Minister of Trade, Industry and Competition Parks Tau assured the public that South Africa remains firmly on course to stimulate investment and industrialisation, stating the government is focused on these areas and combating illicit trade. Speaking in Cape Town on Tuesday during his department’s Budget Vote, Minister Tau acknowledged significant global challenges currently impacting economies worldwide. He noted the profound instability caused by international conflicts. "The global environment has been deeply unsettled by the ongoing Middle East War and its associated disruptions to supply chains of energy, fertilizers and petrochemicals," he said, noting South Africa's vulnerability as a net oil importer with real recessionary risks and threats to its industrial competitiveness. These external pressures show the importance of strong domestic economic strategies. Cabinet recently adopted the Industrial Development Strategy (IDS) to provide a clear framework and direct the country's industrial policy agenda, ensuring a focused approach to economic growth and resilience.
Driving Industrial Growth and Investment
The Industrial Development Strategy is anchored by pathways of decarbonisation, diversification, and digitalisation, according to official statements from the department. This strategic framework is designed to modernize and strengthen South Africa's industrial base, preparing it for future economic landscapes. As part of this full strategy, the Automotive Production Development Plan (APDP2) is undergoing a thorough review process. This review aims to stimulate new investments within the automotive sector and support the expansion of component manufacturers, thereby enhancing local production capabilities and creating more jobs. The government's commitment to industrial growth is further demonstrated through its ambitious investment targets.
South Africa's second investment mobilisation drive was launched with an ambitious target of R3 trillion in new investment by 2030, reflecting the nation's determination to attract significant capital. The 2026 South African Investment Conference (SAIC) successfully recorded the highest-ever value of investment commitments since its establishment in 2018, marking a significant milestone in the country's efforts to boost its economy. Notably, two-thirds of the investments secured at the SAIC originated from South African companies, noting strong domestic confidence and participation in the national investment drive. These local contributions are key for sustainable economic development.
The target for localisation in the current financial year is set at R100 billion, emphasizing the government's push to increase the procurement of locally manufactured goods and services. During the 2025/26 financial year, R86.6 billion in locally manufactured goods and services were procured, demonstrating tangible progress towards this goal. The Department of Trade, Industry and Competition (dtic) and its associated entities have been entrusted with consolidated resources amounting to approximately R130.6 billion over the medium term to support these critical initiatives, including industrialisation efforts and investment promotion. These resources are vital for implementing the various programmes and achieving the set economic objectives.
Combating Illicit Trade
The illicit economy costs the South African economy an estimated R700 billion annually, a staggering figure representing roughly 10% of the nation's Gross Domestic Product (GDP). This substantial loss undermines legitimate businesses, deprives the fiscus of key revenue, and distorts market competition. To counter this widespread problem, the Department of Trade, Industry and Competition (dtic) is implementing new, stringent measures designed to enhance oversight and curb illegal activities. In the current financial year, a Track-and-Trace mechanism on goods will be published. This innovative mechanism is specifically designed to protect consumers from illicit trade by providing transparency and accountability throughout the supply chain. The Track-and-Trace system will mainly target illicit trade within specific sectors, including tobacco, alcohol, food, and consumer appliances, aiming to enhance oversight and reduce financial losses across these key industries. This targeted approach is expected to yield significant results in the fight against the illicit economy.
Special Economic Zones and Future Outlook
The Special Economic Zone (SEZ) Programme has proven to be a significant catalyst for economic development, attracting 224 operational investments to the value of more than R31 billion. These substantial investments have led to the creation of 28,821 active jobs within the designated zones, providing much-needed employment opportunities and contributing to local economic growth. Minister of Trade, Industry and Competition Parks Tau acknowledged the broader challenges facing South Africa's economic ambitions, reiterating the impact of global events. "The global environment has been deeply unsettled by the ongoing Middle East War and its associated disruptions to supply chains of energy, fertilizers and petrochemicals," Minister Tau stated, emphasizing the persistent external pressures. Such global disruptions can profoundly influence investment flows and operational costs for businesses within and outside the SEZs, necessitating adaptive strategies. Efforts to expand industrialisation and job creation through initiatives like the SEZ Programme continue amidst an international economic landscape marked by volatility. The programme's tangible outcomes reflect its significant contribution to South Africa's overall strategy for economic growth and stability, demonstrating resilience in the face of global headwinds.
