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The country manufacturing the destruction of SA manufacturing is … South Africa

Hard talking ahead, and not the usual nonsense – action is needed.
In 1969 more people were employed in the country’s formal manufacturing sector than in Q2 this year. Image: Luke Sharrett, Bloomberg

We need an honest discussion about South Africa’s economic policy and the disaster that is taking place in much of our manufacturing industry.

Manufacturing production levels over the three months to July were lower than at the start of 2005.

After 16 years of the Industrial Policy Action Plan (Ipap) and as many versions, South African manufacturing has gone nowhere. In the second quarter the result was that fewer people were employed in the formal manufacturing industry than in 1969.

Yip, 52 years ago more people were employed making things in South Africa.

Read:

Some would say that SA is just feeling the impact of China and we must get used to it.

But many other economies have more people employed in manufacturing than two decades ago, many of which are African.

We cannot ‘get used to it’.

I think we are feeling the impact of high costs of power, labour, water, and regulations such as black economic empowerment (BEE).

We are also impacted by people who should not intervene in the economy but do so due to the power given to them at so many levels, from municipal to national government level.

Officialdom and incompetence have resulted in trains that do not bring workers close to the factories in Wadeville, and in water not flowing in Standerton. Corruption has resulted in higher power prices and inconsistent supply, while the thieves are rich and free.

Moreover, the fast-growing manufacturing countries no longer just include China.

Outside of China, Ireland, Nigeria and Georgia are the top three fastest-growing manufacturing countries in the 10 years to mid-2021.

National shame

South Africa is one of 13 economies producing less now than a decade ago, along with Russia and Brazil: SA 3.3% less, Brazil 17.4% and Russia 5.6%.

Among 59 countries with a decade-long manufacturing history the median increase over the past decade was 15.5%.

South Africa is deindustrialising in both absolute and relative terms.

Our share of world manufacturing value added has been in decline since the 1980s.

Read: New rebate on certain imported yarns and textiles is complex

At present SA is faring worse than very big advanced economies, which should not be the case: they have large manufacturing sectors, but their costs are higher and they have more regulations than most countries.

Employment in manufacturing

Since 1990 employment in South African manufacturing has declined by 40%. Yes, you read that right.

Since 2019, when the minimum-wage structure was implemented, employment in manufacturing has fallen 11.6%

These numbers are as at the second quarter of 2021. We don’t yet know what impact the riots and looting has had on employment.

Remember also that employment is something of a lagging indicator in that retrenchment decisions are not easy to take, nor is the process fast.

Covid-19 hurt everyone – but very few as badly as SA as far as I can surmise from recent data.

This feels like the great financial recession, where SA lost one in eight jobs and took longer than most to bounce back.

SA no longer the ‘most industrialised economy’ in Africa

Our manufacturing sector used to have the largest share of GDP on the continent, and people still refer to South Africa as the most industrialised economy on the continent – but this is no longer true: Egypt has a larger economy, and its manufacturing sector has a larger share of that larger economy.

Egypt, Ethiopia and Nigeria all employ more people in manufacturing now than South Africa does. Manufacturing employment as a share of the population has been larger than in South Africa in all three countries in the last few years.

When South Africa introduced Ipap in 2007 the stated objective was to grow manufacturing jobs by at least 350 000 by 2020. Instead, it had lost 218 000 manufacturing jobs by the end of 2020.

There is no shortage of ideas or plans as the Ipap was updated every year, but still we fell over 500 000 people short of the target.

Interestingly, we added quite a few jobs as a result of data revisions: most of those jobs were already around in 2007 but weren’t recorded then. Based on this, the actual shortfall would be closer to 700 000!

The reasons for the job destruction are plentiful

Firstly, South African manufacturing output peaked in early 2008 and since then has dropped by 15%.

Our output from manufacturing is lower in the three months to July 2021 than the three months to June 2004.

With the power outages, water shortfalls, and extreme price increases in the utility bills of businesses, it has become far more difficult to do business in South Africa – and government is seen doing nothing.

