Economy: Sugar industry crisis will be addressed – Minister

A long-term strategy for alleviating the sugar industry ‘crisis’ (Fin24) will need to include support interventions appropriate to the entire value chain, according to Trade & Industry Minister Ebrahim Patel. This is noting the negative impact of the tax on sugar-sweetened beverages and the importance of boosting demand for SA’s sugar cane in a more diversified market, reports Pam Saxby for Legalbrief Policy Watch. The Minister made these remarks yesterday during a meeting of the National Assembly’s Trade & Industry Committee, when he briefed members on the context in which his department intends giving practical effect to the ‘reimagined industrial strategy’ to which President Cyril Ramaphosa alluded in last month’s State of the Nation Address. Responding to a question from the DA’s Dean Macpherson – and conceding that last year’s tariff increase on imported sugar has not provided relief on the scale envisaged – Patel said his department will need to ‘work through’ the complex implications of any further interventions before proceeding.

The Minister expressed confidence that the need for meaningfully broader black economic empowerment will be addressed to some extent by provisions in the 2018 Competition Amendment Act, making ‘worker ownership arrangements’ a precondition for the approval of mergers and acquisitions. He made this observation in response to a question from the ACDP’s Wayne Thring, nevertheless also acknowledging the need for a ‘re-think’ on broad-based black economic empowerment policy implementation. With that in mind, while every enterprise identified for development under the black industrialists programme is ‘still in business’, the focus of support will shift to market access.

Asked by FF Plus MP Frederik Mulder about the impact of state capture on SA’s economic performance – and having responded with alarming statistics illustrating the magnitude of investment and job creation opportunities lost – Patel emphasised the importance of ‘doing things differently’ at a departmental and entity-specific level. By way of example, he said that – in the interests of greater transparency – the Industrial Development Corporation now publishes the names of loan beneficiaries on its website, despite this not being generally accepted development finance institution practice. Further, should any entity falling under the department’s jurisdiction receive a qualified audit, there will be ‘consequences for wrongdoing’ the severity of which the Minister believes, over time, will bring about a ‘change in mindset’.

The briefing document circulated at yesterday’s meeting includes information taken from separate 2019/20 annual performance plans and budgets for the Departments of Trade & Industry and Economic Development, which have just begun the process of merging in keeping with the requirements of the President’s reconfigured national departments and related ministries. The necessary arrangements are expected to have been concluded by the end of the year.

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