The National Assembly will soon elect the president of the seventh administration. We expect that to be Cyril Ramaphosa.
Elections come and go, but it is imperative to return to the work of growing the economy, creating jobs, creating a capable state and addressing crime and corruption.
Key to this work is industrial policy. The role of the trade, industry & competition department and that of various industrial support programmes are central to boosting industry.
South Africa’s 41% unemployment rate, alongside entrenched levels of poverty and inequality is our most pressing crisis.
The ANC election manifesto is anchored in industrialisation and local procurement at scale as the most effective path to growing the economy and slashing unemployment. This has been done in China, Vietnam, Korea — among other countries — with great success.
Business and consumers need to support local manufacturing through a commitment to purchase goods produced locally, particularly clothing, shoes, food, appliances, furniture and cars
Key focus areas
First, to ramp up local procurement. This includes the president’s pending assent to the Public Procurement Bill, which would provide a boost to local procurement from government — from departments to municipalities and state-owned enterprises. With an annual procurement budget of R1-trillion, the state is the largest buyer from local industries.
Second, business and consumers need to support local manufacturing through a commitment to purchase goods produced locally, particularly clothing, shoes, food, appliances, furniture and cars.
The trade & industry department has put in place master plans in intensive sectors — from poultry to sugar, clothing and textiles, automotive manufacturing and furniture production. These master plans have brought together government, business and labour to address obstacles to growth in these sectors.
While some master plans are in their infancy, we are seeing green shoots with big clothing retailers having increased their supply of locally produced goods 50%, a 25% increase in locally produced vehicles and support for emerging sugar farms in Mpumalanga and KwaZulu-Natal.
New investment has also recently been announced in South Africa — VW is investing R5bn at its Kariega Plant, Hisense R1bn at its Atlantis Plant or the Defy manufacturing hub Ladysmith, while Ford Motors in the Tshwane Automotive Special Economic Zone has created 3,000 jobs.
Mineral resources & energy minister Gwede Mantashe recently announced the appointment of a service provider to develop a fit-for-purpose mining rights application system. This is central to unlocking billions in mining investment, ensuring long-term growth and creating thousands of jobs, and needs to remain on top of the incoming administration’s to-do list.
Government has various financing instruments to support industrialisation and small and medium enterprises. While these have good intentions, they are insufficient if we seek to reverse the trend of deindustrialisation. Allocations must be drastically increased to give these sectors the momentum needed.
The private sector too needs to come on board. This means a less stifling approach to lending by commercial banks to emerging businesses, and a more aggressive approach to boosting manufacturing.
Cosatu and its affiliates have, for years, raised the alarm over the enforcement of customs payments due by importers to the South African Revenue Service (Sars). Levels of compliance are of deep concern, though we are heartened at Sars' increased efforts, under President Ramaphosa’s administration, to address tax and customs evasion.
There has been a close partnership with Sactwu, to ensure clothing importers declare the actual value of imports and pay the customs due.
This is an important aspect in protecting local business, their value chains and the jobs linked to them. It is also critical to ensuring Sars collects tax due to the state and necessary to fund public services that working-class communities and the economy depend upon.
One of the pioneering successes of the minister of trade, industry & competition, Ebrahim Patel, has been the employee shareholder and ownership programme that has seen more than 530,000 employees become shareholders in the companies they work for.
This provides a boost to workers’ wages and their ability to take care of their families, as well as creating a sense of ownership at the company and a stake in its success and productivity. Extra money in workers’ pockets also stimulates the economy.
This innovative approach to growing workers’ salaries and reducing poverty and inequality needs to be expanded rapidly.
Linked to this is the Companies Amendment Bill, which will require listed companies and state-owned enterprises to disclose the wage gap between their highest and lowest paid employees as a first step towards reducing the obscene apartheid wage gap still so prevalent in large parts of the private sector.
Further engagement is needed regarding the maximum acceptable wage gap between private and public sectors. What we cannot do is to continue to normalise a scenario in which the CEO of a mining company makes R300m a year and then quibbles with mineworkers seeking an extra R150 a month, or a banking CEO making R400,000 a day when a bank teller would take four years to earn the equivalent.
Shareholders — many of whom are represented in workers’ pension funds — must make their voices heard on such matters.
Last, we need to expand markets for South African exports. Government working with business and Cosatu has done well to secure access to the lucrative US market through the African Growth and Opportunity Act (Agoa). Important work is being done to establish the African Continental Free Trade Area. Similar endeavours are needed with South Africa’s Brics partners.
These industrial policy interventions need to be anchored by reliable and affordable electricity, modernised ports, secure and efficient freight and passenger rail, and quality municipal and public services. Additionally, crime and corruption must be addressed and reduced.
After a devastating chapter of state capture and corruption, we are pleased the seeds of renewal are being planted. We need to nurture and accelerate their growth and strengthen the foundations of partnership between government, business, labour and society.
• Phetoe is Cosatu general secretary
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