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Manufacturing Circle launches plan to create new jobs in the next decade

Manu CirSouth African government has prioritised inclusive growth in the manufacturing sector. (Image source: Kristen Rice/Flickr)The Manufacturing Circle, a voice for South African manufacturing sector, has launched its ‘Map to a Million New Jobs in a Decade,’ which contains realistic, constructive and actionable plans to ensure job creations and thrive manufacturing in the country

“With unemployment at a 14 year high of 27.7 per cent, business confidence at its lowest level in a quarter of a century and more than half of the population living in poverty, delivering jobs and inclusive growth has to be highest priority for government, business and labour,” said André de Ruyter, chairman of Manufacturing Circle.

The first priority is to prevent further de-industrialisation in rust belts like the Vaal Triangle, arresting further job losses and stabilising the industrial base. To increase the utilisation of existing capacity and boost the demand for new investment, manufactured goods are required to be created, the organisation said.

The plan proposes a number of demand-side interventions to increase domestic demand, pursue import substitution and enhance South Africa’s export competitiveness. These include:

· A commitment by both business and government to visibly support Proudly South African, increasing the procurement of locally manufactured goods

· Greater collaboration between producers across value chains to enhance in-country value addition, particularly in the agro-processing, platinum, manganese and steel value chains

· A reduction in Portnet tariffs, which are 88% higher than the world norm, and an improvement in port efficiency

· An increase in the renewables’ component of electricity procurement, with solar and wind generation equipment manufactured in SA

The plan has proposes various supply-side interventions to improve manufacturer’s competitiveness by reducing input costs, make changes to fiscal policy, support labour productivity, ensure effective price regulation of natural gas and electricity, regulate pricing of key inputs from sole suppliers, enable competition in electricity generation by deregulating the sector and others.

In addition to these improvements, the proposed structural fixes are expected to increase investment and job creation through manufacturing. These include:

· Prioritising industrial development and job creation in a coordinated manner, through a super-ministry similar to Japan’s MITI, incorporating dti, EDD, DSBD and DPE

· Introduce significant private sector equity participation in SOEs

· Focusing on education as an essential service, and promote high standards instead of high pass rates

“None of these interventions on its own will be enough to create economic growth and job creation through manufacturing,” said de Ruyter. “We propose that a manufacturing working group between business, labour and government be established to coordinate the implementation of the Map to a Million.”