SPECIAL FEATURESouth
SPECIAL FEATURESouth Africaninvestment incentivesThe South African government, particularly the Department of Trade, Industryand Competition, has a range of incentives available to investors, existingcompanies, entrepreneurs and co-operatives across many sectors.PG Bison is one of several companies that are ramping up investment into the Mpumalanga economy.A new front-end dryer has been installed at Mkhondo.South Africa wishes to diversify itseconomy and incentives are an importantpart of the strategy to attract investors tothe country.The Department of Trade, Industry andCompetition (the dtic) is the lead agency in theincentives programme, which aims to encouragelocal and foreign investment into targetedeconomic sectors, but the Industrial DevelopmentCorporation (IDC) is the most influential funder ofprojects across South Africa.There are a variety of incentives available andthese incentives can broadly be categorisedaccording to the stage of project development:• Conceptualisation of the project – includingfeasibility studies and research and development(grants for R&D and feasibility studies, THRIP,Stp, etc)• Capital expenditure – involving the creationor expansion of the productive capacity ofbusinesses (MCEP, EIP, CIP, FIG, etc)• Competitiveness enhancement – involving theintroduction of efficiencies and whetting thecompetitive edge of established companies andcommercial or industrial sectors (BBSDP, EMIA,CTCIP, etc)• Some of the incentives are sector-specific, forexample the Aquaculture Development andEnhancement Programme (ADEP), Clothingand Textile Competitiveness ImprovementProgramme (CTCIP) and the Tourism SupportProgramme (TSP).MPUMALANGA BUSINESS 2025/2630
ManufacturingKey components of the incentive programme arethe Manufacturing Incentive Programme (MIP) andthe Manufacturing Competitiveness EnhancementProgramme (MCEP). The initial MCEP, launched in2012, was so successful that it was oversubscribedwith almost 890 businesses receiving funding.A second phase of the programme waslaunched in 2016. The grants are not handoutsas the funding covers a maximum of 50% of thecost of the investment, with the remainder to besourced elsewhere.The Enterprise Investment Programme (EIP)makes targeted grants to stimulate and promoteinvestment, BEE and employment creation in themanufacturing and tourism sectors. Aimed atsmaller companies, the maximum grant is R30-million. Specific tax deductions are permissible forlarger companies investing in the manufacturingsector under Section 12i of the Income Tax Act.Other incentivesOther incentives available to investors and existingbusinesses in more than one sector include the:• Technology and Human Resources for IndustryProgramme (THRIP)• Support Programme for Industrial Innovation (SPII)• Black Business Supplier Development Programme(BBSDP), which is a cost-sharing grant offeredto black-owned small enterprises• Critical Infrastructure Programme (CIP) that coversbetween 10% and 30% of the total developmentcosts of qualifying infrastructure• Co-operative Incentive Scheme, which is a 90:10matching cash grant for registered primaryco-operatives• Sector Specific Assistance Scheme, which is areimbursable 80:20 cost-sharing grant that canbe applied for by export councils, joint actiongroups and industry associations.Incentives for SMMEsA lot of emphasis is placed on the potentialrole of small, medium and micro enterprises injob creation and a number of incentives areMany incentives are available to support smallbusinesses and startups. Established businesses areencouraged to support smaller entities along theirsupply chain.designed to promote the growth of thesebusinesses. These include:• Small Medium Enterprise DevelopmentProgramme (SMEDP)• Isivande Women’s Fund• Sedfa is the Small Enterprise Development andFinance Agency, an agency of the Departmentof Small Business Development that exists topromote SMMEs.Trade-related incentivesThe Export Marketing and Investment Assistance(EMIA) Scheme includes support for localbusinesses that wish to market their businessesinternationally to potential importers andinvestors. The scheme offers financial assistanceto South Africans travelling or exhibiting abroadas well as for inbound potential buyers of SouthAfrican goods. ■ONLINE RESOURCESDepartment of Trade, Industry and Competition:www.thedtic.gov.zaIndustrial Development Corporation:www.idc.co.zaMpumalanga Economic Growth Agency:www.mega.gov.zaOfficial South African government incentiveschemes: www.investmentincentives.co.za31 MPUMALANGA BUSINESS 2025/26