As many have said: the more government says it will fix its utilities, the less is done.

The redistribution theme continues, with high taxes and ever-increasing labour expenses meaning that it is difficult for SA to compete. Strikes do take place more often here than in other countries and are often quite destructive, partly because workers are told how the owners just exploit them.

On top of that the ruling party and others still want to dilute ownership.

Then there’s the fact that South Africa is filled with rent-seeking go-betweens who add to input costs and add a percentage to selling prices to state-owned enterprises (SOEs), which then need to increase their prices to clients even more.

SOEs, which are often more exploitative in their pricing than almost all real private sector firms, often don’t deliver the services in full as promised.

Government attitude

But mostly it is the attitude of government that often threatens the private sector. It is never seen to be on the side of business.

During Covid it was mainly private sector funds that helped businesses as government thought it had to help the poor and jobless.

The Temporary Employer-Employee Relief Scheme (Ters) – though linked to workers’ and employers’ previous contributions to the Unemployment Insurance Fund (UIF) – came to the rescue of some employees, as did low interest rates.

But unlike almost all governments around the world, ours did not help fund business over the lockdowns.

If SA business did not have 19% of GDP in its bank accounts, there would not be an airline, hotel or even a wine farm left.

Government proved it does not understand the basic fact that it is easier to save something than try to build it again.

African diplomats have stated that South Africa is now seen as one of more corrupt African countries. Our rent seekers and government officials are seen as arrogant, corrupt and, in some cases, plain dumb.

‘Employment first’ needs to be the focus from now

The decline in employment in manufacturing is a fact.

Friends call the East Rand ‘The wasteland’ and think we can make good horror movies in the wrecked factory buildings.

In our industrial areas around the Witwatersrand there are so many factories and warehouses to let that it is hurting not just labour but property companies, local government revenues and of course other service providers such as taxi drivers.

While at present South Africa’s economy seems to be pumping and doing great, that is an illusion that massive increases in commodity prices have created.

If we do not address the manufacturing sector and remove the self-created chains like BEE, expensive rates and tariffs, and non-functioning trains, the high cost of labour will continue to affect our competitiveness – and impact our ability to survive.

This is the time to make use of the commodities windfall and build back manufacturing.

If we do not build real productive capacity in SA, we will have ever-increasing inequality. SA was one of the five or so countries where poverty had already been increasing before the pandemic.

Giving the poor social grants will never satisfy even their basic needs – particularly in a stagnating economy.

We need manufacturing enterprises and the employment they create.

Read: A universal basic income grant isn’t the solution

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Clearly this falls squarely into the area of the Policy Makers (or rather the lack thereof).
“After 16 years of the Industrial Policy Action Plan (Ipap) and as many versions, South African manufacturing has gone nowhere”

But do not despair, we have another plan…..

“But do not despair, we have another plan….” …. and another 27 years to talk, discuss, workshop, consult and legotla about it (and many, many more plans over and above that one)!

What future does a country have where the leaders constantly have to appease the ancestors? What did the ancestors know about cellphones, laptops and electric vehicles? How can they show us the best way forward?

This regression to cultural “gobbildygook” whilst trying to appear civilized with all the latest gadgets is an interesting one. Almost like children playing “grownups” – got the costume but just don’t have the experience or the know-how! The “gobbledygook” becomes the excuse for failure!

Could the ancestors perhaps be dead? Like the cold i-Pap…

I am always amazed by the inconsistancy of believing in ancestors still have a hand in today’s happenings.
Surely, if you really believe this you would not even think of murdering somebody because he would get back to you to get even.
Yet we have one of the highest murder rates in the world.

I am afraid it does not stop there. This phenomenon is merely the symptom of a far bigger problem from a planning perspective.

