'High hopes' for revival of manufacturing grant programme

There are “positive signs”

that the Department of

Trade and Industry’s

(dti) Manufacturing

Competitiveness

Enhancement Programme

(MCEP) – an incentive

programme

created to

support

production in

the country –

will be revived

in April this

year.

So said

Rashid

Ahmed, CEO

of Incentives

SA, speaking

at a tax and

incentives

breakfast

briefing held by the

Johannesburg Chamber of

Commerce and Industry

(JCCI) last week.

The MECP grant

programme was suspended

by the dti in October last year

because the large number of

applications far exceeded the

R5 billion in funds set aside

for the programme.

The dti commented at the

time that it would re-open

a new application in April

this year “pending the

availability of funds”. Ahmed

told FTW that Incentives

SA, which helped facilitate

access to grants and funding

from various

government

agencies, was

lobbying to

re-open this

programme.

“For South

Africa to

address its

ever-widening

import/export

deficit and

continue to

compete on

the global

trade stage, it

has to support manufacturing

and production – and

government has to step

up and do more to help

businesses achieve improved

production,” he said.

Dean Macpherson,

Democratic Alliance shadow

deputy minister of trade

and industry, agrees with

Ahmed, commenting that

the MCEP programme

is vital to ensuring that

SA’s manufacturing sector

remains competitive, retains

jobs and has the necessary

space to create more jobs.

“The current sector is already

in turmoil due to the ongoing

electricity crisis, falling

commodity prices and labour

unrest,” he said.

During a Q&A session at

the JCCI breakfast, several

delegates raised the issue of

submitting their applications

and waiting up to six months

or longer to hear the outcome,

only to be told afterwards

that the grant programme

had been suspended.

This raised serious

questions about the overall

management of the initiative,

said Duane Newman,

director of Cova Advisory.

According to him, several

small manufacturers who

relied heavily on getting

the grant said they had lost

faith in the dti. “Some had

to retrench staff or even face

closure of their businesses –

something an ailing economy

can ill afford,” he said.

He also questioned

the dti’s assertion at the

time of closure that the

suspension would only

apply to new applications.

Newman pointed out

that this had proven not

to be the case. “Many

applications that had been

in the system for a year had

already received rejection

letters on the back of the

announcement,” Newman

said.

Ahmed expressed

confidence that when

the MCEP programme

was re-opened, the

turnaround time for

processing of applications

would be improved. “We

have high hopes for the

re-opening of the MCEP

grant programme – as

there has been a lot of

support for it – and we

are confident that the

issues experienced the last

time will be addressed

based on lessons learnt

since the inception of the

programme in 2012.”

He pointed out that

obstacles to approval

included companies

not complying with the

new black economic

empowerment (BEE)

rules, company taxes

not being up to date and

financial statements and

projections not being

realistic or sustainable.

“Using a company

that knows how the

dti works and is up to

date with new rules

and regulations could

significantly speed

up the application

process,” said Ahmed.

INSERT & CAPTION

Government has to

step up and do more

to help businesses

achieve improved

production.

– Rishad Ahmed