Posted: March 12, 2015
Gauteng Agro-Processing Summit Held at Kliptown Soweto, Gauteng Province
|The Honourable Premier, Mr David Makhura,
The Honourable MEC, Mr Lebohang Maile
The Honourable Executive Mayor of Johannesburg, Mr Parks Tau
Delegates from Gauteng Provincial government and other government departments
Members of the Media
Ladies and Gentlemen,
All protocol observed,
With utmost humility, and on behalf of the Minister, I wish to convey our sense of gratitude as the Department of Trade and Industry for being afforded an opportunity to address this gathering.
Occasions of this sort afford us the opportunity to assess and improve vertical consistency in policy articulation between and amongst all spheres of government.
Related to this fact, I must state that we have had the opportunity to interface in detail with the Gauteng Agro-processing strategy and other similar policy work of the Gauteng government. From this exercise we have noted the positive fact that the Gauteng Provincial priorities are consistent with the thrust of the National Development Plan; in the sense that they emphasise the importance of job creation, especially decent work and inclusive economic growth.
In this regard, the Gauteng agro-processing strategy reflects the renewed emphasis in overall government policy on the creation of work opportunities through inclusive economic growth. Central to this growth strategy has to be the systematic creation of industrial linkages between the primary and manufacturing sectors, a connection that agro-processing achieves quite well.
As things stand, the agro-food complex (inputs, primary production, processing) contributes approximately R 124 billion to South Africa’s Gross Domestic Product (GDP) and employs in excess of 451 000 people in the formal sector.
There is massive potential for growth in the agro-food complex beyond these current figures. This potential requires strategic choices in particularly industrial policy in a manner that can draw in a wide array of players into the economy.
In pursuing this inclusivity, the dti is currently engaged in a policy process for the development of industrial players from historically marginalised sections of society. Amongst the identified sectors around which their emergence could be fostered is agro-processing.
This is partly because there has been a fairly significant contribution of agro-processing to Gross Domestic Investments (GDI) from 2011 to 2013. The GDI has increased from R13, 6 billion (2011) to R13, 7 billion (2012) and shot up to R19, 5 billion (2013).
Gauteng identified 11 downstream agro-processing sub-sectors:
All of these subsectors are important elements of the whole agro-processing package. Agro processing is a capital intensive sector and to change the current outlook of a negative trade balance in South Africa there is a need to investigate the potential of processing products such as soya beans, olive oil and cereals to mention a few so that the high imports of oil cake can be reduced.
This import-substitution strategy is necessary across the food production value-chain. Serious investment in this strategy simultaneously achieves the improvement of the survivalist mode of agricultural production of most of pour people into commercial enterprise as well as managing the impact of imports and local monopolies on food price-inflation. This will require increased investment in critical infrastructure for processing and in improving the production capacity of our people as we draw them into this value chain.
FOOD PROCESSING EXPORTS AND IMPORTS SHARE
The demand for food in South Africa has increased substantially in the past and this trend is expected to continue. The increase has been driven by population growth, changing consumption patterns mainly by the middle income groups and improved living standards. This demand continues to grow despite the lack of sufficient investments in processing facilities, more especially in the rural areas. These are some of the reasons that contributed to an increase in the imports growth rate.
Most of South African imports are from Argentina, Brazil, China, USA and Malaysia. The major imported products are oil cake, soya oil, wheat, cereals and rice. As I had already indicated, some of these imported products are capable of being produced locally if we successfully evolve a penetrative and developmental microeconomic dispensation.
The industry’s top five export destinations are the United Kingdom, Netherlands, Zimbabwe, Germany and Japan. South Africa ranks as one of the top five exporters of grapes, avocadoes, citrus, and plums.
From our side as the dti, our Industrial Development Division (IDD) is the custodian of agro-processing in South Africa and necessary support such as policy guidelines, statistics were provided during the process of developing Gauteng Province’s Agro-processing strategy. In addition, the dti has been invited to participate in all the public consultation workshops in various regions of Gauteng Province.
As a result, the dti also took the opportunity to communicate their services to the residents of Gauteng Province and other stakeholders. We will also do the same with our mega projects like the Black Industrialists programme. We need to galvanise the imagination of our people towards the realisation of the industrial potential that is carried by this sector of the economy.
I thank you!