Johannesburg - National Treasury director-general Lungisa Fuzile on Friday assured the steel industry that the government was aware of the problems it faced and was taking steps to intervene.
Delivering a speech on behalf of Finance Minister Pravin Gordhan at the Metals and Engineering Indaba in Johannesburg, Fuzile highlighted the steel industry’s importance in the implementation of government’s various growth plans.
Read: 'Steel linked to South Africa's growth'
The local steel industry is currently battling for survival because of, among other factors, global steel overcapacity and cheaper Chinese imports.
“At the outset, I must say that as government, we are neither blind nor ignorant of the challenges that the manufacturing sector is going through. And, of course, we are alive to the importance of the sector to the wellbeing of the economy,” said Fuzile.
He said the local steel industry, which accounts for 1.5 percent of gross domestic product was critical to industrialisation and vital to the growth drivers outlined in the Industrial Policy Action Plan, the National Development Plan and the nine-point plan.
“Government has recognised the importance of the steel crisis and what its implications are for industries and the economy broadly and is working on numerous measures to intervene,” said Fuzile.
He said the Department of Trade and Industry had met producers and users of steel.
“(They) have accordingly agreed, through those processes, a package of measures (to) support the industry. So far, one of the very important measures has been the increase in the tariffs to the maximum of what the World Trade Organisation allows with the view to ensure that we protect domestic production from the influx of cheap steel, in some cases from countries that subsidise their industries, thus enabling them to sell steel cheaper,” he said.
The government has set up a multi-departmental steel task team to implement various measures and to monitor developments that would impact on the steel industry “so that it can advise government to develop measures that will help the industry cope with whatever negatives measures arise from time to time,” he said.
Worked tirelessly
Meanwhile, on the day in which the Presidency issued a statement in a move to dispel a perception of a rift between President Jacob Zuma and Gordhan, Fuzile praised his boss.
“From the time he came in December‚ he has worked tirelessly on what was a difficult budget to put together, because our government had to put out a budget that begins to instil confidence in South Africa’s ability to manage its fiscal affairs in a sustainable manner.
“The budget was received overwhelmingly positively. No minister of finance can produce a budget as tough as the one that Minister Gordhan has produced if his colleagues and the president as the chief executive officer of government is not in support of him.”
He said doing so was in the interest of the country. Gordhan has been at the forefront of the country’s efforts to preserve the country’s investment grade rating. “He has been the face of it. But he is running that process on behalf of the government. The president and some of the ministers have been with him‚ either meeting business or addressing the media on the same issues.”
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