A report on South Africa’s manufacturing sector has reaffirmed what the national Proudly South African campaign has said for more than two decades – buy local to create jobs and grow the economy.
Proudly SA commissioned the Pan-African Investment and Research Services team, led by top economist Dr Iraj Adedian, to produce the Revitalising SA’s Manufacturing Sector report.
The report analyses the South African manufacturing industry and quantifies its valuable contribution to the country’s economy.
The 60-page study is the third in a series of research papers that identifies the sector’s potential in boosting the country’s development, especially on the back of the COVID-19 pandemic and pre-existing challenges.
The report found that a process of de-globalisation is at play, partly driven by ongoing global supply chain disruptions, highlighting the need for increased localisation as a means of expansion, security and survival for specific industries.
The report includes investment scenarios, which show that a mere 10% increase in investment spending in the manufacturing sector could lead, in the medium term, to:
– 13% GDP growth;
– 8% more jobs created;
– 8.3% overall boost to investment across the economy, and
– 9% jump in tax revenues.
The calculations of actual numbers of jobs created across all skill levels reveal potential medium-term gains of:
– 75 300 new jobs in manufacturing;
– 11 500 new jobs in mining, and
– 10 100 new jobs in agriculture.
Local procurement, the report revealed, plays a vital role in the local manufacturing sector and, done correctly, could help bolster the struggling industry.
“The study confirms what we’ve always said; that we can’t downplay the economic impact of localisation. It gives us a clear sense of what impact there’d be if we started buying local. If you look at the data we have now, it’s a no-brainer.
“We are constantly challenged by naysayers, who tell us we must focus only on those industries where we have a competitive advantage, and not worry about localisation. But we can’t condemn people to unemployment forever; these research findings show that we can turn things around by utilising the buying power at our disposal,” said Proudly SA CEO, Eustace Mashimbye.
The views are backed by the study’s author, Abedian, who said localisation had now become economically sensible, not just “socially and politically”.
“Manufacturing in SA has huge potential, availability, socio-economic impact, and environmental impact. And SMEs are at the centre of this as the creators of jobs and opportunities. If government listens and engages more with SMEs, sector by sector, region by region, we can get manufacturing revitalised,” Abedian said.
Abedian said SA needed to move away from generalising investment, and instead identify specific opportunities that brought together relevant stakeholders to transform them into success stories.
Proudly South African is the country’s official Buy Local campaign, which aims to stimulate much-needed job creation and retention in the country through lobbying for and promotion of local goods, services and industries.
Proudly SA lobbies the public and private sectors to increase levels of local procurement through their supply chain structures and encourages consumers to do so through changing their purchasing habits.
The organisation is membership-based and only companies that have been audited and approved are entitled to carry the logo, which symbolises the adherence of that product or service to required local-content thresholds and quality standards.