The life experience of this demographic group is also focused on the past. The future is a foreign concept to them. They care more about the opinion of their ancestors than they care about the opinion of their descendants. This leads to short-termism, political myopia, populism, and economic ignorance. Their planning and execution focus on extracting maximum gain in the present moment, while they fail to conceptualize the future repercussions for themselves and others. The future does not exist for them, and any potential criminal charges or costs are somewhere in the future.

They find their solace and identity in their victimhood. This is why they constantly remind each other of historic events like colonialization and apartheid, while they conveniently forget about their own atrocities and maltreatment of other clans and groups. They ignore the fact that every new day offers a new opportunity. They cling to the past rather and demand redress for the past. It is the easy way out. The lazy man’s business plan. The problem is, it works for them.

Our economy is a textbook case for the well-known decivilization and deindustrialization effects of socialism. Socialism transforms a formal economy into an informal one, while it destroys both the tax base and employment opportunities.

The impossibility of socialism lies in its inefficient allocation of resources and in the incentives problem. It incentivises parasitic behaviour patterns and victimhood, while it destroys entrepreneurship and investments by coercive allocation of capital to projects of redistribution such as BEE and rates and taxes. BEE destroys the value of the investment for the investor.

Who ultimately suffers and pays, and who benefits from BEE schemes? Let us use the visible results as a guideline.
Seen from a distance, BEE is a government program that plunders and abuses those who fail to find a job, to enrich wealthy connected BEE beneficiaries. This socialist act merely redistributes the value of the jobs that were lost to the BEE partners. Our unemployment figures prove the efficiency of this mechanism.

I apologize for the long quote but it describes the essence of the issue.

“Anything that guarantees the private ownership of what each person creates and contributes to the production process, that defends the peaceful possession of what each person conceives or discovers, and that facilitates (or does not impede) voluntary exchanges (which are always mutually satisfactory in the sense that they mean an improvement for each party) generates prosperity, increases the population, and furthers the quantitative and qualitative advancement of civilization.

Likewise, any attack on the peaceful possession of goods and on the property rights that pertain to them, any coercive manipulation of the free process of voluntary exchange, in short, any state intervention in a free market economy always brings about undesired effects, stifles individual initiative, corrupts moral and responsible behavior habits, makes the masses childish and irresponsible, hastens the decline of the social fabric, consumes accumulated wealth, and blocks the expansion of human population and the advancement of civilization, while everywhere increasing poverty.”

– Jesús Huerta de Soto

Very well put as an addendum and comment on an excellent article. We should also pay attention to the racialisation of any conversation regarding opposition to the government’s ineptitude and centralised authority ideology. I.e. any debate quickly devolves into a racial issue because it suits the kleptocrats to divide us. Mostly, they are hypocrites who would rather turn a once-functioning, powerful economy into socialist dust than to allow it to prosper with able hands at the tiller (and the till!).

It is quite interesting to compare the cost of labour under the ANC government to the cost of a slave during colonialism. The economic destruction of ANC policies leads to an oversupply of labour that is unproductive even at the minimum wage.

When slavery was abolished in 1838 a slave was valued at R700 000 in today’s money.(value at the time, in pound sterling converted to ounces of gold, and converted back to the current purchasing power of the rand.)

This implies that if a slave had a productive lifespan of 30 years, at an interest rate of 8%, the capital cost of a slave was R5 800 per month. Then you still had the additional cost of food, clothing and shelter to protect your valuable asset.

The cost a slave at the minimum wage under the ANC government is less than 50% of the cost of a slave during slavery.

How they can “struggle” for freedom and economic emancipation when they actually enslaved themselves through socialism, is beyond my ability to comprehend.

The article is brilliant and most of the comments are interesting until you came along and mentioned that the price of a slave is valued at 700 000.00 in todays money. This sounds extremely bizarre and I would like to understand how you arrived at this value. I think at times we should just not allow some information to pass without fact checking it.

Anonymous, the last time I was reprimanded like that was in grade 5 when a skunk jumped out of my school case during class. That was 55 years ago.

