the dti

The Department of Trade and Industry (the dti) promotes structural transformation creating a dynamic industrial and globally competitive economy. It broadens participation in the economy to strengthen economic development and continually aims to respond effectively to the needs of South Africa’s economic citizens. MORE>>

The IDC

The Industrial Development Corporation (IDC) is the national development finance institution promoting economic growth and industrial development. The organisation’s primary objectives are to contribute to the creation of balanced, sustainable economic growth in South Africa and the rest of Africa. MORE>>

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MCEP on hold

New applications for MCEP have been temporarily suspended with immediate effect due to the large number of applications.
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MCEP makes an impact


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In only four years the Manufacturing Competitiveness Enhancement Programme is already making a difference to the lives of thousands of South Africans – through making companies more competitive and jobs more secure.

This government incentive scheme has been so successful that it has been oversubscribed; a new phase of MCEP will be opened in April 2016.

Although it was only launched in 2012, MCEP has already approved funding to the value of R5.2-billion. Some 890 businesses have received funding to give them a competitive edge in their markets.

Building a vibrant manufacturing sector

But, MCEP support has a much bigger impact: what this means in reality is that 889 companies can compete locally and international; and that the employees and their families in 889 businesses across the country have secure jobs and enhanced employment prospects. More than 40 000 jobs have been made more secure.

The businesses supported by MCEP are expected to invest more than R24-billion in the manufacturing sectors, particularly in agro-processing, metals and chemicals.

MCEP has assisted companies with existing manufacturing facilities to become more competitive through better financing or through investing in new equipment. Businesses in the metal, motoring and plastics and jewellery sectors in particular, have benefitted. The investment allowed these companies to take on the competition from global competitors.

It is important to realise that grants are not hand-outs; the funds made available cover a maximum of 50% of the cost of the investment, with the rest coming from other sources. Other interventions, such as cluster competitiveness improvement, qualify for funding of up to 80%, with the size of the intervention designed to reflect the impact it has on the sector as a whole.

Why manufacturing, why MCEP?

Manufacturing is particularly vulnerable to market changes. As a supplier to other sectors, any downturn in these sectors will have a knock-on effect on manufacturing. Since 2008 the manufacturing sector is estimated to have lost more than 360 000 jobs through downsizing, closing or moving offshore.

However, growing the manufacturing sector is vital to the future strength of the South African economy. Some 1.7-million people are employed in this sector – stable employment is one of the key weapons in the battle against poverty.

Over the past four decades the South African economy has shifted from mining, agriculture and manufacturing in the 1970s to financial services, government and wholesale and retail trade today. These three sectors make up more than 50% of the South African economy. Given the shift to a services economy the question might be posed as to why the government continues to place such a strong emphasis and continue to support the local manufacturing sector.

Manufacturing companies provide employment to large numbers of people, especially people that might not have skills that would make them easily employable in the services sectors.

It also offers the capacity to create products that are exportable. For a country like South Africa which has to import a significant portion of its fuel requirement from other countries there is a desperate need to balance imports with exports so as to maintain a favourable balance of payments. While exports of primary products such as iron ore, coal and agricultural products make up the largest part of the country’s exports, the export of high value manufactured goods is a critical component in the equation.

Another reason for the importance of building a robust manufacturing sector is ensuring that the local economy is sufficiently diverse, enabling it to weather better any storms that may occur.