‘Larger manufacturing sector needed’

INLSA

Economic Development Minister Ebrahim Patel. Photo: Mxolisi Madela.

Johannesburg - The South African economy needs a larger manufacturing sector in order to improve employment, Economic Development Minister Ebrahim Patel said on Thursday.

“Manufacturing creates jobs directly. It has a positive impact on forex, both on export earnings and in reducing the import bill,” he said in a speech prepared for delivery at a supplier development summit.

“It expands the technological base of the society...(and) above all, it creates jobs in supplier industries, from mineral processing to services that support manufacturing. It is a vital component of a balanced, high performance economy.”

He said 90,000 jobs in South Africa were dependent on exports from South Africa to the rest of the continent.

“We need to use our local consumption base to provide the platform to export more, starting on the continent.”

He said an expansion of the country's industrial base required a closer relationship between business and labour.

“A fractious and conflictual (sic) shopfloor is not conducive to the joint effort that is at the heart of successful industrialisation in a society,” Patel said.

“Workers and entrepreneurs need to co-operate to expand employment, develop industrial competencies, improve skills, strengthen productivity and address income and social inequalities.”

He said an international survey of 200 senior automotive sector executives by KPMG found South Africa to be the fifth best investment choice by car makers globally.

“It placed us above Japan and western European and north American countries, but also above other emerging economies such as Indonesia, Turkey, Vietnam and Colombia,” he said.

“This is an example of the successes that are achieved where the state works closely in the economy with private sector partners.” - Sapa