Johannesburg — TRADE and Industry Minister Mandisi Mpahlwa yesterday finally unveiled the state's long-awaited national industrial policy framework, the centrepiece of a major state intervention to kick-start industrial development in four key areas of the economy.

The policy framework is seen as central to the government's bid to speed up economic growth as part of its Accelerated and Shared Growth Initiative (Asgi-SA).

The department said yesterday it would focus on four lead sectors, strategically chosen for their linkages to the rest of the economy, ability to boost exports, and potential for job creation and downstream beneficiation.

The sectors earmarked for state intervention are capital and transport equipment and metals; automotives and components; chemicals, plastic fabrication and pharmaceuticals; and forestry, pulp and paper, and furniture.

At the same time work on the Asgi-SA sectors -- biofuels, tourism and business process outsourcing -- is continuing, while clothing and textiles will continue to receive help in a bid to stabilise the industry.

Unveiling the policy framework yesterday, Mpahlwa motivated the government's planned intervention, saying: "We see a very clearly defined role for the state. Growth cannot be sustained at higher levels if we are only focused on commodity-driven growth and consumer spending. It has to be driven by value-added manufacturing and a strong industrial policy is essential to facilitate this structural change."

Some of the key instruments that will be used to drive the interventions are industrial upgrading for various sectors and increased levels of industrial financing. The department, however, did not quantify the scope of these interventions.

On the cost side, the department will turn to import tariff reductions, tightening of competition legislation and interventions to reduce labour costs.

The department yesterday also released an action plan that will drive the industrial policy framework. To get the ball rolling, the department, sometimes deemed sluggish on implementation, has set itself some stiff targets and deadlines.

Its interventions will include: finalising competition policy to strengthen competition legislation and developing a state-owned enterprise pricing and procurement framework, both by year-end.

It also wants to finalise a comprehensive review of import duties related to the "lead" sectors by March.

Furthermore, it wants to get the upgrading of the tooling and foundry support industries under way by March and is looking to fast-track the issuing of water licences to facilitate the forestation of thousands of hectares of land in Eastern Cape and KwaZulu-Natal.

The policy envisages ascaling-up of industrial financing, through the government's development finance body, the Industrial Development Corporation. But it is also engaged with the treasury to fast-track the formulation of an improved suite of incentives, which would include the reintroduction and scaling up of tax incentives, a revised development programme for small businesses (the SMEDP), scaling up the Critical Infrastructure Fund and new sectoral incentives.

In an implied admission of the tensions between the department and the treasury over the cost of industrial interventions, it was disclosed that the department had appointed a technical team that was working with the treasury on the fiscal implications of the incentives.

Incentives and funding would be allocated on a strict principle of reciprocity, while projects with potential benefits for other sectors would be prioritised, Deputy Trade and Industry Minister Rob Davies said.

"You could liken it to a snowball. We will start with key interventions and the rolling process will gather momentum and get bigger and bigger as we proceed," he said.

One of the key strategic thrusts, linked to the targeting of capital equipment as a lead sector, relates to an aim to leverage industrial activity off the government's planned R240bn public sector capital expenditure programmes.

The department defended its pursuit of the strategy. "Historical evidence shows that rapid industrialisation and diversification do not happen automatically. Developing countries that have succeeded are the ones that implemented robust industrial policies. They all intervened -- sometimes against the judgments of the markets of the time," Davies said.