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The Manufacturing Circle today releases it’s position document, Manufacturing: South Africa's Greatest Opportunity for Job-Rich Economic Growth (attached) as well as a presentation of key interventions required by the ANC at it’s National Conference in Mangaung in December (attached).
 
Manufacturing: South Africa’s Greatest Opportunity for Job-Rich Economic Growth
This document is the first in a series of documents to be released by the Manufacturing Circle through the course of next year to make the policy positions required for manufacturing growth clear. This first installment details:
 
•    The value of manufacturing to the SA economy
•    The crisis that Manufacturing in South Africa finds itself in
•    Four goals outlining what manufacturing growth requires
•    What steps must be taken to achieve those goals
 
Manufacturing in South Africa employs around 1.7 million people, accounts for 15% of GDP and is among the top three multiplier sectors in terms of value addition, job creation, export earnings and revenue generation for every R1 invested. However, the positive contribution made by Manufacturing to the South African economy is also under severe threat.
 
Since the beginning of 2008, 300 000 jobs were lost in Manufacturing. The negative situation in manufacturing has contributed to the loss of 440 000 small businesses between 2006 and 2011. The BER’sPurchasing management Index is currently at a three-year low. Electricity costs are likely to double again over the next five years, while competitors such as Brazil are readying to provide discounts of 30% to their manufacturing sector.
 
In order to address the situation, the Manufacturing Sector believes South Africa needs to prioritise the following four goals:
 
Goal 1: South Africa will offer a business environment that attracts investment in manufacturing and nurtures existing manufacturing companies


Goal 2: South Africa will be the gateway manufacturing destination for exports to Sub-Saharan Africa and South African manufacturers will compete domestically on an equal footing with imports


Goal 3: South Africa will be a competitive beneficiator of its own resources


Goal 4: South African manufactured products will be preferred by South Africans and have an excellent reputation around the world.
 
We have set these goals out in greater detail in our document, Manufacturing: South Africa's Greatest Opportunity for Job-Rich Economic Growth, and will expand on them systematically over the next couple of months. We urge our policy makers to make the pursuit of these goals their top priority.
 
Key Interventions Required by the ANC at their National Conference
The Manufacturing Circle recognises the ANC’s position as the governing party of South Africa, and the important role performed by the ANC’s National Conference in setting the policy agenda for the country. The Manufacturing Circle has therefore met with themembers of the ANC’s Economic Transformation Committee at various junctures to put forward its proposals in respect of key interventions required at the ruling party.
 
The proposals (set out in the attached presentation) follows on recommendations made by the ANC Policy Conference earlier in the year and in summary proposes the following for insertion in the ANC’s Economic Transformation Policy Document for adoption at the Mangaung Conference:
 
·      On Monetary Policy

-    that a broad range of monetary policy tools be considered for use in pursuing a competitive and stable currency (includingmacro-prudential regulation, capital control, exchange rate bands and currency market interventions to minimise volatility); and,

-    that South Africa should strengthen it’s reserve position going forward as it is currently below the adequacy range as defined by the IMF, and is rendered largely unable to proactively pursue currency stability.


·      On Industrial and Trade Policy

-    an acknowledgement of the strain put on the manufacturing sector as a result of bunched-up super-inflationary electricity price increases over a protracted period and, the industrial electricity support measures being instituted in some of South Africa’s competitor economies;

-    a proposal that discounts be considered to support energy efficient industrial electricity users in the face of rapid escalating electricity prices and price subsidies in competitor markets;

-    an acknowledgement of the threat to job creation and domestic manufacturing because of South Africa’s vulnerable trade position and lack of protection against predatory exporters, particularly from China;

-    a proposal that South African trade and non-trade barriers be benchmarked against peer countries, that a much bolder posture is adopted in bi-lateral and multilateral trade negotiations and that the Market Economy Status granted to China be up for review, subject to greater tansparency on domestic incentives and trade reform


Further proposals on infrastructure and localization were also made and are detailed in the attached presentation.