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GEORGE NEWS & VIDEO - Localising production, creating jobs and creating an inclusive ownership framework. These are the steps recommended by Faiez Jacobs, ANC Member of Parliament, for rebuilding the South African economy.
Jacobs spoke to George Herald during a visit to the Southern Cape on 27 November. He said government has an economic recovery plan that is very applicable in these challenging times.
He used his visit to explain the Department of Small Business Development's (DSBD) proposed SMME-focused localisation policy framework to help the numerous companies that are currently battling.
"No country has made the arduous journey from widespread rural poverty to post-industrial wealth without employing targeted and selective government policies to modify its economic structure and boost its economic dynamism," said Jacobs.
According to him the South African economy is historically, structurally and systematically characterised by inequality. To rectify this, Cabinet decided to adopt an approach of industrialisation and asked DSBD to develop a policy in the 2019 to 2024 medium-term strategic framework (MTSF).
He said SMMEs comprise the biggest part of the business sector in South Africa, estimated to range between 2,4 million and 3,5 million, with the largest number in the informal and micro levels of business activity.
Given their reach and their meaningful participation in the economy, particularly in production, participation of the previously disadvantaged SMMEs in the mainstream of the economy should be expanded.
This is why DSBD developed a localisation policy framework for SMMEs (Small, Medium and Micro Enterprises) that focuses strongly on the manufacturing industry and localisation. The latter is a developmental policy tool in which a product or content is adapted to a specific local or market. Part of the plan is to stimulate domestic demand for goods produced by South African SMMEs, in particular through public sector procurement.
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He said lessons can be learned from the manner in which the old National Party empowered local Afrikaner communities. It was a form of localisation. In the 1940s the Industrial Development Corporation was formed and loans were given to companies so that products could be locally manufactured.
Similarly, if there is a coordinated and consolidated effort between government and the private sector to implement the localisation programme, the ESDP funds (enterprise development funds) and manufacturing support funds can be optimally and impactfully used to achieve the targets.
"We want to create a win-win situation. The economic ownership must be shared," he said. "It can't be in the hands of just a few persons or companies. Hands must be taken with established companies and partnerships be formed. We want meaningful partnerships."
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