26 July 2013
South Africa’s Department of Trade and Industry (DTI) has ramped up its incentives for small businesses over the last year, and put a number of measures in place to help them become more competitive, says Trade and Industry deputy director-general Tumelo Chipfupa.
Briefing Parliament’s portfolio committee on trade and industry in Cape Town on Wednesday, Chipfupa said grant approvals under the DTI’s Black Business Supplier Development Programme had increased fourfold – from 306 approvals valued at R96.6-million in 2011/12 to 1 213 approvals valued at R451.2-million in 2012/13.
The Black Business Supplier Development Programme provides cost-sharing grants for technology and business support services to black-owned small enterprises.
The number of grants approved under the DTI’s Co-operative Incentive Scheme had increased by more than 70% to 182 approvals valued at R85-million over the same period, while grants under its Export Marketing and Investment Assistance Scheme had increased by 17% to 1 018 grants valued at R70-million.
The Co-operative Incentive Scheme provides cost-sharing grants to co-operatives to purchase equipment or carry out enterprise support, while the Export Marketing and Investment Assistance Scheme help businesses to attend national pavilions, trade missions and trade shows.
The DTI spent about R100-million helping over 1 000 businesses attend 22 national pavilions, 43 trade missions and eight trade initiatives and special projects in 2012/13, in the process enabling them to generate sales of R3.8-billion.
Chipfupa said the department had been able to step up lending through the Black Business Supplier Development Programme by appointing key partner organisations in South Africa’s provinces.
In all, 409 of the programme’s 1 213 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 DTI administers about 15 incentives aimed largely at improving industrialisation and broadening economic participation in the country.
Other grants approved by the DTI in 2012/13 included the following:
- R3.3-billion granted to 12 projects in tax allowances under the 12i tax incentive scheme.
- Over R1.7-billion committed to 539 projects under the Manufacturing Investment Programme.
- R983-million committed to 197 projects under the Manufacturing Competitiveness and Enhancement Programme.
- 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 was relocated to the Department of Tourism in October 2012.
- R281-million committed to original equipment manufacturers and a further R125.7-million committed to component manufacturers under the Automotive Investment Scheme.
- R41-million committed to 12 projects involving call centres and business process outsourcing centres under the Business Process Services projects.
- R39.5-million approved to nine engineering firms to conduct feasibility studies on the continent under the Capital Projects Feasibility programme – up from R25- million approved to eight firms in 2011/12.
- R31-million paid out in claims to 424 very small black-owned enterprises and 25 export councils and industry associations under the Sector Specific Assistance Scheme, up from R24-million paid out in 2011/12.
In addition, R169-million – half of this provided by the government – was committed to support 14 incubation programmes under the DTI’s new Incubation Support Programme, which was launched in September.
Cost-sharing grants were also approved for six projects under the DTI’s Critical Infrastructure Programme, helping to leverage R9.8-billion in investments.
Chipfupa attributed the drop in Automotive Investment Scheme grants and beneficiaries – from R798.2-million in 2011/12 to R281.3-million in 2012/13 – to a slowdown in the number of big 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 would make it easier for businesses to apply for grant funding.