Manufacturing in SA lacks strong black ownership - Radebe

Cape Town - The current administration under President Jacob Zuma’s presidency is left with only two years to implement its programmes and not many of the targets set out over the medium term have been attained, said Minister in the Presidency Jeff Radebe.

Speaking at the launch of a new textile group Ivili Textile in Johannesburg, Radebe said government needs to change its strategy to step-up and accelerate transformation in society. 

Echoing the sentiments expressed by Zuma in his State of the Nation Address early in February, Radebe said the economy is still in the hands of those who benefited from South Africa’s “divided past”. 

“It was in view of the slow pace of transformation and lack of inclusivity in the economy that President Zuma introduced the radical socio-economic transformation.”

Radebe said transformation does not only refer to the replacement of a white executive with a black one. “Transformation is much deeper and more complex than that. It must address the spatial differences that are prevalent in our society. We have entered a more rigorous phase in our journey towards building a better and more prosperous South Africa.”

The “radical socio-economic transformation”, he said, builds on the previous interventions that were aimed at transforming various aspects in the South African socio-economic landscape. 

“Transformation must be visible in the lives of the most disadvantaged South Africans through the creation of new employment opportunities,” Radebe said. 

“The emphasis here is on fundamental change in the structure, systems, institutions and patterns of ownership, management and control of the economy by the disenfranchised black people.”

Local and global economy 

Moving to the economy, Radebe said South Africa is part of the global village and the economic environment internationally remains volatile. 

“We have not fully recovered from the pangs of the 2008 global economic downturn and most recently, we narrowly survived credit ratings downgrade. We are well into our recovery trajectory, but for our economic standing to be stable we need growth in trade and investment.”

He referred to utterances made by Finance Minister Pravin Gordhan in his 2017 Budget Speech delivered on Wednesday that economic growth is slow and unemployment far too high, which put many businesses and families under stress. 

“These dire economic conditions should be a matter of concern to all of us,” Radebe said. 

Manufacturing industry disappoints 

Since 1994, the main challenge for rural development has been marginalisation of the poor. He said it is therefore crucial to bolster rural economies and address some national imperatives, such as expanding manufacturing in South Africa.

The manufacturing industry, Radebe said, has suffered major deficits in recent years. “The closure of factories and manufacturing companies over the past few years has robbed many people of employment and economic opportunities.”

Manufacturing as an overall share of GDP has declined from 21% in 1994 to 13% in 2016, while employment in the sector continues to decline with 2.1 million employed in the manufacturing sector in 2008, falling to 1.68 million people in 2016. 

“Although manufacturing remains critical for industrialisation and for export earnings, we have not built strong black ownership and consequently there are very few black industrialists and manufacturers,” Radebe said.

He said the socioeconomic conditions such as the status of the manufacturing industry require renewed vigour from government, business, labour and civil society in order to overcome our challenges and build a strong industrial base in our economic landscape. 

“A healthy cooperation between the key stakeholders in the economic sector is what can change the living conditions of the poor and propel us forward as a nation.”