The South African government has stated in a report that it has recognized the importance of the steel crisis and what its implications are for the steel industry and the economy more broadly and is working on numerous measures to intervene. Accordingly, the government stated that South Africa’s Department of Trade and Industry (DTI) and Economic Development have met with steel producers, users and other stakeholders, and agreed on a package of support measures for the industry. So far the industry has received support in the form of tariff protection on certain steel products, at the maximum level allowed by the World Trade Organization (WTO) in terms of its bound rates.
According to the government’s statement, the DTI has done a significant amount of work to support the foundries, including the development of a new incentive to complement many other manufacturing-focused incentives, such as the Manufacturing Competitiveness Enhancement Program (MCEP) and the tax allowance program. In total, a significant amount of money is allocated each year to such incentives: aggregated medium-term funding of ZAR 16.2 billion ($1.03 billion) for example is dedicated to various incentives, promotion of various industries including steel, and assistance to small enterprises and cooperatives, while the government also forgoes revenue of about ZAR 24 billion ($1.52 billion) each year to provide various business tax incentives. Meanwhile, a multi-departmental steel task team has been set up to implement various measures and monitor metals and industry-related issues.