The writer says South Africa needs to boost its manufacturing. Photo: AP

JOHANNESBURG – It’s hard to know what to make of Donald Trump’s presidency. It may only become apparent if his trade policies are good or bad for the US long after he’s left the White House, as the impact of his wilfulness will be felt for many years to come. Political bridges may need to be rebuilt and diplomatic damage control may very well also be necessary.

While I don’t feel that I can adequately comment on the pros and cons of his efforts to make America great again, I was prompted to write about Potus45 after I saw his Tweet: “The Wall Street Journal has it wrong, we are under no pressure to make a deal with China, they are under pressure to make a deal with us. Our markets are surging, theirs are collapsing. We will soon be making billions in tariffs and making products at home.”

There were as many pro as anti-Trump replies to the post, but only time will tell if he is the best thing to happen to US manufacturing, economic growth and sustainable job creation or not. What we know now is that according to a March report by the US Bureau of Labor Statistics, 222 000 jobs were added to the manufacturing sector over a 12-month period, which was at a higher rate than any other sector, and higher than at any time over the last half-century.

One US economist quoted a figure of one dollar invested in US manufacturing resulting in $3.60 (R53.71) of value being generated elsewhere in the economy. We have a statistic of our own that corroborates the importance of investment in manufacturing from a multiplier effect study undertaken by The Manufacturing Circle in 2014.

The investment of just R1 in manufacturing will result in a R1.13 increase in our gross domestic product, an increase of R0.13 in export receipts and R0.35 in fiscal revenue. One million rand of investment will result in the creation of three new, sustainable jobs.

What damage the imposition of Trump’s tariffs will do to his economy is not a discussion for here, but the point I want to make is that re-industrialisation is an absolute necessity for our country if we are to re-build our economy and create a significant amount of jobs.

Manufacturing has a massive multiplier effect that jobs in the service sector simply don’t have. Manufacturing jobs create a path for upward economic mobility. Manufacturing can train on the job, so little or no work experience is needed for some entry level positions.

One quote I read says: “Keeping production local keeps innovation local”.

We know that South Africa does not lack in the innovation or entrepreneurial department. What we need is for budding entrepreneur industrialists to look for niches into which they can insert themselves and their businesses and create import replacement alternatives to the products we bring in from overseas.

If job-seekers should look for where there are skills shortages and therefore where the best career opportunities lie, then manufacturers can make an equivalent decision.

Look where there is room for a new domestic manufacturing business that can be created entirely on an import replacement business model. It is a fallacy that locally manufactured goods are more expensive than import equivalents.

Consider shipping costs and times, import duties, fluctuating exchange rates and many other factors that can make local manufacturing more cost-effective.

Our fashion retailers have given us the best example of this, giving “quick response” a new meaning as they get the latest fashions in store while they are still on trend and creating options and value in the process.

What Trump is doing, arguably, is finding a way to protest against imported goods. Thandiswa sings about protest in her song Zabalaza, so without taking to the streets and destroying property, let’s start a protest of our own by buying local.

Let’s “find the gap” and fill it with factories, manufacturing plants, and production lines of our own, manned by a skilled South African workforce. It is imperative that we drive our manufacturing and industrial sector. Maybe not at any or all costs, which many contend Trump is doing, but in a sustainable way.

Eustace Mashimbye is chief executive of Proudly South African.

The views expressed here are not necessarily those of Independent Media.

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