The importation strategy is failing the country
The Black Business Council (BBC) this week said the Covid-19 crisis has highlighted the need to urgently reindustrialise the South African economy.
BBC CEO Kganki Matabane said South Africa has adopted an importation strategy that has promoted job creation in other countries, mainly India and China.
“Now the importation preference strategy has backfired as we scramble to source basic medicines and medical consumables such as paracetamol, masks, gloves and swabs for conducting tests, personal protective equipment and other basic commodities that are not complicated to manufacture locally,’’ Matabane said.
“Covid-19 has revealed to us that we do not have a secure supply of the medicines that are essential to the nation’s livelihood, which is premised on strong, sustainable local manufacturing.”
BCC said the government must develop a localisation and reindustrialisation plan for the country which should be implemented as soon as possible.
Zwelinzima Vavi, general secretary of SA Federation of Trade Unions, said the government must set up import-substituting industries to ensure continuous supply of all essential needs the country currently depends on imports.
“On March 15, we demanded urgent implementation of an inward-oriented reindustrialisation strategy – also to support the African continent by generating more locally made basic need commodities – in advance of the continental free trade deal,” Vavi said.
South Africa has been through a period of almost de-industrialisation – the country’s manufacturing sector has dropped over the last two decades from contributing 28% to the gross domes tic product down to just 13%.
Raymond Parsons, a professor at University of North West Business School, said localisation can have huge benefits for the economy through reducing imports and building local capacity.
“We need policy certainty and synchronisation to be able to fully reindustrialise this economy,” Parsons said.
