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3 July 2008

A new incentive targeted at stimulating growth, employment and broadening participation will be introduced later this month. This was announced by Trade and Industry Minister Mandisi Mpahlwa at the launch of the Enterprise Investment Programme (EIP) in Pretoria today.

EIP will initially comprise of the Manufacturing Investment Programme and the Tourism Support Programme. The programme will be accessible to both local and foreign owned entities wishing to locate their operations in South Africa.

Speaking at the function Minister Mpahlwa said EIP provides an investment grant of between 15% and 30% towards qualifying investment in plant, machinery and equipment and customised vehicles required for establishing new or expanding existing production facilities or upgrading production capability in existing clothing and textiles operations.

According to the minister, a separate selection criteria has been developed to ensure that support for tourism projects achieves objectives for employment creation and promotes tourism enterprise activities in new areas outside the metropoles that already have an established tourism industry.

However, Cape Town, Johannesburg and Ethekwini metropolitan areas are not prioritised for tourism incentive support, as they already have a critical mass of tourism product, which already provides an obvious business case for additional tourism investment. However, projects locating in marginalised areas within these metropolitan areas will be eligible to apply.

The introduction of the Enterprise Investment Programme (EIP) is part of an implementation plan arising from the broader incentives review process, which includes modifying certain incentives, benchmarking the incentive practices in other economies, as well as introduction of new incentives to promote investment, growth and employment creation.

The EIP is aligned to the National Industrial Policy Framework (NIPF), which was approved by cabinet last year. Consultation workshops on the EIP were also held to ensure policy coherence and synergy with activities of provincial economic development departments and their investment agencies the Industrial Development Corporation (IDC), National Empowerment Fund (NEF), Khula as well as commercial banks, entrepreneurs and various industry associations and export councils.

Issued by: Department of Trade and Industry
3 July 2008