On Saturday 23 February 2019, Democratic Alliance Leader, Mmusi Maimane released the party’s most comprehensive manifesto to date. It is a document that covers every aspect of South Africa’s landscape from education to health care and the economy.

A strong focus in the manifesto is given to trade, investment and manufacturing as drivers for economic growth and job creation.

A strong focus by Maimane is on manufacturing as a key catalyst and multiplier for job creation which has incredible potential to stimulate economic growth, regain our space in manufacturing global value chains and ultimately create jobs.

In South Africa, manufacturing has been in a deep crisis for a long time with its contribution to GDP falling from 18% in 1997 to 11% in 2018.

We have witnessed hundreds of thousands of jobs lost in the “nine wasted years” due to reckless ANC policies which have seen the costs of manufacturing increase exponentially while productivity has declined dramatically.

According to the World Bank, manufacturing has the highest job multiplier out of any sector. According to the Manufacturing Circle, it is R0.35 for the fiscus, three additional jobs and R1.13 for output. Thus, for every rand invested in manufacturing, fiscal revenue increases by R0.35 and for every R1-million invested, three jobs are created.

With 9.6-million unemployed South Africa’s, we need to focus on sectors that have the potential to create jobs that will drastically reduce this number.

This is why manufacturing is a major focus for the Democratic Alliance in our manifesto which contains some big ideas on how to make manufacturing a sunrise sector for our economy.

At the cornerstone of this policy is making manufacturing in South Africa an attractive place once again through lowering corporate tax for manufacturers to 15%, conditional on a percentage of turnover being re-invested in a capacity that expands production with new technology which drives down costs through improved productivity.

We believe that this will ultimately lead to more job opportunities, skills training and Corporate Social Investment (CSI) through this incentive.

One of the biggest costs for any manufacturing industry is that of electricity, which through continued above-inflation increases from Eskom, coupled with unpredictable blackouts, have put the brakes on the sector from seeing any meaningful growth and expansion.

To this end, the DA believes that we must ensure manufacturing has access to cheap and reliable power suppliers in order to lower the cost of manufacturing.

This would include bulk and long-term deals for energy-intense industries. We believe this can be achieved through the break-up of the energy sector with the DA’s Independent System and Market Operator (ISMO) Bill championed by MP Natasha Mazzone.

Incentive programmes are the very lifeblood of the manufacturing sector, whether a big or small company, allowing them to compete in a global economy.

There is one such programme that the DTI introduced which was fairly successful called the Manufacturing Competitive Enhancement Programme (MCEP). The problem with it was its inability for a longer-term view to be taken and the limited focus of it.

At the time of writing this and despite my repeated requests, the DTI has been unable to provide a 10-15 year view for manufacturing incentives like this which stymie the sector from long-term production planning.

That’s why the DA believes we can introduce Sector Specific Manufacturing Incentives (SSMIs), with a long-term view, as a way to incentivise investment in manufacturing in labour absorptive sectors (such as agro-processing) where there is also a clear business case for successful growth.

Incentives would be based on the ability to improve production efficiencies, lowering of manufacturing costs and the ability to create new jobs. These incentive programmes will focus on assisting existing firms to become more competitive and adaptive and encourage new firms to open in sectors where there is a comparative or competitive advantage.

The DA’s manifesto on manufacturing is realistic, bold and a clear roadmap for the future of the sector. It provides certainty, encourages investment in new technology that will increase factory floor efficiency which will lead to job creation. We believe this is exactly what the sector requires to make South Africa a manufacturing hub not only in Africa, but the world. DM