Enviro News Asia, Cape Town — South Africa is pressing ahead with efforts to strengthen industrialisation, attract investment, and tackle illicit trade despite growing global economic uncertainty linked to the ongoing conflict in the Middle East and disruptions to global supply chains.
Minister of Trade, Industry and Competition Parks Tau stated during the presentation of the department’s Budget Vote in Cape Town on Tuesday that South Africa remains committed to maintaining economic momentum while addressing rising risks to industrial competitiveness and recessionary pressures.
According to Tau, the ongoing conflict in the Middle East has disrupted supply chains for energy, fertilizers, and petrochemicals, creating challenges for countries such as South Africa that rely heavily on imported oil. Despite these pressures, the government believes the country is entering a more stable phase of economic development.
The minister explained that South Africa’s policy direction is now more consistent and forward-looking following the adoption of the Industrial Development Strategy (IDS) by Cabinet. The strategy focuses on three key pathways: decarbonisation, economic diversification, and digitalisation, which are considered essential for improving the country’s competitiveness in the global economy.
As part of the industrial policy agenda, the government is also reviewing the Automotive Production Development Plan (APDP2) to encourage new investments and strengthen domestic automotive component manufacturing.
Tau highlighted progress in localisation policies, noting that locally manufactured goods and services worth approximately R86.6 billion were procured during the 2025/26 financial year. The government has set a target of reaching R100 billion in localisation spending during the current fiscal year through collaboration with business and labour stakeholders.
The Department of Trade, Industry and Competition is also intensifying efforts to combat the illicit economy, which is estimated to cost South Africa nearly R700 billion annually, equivalent to around 10 percent of the country’s Gross Domestic Product (GDP). To address the issue, the National Consumer Commission plans to introduce a Track-and-Trace mechanism for products such as tobacco, alcohol, food, and consumer appliances to improve monitoring and reduce illegal trade activities.
On investment performance, Tau said the 2026 South African Investment Conference recorded the highest value of investment commitments since the event was first launched in 2018. Domestic companies accounted for nearly two-thirds of the pledged investments, reflecting growing confidence in the local economy.
The conference also marked the launch of South Africa’s second investment mobilisation drive, which aims to secure R3 trillion in new investments by 2030.
Meanwhile, South Africa’s Special Economic Zone (SEZ) Programme continues to contribute to regional economic development. Government data shows that the programme has attracted 224 operational investments worth more than R31 billion and created over 28,800 active jobs.
The Department of Trade, Industry and Competition and its related entities have been allocated approximately R130.6 billion over the medium term to support industrialisation, economic transformation, and investment programmes across the country. (*)
