‘Manufacturers could create a million jobs, but government has to come to the party’
Government interventions are key to slowing down the rate of job losses and de-industrialisation, according to Manufacturing Circle chairman Andre de Ruyter.
"If manufacturing can expand to 30% of GDP, between 800,000 and 1.1-million direct jobs can be created, with five to eight times that in indirect jobs," De Ruyter said at the launch of the Map to a Million initiative on Friday at the Gordon Institute of Business Science (Gibs). The initiative seeks to create more than a million jobs in the manufacturing sector.
The first step of the initiative, De Ruyter said, was to prevent further de-industrialisation in belts like the Vaal Triangle to mitigate job losses and stabilise the industrial base.
Additionally, the initiative includes bolstering the relationship between business and government to increase the procurement of locally manufactured goods.
"We propose that a manufacturing working group between business, labour and government be established to co-ordinate the implementation of the Map to a Million.
"First of all we want to increase domestic demand, pursue import substitution and enhance export competitiveness," he said.
Part of the actionable steps include government investment in catalytic projects, increasing the renewable component of electricity procurement and reconsidering administered prices such as petrol to pad consumers’ pockets. Additionally, the Manufacturing Circle suggests implementing export incentives, reducing port tariffs and re-instating rail subsides for containers destined for export.
On the supply side, measures include reducing input costs; changes to fiscal policy, including conditional tax holidays for investment, policy certainty and recapitalisation allowances; and greater visibility of labour organisations.
"We are not against trade. We just want a competitive advantage," De Ruyter said.
Since the early 1980s, manufacturing’s contribution to GDP has dropped from 24% to less than 13% in 2017.
De Ruyter explained that increased competition from imports, increased labour costs, high energy costs and policy turbulence have contributed to the plateau in manufacturing.
Since 1989, the sector has shed half a million jobs.
Trade and Industry Minister Rob Davies welcomed the initiative.
"We are committed as the DTI [Department of Trade and Industry] and as the government to working with you on the proposals raised in the document. Some of the interventions are beyond the ability of the DTI or the government to deliver. We need more coherence in government to support re-industrialisation," he said.
He added that while government interventions were important, the private sector needed to do more.