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Reviving manufacturing only way to fast-track economic recovery

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Local manufacturers have responded positively to President Cyril Ramaphosa’s Economic Reconstruction and Recovery plan, a strategy to help South Africa overcome the economic consequences of the COVID-19 pandemic. A key priority is reviving the local manufacturing industry to reduce the country’s reliance on imports, make its exports competitive, and create hundreds of thousands of jobs.

Local manufacturers have welcomed the President’s pledges. “The President has hit the nail on the head. Reviving our labour-intensive manufacturing sector and making it globally competitive is the only way to recover from the pandemic and create hundreds of thousands of jobs fast,” said Jonathan Shapiro, CEO of LESCO Manufacturing, a Johannesburg-based producer of electrical products. “Manufacturing, after all, has the highest job multiplier of any sector.”

Next month marks eight months since South Africa recorded its first COVID-19 case, which led to a strict lockdown to assist our healthcare system prepare for the worst of the pandemic. Whilst the measures have helped to save lives, the economy, like anywhere else in the world, is suffering.

South Africa’s strategy to overturn these effects will involve growing its local industrial and manufacturing base, President Ramaphosa announced last week. “To place our economy on a new trajectory, we are going to support a massive growth in local production,” he explained, adding that together with business and unions, the government will publish localisation targets for goods in areas like agri-processing and health care, as well as basic consumer goods, industrial equipment and construction materials.

The overall aim is to grow the economy by lowering South Africa’s reliance on imports and increasing exports. “South Africa currently imports around R1.1 trillion of goods, excluding oil, each year. If we were to manufacture just 10% of these goods locally, it is estimated that we could add 2% to our annual GDP,” Ramaphosa said.  He added that plans are in the pipeline to ensure public infrastructure projects will use locally made materials, whilst establishing supplier development programmes for large companies and in critical sectors.

For the government’s plans to bear fruit, they need to be transformative and inclusive, Shapiro added. “He mentioned the word inclusivity, and we hope that he meant that everyone will be part of his plans, including low-skilled people and workers with disabilities,” Shapiro explained, adding that millions of South Africans have never been able to find work because they are living with a disability or do not have relevant skills.

“They need to be included in the plans otherwise they will never find work,” he urged, noting that according to 2019 figures by the National Council of and for Persons with Disabilities (NCPD), 68% of South African adults living with a disability were unemployed last year. “This year, this figure is likely much higher.”

This shouldn’t be the case, Shapiro said, explaining that sitting in a wheelchair or being under-skilled doesn’t mean you can’t create value for a business or the country at large. “Our view is that all businesses should have an inclusive business model that plays to the strengths of people with disabilities.”

“Our workforce of over 100 men and women who are considered traditionally unemployable due to their lack of skills or being disabled is our company’s strength,” he added. “We turned 21 years old this year, and to date, we have sold 170 million products – eight million per year, and all of this has been achieved by integrating the traditionally unemployable into our workforce. We are ready to continue this trajectory.”

 

LESCO Manufacturing (Light Electrical Switch Company) is a South African producer of electrical products that employs the traditionally unemployable, namely  unskilled, semi-skilled and disabled people, with a primary focus on women and youth. They do this by incorporating smart design processes into the manufacturing and assembly of electrical products such as adapters, multiplugs, switches and sockets. For more information visit https://www.lescosk.com/

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