Localisation for Africa
Which of Government ’ s Infrastructure investment expenditure projects will be the most beneficial to the manufacturing sector and for the South African economy ? Improvements in electricity generation and bulk water infrastructure are crucial , as are those affect transport logistics . However , we will need to see much higher levels of private sector involvement in the establishment and roll-out of those bulk utility and distribution networks and better and quicker government execution of the spending plans .
Is there a way of measuring local content spend or a way of ensuring the designated products are produced locally ? One would need to survey procurers . The Manufacturing Circle is currently contemplating such a survey - an announcement will follow soon in this regard .
What is the Manufacturing Circle ’ s view on preferential procurement / product designation ? We believe that part of ensuring the productive spending of our public funds , is to ensure that it prioritises local procurement to the degree that the price differentials incurred make for economic outcomes that support economic growth and job creation and sustains our national revenue base . A strong local procurement campaign is also required to encourage the private sector to more vigorously support a programme to localise production to create jobs .
The Manufacturing Circle is concerned about tenders that give undue preference to imported options due to factors other than price and quality . Preferential procurement should be enhanced to ensure that fronting is not rewarded and that predatory pricing does not eliminate local manufacturing bids for government tenders .
Treasury should ensure that the rules for preferential procurement are clear , well publicised and well policed . Any gaps in the rules governing preferential procurement should also be tightened .
A vigorous campaign to promote local procurement by both public and the private sector , but the private sector in particular is also required .
This is needed specifically , as the influx of subsidized imports is having an extremely negative effect on South African manufacturing , costing thousands of jobs . It is putting many companies under stress , ultimately resulting in business failures . Concerted action from both the public and private sectors are required to ensure volumes can be increased in the domestic market .
We are currently in the process of motivating for such a campaign and the pro-active involvement of broader organised business , labour and government in it .
The Manufacturing Circle has initiated a joint statement on the importance of buying local , which has received the buy-in of treasury , EDD , DTI Cosatu , Fedusa , Nactu , BLSA and ProudlySA . The intention is that this joint statement will kick off a broader campaign .
What is your take on Government ’ s infrastructure investment programme ? While the plan details exciting projects , the key will lie in the execution thereof . The proof , as the say , is in the pudding .
How do you feel about SA ’ s involvement in BRICS ? We need to cultivate close relationships with our BRICS partners and use it better as a platform to create a level playing field for South Africa when it comes to international trade .
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