018, valued at R70 million.

The CIS provides cost-sharing grants to co-operatives to purchase equipment or carry out enterprise support, while Emia assists businesses to attend national pavilions, trade missions and trade shows.

The department spent about R100 million in 2012/13 assisting over 1 000 enterprises to attend 22 national pavilions, 43 trade missions and eight trade initiatives and special projects, which assisted these firms to generate sales of R3.8 billion.

Chipfupa said the department had been able to vamp up lending through the BBSDP through the appointment of key partner organisations in provinces.

In all, 409 of the 1 213 BBSDP grants in 2012/13 went to women-owned enterprises and Chipfupa said the department was considering ring-fencing some of the grant funding for women and youth-owned enterprises.

The department administers about 15 incentives aimed largely at improving industrialisation and broadening economic participation.

Other grants approved in the last financial year include:

– R3.3 billion granted to 12 projects in tax allowances under the 12i tax incentive, which will help create over 1 300 jobs.

– Over R1.7 billion committed to 539 projects under the Manufacturing Investment Programme, which will support over 40 000 jobs.

– R983 million committed to 197 projects under the Manufacturing Competitiveness and Enhancement Programme (MCEP), which will sustain over 33 000 jobs.

– R386 million committed to support 70 television productions under the Film and TV Production incentive.

– R283 million approved for funding to 121 tourism operators under the Tourism Support Programme, which in October last year relocated to the Department of Tourism

– R281 million committed to original equipment manufacturers (OEMs) under the Automotive Investment Scheme (AIS), with a further R125.7 million committed to 25 component manufacturers under the scheme – which in total will create over 750 extra jobs.

– R169 million – half of it from the government – was committed to support 14 incubation programmes under the department’s new Incubation Support Programme, which was launched in September last year.

– R41 million committed to 12 projects to call centres and business process outsourcing centres, under the Business Process Services projects, with over 8 800 jobs supported through these projects.

– R39.5 million approved to nine engineering firms, under the Capital Projects Feasibility programme, to conduct feasibility studies on the continent – up from R25 million approved to eight firms in 2011/12.

– R31 million was paid out in actual claims in 2012/13 to 424 very small black-owned enterprises under the Sector Specific Assistance Scheme (SSAS) and 25 export councils and industry associations, up from
R24 million paid out to 434 enterprises in 2011/12.

A further 4 981 jobs are expected to be supported by cost-sharing grants approved to six projects under the Critical Infrastructure Programme, which helped leverage R9.8 billion in investments.

Chipfupa attributed the drop in AIS approved grants and beneficiaries – from R798.2 million to OEMs in 2011/12 to R281.3m in the last financial year – to the slowdown in the number of key projects by car manufacturers in the last financial year.

He said the department was in the process of rolling out a web-based platform, which will make it easier for businesses to make applications for grant funding.

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