Localisation for Africa
Product Designation
On the 29th of January industry had much to celebrate . The Department of Trade and Industry ( the dti ) officially announced the further designation of valves , manual and pneumatic actuators , electrical and telecommunication cables as well as components of solar water heaters for local production and content in the public sector procurement system .
The Minister of Trade and Industry , Dr Rob Davies has signed the necessary authorisation in terms of his powers under the Amended Regulations of the Preferential Procurement Policy Framework Act ( PPPFA ). The National Treasury will in due course circulate the instruction notes , which will regulate the environment within which government departments and public entities may procure designated products .
The instruction notes will have minimum local content thresholds .
Sectors already designated for local production with minimum local content thresholds are :
rail rolling stock , power pylons , bus bodies , canned / processed vegetables , certain pharmaceutical products , furniture products , and the textile , clothing , leather and footwear sector .
Public procurement is one of the key industrial levers in the Industrial Policy Action Plan ( IPAP ). The revised Preferential Procurement Policy Framework Act ( PPPFA ) regulations , which came into , effect on the 7 December 2011 empowers the Minister of Trade and Industry to designate industries , sectors and sub-sectors for local procurement at specified levels of local content .
The designation policy instrument is one of a suite of policy levers designed to maximise support for domestic manufacturing , others are the Competitive Supplier Development Programme ( CSDP ) which is led by the Department of Public Enterprises and governs the procurement programmes of State Owned Companies ( SOC ’ s ) and the National Industrial Participation Programme ( NIPP ).
At the end of 2012 the National Cabinet signed off on a set of policies that tighten the NIPP framework , close existing loopholes and aligning the policy with other public procurement instruments . NIPP obliges overseas companies that have won tenders worth more than US $ 10 million to provide ‘ offset ’ obligations through investments in the domestic economy .
The dti is confident that local production of designated products will help to stimulate aggregate demand and strengthen support for the domestic manufacturing sector . In so doing , the deployment of procurement policy levers is an added incentive for foreign direct investment in the production sectors of the economy .
“ In the year ahead the dti will significantly scale up designations and other procurement policy levers in support of domestic manufacturing . This will be done at the same time as the dti deploys a range of other supportive and inter-locking instruments to raise the competitiveness of South Africa ’ s manufacturers . This will be done in close collaboration with business and labour ,” says Minister Davies . LFA
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