We have the capacity to drive regional economic growth
the constant fear that sounds like the old “swart gevaar” being placed daily on the national radar screen. It is not helpful.
The elephant in the room is the continued control of a few companies who dominate the supply chains across major sectors, particularly in state-owned companies. The unfair distribution of contracts limits the impact of contracts and the spread of incomes.
The opening up and broadening of procurement spend is essential in deepening the economic participation of new entrants and to ensure prosperity is expanded and the racial market distortion within the economy is altered.
It’s also concerning when oil companies are reported to be perpetuating collusive behaviour at the disadvantage of new entrants and fair competition. I worry more when pharmaceutical companies dominate government supply chains without also assisting in building diversified suppliers in this crucial markets.
India has demonstrated how local pharmaceutical manufacturing capability could be developed by local people, but through joint ventures with international players.
The local automotive industry enjoys a significant slice of government grants and incentives, and yet it remains hugely untransformed.
According to the Minister of Trade and Industry, Dr Rob Davies, “the transformation of the sector will ensure that the sector is representative of the national demographics profile – it is important and non-negotiable”.
The retail sector, controlled by a handful of powerful companies has a stranglehold on the local supply chain, while the retail shelf space is impenetrable by new black players, because of vertically integrated monopolistic tendencies.
The retail sector particularly thrives off the huge black buying power and yet it is one of the least transformed. It’s an ideal sector that could accelerate economic transformation through opening up its major value chains, and increase support for a new vibrant manufacturing sector that would increase black ownership of the supply sector.
The radical diversification of the manufacturing sector across many industrial segments has the potential to re-industrialise South Africa’s industrial base and contribute towards the creation of thousands of sustainable jobs.
Of course, there is merit in seeking monetary and fiscal intervention relating to the relaxation of interest rates and taxation in order to reduce the statutory and regulatory burden for small enterprises, and drastic policy shifts should target incentivising businesses to contribute towards supporting small, medium and micro enterprises.
We need to unlock our economic development potential through inclusive growth.
Doing better
We can certainly do better as a leading economy on the continent. We have the capacity, depth of knowledge and human capital to become the industrial giant that could be leading the resurgence of the southern Africa region as the industrial tip of the continent.
We have the capacity to drive regional economic growth through an integrated economic development trajectory that would enable the arrest of migration to the country, and to balance regional economic development and job creation.
We have the right policies; the challenge has always been implementation. We therefore need to support the government in deepening economic development that takes cognisance of the disparities that continue to divide us as a nation.