The value of a slave was 79 pounds sterling in 1838. England was on the gold standard at the time, so gold was the actual means of payment. 79 pounds bought 25 ounces of gold at the time. This implies that a slave was worth 25 ounces of gold. The value of 25 ounces of gold at the moment is R700 000.

If your calculations come up with a different figure I would like to see them.

You also have access to the same facts. Why are you expecting me to do the math on your behalf? You are lazy.

“Necessity is the mother of invention” – no need to work when you can just rob the tax payer and call yourself a “socialist” country until you’ve devolved completely when there is nothing left to take.
Politics, economics, the Judiciary and Social responsibility are the four corners of a country that keeps it standing…our corners are collapsing slowly but surely…… hasn’t taken long either. What a tragedy.

As Maggie Thatcher succinctly put it; “Socialism works until you run out of other people’s money”.
From my perspective, the ANC will ride the Socialist train until it runs out of rail, but they will not change their ways, given that their only way of holding onto power, and buying votes is through appeasing the ignorant masses, no matter how much damage it causes.

Excellent article. Pity it will not inform decision makers

“Those who read do not count. Those who count, cannot read.”

“Government proved it does not understand the basic fact that it is easier to save something than try to build it again.”

& so much easier to loot & destroy.
The answer to over 75% of SA problems Political Will.

Mike. Our government (if you can call it that) couldn’t care a less if the country is de-industrialising. Its simply not a concern for them.

The true legacy of Mr Patel, our Minister of Trade and Industry, and the ANC! When he banned open shoes and hot chicken during lockdown then more jobs were lost….it is staggering that such fools are in power!

Current Minister of Trade and Industry destruction at full throttle.

Oh let’s not forget Dr Dlamini Zuma’s impact on the Tobacco ban, Deputy President Mr Russia back shouting his mouth off.

The weak President no clear direction but he has his strong back stop Gwede who are at odds not only to address Climate change but resolve our Energy plan.

We need younger educated people in Goverment. Cyril must go next year. Not a big fan of Lindiwe Sisulu but God help us if Kopdoek takes over.

We need a Coalition Goverment including our Top brains in the country to set us on a 4 year path for renewal and policy for our Country.

Unfortunately this will not had due to a free T shirt and a parcel of groceries or Kentucky.

WJS

Dear ANC… thank you for destroying South Africa… Pity most of the people will still vote for you… Blinded by greed and social grants…

And rank, blatant stupidity !

Dump the clowns in the SACP and COSATU and the problem is solved. Unfortunately the ANC will continue its life as parasite ridden dung heap because that way all the cadres get paid.

It is true that manufacturing jobs have declined by 40% in SA since the 1990’s. The reason is:

1)More automation in the industry
2)More competition from other countries especially China

The commentator has failed to mention these salient points in his article.

Maybe you should read the article again, he clearly states that there are several other countries who have increased employment despite competition from China. No need to read again actually just look at the first chart in the article.

The increased competition is actually the point as well, how can we as a country in which unemployment and poverty has increased at alarming rates implement business and labour legislation that takes the basic dignity of employment opportunities away from poor people. It would be better to get as many people as possible working even if its for a lower wage.

Even proponents of basic income should support this, because every Rand earned even at lower wages reduces the burden on treasury for implementing basic income. For example if a poor uneducated unemployed person is allowed to lets say work for a monthly salary of R2000, that is R2000 less that the government has to pay for a basic income. The government can just supplement the difference between the lower wage and basic income while the worker can now gain experience and build a reputation with his/her employer. This could lead to this person possibly gaining more meaningful employment that would remove this person from requiring a basic income from the state entirely. Business and the economy wins with more production and the worker wins because otherwise he/she would still be unemployed with no prospects of gaining any meaningful employment and thereby adding more pressure on treasury and the state.

He might have read, but didn’t comprehend.
Socialist Dogma has formed a mental block, thus inhibiting his ability to think and comprehend.

I have noticed in the supermarket that more and more basic goods are imported.

