BUSA’s Cas Coovadia on SA’s localisation strategy

South Africa is embarking on a mission to revitalize its economy post-COVID-19 by prioritizing local manufacturing through a strategy of localization. A recent study conducted by Intellidex for Business Unity South Africa and Business Leadership South Africa sheds light on the potential of this ambitious target. In an interview with CNBC Africa, Cas Coovadia, CEO at Business Unity South Africa, discusses the findings and challenges of this localization drive. The target set by the government aims to substitute 20% of non-petroleum goods imports with domestically produced goods within the next five years. While this target is seen as aspirational, Coovadia emphasizes that it is not a one-size-fits-all approach. Certain sectors of the economy, such as the food sector, agriculture, textiles, and the motor industry, are more amenable to reaching the 20% goal, while others may face challenges. Coovadia highlights the success story of local PPE manufacturing during the pandemic, showcasing the potential for growth in the health sector as well. To achieve the localization target, specific economic reforms are deemed necessary. Among these reforms are improving the ease of doing business in South Africa, enhancing financing options for small and medium enterprises, addressing skills development, and engaging in discussions about labor laws to support medium-sized manufacturing enterprises. Building confidence in the economy through short-term interventions like renewable energy projects is also crucial to attract investments. Learning from the experiences of other countries that have successfully implemented localization policies, such as Brazil, is essential for South Africa's strategy. Coovadia stresses the importance of collaboration between government and business to leverage best practices and address the identified gaps in industrial capacity. As South Africa enters the second phase of its COVID-19 vaccine rollout, business confidence is closely linked to the success of the vaccination campaign. Coovadia acknowledges the challenges posed by the global vaccine supply chain but expresses readiness to support the government in administering vaccines efficiently. The collaboration between business and government in managing the vaccine rollout showcases a united effort to combat the pandemic and restore economic stability. The successful implementation of the vaccine rollout is seen as a critical factor in rebuilding confidence in the economy and supporting the overall recovery efforts in South Africa.