19 March 2013
“Some 12 months ago, none of the taxis on our roads were assembled in South Africa. Today about 50 percent of all taxis that are purchased are made or assembled here in South Africa, and we’re moving towards the target of localizing two-thirds of assembly in the taxi industry by 2015.”
The government is leading a campaign to promote the local procurement of supplies across all industries in order to boost the economy’s capacity to create jobs.
He said the labour-absorbing capacity of local manufacturing industries had to be boosted to stimulate job creation and economic growth, adding that a strong local manufacturing sector would have a positive impact on South Africa’s balance of payments.
“We are working in partnership with a major manufacturer, Toyota, who has expanded the factory in eThekwini, as well as a partnership with the IDC and a Chinese manufacturer called the Beijing Automotive Works that has started a factory in Gauteng.
These companies had already employed 220 people to assemble taxis locally, with the number set to increase significantly by 2015, Patel said.
In October 2011, the government, business, labour and community-based organisations signed a Local Procurement Accord committing the parties to work together to increase local procurement as part of South Africa’s plans to create five- million jobs over the next decade.
And in December, the government put the buying power of the state firmly behind local manufacturers, with new amendments to the the Preferential Procurement Policy Framework Act allowing the government to name sectors and products that require a minimum level of local content to qualify for state procurement.
Bus manufacturing was among the first batch of sectors designated for local procurement under the amended law, resulting in the local sourcing of 80 percent of all inputs and supplies in the manufacturing of bus bodies for the rapid public transport systems in Pretoria, Cape Town and Johannesburg.
Other products designated in the first batch included power pylons, rolling stock, TV set-top boxes, clothing, canned vegetables, footwear and leather products.
In January, the Department of Trade and Industry announced a second batch of designated products, namely electrical valves, manual and pneumatic actuators, electrical and telecommunication cables, and components of solar water heaters.