Following protracted negotiations with the department of trade and industry (the dti), the South African treasury has approved funding to initiate the country’s industrial policy action plan. The allocation, running into hundreds of millions of rands, is to be announced later this month when finance minister Trevor Manuel tables the national budget in Parliament.

The funds are to be used for incentives to promote the high-priority industrial sectors of the economy identified by the industrial policy: automotive, chemicals and pharmaceuticals, capital equipment and mining beneficiation, and forestry and pulp. The Industrial Development Corporation will supplement the state funding.

Sipho Zikode, the dti’s acting deputy director-general said this week that the implementation of the policy had had to be delayed until funding was available for incentives and research. He added that funding would be provided for incentives for tourism, business process outsourcing and the development of arts and craft hubs.

Only 70% of the amount requested was allocated for the 2008-2009 financial year, while over the three-year term of the medium-term expenditure framework, the amount granted was even less, about half what was required. The funding could, however, be increased at a later point if the dti showed that it could spent the funds effectively.