South Africa

Presidents's speech offers opportunities for localisation

JOHANNESBURG – The State of the Nation Address (Sona) had its controversial moments, including the content of the speech, which many people found disappointing. 

However, we believe that it contains a multitude of opportunities for increased localisation, re-industrialisation and local procurement that speak to our work. 

The president put an emphasis on social compacts and the importance of the government and business working together to grow our economy and create jobs. The government alone cannot provide the jobs required to remediate current levels of unemployment, where 1.2 million young people alone enter the labour market each year.

Here are some of the areas mentioned in the president's speech where we see great potential for local procurement and the resultant job creation: 

With renewable energy projects come green economy opportunities. As we lose many traditional jobs and skills, this sector is set to become a growth area for new and exciting positions. Similarly, the digital economy is set to grow, providing jobs whose descriptions have still not been written. 

To support these sectors, a brand-new University of Science & Innovation is set to be built in Ekurhuleni. This, along with the construction of 9 new TVET colleges and a Crime Detection University in Hammanskraal, all offer courses for graduates who will be trained for a new jobs landscape.

But not only will these institutions train new job market entrants, the education sector as a procurer of furniture offers an enormous opportunity for local manufacturers. We have previously engaged a number of private educational institutions and groups and challenged them to make local procurement a priority. 

So while we celebrate the creation of these new tertiary institutions, we celebrate the potential they represent for massive local procurement (think desks, chairs, office furniture, shelving, storage cupboards, etc). 

The construction of student accommodation was another of the projects mentioned by the president and these units will all require bathrooms (Lixil taps and sanitary wear), tiling (Italtile), cupboards and carpentry (PG Bison) and so can be entirely constructed and furbished with Proudly South African member companies’ manufactured items, as these companies have been vetted and we can vouch for their high quality local content.

Student housing and job creation – two birds with one stone.

Along with educational establishments, during 2019 we challenged financial institutions to look at their supply chains and to increase local procurement, and so for Proudly SA, the establishment of a State Bank represents an opportunity to furnish and equip offices and premises with locally manufactured items, as well as a new banking service for South Africans. 

Crime prevention was part of the Sona and we heard that there were 5 000 SAPS graduates last year and a further 7 000 recruits this year. That's a lot of boots on the ground. 

For some, this is a figure of speech, but for us it means boots in the literal sense, and uniforms, all of which can be procured from local clothing, textile and footwear manufacturers. 

Big infrastructure projects that featured in the Sona included the refurbishment of Prasa stations, parkways and signalling, port installations as well as and work on the rural road network. 

Much of the materials and even some of the machinery for these can be procured from local manufacturers. 

All of these projects pale in significance next to the ambitious creation of a new city in Lanseria, which will be home for up to 500 000 people in the next decade. 

Imagine all the raw materials, fixtures, fittings – the list is endless of items that will go into the “end product” which represent thousands of jobs for the duration of the construction and finishing phases.

And to assist small, upcoming entrepreneurs, many of whom will be the suppliers of all or at least many of the items we have mentioned, there are many initiatives that will assist to capacitate them to meet these exciting challenges. These include the Biz Portal platform which is already making registering a company quicker and easier, support of youth entrepreneurship and a youth employment intervention, the SheTradesZA project to develop more women owned enterprises, among others.

Sectoral Master Plans that have been driven by the relevant sector desks in the dti have been formulated or are being formulated currently to boost job sustainability and new job creation in the poultry (saving 54 000 jobs), clothing and textile (creating 121 000 new jobs over 10 years), sugar, steel and automotive industries. 

And finally, the African Continental Free Trade Area will be introduced this year and is very exciting for more established businesses who are export ready. But that is the subject for an entire column of its own.

If we look into the Sona and find the good in it, we can see many projects that drive local procurement and job creation and job retention in this tough economic climate. 

For us, it presents multiple opportunities that can be turned into positivity, especially if procurement decision makers put South Africa first. Selaelo Selota’s hit song entitled Village Chant is very relevant for us given the continued loss of jobs. The South African village has a collective responsibility to contribute and to chant “buy local to create jobs”.

Eustace Mashimbye is the chief executive of Proudly SA.

BUSINESS REPORT