Industry for Sustainability: "Localisation" in SA
Why localisation?
"Localisation" is a valuable policy tool for industrial development in South Africa and will assist in growing the economy and the industry sector. Industry for sustainability need not use foreign resources and products and services may be localised within South Africa to enhance the economy within the country.
The Preferential Procurement Policy Framework Act (PPPFA) has allowed the government to designate certain products that have to be bought from locally industry sources, according to precise specifications. The designations indicate the percentage of different kinds of products that have to be locally made. All organs of State Owned Enterprises must purchase products according to the specifications of designations. 21 Products have been designated for local procurement, with stipulated minimum thresholds of local content.
The benefits of localisation
The latest iteration of the Industrial Policy Action Plan (IPAP) has been approved by Cabinet and will indicate that work is continuing on another range of products that will be subject to designations. If this policy tool were appropriately applied, individual enterprises and value chains would benefit significantly.
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Localisation will aid in creating a more inclusive economy and create more opportunities for entry into the industry sector. Besides the "local for local markets" notion, it is paramount to build local industry capacity for the export markets.
If the government were to offer international companies a tax incentive to set up industry plants, allowing them to take advantage of preferential procurement by advancing localisation, it would be expected of them to have a certain level of broad-based black economic empowerment (BBBEE) recognition.
"Some of this, under the new [Broad-based Black Economic Empowerment] scorecard, will have to be earned in some form of enterprise and supplier development," he said, adding that international companies needed to include black suppliers in their value chain.
HV Promotions has exclusive access to an extensive database of buyers and suppliers in the South African industry sector, as well as a tested methodology of business matchmaking between these parties and can thus assist you in industry for sustainability while supporting "Localisation" in the country.
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