Youth plan doomed

AFTER six years I am leaving South Africa partly because the future of the domestic economy is a nightmare. It was a hard decision to make after having lived all over the world. South Africa and the Cape has been one of the most beautiful places to call home.

This letter is for Ebrahim Patel: a foreign investor’s opinion on why asking young black entrepreneurs to enter manufacturing is setting up failed economic policy.

Manufacturing is the most complicated, capital-intense industry with the longest return on investment. To ask a young person to step into this role is ridiculous – they will never succeed. Out of 250 000 young people perhaps 10 could create a profitable manufacturing venture. No matter the colour of their skin – it’s just too hard.

The harsh reality is that in South Africa it’s impossible to make a profit selling goods to a nation that is mostly unemployed or living below the poverty line. With rent, transport, food and school fees, you need a minimum of R5 000 per month, which is about R51 per hour working full-time.

South Africans cannot afford to buy South African products. Sure Mr Price, Tiger Brands, PEP and Defy are shining examples, but these companies grew fromwell-managed capital over decades of planning and world-class strategy.

The risks in manufacturing are far too high (load shedding, bureaucracy, labour unrest) and the profit margins are miniscule. As a guest who came here to start a health food manufacturing venture, I know. On my biggest day of sales after seven months of effort, in the middle of juicing, blending and grilling for my customers, the lights went off thanks to Eskom. I knewit was time to say goodbye.

Ebrahim, please don’t ask the youth to do something you would not do. Susan Standfield-Spooner