The only way to create wealth is through Agriculture, Mining, Manufacturing and Tourism.

Get the basics right and SA will grow by leveraging its strengths.

You are dealing with people who don’t comprehend a Swot analysis

Dear ANC/EFF shill. Explain, for 10 marks, WHY South Africa can’t compete with China…..

….our ‘workass’ have a strike-culture. The Chinese does not.

Simple. 10 out of 10.

😉

In China they shoot those who mess up, in SA they promote them to higher positions.

because south africa has endemic corruption just like the USA and their leaders are greedy af

Why are you explaining things to the bot? The remark shows that he either cannot read or otherwise cannot read with comprehension. Please all, just ignore him and hopefully he will go away, as has similar bots and leave us to carry on with educated conversations.

The overly interventionist nature of labour legislation, combined with political tolerance for labour unions with their militant and coercive infringements on the property rights of employers, is a mechanism that exports employment opportunities to our international competitors and imports unemployment from them.

This is the “hidden hand” of the economy, the law of unintended consequences, and the punishment for economic stupidity.

After more than 25 years, the success of this process is evident in the fact that we have record-high unemployment figures while our international competitors have social stability because they enjoy full employment.

In effect, the myopic populist policies of both the ANC and the EFF import social unrest and poverty from our international competitors and export social cohesion to them. The local low scale civil war(service delivery protests and crime) proves this fact.

The market does not give a hoot about our local issues of social redress and empowerment. The market wants the best product at the best price and our labour laws manufacture the worst product at an exorbitant price.

@EFF Commie:

In response to point 2 “more competition from other countries”.

…so you’re saying the SA laborer is actually lazy & useless?? (against competition). Why does China beat “our people”? You have a very low view of the SA worker/laborer.

Some people are just short of intelligence.

You Obviously Didn’t read Mike’s article, did you?

Excellent work here (and as always) Mr Schussler. It must be frustrating to you in the extreme to sound off these warnings that go unheeded. All this so that the common people of South Africa can all benefit, instead of the usual beneficiaries that are government officials and their connected cronies. All have waited for this monster to “eat itself” but so far it is bleeding us dry or going the “slow boil of the frog” scenario as Cyril advocated sometime ago. Such a shame that a country that could at one stage compete with the best of them has now become a cautionary tale to the rest of the world. Yet another continental “has been”.

Its too late for a warning. This is a post mortem.

Welcome to the ANC -the entitlement home of arrogant delusional shameless self serving parasites.

Mike, you’re not wrong, BUT… is it not true that just about every forward looking author has said that future employment will be in the services sector? Just as agriculture employs less and less, due to mechanisation, so does manufacturing. It is, therefore, part and parcel of the shift from the old sectors to a relatively new sector. Eventually the vast majority of us will be in the services sector (or have no job at all, if you can’t retrain), with a small minority manning computers in a factory. In any case, with our local lads as unproductive and unemployable as they are, we will struggle to be competitive on the international market. We need a sector that can accommodate millions of untrained and untrainables, such as the informal (mostly service orientated) sector. It already accommodates millions of people (taxi drivers, home-based spaza shops, etc). Wouldn’t it make more sense to beef that up? I do understand that the informal sector is difficult to control (which will not please the government at all), but ultimately people must put bread on the table. Since it is preferably for people to have a job, rather than a grant, it makes sense to play to our strengths. After all, do you really think we can win the manufacturing race against China?

Those forward-looking authors mostly come from post-industrial countries where the remaining manufacturing is high-value (eg. aircraft engines) and there is nearly full employment and a broad tax bases.

” We need a sector that can accommodate millions of untrained and untrainables” <——-manufacturing was that sector. Beefing up spaza shops will just make each one less profitable and disincentivise the sector, because of the lack of disposable income caused by mass unemployment.

