South Africa's Budget Speech 2010 focuses financial support for the 2010/11 IPAP
On Wednesday (17th Feb), the National Budget was presented to Parliament in Cape Town. In a much anticipated address, Finance Minister Pravin Gordhan announced that government had set aside R3.6 billion for the Department of Trade and Industry (DTI) to partially support the 2010/11 Industrial Policy Action Plan (IPAP).
Although there were hints that the Budget Speech would contain some support for the IPAP, this has shown a breaking away from recent budget trends. In previous years, the National Treasury has been reluctant to support plans on sector-specific industry incentive schemes.
As expected, the Industrial Development Corporation (IDC) will continue to play a role in the implementation of the IPAP, although they received no additional funding support from the National Treasury.
The funding allocation will support the new Clothing and Textile Production Incentive (R1.75 billion) and the Automotive Production and Development Programme (R2.6 billion). The fact that only two sectors were chosen for additional support also means that the DTI will have to source external funding for the remainder of the IPAP proposals.
Trade and Industry Minister Rob Davies will give further details in the much anticipated release of the 2010/11 - 2012/13 IPAP today (18 Feb).
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