South Africa’s Industrial Investment Tops R31bn, Exceeding Target Threefold

South Africa’s industrial investment exceeded 31 billion rand in the 2025/26 financial year, more than three times the government’s 10 billion rand target, while local procurement reached 86 billion rand against a target of 50 billion rand.

Trade, Industry and Competition Minister Parks Tau presented the department’s annual report to Parliament’s Portfolio Committee on Trade, Industry and Competition on Wednesday, outlining progress against investment and export targets alongside delays in industrial development programmes.

Global exports reached 142 billion rand, surpassing the 120 billion rand target, while continental exports totalled 146 billion rand. Exports by small, medium and micro enterprises (SMMEs) were reported at 764 billion rand.

Tau said the Department of Trade, Industry and Competition was shifting its focus from crisis management towards a targeted industrial development strategy, with greater emphasis on measurable economic outcomes.

The revised approach prioritises special economic zones and industry-specific industrial parks, he said, as the government seeks to strengthen domestic production and expand the country’s industrial base.

The department is also seeking to diversify export markets through trade arrangements and partnerships involving the European Union, the Southern African Development Community, BRICS Plus, the United States, the United Kingdom and other African countries. Export promotion efforts are intended to support manufacturers, SMMEs and black-owned businesses.

However, the report identified constraints affecting industrial growth and implementation. Manufacturing expanded by 0.4 percent, falling short of the 0.5 percent target, while funding limitations delayed the development of industrial parks. Only 10 of the 45 targeted parks received funding during the reporting period.

Logistics constraints also affected imports of rail and transport components, with Tau saying concessions were needed to sustain operations in the short term.

Negotiations with the UK over electric vehicles remain ongoing, amid concerns about domestic industrial capacity and the potential impact on future investment. The automotive sector has made progress under the Automotive Master Plan, but other industries continue to face external pressures.

Tau said the poultry industry was dealing with increased US demands and quota issues, while higher steel tariffs aligned with those imposed by the European Union were constraining market access.

The department’s expenditure included 9.1 billion rand allocated to industrial incentives, of which five billion rand was disbursed, and 1.3 billion rand for the Social Employment Fund. It also spent 41 million rand on membership fees and made transfers to non-profit organisations.

Source: FSX Business News