Good and informative article Mike. A comment by the Nigerian academic, Claude Ake, sums it up best when he said, “the problem of development in Africa is not so much that it failed but that never really was on the agenda in the first place”. “After decades of mismanagement and coruption, most African states have become hollowed out. They are no longer instruments capable of serving the public good. Indeed, far from being able to provide aid and protection t”o their citizens, African governments and the vampire-like politicians who run them are regarded by populations they rule as yet another burden, they have to bear in the struggle for survival”.
(Quoted from “The State of Africa” by Martin Meredith.)

The impact of ANC corruption on Eskom and the subsequent blackouts has been devastating for manufacturing.

Well we have a “leader” that said in parliament that BEE is here to stay clearly displaying his ignorance as to what the real problems are. The ignorance is followed by arrogance in that he constantly calls on “business” to assist in solving his and his cadre’s problem.

Not so easy. The same “leader” with much fanfare employed envoys to encourage FDI. Remember he set a target of $100 billion over 5 years. He is now running around fudging the numbers to make it look good. Well it does not look good. Last year the total FDI came to $3.9 Billion. They have now sort of given up on this and are now focusing on local investment etc.

Local investment has disappeared with FDI and the reason is as described in the article. BEE, parasites, gatekeeping etc. etc. What is not clear is that even if these policies are reversed right now it’s too late. Local investment has gone (and are going) elsewhere at a rapid pace.

The only place they will get local investment is pensions. They WILL come after it they have no option. This will force more local discretionary investments offshore. The goose is cooked.

The transformation agenda is admirable but is populist and will enhance this local culture of destruction. They are now forcing their way into every boardroom and business with no ability except being politically connected. This is how they destroy what the want to own. So the value of what they will be owning will trend to zero.

Its gone too far and cant be reversed at this stage. Its going one way. At least it all happens under the “leader’s” nose, supervision and encouragement.

Will you invest your money in this?? If you still have your pension here the answer is yes!! Good luck.

@ Mmmm

Spot on ! Humpty Dumpty is broken and most parts were stolen. Failed State.

This is the thing about the “new dawn”, so many people were jumping up and down saying Cyril is a great businessman and he understands business etc. Fact is he still part of the ANC, and the fact that he still stands by the same destructive policies shows that this in not the case.

Agreed.

He is no businessman. He is a unionist.

Although he is a “shareholder” in many businesses his ability is restricted to being a beneficiary. There is a big difference between beneficiary and investor.

He himself is the first citizen beneficiary in this country and his persistent insistence on BEE is just a demonstration of his capabilities.

He can “create” beneficiaries (even out of thin air) but can not get investors.

So when you have 100% beneficiaries and no investors in a company?? Hahhaaa.

The guy needs to go and sit and think for a bit, or someone needs to do the thinking for him. The problem is its too late. Most investors have gone or are going and wont return.

The incessant beneficiary creation is this counties downfall. If they think that gives them “dignity” Hahahaaa. Be my guest. Comes across as quite the opposite.

He is an incompetent dreamer who got his money from anything but hard graft from zero

A very sobering article. Not how I wanted to start my day, to be sure.

Seeing this article a day after engineering workers go on strike for an 8% increase. Our country in a nutshell I suppose.

The 8% wage demand is a clear indicator of the level of ignorance in regard to economics.
It appears that those demanding this Insane wage hike firmly believe that they are the only ones ho suffered as a result of Covid, and that it their employer’s fault, and that the Employers must now pay up and make good for the disastrous handling of the Covid lock down at all levels.

And so the economy was built up to the capitulation in 94.

I know of a steel factory in Wynberg which was a smaller subsidiary of a much larger company. They decided to sell this factory for R30mil and obviously it was bought by a BEE candidate who could very easily get the loan of R30mil because it would then be 100% black owned.

It took 1,5 years for this place to collapse into bankruptcy, it had run for many years without a single glitch and supported many black workers and their families but because the owner was the right colour he didn’t need the expertise or knowledge to run a steel factory, all that mattered was that is was 100% black owned.

