PRESIDENT Cyril Ramaphosa has urged South African consumers and companies to buy goods locally this festive season in order to boost growth.
Ramaphosa said this when he unveiled his Economic Reconstruction and Recovery Plan during a joint sitting of Parliament on Thursday.
“We call on every South African to contribute to our recovery effort by choosing to buy local goods and support local businesses. This is one way that each and every one of us can contribute to building a new economy,” said Ramaphosa.
Ramaphosa emphasised the importance of manufacturing products locally instead of relying on imports, saying last year alone, South Africa recorded its first trade surplus with the European Union, driven by record exports of manufactured goods.
“South Africa currently imports around R1.1 trillion of goods, excluding oil, each year. If we were to manufacture just 10% of these goods locally, it is estimated that we could add 2 percentage points to our annual GDP,” said Ramaphosa.
“The rest of Africa currently imports R2.9 trillion worth of manufactured goods from outside the continent each year. If South Africa were to supply just 2% of those goods, it would add 1.2 percentage points to our annual GDP. And if we succeed in reaching our target of R1.2 trillion in new investment by 2023, it could add around 2.5% to our annual GDP.”
Ramaphosa noted that a vital part of growing localisation effort is the sectoral master-plans, which bring all partners together to agree on specific measures to improve productivity, investment and competitiveness.
There are currently master-plans in the automotive, clothing and textile, poultry and sugar sectors.
The Retail-Clothing Textile Footwear and Leather Master Plan 2030 is a commitment signed by the clothing retailers, labour and government in November last year.
It aims to see them boost locally produced goods to 65% of overall apparel items by 2030, from about 44% at present.
Major clothing Retailers such as the Foschini Group, Truworths, Mr Price, Pep and Pick n Pay Clothing have started investing or expanding local factory capacity under the Master Plan.
They say a major advantage of sourcing locally is shorter lead times for clothes to get on to shelves and thus help them respond quickly to trends as well as inventory requirements.
Challenges that clothing retailers have cited includes an ageing skills base, with factories in the Western Cape staffed by people with close to 30 years’ experience, but some lost in the 90s when factories suffered heavy job losses.
“A central pillar of this work is the transformation of our economy, creating space for new black and women entrants and take deliberate steps to change ownership and production patterns,” Ramaphosa said.
“In promoting localisation and industrialisation, we will be focusing in particular on the development of small, medium and micro enterprises.”
Ramaphosa said localisation will take place alongside the development of rural and township economies noting that here are between 2.4 million and 3.5 million SMMEs in the country, with the largest number in the informal and micro sectors.
“They offer the greatest untapped potential for growth, employment and fundamental economic transformation.”
The plan also has a particular focus on women owned enterprises.
“Economic growth cannot be realised without the inclusion and active participation of women,” said the president.
“Among the other measures we have outlined, we will be working with women-empowered companies to progressively reach our target of directing at least 40% of procurement spend to such enterprises.”
South Africa has had the Proudly SA initiative since 2001, designed to encourage the purchase of locally sourced and developed goods and service.
Over the years, it has demonstrated that price, quality and service, rather than sentiment, drive decisions to purchase goods locally.
“Local is not only lekker. It also helps to create jobs,” he said.
(COMPILED BY INSIDE POLITICS STAFF)