Abstract
M. Comm.
Industrial incentives were introduced in South Africa for the first time during 1956.
It was initially applied near the so-called homelands, and were only made available to all the industrialists in 1996. The problem which led to this study was that the incentives which were granted to industrialists have had no real benefits for the economy in the long run. South Africa is still not competitive in the global markets, we are still facing low productivity levels and the economy has no real wealth creation amongst its people. The purpose for this study was to compare the industrial incentive programmes with that of other African countries, with other developing countries and even with some developed countries to identify the shortcomings. This would then indicate which route South Africa could take to ensure that monies paid to industrialists are well spent. The factors which governments are taking into consideration when introducing incentives to industrialists were identified. It became clear that there are major differences in the objectives between developing and developed countries. The factors identified by of the United Nations were taken as a benchmark and as a starting point to evaluate specific industrial incentives for South Africa. These factors are investments and financial resources, technology, exports, employment and skills development, and the protection of the environment.
The Department of Trade and Industry is in a process to implement new incentive
programmes. Although the proposals are accommodating the labour and skills
problems of South Africa effectively, the other factors have not been addressed as
promptly. Proposals have been made that all the factors as identified by the United
Nations should be addressed much more comprehensively in future. The new incentive programmes have not been approved by the SA Government as yet.