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DTI: Incentives to target township businesses

November 10, 2013

The Department of Trade and Industry (DTI) says it plans to shift the focus of its billion-rand financial support programme from developed urbanised industries to assisting township businesses, rural development and underdeveloped provinces.

“Most of it (incentives) is going to established businesses in the major urban areas… what needs to happen now is to make a new push into the township areas and the rural areas and the less developed provinces such as the Northern Cape and Limpopo (which are) under serviced by our incentives,” director-general of the Department of Trade and Industry Lionel October, following a parliamentary briefing on the roll-out of incentives.

The DTI’s financial support programmes or ‘incentives’ offer monetary grants to qualifying companies in various sectors of the economy, including those involved in manufacturing, business competitiveness, export development and market access, as well as foreign direct investment.

According to its 2011/2012 Incentive Performance Report, the DTI “disbursed more than R2.8-billion to 3,244 private sector enterprises” in that financial year.

Where before the minimum amount allotted for a grant was around R100,000, October says the new scheme, which has been temporarily dubbed the “informal sector incentives” will offer smaller businesses loans starting from as little as R5,000.

“What we’re looking at is a programme for hawkers to help them have proper stalls, one that helps small-scale manufactures to small-scale backyard mechanics – to help set them up in formal hives and incubators for small-scale manufacturing retailers.

“We need a dedicated set of incentives that directly target township businesses and the informal sector micro-enterprises so that we incorporate them into the formal economy,” said October.

October says the department will have to work closely with municipalities to facilitate applications and ease distribution of the incentives.

“We’re running a pilot project already in the Free State with the local municipality – so we’ll partner with municipalities such as that one to roll out to the smaller sector,” said October.

The department also plans to make  the incentive application process easier by putting all applications online as well, so applicants “don’t have to come to the DTI offices in Pretoria with printed documents”, said October.

The department also hopes to expand the country’s Industrial Development Zones (IDZ) to include several Special Economic Zones.

The country currently has three IDZ’s in Coega, East London and Richard’s Bay, with Saldanha Bay likely to qualify soon as well. These are purpose built, industrial estates whose purposes are to encourage increased levels of foreign direct investment in the economy.

Through the Special Economic Zones Bill, which is currently before parliament, the IDZs will be expanded to include 10 other zones and will all qualify for special incentives such as a reduced corporate tax rate of 15 percent instead of 28 percent for companies.

Zones earmarked are Upington, Rustenburg and the Dube trade port in Durban.

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2 Comments
  1. We are a company that manufacture corporate, retail clothing, Safety wear and uniform. We need financial assistance. We are based in Doornfontein and have Employed 13 machinist and 3 office staff.

    Like

  2. We need funding

    Like

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