President Cyril Ramaphosa’s State of the Nation address revealed a new direction in economic policy: “import substitution industrialisation”: producing goods locally where possible. The approach was most effective from 1933-1945, during South Africa’s first modern manufacturing boom. The era featured an average 8% annual gross domestic product growth, more economic balance, and even improved racial equity in wages.
The need for local sovereignty is today even greater, given the deindustrialisation-driven jobs bloodbath underway. But Pretoria’s residual economic schizophrenia is remarkable, especially thanks to wasteful subsidies for Special Economic Zones (SEZs).
Substituting imports for exports, according to Ramaphosa, will occur through a clothing and textiles master plan featuring “commitments by retailers to buy goods locally… Government has already begun to act vigorously against illegal imports.” Likewise, the poultry master plan requires “a new poultry import tariff adjustment to support the local industry”. Ramaphosa also promised master plan support to two other sectors devastated by ultra-cheap foreign competition — sugar and steel — in coming weeks.
But true to the neoliberal agenda, Ramaphosa also lauded trade, promising to “undertake a fundamental overhaul of the Durban port, the third largest container terminal in the southern hemisphere”, in spite of opposition from residents in Wentworth and Chatsworth to the R250-billion scheme, and Transnet’s corruption that, in 2019, derailed port expansion.
Moreover, continued Ramaphosa, “Thanks in large measure to the auto master plan, we sold more cars to the rest of the world last year than ever before. We launched a new auto SEZ hub in Tshwane.” But the subsidies (more than R30-billion annually) that made this possible are unsustainable, and cars are a major contributor to climate change.
