To download the soundbite of the Chairperson of the Portfolio Committee on Trade, Industry and Competition, Mr Mzwandile Masina, click here: https://iono.fm/e/1508229
The Portfolio Committee on Trade, Industry and Competition participated in the Economics Cluster media briefing held at Parliament.
The Chairperson of the committee, Mr Mzwandile Masina, provided an overview of the committee’s work since its establishment. He highlighted that the committee has engaged robustly with the Department of Trade, Industry and Competition (DTIC) and its entities regarding their performance and programmes related to three focus areas: industrialisation, inclusive economic growth and transformation.
Mr Masina acknowledged the progress made by the department and its entities, while also emphasising the need to refine policies and implementation strategies to achieve the desired goals of economic growth, job creation, and equality.
Industrialisation
The committee examined efforts to facilitate upscaled industrial growth, financing and access to markets. However, significant barriers remain, particularly those inhibiting the export of value-added goods. These barriers include administered prices and inefficient transport logistics, which need urgent attention.
The committee also engaged with South African start-ups – businesses leveraging technological innovations with high potential for rapid scaling.
Transformation
On the transformation front, the committee prioritised:
- Demographic changes in ownership, management, and control of production to promote inclusivity.
- Coordination of industrialisation efforts and job creation to foster inclusive economic growth.
- A comprehensive review and enhancement of Special Economic Zones to ensure they contribute effectively to inclusive growth.
- Promoting state procurement as a tool for redistributing wealth and driving inclusive economic transformation.
- Encouraging the procurement of locally manufactured goods to support domestic industries and create jobs.
Financial sector
In the financial sector, the committee focused on ensuring the availability of funding for productive activities, particularly for micro, small, and medium enterprises. Despite some progress, it noted a disproportionately low share of developmental credit compared to total credit provided.
The committee was informed that approximately R446.8 million was allocated to productive activities during the second quarter of 2024. This funding supports the growth of small businesses, which are key drivers of economic development and job creation.
The committee noted with concern that outstanding developmental credit accounts for less than 3% of the total outstanding debtors’ book. This highlights the critical need for increased funding to support industrialisation and transformation, particularly from both the banking sector and development finance institutions.
The committee stressed the importance of regulations within the banking and insurance sectors to advance transformation. This includes prioritising black-, women-, and youth-owned businesses as suppliers in their value chains to drive inclusivity and economic empowerment.
Green hydrogen and electric vehicles
Green hydrogen was identified as a key component of South Africa’s energy mix within the Just Energy Transition. The committee acknowledged the need to balance South Africa’s energy requirements with the demands of the transition and to develop an appropriate energy mix.
Global trade trends driven by climate change are exerting pressure on industries to adopt greener energy and production processes to maintain competitiveness. Green hydrogen presents a significant opportunity for South Africa to enter a developing global market; establish itself as a major exporter and innovator; and capitalise on its existing hydrogen resources.
In the automotive sector, the committee highlighted the growing shift of major export markets towards electric vehicles to replace petrol and diesel engines. Without adapting to this global transition, South Africa risks being locked out of key markets and losing competitiveness. It would also face the challenge of identifying alternative export markets for its conventionally powered vehicles.
Oversight of the National Lotteries Commission
The committee undertook close scrutiny of the National Lotteries Commission (NLC), focusing on issues of maladministration and the misuse of proactive funding provisions in the National Lotteries Commission Act.
Specific concerns included maladministration in the approval of grants, where non-profit organisations and non-profit companies used grant funding for purposes unrelated to their original applications. Another concern related to the misuse of funds, which undermines the intended social and developmental objectives of the NLC’s funding mechanisms. The committee remains committed to strengthening oversight and ensuring accountability in the use of public funds by the NLC.
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