COMMENT
W
Curtain call
hile the curtain falls on 2018, critics are still out
as to whether the year was a tragedy, or a
comedy of errors. How will the much-anticipated
2019 sequel play out?
In the run-up to 2019, and caught up in the hype and the
hope and the promise that a new year brings, I came across a
great quote by Bill Vaughn, an American columnist and author,
that goes, “An optimist stays up until midnight to see the new
year in. A pessimist stays up to make sure the old year leaves.”
I thought, what could ring truer of South Africa’s trade and
industry sector — a mixed bag of players; some optimists,
some pessimists, yet all vying for favourable economic
outcomes?
In the closing scenes of 2018, culminating in final curtain
fall, the critics were decidedly split. While some felt that,
despite slow economic growth inherited from 2018 on the back
of falling agricultural, mining, and construction sector output
and rising inflation, South Africa’s economy will have a slow
rebound in 2019 and the growth outlook will brighten modestly.
Others felt that while Cyril Ramaphosa’s election as president
and his subsequent moves to root out public sector corruption
buoyed confidence in the country’s economic prospects,
negative growth and perceived slow progress have reversed
this confidence on an almost unprecedented level.
One thing everyone can agree on, however, despite
their degrees of optimism or pessimism, is that the biggest
challenge of all remains the political environment ahead of
the mid-2019 general election (likely to be held in May), and
that South Africa’s slow growth into 2019 again highlights the
serious need for substantial, meaningful structural reform.
World Bank chief economist for Africa, Albert Zeufack,
summarised it wholly when he said, “To accelerate and sustain
an inclusive growth momentum, policymakers must continue
to focus on investments that foster human capital, reduce
resource misallocation, and boost productivity. Policymakers in
the region must equip themselves to manage new risks arising
from changes in the composition of capital flows and debt.”
This means that turning around the fortunes of South
Africa’s mining industry, for one, will require greater
collaboration between industry stakeholders. And there
are staunch supporters of this view. I met with the South
African Capital Equipment Export Council (SACEEC) CEO, Eric
Bruggeman, to discuss South African manufacturers’ enormous
potential to increase their market share both locally and
internationally — which you can read in our Insights column in
this issue on page 40.
Another major supporter of a greater collaboration between
industry stakeholders is Department of Trade and Industry
(dti) director, Yusuf Timol, who spoke at a presentation hosted
by the Mining Equipment Manufacturers of South Africa on
the sidelines of last year’s Electra Mining Africa conference
and exhibition. Timol pointed out that a significant contributor
www.plantonline.co.za
to the contraction of the economy is the trade balance (or,
rather, imbalance). Machinery and commodities were the main
contributors to the negative movements in the country’s trade
balance in all of 2018’s quarters. These contractions provide an idea
of how serious and difficult the current (and now, inherited into
2019) trading environment is. Timol urged industry stakeholders
to form collaborative platforms so that industry stakeholders,
which include the government and the private sector, work as a
collective. “This will help us, as government, to provide the right
trading environment for the private sector to be successful in their
business,” he said.
And 2019 definitely brings with it some hope. In an effort to
assist in difficult trading conditions, the dti will be focusing on
several areas in the South African mining industry; the first being
regional integration, and several projects are currently on the
table. Supplier development will also be a focus area, with the
dti investigating what mining companies are buying, from whom,
and at what price and volumes. This will assist the dti to identify
better localisation and import substitution opportunities, while
also improving the competitiveness of suppliers. Conversations
between supplier groups, mining and procurement companies, as
well as manufacturers and suppliers are encouraged and will assist
in understanding what needs to be done for mining companies to
rather invest and buy locally — which could be the industry’s
saving grace.
I’ll leave you with another thought-provoking quote for the new
year by English writer GK Chesterton, “The object of a new year
is not that we should have a new year. It is that we should have
a new soul.” We, as an industry, have to believe that change is
possible — in the form of an inclusive growth momentum charged
with optimism, and fuelled by collaborative efforts. It’s the only way
to feed this country’s (collective) soul.
Sources:
businesslive.co.za
Memsa.org
Old Mutual Media
Centre
Tarren
JANUARY 2019
3