Small, Micro- and Medium-sized Enterprises (SMME) Development Incentives
BBSDP is a cost-sharing grant offered to small black-owned enterprises to assist them to improve their competitiveness and sustainability in order to become part of the mainstream economy and create employment. BBSDP provides a grant to a maximum of R1 000 000 (R800 000 maximum for tools, machinery and equipment and R200 000 maximum for eligible enterprises to improve their corporate governance, management, marketing, productivity and use of modern technology).
The Co-operative Incentive Scheme (CIS) is a 90:10 matching cash grant for registered primary co-operatives (a primary co-operative consists of five or more members who are historically disadvantaged individuals). The CIS is an incentive for co-operative enterprises in the emerging economy to acquire competitive business development services, and the maximum grant that can be offered to one co-operative entity under the scheme is R350 000.
The DTI initiated the ISP as a grant to develop incubators into successful enterprises with the potential to revitalise communities and strengthen local and national economies. The ISP encourages partnerships whereby big businesses assist SMMEs with skills transfer, enterprise development, supplier development and marketing opportunities.
THRIP is a partnership programme funded by the dti and managed by the National Research Foundation (NRF). On a cost-sharing basis with industry, THRIP supports science, engineering and technology research collaborations focused on addressing the technology needs of participating firms and encouraging the development and mobility of research personnel and students among participating organisations.
Industrial Development-Related Incentives
The Manufacturing Competitiveness Enhancement Programme (MCEP) is one of the key action programmes of the Industrial Policy Action Plan (IPAP) 2012/13 – 2014/15. It will provide enhanced manufacturing support aimed at encouraging manufacturers to upgrade their production facilities in a manner that sustains employment and maximises value-addition in the short to medium term. The MCEP comprises two sub-programmes: the Production Incentive (PI) and the Industrial Financing Loan Facilities which will be managed by the dti and the Industrial Development Corporation respectively.
Manufacturing Investment Programme (MIP)
The MIP is a reimbursable cash grant for local and foreign-owned manufacturers who wish to establish a new production facility; expand an existing production facility; or upgrade an existing facility in the clothing and textiles sector.
As part of the Government’s strategy to consolidate small-enterprise support activities since April 2006, the activities of the Godisa Trust, the National Technology Transfer Centre (NTTC), the three business incubators of the dti, the Technology Advisory Centre (TAC), the technology-transfer activities of the Technology for Women in Business (TWIB) programme and the support programmes for small enterprises of the South African Quality Institute were merged into a single programme – the seda Technology Programme (STP).
The SPII is a support programme of the dti, managed by the Industrial Development Corporation (IDC). The SPII is designed to promote technology development in industry in South Africa through the provision of financial assistance for the development of innovative products and/or processes. The SPII specifically focuses on the development phase, which begins at the conclusion of basic research and ends when a pre-production prototype has been produced.
The SSAS is a reimbursable 80:20 cost-sharing grant offering financial support to export councils, joint action groups and industry associations. The scheme comprises two sub-programmes, namely Generic Funding and Project Funding for Emerging Exporters (PFEE). The aim of the SSAS is aligned to the dti’s overall objectives in several respects, as indicated below.
Under the PI, applicants can use the full benefit as either an upgrade grant facility or an interest subsidy facility, or a combination of both. Eligible enterprises include clothing manufacturers, textile manufacturers, Cut, Make and Trim (CMT) operators, Footwear manufacturers, Leather goods manufacturers, and Leather processors (specifically for leather goods and footwear industries).
The FIG compensates qualifying foreign investors for costs incurred in moving qualifying new machinery and equipment (vehicles excluded) from abroad to the Republic of South Africa.
The CTCIP aims to build capacity among clothing and textile manufacturers and in other areas of the apparel value chain in South Africa to enable them to effectively supply their customers and compete on a global scale. Such competitiveness encompasses issues of cost, quality, flexibility, reliability, adaptability and the capability to innovate.
The CPFP is a cost-sharing programme that contributes to the cost of feasibility studies likely to lead to projects outside South Africa that will increase local exports and stimulate the market for South African capital goods and services.
The South African Government implemented a Business Process Outsourcing and Offshoring (BPO&O) incentive programme as from July 2007. Between July 2007 and March 2010, the incentive resulted in the creation of at least 6 000 new jobs and attracted R303 million in direct investment. As part of a process of improving South Africa’s position as an investment destination, a systematic review of the BPO&O incentive programme was undertaken with the private sector, resulting in a revised BPS incentive.
Trade, Export and Investment Incentives
The dti assists South African exporters by organising National Pavilions to showcase local products at international trade exhibitions. The EMIA scheme bears costs for space rental, the construction and maintenance of stands, electricity and water charges, as well as freight charges, up to a maximum of three cubic metres or two tonnes per exhibitor. Also included are assistance with International Trade Exhibitions, Group Outward-Selling Missions and Group Outward-Investment Missions
The CIP is a cost-sharing cash grant for projects designed to improve critical infrastructure in South Africa. The grant covers qualifying development costs from a minimum of 10% to a maximum of 30% towards the total development costs of qualifying infrastructure. It is made available to approved Eligible Enterprise upon the completion of the infrastructure project concerned. Infrastructure for which funds are required is deemed to be ‘critical’: if the investment would not take place without the said infrastructure or the said investment would not operate optimally.
The South African Government offers a package of incentives to promote its film production and post¬production industry, which includes the Foreign Film and Television Production and Post-Production Incentive and the South African Film and Television Production and Co-Production Incentive. The Foreign Film and Television Production and Post-Production Incentive aims to attract foreign-based film productions to shoot on location in South Africa and conduct post-production activities in the country. The South African Film and Television Production and Co-Production incentive aims to assist local film producers in the production of local content.
The AIS is an incentive designed to grow and develop the automotive sector through investment in new and/or replacement models and components that will increase plant production volumes, sustain employment and/or strengthen the automotive value chain. Eligible Enterprises include Light motor vehicle manufacturers that have achieved or can demonstrate that they will achieve a minimum of 50 000 annual units of production per plant, within a period of three years; or Component or deemed component manufacturers that are part of the Original Equipment Manufacturer (OEM) supply chain and will achieve at least 25% of a total entity turnover of R10 million by the end of the first full year of commercial production as part of a light motor vehicle manufacturer supply chain, locally and/or internationally.
The objective of the APSS is to stimulate investment by South African agro processing/beneficiation (agri-business) enterprises. The investment should demonstrate that it will achieve some of the following; increased capacity, employment creation, modernised machinery and equipment, competitiveness and productivity improvement and broadening participation.
The APSS offers a cash grant to qualifying enterprises who undertake capital investment projects. Small enterprises may claim 30% of their investment in qualifying assets, to a maximum of R3 million, while medium and large sized enterprises are entitled to claim 20% of their investment, to a maximum of R20 million.
The Department of Trade and Industry (DTI) has launched an incentive scheme called the Black Industrialist Scheme (BIS). The objective of the scheme is to unlock potential of black industrialists within the SA economy through financial interventions.
The BIS offers a cost-sharing grant ranging from 30% to 50% to approved entities to a maximum of R50 million. The quantum of the grant will depend on the level of black ownership and management control, the economic benefit of the project and the project value.