South Africa’s global export share has steadily declined since 2010, signaling an urgent need to revamp industrial policies to enhance international competitiveness. Busi Mavuso, CEO of Business Leadership South Africa (BLSA), advocates for a strategic shift towards empowering export industries, particularly small businesses poised for growth in neighboring markets and services exports.
The World Bank’s recent analysis reveals a troubling lag in South Africa’s trade performance relative to its overall economic expansion. The dominance of large firms in minerals and agriculture contrasts sharply with the underperformance of the manufacturing sector, with only the automotive industry showing some resilience. Services exports, too, trail far behind those of other middle-income nations.
Mavuso emphasizes that domestic trade policies must prioritize export competitiveness over protectionism. The focus should be on enabling South African companies to penetrate global markets, supported by a robust partnership between government and business.
Logistical inefficiencies exacerbate the nation’s export challenges. The subpar performance of ports and railways, combined with South Africa’s geographic distance from key markets, has resulted in prohibitively high logistics costs, further weakening export potential.
The World Bank also criticizes the current localisation-focused industrial policy, which it argues has stifled innovation and competitiveness. Forced local content requirements, coupled with tariffs and other restrictive measures, have raised costs for consumers and diminished the global competitiveness of South African industries.
Mavuso warns that this approach could harm the very industries it seeks to protect, reducing their ability to compete internationally and stifling overall economic growth. The World Bank calls for a comprehensive review of South Africa’s localisation strategy, a sentiment echoed by Mavuso, who sees a critical opportunity for the Government of National Unity (GNU) to pivot towards a more export-oriented approach.
Trade, Industry, and Competition Minister Parks Tau’s recent initiatives, including engaging with business leaders and strengthening ties with key markets such as the United States, mark a promising step toward restoring South Africa’s trade relations. Mavuso underscores the need for this momentum to develop into a cohesive industrial and trade policy that aligns government actions with the broader goal of boosting export competitiveness.
Effective coordination of border posts, ports, and railways will be crucial for facilitating improved trade flows. Additionally, aligning trade policy with South Africa’s diplomatic efforts to secure beneficial global partnerships will be vital for expanding market access.
BLSA has already proposed several strategies to the Minister to enhance competitiveness and remains committed to collaborating with other Cabinet members. Mavuso advocates for a unified, government-wide strategy to propel South Africa back onto the global stage as a formidable trading nation.
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