Textile Federation welcomes proposed new incentive scheme

THE TEXTILE Federation has welcomed a report that the department of trade and industry (dti) has finalised an action plan to recapitalise and upgrade the clothing and textiles sectors. “We are encouraged by the announcement,” executive director, Brian Brink told FTW, “but will await the details before expressing a fuller response.” However, he added, based on the sketchy outline contained in the report, some of the components of the long-awaited customised sector programme (CSP) are to be implemented. “This is good news,” he said. “It was agreed to by all stakeholders on July 12 last year and it’s only now that some announcements in this regard are expected.” Although the CSP programme is expected to stabilise the industry, trade and industry minister Mandisi Mpahlwa said the department was looking beyond this “to stimulate long-term growth”. Like the motor industry development programme (MIDP) – which is currently under review – there is a move away from an export-linked incentive. The dti felt that only a few manufacturers were export- competitive enough to take advantage of it. The department has moved to what it described as “a broader” volume-based incentive. The productivity linked incentive programme will replace the current export-based, duty credit certificate scheme – where the tradability of the credit certificates has also been an on-going problem. At the same time, the government is looking at improving research and development (R&D) funding for the industry, and upgrading skills. It is also thinking of accelerating integration in the Southern African Customs Union (Sacu) – where SA fellow member countries, Lesotho and Swaziland, also have relatively large clothing and textile industries that contribute significantly to their economies. The dti also expects the Industrial Development Corporation (IDC) to play an important role in funding sector re-capitalisation.