Minister of Trade, Industry and Competition Ebrahim Patel said yesterday that the government had mobilised at least R240 million from the private sector to support initiatives for localisation of jobs.
The department has announced an industrial policy shift to create a more inward-looking and locally-based productive economy focused on manufacturing to boost job creation.
Patel said the funding would be used to support the recruitment of technical experts such as industrial engineers, project managers and supply chain specialists who will help identify and implement localisation initiatives.
In the Policy Statement on Localisation for Jobs and Industrial Growth, Patel said localisation was aimed at creating sustainable jobs and building the economic base.
This policy statement argues that localisation would increase the country’s competitiveness, fast-track economic reforms, develop jobs in new industries and boost inclusive growth.
The country’s unemployment rate is at an all-time high with more than 32.5 percent of the population out of jobs, mainly the youth.
Patel said localisation was also about building local industrial capacity for the domestic market and for export markets, not a turn away from engaging in global markets.
“The local industrial effort – what we call localisation for shorthand – must be rooted in building both dynamic firms and an inclusive economy,” Patel said.
“Competitiveness and industrial agility are critical to longer-run localisation efforts.
“Sector master plans developed and implemented in partnership with business and unions contain the details of how to do this.”
This comes as Nedlac parties have agreed to work together to reduce South Africa’s non-oil import bill by 20 percent over the next five years.
A recent survey by Intellidex showed that businesses were positive and optimistic on the future potential for localisation, but had some pessimism about existing localisation policies.
Patel said the manufacturing sector had underperformed the overall economy since the start of the democratic era in 1994, declining to 11.8 percent in 2020 from 19.2 percent.
He said the decline in the sector had had a detrimental impact on the overall economy and jobs as manufacturing stimulates growth in ancillary industries like packaging, logistics and transport, component manufacture, and other service sectors.
To boost localisation, the government has successfully prioritised procuring 27 key products from local manufacturers.
“The phenomenon in which manufacturing share of GDP declines over time, known as de-industrialisation, is not unique to South Africa,” Patel said.
“However, the extent to which it has impacted has been far more severe than many other countries.”
The department has also released a Green Paper on a proposed roadmap to local production of electric vehicles and now seeks public comment.