By Charmaine Ndlela
Africa must stop exporting raw materials and buying back expensive finished products if it is to create jobs, retain wealth and secure greater economic sovereignty, Deputy President Paul Mashatile said on Tuesday.
Delivering a virtual keynote address at the 13th Manufacturing Indaba in Sandton, Mashatile told African countries to place manufacturing at the centre of their economic development strategies, saying industrialisation was critical to driving innovation and securing long-term prosperity.
ALSO READ: Steenhuisen says manufacturing key to jobs, investment and economic recovery
Speaking later at the same conference, Electricity and Energy Minister Kgosientsho Ramokgopa warned that manufacturing’s contribution to South Africa’s economy had fallen from about 22% in 1994 to around 12%, reflecting the effects of unreliable electricity, weak investment and persistent logistics bottlenecks.
Mashatile said manufacturing remained the backbone of a resilient economy, strengthening national self-reliance while positioning countries to compete in an increasingly technology-driven global economy.
He said the sector was also central to South Africa’s transition towards a greener economy through cleaner production methods, greater efficiency and more sustainable industrial development.
“Ultimately, manufacturing is about people. It is about restoring dignity through decent work, creating opportunities for young people, strengthening communities and giving businesses the confidence to invest, expand and innovate,” he said.
He said Africa possessed the talent, natural resources and entrepreneurial energy required to become a global manufacturing force, but insufficient investment in value addition, technology, infrastructure and regional integration had prevented the continent from realising its full potential.
“For too long, our continent has exported raw materials while importing finished products at a premium. That model cannot sustain the aspirations of a continent seeking inclusive growth and economic sovereignty,” he said.
Africa’s future, he said, lay in processing its own resources, manufacturing high-value products, expanding regional value chains and building industries that created jobs, retained wealth and improved livelihoods.
Achieving that vision would require stronger regional trade, strategic partnerships and sustained investment in productive capacity, modern technologies and critical skills, Mashatile said.
He said industrialisation was not simply about increasing production, but also about improving quality, competitiveness, sustainability and resilience.
ALSO READ: SAPS Inquiry Committee sends preliminary report back for revisions
“It is the pathway to economic sovereignty, expanded opportunity and long-term prosperity,” he said.
Mashatile said no industrialisation strategy could succeed without reliable and affordable energy, pointing to government reforms aimed at diversifying electricity generation, expanding renewable-energy capacity and increasing private-sector participation in the energy market.
He said regulatory reforms had unlocked new investment opportunities, while the Renewable Energy Independent Power Producer Procurement Programme continued to attract investment aimed at strengthening energy security and improving manufacturing competitiveness.
Efficient transport corridors, reliable logistics systems, rail infrastructure and ports were also critical to lowering the cost of doing business, connecting producers to markets and strengthening regional integration, Mashatile said.
He said improved infrastructure was essential to unlocking the full potential of the African Continental Free Trade Area, expanding intra-African trade and accelerating industrial transformation across the continent.
“As one of Africa’s most industrialised economies, South Africa has a responsibility to contribute meaningfully to this agenda,” he said.
He called for stronger partnerships between governments, investors, development finance institutions and the private sector, saying industrialisation required capital, confidence and collaboration.
While the government continued to support manufacturers through industrial incentives and targeted financial assistance, he said finance alone would not guarantee success.
Industry 4.0 technologies, including artificial intelligence, automation, digitisation and advanced manufacturing, were reshaping global production systems, making investment in digital skills, robotics, engineering, data analytics and artisan development increasingly important, he said, adding that Africa could not afford to be left behind.
Mashatile also called for closer cooperation between universities, research institutions and industry to accelerate innovation and commercialise research.
“Stronger partnership between universities, research institutions, and industry will accelerate technological advancement, commercialise research, and create new opportunities for entrepreneurs developing African solutions to African challenges,” Mashatile said.
He encouraged consumers and businesses to support locally produced goods, saying buying African-made products strengthened local manufacturing, created jobs and kept wealth circulating within African economies.
“The future of South Africa’s economy will not be determined solely by what we extract from the ground, but increasingly by what we design, manufacture, innovate and export to the world.”
SA manufacturing in decline
Ramokgopa echoed Mashatile’s call for industrialisation but warned that South Africa’s manufacturing sector had steadily declined over the past three decades.
He said manufacturing had contributed about 22% to the country’s economy in 1994 but had since fallen to around 12%, reflecting the structural challenges facing the economy.
Ramokgopa said the National Development Plan (NDP) had envisaged annual economic growth of 5.5% and investment equivalent to 30% of gross domestic product.
However, he said gross fixed capital formation had fallen to about 13.9% of GDP, well below the plan’s target.
He said the NDPs ambitions had been based on the assumption that South Africa would continue to have reliable and affordable electricity.
ALSO READ: Cele says 2010 World Cup was SAPS priority during delays in TRC case investigations
The underperformance of the electricity generation fleet and persistent logistics bottlenecks had instead undermined economic growth and weakened the country’s manufacturing base, he said.
“Those structural constraints have limited the ability of the South African economy to grow, and one of the biggest casualties has been the manufacturing sector,” Ramokgopa said.
Restoring energy security remained fundamental to rebuilding industrial capacity, attracting investment and enabling manufacturers to operate competitively, he added.
