By: Tebogo Mokwena
SMEs must be at the centre of building the manufacturing sector and the state’s localisation drive, according to some economists and Proudly SA. One of them was Iraj Abedian, who was speaking following the launch of the Revitalising SA’s Manufacturing Sector report, which was commissioned by Proudly SA. Abedian was part of the Pan African Investment and Research Services team who compiled the report.
It is the third research study in a series of papers that identifies how the manufacturing sector can boost the country’s development following the devastation left by the Covid-19 pandemic on manufacturing. The sector was one of the hardest hit because manufacturing shut down due to lockdown regulations. According to the report, South Africa stands a greater chance of reviving the manufacturing sector if the greater focus is placed on it.
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The report analysed the sector in order to see how it contributed positively to economic growth. It showed that if investment in the sector was ramped up by 10%, it would result in substantial growth. This included a 13% growth in the GDP and 8% more jobs. The report stressed the significance of local procurement, arguing that if it was implemented correctly, it could bolster the struggling sector. Proudly SA CEO Eustace Mashimbye said that the country could not downplay the economic impact of localisation.
“It gives us a clear sense of what impact there’d be if we started buying local. If you look at the data we have now, it’s a no-brainer,” he said. “We are constantly challenged by naysayers, who tell us we must focus only on those industries where we have a competitive advantage, and not worry about localisation. But we can’t condemn people to unemployment forever. These research findings show that we can turn things around by utilising the buying power at our disposal.”
According to Abedian, the country needed to move away from general investment to identifying specific opportunities for growth in various sectors. “Manufacturing in SA has huge potential, availability, socioeconomic impact, and environmental impact. And SMEs are at the centre of this as the creators of jobs and opportunities. If the government listens and engages more with SMEs, sector by sector, region by region, we can get manufacturing revitalised,” Abedian said.