I would have loved to have asked all those workers who lost their jobs if they think BEE is a good thing, I think they might have a different view.

BEE and BBE only, is the main cause of RSA going backwards.

the ANC supporters must thank the ANC for this mess and keep on voting for them -EISH !!!!!!!!!!!!?????????????????????

I wouldn’t say Only Bee, but Bee is certainly one of the most predominant factors leading to South Africa’s economic demise, not only in the manufacturing sector.

I have a bunch of qualifications, incl an engineering degree, honours and a post grad diploma (also in the engineering field). During my last interview in SA the companies’ VP called me aside and told me that he thought that I would be perfect for the job, only issue was that he was not allowed to employ a white male.

I did consultation work for a couple of years (I was not eligible for a job at my local power station (eskom), as again I am a little bit challenged in the pigmentation department).

During discussions with clients and the IDC, I had to leave the room when “sensitive commercial” discussions (read bribes for IDC employees and connected individuals) were discussed.

I have first hand experience on the enormous corruption happening at eskom. A friend (working for eskom) told me one day that the sole reason for eskom’s existence is to transfer funds from the state to the ruling partys connected elite.

I have since left SA (and I really do miss SA), our family (my wife owened a business) employed 6 people of whom 5 had not been able to find work since we left.

But hey thats good news for the anc as that means there are 4 less white people that they have to drag down, as they are incapable improving the lifes’ of the masses of desperate people.

Good on you! NEVER look back

It’s time people understand some hard facts:

The Far East and Asia have been manufacturing and trading for thousands of years. Review the architecture, ceramic and craft designs from thousands of years ago. It’s in their blood and culture.

In that time, Africa stood still. Then colonialism arrived and brought manufacturing, mining and international trading on a scale unknown here. Like it or not.

Mines, (the low hanging fruit) and the backbone of the SA economy (still) grew, based on the strength of black labour. Manufacturing and construction was the domain of the immigrant settlers, using some of the black labour.

This has hardly changed due to:

The culture of the Bantu people who are land based in cattle and subsistence farming.
That their education was neglected by the Apartheid regime and now destroyed by the hubris, incompetency and corruption of the ANC.

We have now had an educated class of professionals emigrating for a generation and nothing to replace it.

The ANC will only do what enriches F&F – Family & Friends.

That’s it ….

The party manufacturing the destruction of SA manufacturing sector is … ANC.

Before made in China, there was Made in Taiwan, Made in Hong Kong, Made in Japan etc… etc…In the future it will be Made in India, Made in Thailand, Made in Nigeria etc.. etc….

In the 80’s South Korean’s GDP was less than South Africa.
THe current GDP of South Korea is over USD1.6trillion where South Africa’s GDP is around USD300m!

Point is we can continue to blame “others” and other countries for our problems. But in reality the problems come from within.

We play too nicely in international trade when it comes to protecting our industries from dumping and subsidized imports.

Irish cheese lands here at our raw milk prices
EU meat gets subsidy that exceeds our supply price
Chicken lands here at our cost to feed a chicken
We charge our value added steel industry import parity prices instead of ex-gate prices – many of those including chemicals.

We should look to more value-add in many sectors and especially agriculture. Agriculture could be a MUCH bigger employer.

My companies employed :

In 1990 = about 700 employees
In 1995 = about 950 employees
In 1996 = about 100 employees

( sold the company with the most labor issues )

In 2000 = about 110 employees
In 2020 = exactly 0 employees

Governments response to Covid definitely helped me in the decision to finally stop being a capitalist exploiter as well as tax collector for a criminal government.

Sad thing is that I had very good staff, good thing is that we found employment for most of them. Would I again start a manufacturing business in South Africa under present conditions ? Definitely not !

I still cannot believe how serene and trouble free my life has now become.

I’m curious what you do now for an income? but fully agree, when you have your own business in SA…..no serenity and just trouble and worries and it shouldn’t be that way!

Sad to hear, Pelz-ebub.

