South Africa must increase export of value-added goods
The time has come for South Africa to start exporting value-added goods. This was said by Aspen Group’s Senior Executive responsible for Strategic Trade, Mr Stavros Nicolaou. Nicolaou was speaking during the Economic Policy Dialogue on Incentive Schemes in the Manufacturing Sector that was hosted by the Department of Trade and Industry (the dti) in Pretoria.
According to Nicolaou, incentive schemes in the South African manufacturing sector are necessary and can enhance competition and comparativeness in the global field for South African companies, which will lead to an increase in export of value-added products. Nicolau added that if the South African manufacturing sector were to be given the necessary support, it is capable of addressing the triple challenges of poverty, unemployment and inequality.
“While incentives are necessary to support the manufacturing sector, we also need industrial activists who want to see growth in the economy, development of skills and creation of jobs,” said Nicolaou.
According to Nicolau, incentives have created 1.6 million jobs to date and have contributed 11% to the Gross Domestic Product (GDP). Nicolau emphasised that addressing challenges in the sector head-on will double the 11% that the sector currently contributes to the GDP.
Senior Researcher at the Corporate Strategy and Industrial Development Research Group, School of Economics and Business Sciences at the University of Witwatersrand, Dr Lotta Takala-Greenish said that labour costs and import competition are only a fraction in the decline of South African Textiles and Clothing.
She added that this challenge can be addressed if South Africa starts focusing on developing domestic demand.“The increase of consumer purchasing power for example through minimum wages and on incentives that will focus on domestic inputs and production”.Takala-Greenish described textiles and clothing as a potential source of employment as well as a way to achieve manufacturing diversification.
"It is important to look at trends from 1970 and onwards which show the industry’s resilience and importance of understanding the constructive role of labour. It is against this backdrop that the decline began before the trade liberalisation of the 1990s and China effect seen after the year 2000. It is important to note that Chinese imports are not entirely to be blamed,” said Takala-Greenish.
The session was one of a series that are being hosted by the dti to stimulate intellectual discourse on contemporary economic issues pertaining to the South African economy.
Enquiries:
Sidwell Medupe-Departmental Spokesperson
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E-mail: MSMedupe@thedti.gov.za
