Page 7 - 11 Cotton SA March 2017

"Our past production policy was
naïve" so says Mr L October, Dept. of
Trade and Industry director-general.

A was stupid and naïve to have in the world that doesn't have support for exports leave SA every year. A R1 billion
Swithdrawn support for its productive agriculture. So, we're at an absolute incentive scheme has been devised for
sector in the 1990's in line with international disadvantage." downstream agro processing such as
policy guidelines, because the country paid poultry, red meat and fruit. In addition,
a price and had to play catch-up, funds to the agriculture sector would be
Department of Trade and Industry director- increased incrementally.
general Lionel October said in an interview
on recently. The department is working with the World
Bank to develop ways to streamline
October was commenting on a World Bank investment and regulation across all three
report on SA released last week in tiers of government. The World Bank has
Johannesburg. The bank recommended the highlighted SA's growth rate as being too
government redirect its tax incentives to low to lift citizens out of poverty and
labour-intensive industries such as joblessness. The World Bank recommends
agriculture and manufacturing to boost that the country lift its economic growth by
growth and job creation, saying that the rebalancing its imports to stimulate
social returns in manufacturing were domestic product consumption, since
greater than for mining. Since 2007 and 2008 the Dept. has been investment has remained weak.
pushing an industrial policy to reverse
The government wants to provide grant- withdrawal of support. The clothing and The World Bank said the five sectors that
based incentives for agriculture and tourism textiles sector was almost decimated, but were generally most responsive to tax
similar to those offered by the US, the EU the department introduced an incentive incentive schemes were those with the
and Japan to support key sectors. This is scheme six years ago that resulted in the largest employment multipliers. They are
the kind of support SA withdrew in the creation of 6,500 jobs. The automotive typically agriculture, trade and hospitality,
1990s. "That was the biggest mistake we sector incentive has been in force for 20 community and social services,
made as a country. We're the only country years and about R150 billion worth of construction, and manufacturing.

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