Agree with you. How far do business owners have to put up a fight against the red tape & general hostility from govt?

In most developed countries govt actually supports business in various ways. In SA it’s just a lip-service.

Govt (even under RamaPapa) is still anti-business, maybe lesser so. Why? Because we’re most white and represent the historic oppressors.

NO country will flourish under such a regime. The ongoing economic decline thus makes sense…..the mere consequence from poor past ANC policy decisions.

it is not just the red tape and hostility from government but the whole “environment” created by government. One doesn’t feel safe in your own home anymore!!!!

This country is run by a bunch of criminals and the criminal agency called the ANC! They have onerous business policies as well as gimmicks like B E E that only benefits them “IN THE NAME OF HELPING THE DISADVANTAGED.” They are nothing but on the job trainee’s and they sold out the country. They have made the poor, poorer and millions more added to the unemployed ranks. They dumbed down the education system and create government dependents!!!! Says Me the American!!!!!!! THEY KILLED THIS COUNTRY AND MOST OF MY FRIENDS (NOT SOUTH AFRICAN’S) ARE LEAVING LIKE THE OTHERS IN DROVES. THE BRAIN DRAIN HAS STARTED AGAIN AND SOON THE COUNTRY WILL BE WORTH VERY LITTLE AND THE CURRENCY, WELL ZIMBABWE!

…the “disadvantaged” are now quite well-fed and many obese. Life is not that tough for SA’s poorest.

Need proof?
The rest of Africa still trek across the border to find a superior African lifestyle & work opportunities in one of Africa’s wealthiest countries (…where the majority complains most and feel victimised)

Proudly brought to you by the criminal, racist ANC regime.

South africa on the bottom of the list with other firstworld countries….note the top ten fromother parts of africa and asia.

South Africans were fingerpointing and blaming whilst rest of africa didnt…
south africans did it to themselves AND IT SHOWS.

I was a CEO in manufacturing from 1967 in Durban and from 1970 in Benoni.The current state of affairs is so disappointing and so frustrating because, with different policies, we could be up there with the front-runners.

Patel, as minister of Trade and Industry is nothing short of being a total Moron, not that any other ministers are any better.
Patel thinks he can dictate to industry, especially the motor industry, have set targets for incentives way above what the motor industry intends producing in South Africa, this making it more likely that they will produce less rather than more.

Would love to see the unemployment figures alongside the African Big 4 Manufacturing Figures.

Policy Makers must have an inkling of what they are making policies about. The current situation is proof that there is no wisdom in the ballot box as Prof PLO Lumumba says. If you are a dunderhead before you are elected, you just become an elected dunderhead. Most certainly not a wise person that can determine a policy that affects millions!

Thanks for the sobering article Mike
”… remove the self-created chains like BEE, expensive rates and tariffs, and non-functioning trains”
Even that 1% Skills Development Levy all employers pay – pointless.

Fact is,the ANC promised their chinese masters, their support. This was done because of the communist support for the Anc, before 1994.
The clothing industry and many others, was decimated because the CCP called in their favours right after 1994 and now we can All see the result.
This government has single handedly destroyed their own country, enriched a few and made everbody poorer.
The government manipulates our currency and only the rich, get richer.
Another election looms and of course, hope springs eternal, in the hearts of the downtrodden citizens, that the Anc will somehow change their destructive policies and things will change for the better.
Keep the masses uneducated and feed them propaganda most week nights on the state broadcasters and you have a population that will always be manipulated.
Sad but true.

Eyewatering factual rendition of what the (white) nay sayers were saying in 1992 will happen to SA when two-thirds of the (white) voters voted for the ANC (yes vote).
You got what you voted for and now you are whinging big time with two passports in your back pocket, nogal.
Since 1992 the Employment in the manufacturing sector has taken a slow tumble downwards. You couldn’t get a more graphic illustration of the slow dismantling of South Africa.

An informative and well written article Mike. Thank you. Love reading the comments. There’s hope.

End of comments.

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