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Exporters’ playing field put under pressure as DTI manages budget constraints

A reduced budget for the Department of Trade and Industry’s (DTI’s) ExportMarketing and Investment Assistance (Emia) scheme and Sector Specific Assistance Scheme (SSAS), in the previous year, resulted in less support to exporters between 2014/15 and 2015/16.

The overall Emia budget decreased from R240-million to R200-million over this period, along with a drop of more than 40% in approvals of funding to exporters for the Emia Individual and SSAS incentives. DTI Incentive Development and Administration Division (IDAD) chief director Hawie Viljoen said the budget reduction was due to a reduced allocation from the National Treasury, owing to the current fiscal constraints and the need to improve value for money in support of individual and emerging exporters.

Speaking to delegates at the Team Export South Africa (Tesa) workshop, in Midrand, Viljoen explained that just over 50% of the allocated R90-million for Emia and SSAS for this financial year had been spent to date, amid enhanced compliance and quality verification of applicants.

At the current approval ratio and without further significant increases in SSAS applications, this budget will be spent by March 31, 2017.

But, said Viljoen, the number of applications for SSAS and Emia were increasing in an unrivalled manner fuelled by the historic strong correlation between export revenue growth achieved and the financial support provided by the DTI in previous years.

However, he pointed out that IDAD was taking a number of steps to circumnavigate the pitfalls of a lower budget, including enlisting sector- and council-specific viewpoints on new applications, where relevant, to improve alignment and further elevate value for money and exporter success.

IDAD will also work towards improving administrative governance, consistency and efficiency, while clarifying guidelines and interpretations and strengthening post-event export benefit tracking.

DTI export promotion and marketing chief director Zanele Sanni said the fiscal constraints had significantly impacted on the country’s ability to showcase exporters at international trade pavilions and conferences.

“This year was a very tricky year,” she said, adding that the DTI’s purse was very tight. Last year, the department was able to facilitate South Africa’s participation at 29 pavilions, but this year, it fell to 16.

“The picture becomes more grim when looking at our ability to participate in trade missions. This year, out of the 22 that we have planned, we only managed to mobilise South Africans to come with us on 12 missions,” Sanni added.

 

Source: Engineering News