South Africa’s Incentives to Support Local Businesses

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The “rainbow nation” was seen by many – including a lot of its own citizens – to be exceptional, having more in common with the developed states of Europe than some of the countries on its own doorstep.
The “rainbow nation” was seen by many – including a lot of its own citizens – to be exceptional, having more in common with the developed states of Europe than some of the countries on its own doorstep. (Photo Credit: www.shutterstock.com)

Government will continue to support local companies to grow through a range of incentive packages, Finance Minister Malusi Gigaba said on Wednesday.

“Government continues to support South African companies to grow and to become more competitive through incentives in the form of grants, loans and tax allowances,” said the Minister.

Tabling his maiden Budget in the National Assembly, Minister Gigaba said R18.8 billion has been allocated for industrialisation incentives over the medium term of which an additional allocation of R3.3 billion is allocated for the Economic Competitiveness and Support Package to support growth and job creation in support of the Industrial Policy Action Plan.

The Minister said government is spending a significant amount on small business support in the medium term as part of efforts to foster and support entrepreneurs.

Of the incentives budget, R4.9 billion is allocated for industrial infrastructure projects over the medium term for special economic zones, government-owned industrial and critical infrastructure projects to promote industrial development and increase investment and exports of value-added commodities.

Minister Gigaba urged all urban development stakeholders to work imaginatively to transform township economies.

“Let us think beyond car washes and spaza shops, important as they are, and find ways to foster productive, high value economic activity in townships owned and managed by township residents. We need to see factories, workshops, tech hubs and locally-owned retail operations being established in our townships,” said the Minister.

Incentives to support black producers

To strengthen global market access for South African agricultural products,the Department of Agriculture, Forestry and Fisheries (DAFF) received an additional allocation of R40 million over the MTEF to upgrade infrastructure and equipment for analytical services laboratories.

This will provide assurance to global trading partners that South African agricultural products meet internationally recognised standards for human safety, thereby facilitating the country’s ability to export unhindered.

In line with the outcomes of Operation Phakisa on Agriculture, Rural Development and Land reform, the DAFF aims to create and support 450 sustainable and profitable black commercial producers participating in prioritised value chains over a five-year period.

“An estimated R581.7 million is expected to be reprioritised for the black producer commercialisation programme. By creating opportunities for black agricultural producers, we are radically transforming the agricultural sector of our economy,” said the Minister.

Land claims

Minister Gigaba said that over the medium term, the Department of Rural Development and Land reform, intends to accelerate the settlement of restitution claims with plans to finalise 2 851 claims at a budgeted amount of R10.8 billion.

“Accelerating land reform has become urgent and the Department of Rural Development and Land reform has set aside R4.2 billion for the acquisition of about 291 000 hectares of strategically located land.”

State Capture Inquiry

Turning his attention to the Judicial Commission of Inquiry into State Capture, the Minister said the Commission is ready to commence with its work.

He added that the Budget allocation for the Commission will be considered during the 2018 Adjustment Budget once its costing is finalised.

As part of efforts to ensure that poor South Africans can access the courts, the Department of Justice and Constitutional Development has reprioritised an amount of R121 million. The amount is allocated to the Office of the Chief Justice, the National Prosecuting Authority and Legal Aid South Africa to begin operations at the Mpumalanga High Court, which is scheduled to open this year.

Upgrades of the National Identification System

Meanwhile, the 2017 Adjustments Budget included a shift of R264 million from the South African Police Service (SAPS) to the Department of Home Affairs to upgrade the National Identification System.

According to the Budget Review, Medium-term funding of R243 million is set aside for this purpose.

The upgrade will allow police and other agencies to conduct advanced biometric fingerprint identification searches.

Over the medium term, the South African Police Service has reprioritised R158.5 million for the Independent Police Investigative Directorate to increase staffing and finalise the review of its founding legislation in line with the 2016 Constitutional Court judgement.

The allocation will also be used to address weaknesses in internal controls and the case management system.

The 2018/19 budget has allocated R200.8 billion for peace and security. – SAnews.gov.za

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