The Black Industrialists Policy aims to increase the participation of black South Africans in operational management, rather than just financial ownership, of enterprises in key sectors and value chains. The programme was launched in 2015 by the Department of Trade, Industry and Competition, supported by the Industrial Development Corporation and the National Empowerment Fund.
The Black Industrialists Conference in August 2022 examined the impact of the Black Industrialists Programme and explored support measures to boost entry of black-owned businesses and producers into the mainstream economy. It also showcased the work of black industrialists. As an input into the conference, TIPS prepared nine case studies on black industrialists. Renee Grawitzky conducted the research and interviews, and TIPS provided the industry context and looked at the broader developmental objectives.
CapeBio Technologies: biotechnology company
Easy Farm: farms and exports cirtus
Equal ELM Trading: designs and manufactures engine protection systems for the mining, construction, and transport industries
Flat-Foot Engineering: mechanical engineering provider
Ikusasa Green: manufactures roto-moulded cooler boxes
Microfinish: manufactures parts for the auto world industry
Pambili Media: film production company
PepsiCo ESOP: employee ownership scheme
Sindane Mining Ventures: civil engineering and equipment-rental company
This report highlights the myriad interventions available to township firms to develop a more equitable industrial landscape that supports firm growth and employment growth. Many of these response measures aim to address the constraints facing small businesses and industrial development in townships. Gaps however remain. Economic geography is a key component of industrial policy, and requires appropriate policies that supports development in a decentralised urban landscape in order to bring about inclusive and sustainable industrialisation. Based on the gaps identified in this research, the policy recommendations to strengthen small manufacturing businesses in townships include:
Working Paper prepared by TIPS for the Department of Trade, Industry and Competition
This policy brief provides a broad introduction to illicit financial flows (IFFs), some key IFF mechanisms, and how these flows serve to undermine industrial development, particularly in developing countries. IFFs are usually connected to tax havens, and serve to maximise income for a handful of people while eroding the tax base, undermining government capacity and harming industrial development. There is strong evidence to suggest that IFFs are happening at significant scale in South Africa. This is likely to have a negative effect on the country’s existing industrial base and industrialisation efforts via a number of channels that require policy attention. Government departments and agencies with the authority to act on these illicit channels, including via industrial, competition and procurement policy, need to develop the capacity to do so. The brief concludes with recommendations of industrial policy measures that can be implemented to limit the extent and impact of illicit financial flows on industrial development in South Africa.
This policy brief is based on the Working Paper Illicit financial flows, tax havens and industrial development in South Africa. It can be accessed at the following link: main report.
Illicit financial flows (IFFs) of various kinds, and the role of tax havens in facilitating these flows, have come under increased scrutiny since the global financial crisis of 2007-2009. A series of high-profile scandals and leaks of sensitive information about how corporates and individuals organise their financial affairs to escape their social obligations have contributed to this interest.
This report explores the relevance of these for South Africa. It looks at definitions and basic mechanisms, and provides an overview of methodologies used to estimate IFFs. It presents a set of case studies that illustrate how these mechanisms operate in practice, and provides an indication of the scale of IFFs and which tax havens play a significant role in facilitating these. It then explores the channels through which IFFs and tax havens affect industrial development, and makes the case for an active role for industrial policy in protecting South Africa’s industrial base from IFF and tax haven exposure, setting out a number interventions that the Department of Trade, Industry and Competition and other government agencies may develop to reduce the impact on industry in South Africa, accompanied by research proposals aimed at enhancing such efforts.
Download Policy Brief: Illicit financial flows and industrial development in South Africa: A discussion of policy options