Buying local to support S.Africa’s domestic industries - CNBC Africa

Buying local to support S.Africa’s domestic industries

Southern Africa

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South Africa needs to balance its local and international trade for domestic benefit. PHOTO: Getty Images

“South Africa has lost some ground over the last decade on localisation. Under apartheid, it worked out of necessity, I suppose. We opened our markets very quickly after 1994, and there was an outward orientation,” Coenraad Bezuidenhout, executive director at the Manufacturing Circle, told CNBC Africa.

“A lot of that [was] concentrating on procuring locally and keeping local industries through our public entities, and focusing on them in the way that many other countries still did.”

The companies, most of which are currently listed on the Johannesburg Stock Exchange, have strong ties within the country’s business leadership sector, which has always been a crucial industry for economic growth.

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Rob Davies, the South African minister of trade and industry, alongside president Jacob Zuma, are currently in talks with the firms to roll-out the domestic procurement strategy.

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Bezuidenhout added that while South Africa opening her markets to the rest of the world was a positive move, it was nevertheless necessary to continue focusing on not only buying the cheapest goods but also making sure that the local economy benefitted.

“We think the move towards localisation overall is very positive. We think it’s important that there be responsibility placed in front of corporate South Africa to support local manufacturing, and to understand the very important role that manufacturing plays in sustaining services and other sectors of the economy,” he said.

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Majority of the companies, according to Bezuidenhout, are also signatories to the Local Procurement Accord, which was signed in October 2011 with the aim of investing in domestic industries. The accord was however not fully adhered to, and the dependency of social dialogue to implement its necessary strategies fell short.

“Social dialogue is not a sufficient platform on which to monitor implementation. That is where the mess comes in because everybody is responsible,” Bezuidehnout explained.

“You need one person that is responsible, that takes leadership. We think, as a minimum, these companies should at least start measuring what they do procure locally.”

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