BUSINESS WATCH WITH MICHAEL AVERY
WATCH: Review of SA’s industrial policy is urgently required
Michael Avery and guests discuss SA’s industrial policy, what it has achieved and what the future holds
It doesn’t exactly dominate the news cycle, but SA’s industrial policy has major ramifications for economic policy, growth and job creation. Spelt out in a series of annual Industrial Policy Action Plans (IPAPs) and now sector master plans, SA’s industrial policy has been in place for roughly 15 years now.
Instruments have been chosen to support the manufacturing sector in general and certain sectors have been prioritised and receive additional support.
Industrial policy is notoriously hard to pin down, but the numbers don’t lie. Between 1960 and 1994, our GDP grew at an average of 3.17% a year. From 1994 to 2007 (our first year of IPAP and our first true industrial policy), GDP grew at 3.47%. From 2007 to 2020, it grew at 0.89%. If you cut off at the end of 2019, and thus remove Covid-19, it averages 1.83%.
Unemployment reached a low of 22.41% by the end of 2007, and at 34.5% is higher now than it has ever been. It’s fair to say our industrial policy attempts have not yielded the desired results so far.
Trade & Industrial Policy Strategies (TIPS) is an independent, nonprofit, economic research institution established in 1996 to support economic policy development. On Thursday, it turns 25, and so it’s appropriate to ask, what is our industrial policy, what it has achieved and what does the future hold?
Tshediso Matona, secretary of planning in the National Planning Commission in the presidency; and Saul Levin, executive director of TIPS since 2014 join Business Day TV’s Michael Avery for this discussion.
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