Finance Minister Tito Mboweni. Picture: ESA ALEXANDER
Finance Minister Tito Mboweni. Picture: ESA ALEXANDER

More than 2,000 local companies are set to benefit from the government’s fresh drive to open up new export markets.  

SA shipped about R1.39-trillion ($90bn) worth of goods around the world in 2019, down from R1.45-trillion the previous year.

Various captains of industry have long called on government to redouble efforts to open up new markets through preferential trade agreements, among other strategies.

According to budget documents, the department of trade and industry will assist and facilitate the participation of more than 2,000 firms in trade missions and other export promotion initiatives over the next three years. 

“These initiatives are aimed at increasing the participation of historically disadvantaged enterprises and individuals,” the documents state. 

To carry out these activities, just more than R751m is allocated over the medium term to the export marketing and investment assistance scheme.

President Cyril Ramaphosa recently talked of the urgent need to strengthen trade agreements, especially with the rest of the African continent, to boost SA’s sputtering economy.

“The economies of the African continent are, together, growing at a rate far greater than our own, and we need to see the opportunity that such growth presents for our economy and for our people. It is for this reason that we have embraced the African Continental Free Trade Area agreement (AfCFTA),” Ramaphosa wrote in one of his weekly newsletters.

In his budget speech on Wednesday, finance minister Tito Mboweni also spoke of the need to unlock new export markets to boost economic growth.  

“In 2019, SA signed the AfCFTA, which comes into effect on July 1 2020. This agreement will open up new markets, promote regional integration and contribute to economic growth,” Mboweni said.

The economies of the African continent are, together, growing at a rate far greater than our own, and we need to see the opportunity that such growth presents for our economy and for our people.
President Cyril Ramaphosa

He also announced complementary measures to make it easier to undertake cross-border financial transactions, which will support trade and investment.

Steps are also being taken to address SA’s lagging productivity growth and reduce the cost of doing business, the minister said.

Mboweni also spoke of the need to strengthen competition in the economy. According to the Treasury’s growth paper, published in 2019, new firm entry and effective rivalry among existing firms can generate significant consumer welfare benefit.

The government believes the Competition Amendment Act, which came into effect recently, will increase investment and foster greater economic inclusion. The law gives the competition authorities and the government more power to tackle high levels of economic concentration. It is also meant to tackle the limited transformation of the economy and the abuse of market power by dominant firms.

According to budget documents, the Competition Amendment Act expands the mandates of competition authorities to include the initiation of market inquiries, a number of which have already commenced in key economic sectors.

Over the medium term, the department of trade and industry plans to oversee the implementation of these expanded mandates. For this purpose, an additional R65m is allocated over the medium-term expenditure framework (MTEF) period to the Competition Commission and the Competition Tribunal to enhance their capacity to investigate cartels, and elements of dominance and collusion in identified sectors. 

phakathib@businesslive.co.za

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