Local is lekker for economic growth: Ramaphosa

The government will enforce laws to ensure that locally made materials such as cement, bricks and steel products are used in the building of roads, bridges, power stations, dams and other public infrastructure projects.

The country is looking to unlock R1-trillion in new infrastructure investment in the next four years.

This is according to President Cyril Ramaphosa, who unveiled the government's economic reconstruction and recovery plan in parliament on Thursday.

He said the government was embarking on a massive localisation drive and boosting the export of more SA-made goods and services to the rest of Africa, which he said would help grow the economy considerably.

“SA 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 two percentage points to our annual GDP.

“The rest of Africa imports R2.9-trillion worth of manufactured goods from outside the continent each year. If South Africa were to supply just 2% of those goods, it would add 1.2 percentage points to our annual GDP.

“And if we succeed in reaching our target of R1.2-trillion in new investment by 2023, it could add around 2.5% to our annual GDP,” he said.

Working together with business and labour, Ramaphosa said they would be publishing localisation targets for goods in areas such as agro-processing, health care, basic consumer goods, industrial equipment, construction materials and transport rolling stock.

He said an agreement reached with social partners at the National Economic Development and Labour Council (Nedlac) committed all companies and government entities to publicly disclose in their annual reports the value of goods and services they procure from local producers, and to outline extra steps to be taken to improve localisation.

“The social partners have also agreed to support a massive ‘buy local’ campaign for this festive season, with a particular call to support women-owned enterprises, small businesses and township enterprises.

“We call on every South African to contribute to our recovery effort by choosing to buy local goods and support local businesses. This is one way that every one of us can contribute to building a new economy.”

Ramaphosa has previously organised two investment conferences, where more than R600bn in new investments commitments was made.

So far, R170bn of capital expenditure committed during those investment conferences has been invested in projects for construction and buying equipment essential to mining, manufacturing, telecommunications and agriculture, he said.

The government is also planning to open our borders to more countries in a bid to support the tourism sector heading towards the festive season. The sector has the capacity to create thousands of jobs.

An expanded list of countries from where resumption of international travel will be permitted will be published alongside improved efforts to market the country as a destination of choice.

“We urge South Africans to continue to explore their country in support of the tourism recovery as one of the hard hit sectors by the Covid-19 pandemic,” he said.

Ramaphosa said the government was working to:

• improve the participation of SMMEs in the manufacturing value chain;
• revitalise the rail network;
• improve efficiencies at ports;
• release the high frequency spectrum by March 2021; and
• complete digital migration to reduce costs of data for companies and households.

The economic reconstruction and recovery plan commits government, business, labour and other social partners to the creation of jobs through aggressive infrastructure investment and mass employment programmes.

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