During the period immediately following South Africa’s democratic elections of 1994, the country’s competitive advantage was obvious for all to see: cheap and abundant electricity.

This advantage had arisen primarily as a result of a material overinvestment by Eskom during the preceding decade, which had resulted in the State-owned utility actually mothballing capacity – capacity that is now being reintroduced under the blandly named ‘Return to Service’ programme.

As is now well documented, that advantage has been more than eroded on the back of poor policy choices and a regulatory regime that was unable to see beyond the surplus years and, thus, left prices too low for too long.

Without question, South Africa’s current power shortages and fast-rising tariffs have emerged as a major drain on the country’s competitiveness.

Many have also questioned the wisdom of some of the technology choices made in the Integrated Resource Plan for electricity, which is effectively a compromise between economic, energy and environmental policy objectives and obligations. The outcome is likely to mean that South Africa’s power prices will never again emerge as a primary industrialisation lever.

Therefore, South Africa’s economic authorities are in a desperate search for a competitive advantage that is able to replace cheap power.

Minister in The Presidency Responsible for the National Planning Commission Trevor Manuel alluded to this search at a recent conference, where he argued that South Africa should take a fresh look at its competitive advantages and how to use the infrastructure programme to unlock these advantages. Manuel made specific reference to the country’s resources riches, which could only be turned to account through “sufficient rail and port infrastructure”.

Trade and Industry Minister Dr Rob Davies added yet further flesh to the resources-advantage bones. Speaking at a Centre for Education in Economics and Finance.Africa, or Ceef.Africa, function, Davies argued that mineral beneficiation could emerge as the country’s new competitive advantage. “South Africa needs to create a new competitive advantage for manufacturing . . . and the construction of that is going to rest on the availability of mineral products,” he asserted.

To gain fuller benefit, these minerals should be perceived as inputs into a continentwide industrialisation process, rather than commodities to be extracted and sold on the London Metal Exchange. “That is what the African continent as a whole has identified as a key first pillar,” Davies said, noting that the Conference of African Ministers of Industry had already endorsed the beneficiation thrust.

Davies saw agroprocessing and pharma- ceuticals as two other pillars, but acknowledged that much would hinge on African governments agreeing to coordinate their policy efforts in this regard.

What he neglected to say, though, was that unless South Africa and the rest of the continent developed adequate and affordable power capacity, none of these potential advantages would materialise.