Exporting green industries to the rest of Africa

The green agenda is clearly a top priority at the IDC, with the Board of the state's lender making it clear that it has the means and will to fulfill government's objectives of creating a greener economy.

This commitment has been demonstrated most visibly by the R25-billion earmarked for investments in green industries and initiatives.

"Global economic conditions have forced a rethink about how much money developed nations are -willing to commit to the fight against global warming. With uncertainty surrounding the funding required to kick start green projects locally, the IDC is stepping into the breach," the board declared in a recent newsletter.

The green economy is one of the ten job drivers identified by government's New Growth Path and is a key focus area of the department of trade and industry's industrial policy action plan.

As South Africa progressively adopts cleaner, more environmentally-friendly and energy efficient technologies and processes, it will help to safeguard the sustainability of its growth and development path.

The IDC is not only focusing on developing the green economy in South Africa, but also in countries outside our borders. With its rich solar and wind resources, Africa  holds much potential for green growth.

Compared to other African countries, South Africa is well on the way to developing an enabling environment for the growth of the green economy.

This includes ensuring that there is a conducive regulatory environment, which is simplified and streamlined to attract investment.

If the country is to achieve the potential employment benefits associated with developing the renewable energy sector, it will need to localise as much manufacturing as possible and develop the capacity to face fierce international competition.

 Local players will have to offer competitive prices, quality products at various levels of sophistication, and efficient service delivery to withstand import competition. This could prove challenging as the competitiveness of various segments of South Africa's manufacturing base has been eroding over time, for a variety of reasons.

Countries such as Denmark, Switzerland and Germany embraced the green economy model much earlier than most emerging economies and dominate much of the industry. Most machinery and equipment, as well as components associated with green technologies will be subject to serious foreign competition.

Change required
Countries such as China are also positioning themselves for future growth by making huge commitments to green energy production and clearly intend to play a leading role in several of the associated industries, such as the production of wind power equipment, including turbines.

To grow its green economy, South Africa must develop sufficient local demand on a sustained basis as well as seek to penetrate export markets, particularly on the African continent.

To do this will require major behavioural shifts on the part of government, business and individual energy consumers.

The recently signed Green Accord lays the foundation for kick-starting this important industry.

It is vital that the public sector plays a leading and facilitating role in developing the green economy, but the private sector and individual households also need to play their part.

Whether it is the state using its power to procure green energy or property developers buying into the concept of green buildings, households and enterprises will need to be encouraged to opt for energy efficient and water saving technologies.

The shift to a greener economy will require a major change in mindset.

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