SIFISO SKENJANA: Failure to prioritise capacity-building programmes blights planning
Manufacturing’s contribution to GDP is consistently declining, raising the question of reindustrialisation
The second quarter GDP statistics (https://www.businesslive.co.za/bd/economy/2020-09-08-sa-economy-shrinks-by-more-than-half-in-second-quarter/) released on Tuesday show that the economy contracted at an annualised rate of 51% quarter on quarter — the largest such decline since 1960, according to Reserve Bank data. Manufacturing and trade contributed most to the total annualised decline at -10.5% and -10.8% respectively, while construction has now shown eight consecutive quarters of negative growth.
However, the real ailment of the economy is the failure to prioritise capacity-building programmes as the core of our economic planning. Loss of productive capacity in the economy is shown by the decline in manufacturing’s contribution to GDP. It has shrunk from about 28% of GDP 25 years ago to 11% in the latest GDP numbers. When this happens a rise in import intensity — the level of imports required to sustain domestic demand — is also to be expected...
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