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One definition of madness is doing the same thing over and over and expecting a different result. The old adage has never been more true than when you try to understand President Cyril Ramaphosa’s obsession with industrial policy.
It’s as if manufacturing were the beginning and end of all measures of economic success. The ANC has been banging the same drum since almost the moment it came to power in 1994. And just this week the president was at it again, whistling into the wind.
He told a breakfast gathering of the Steel and Engineering Industries Federation that South Africa “should aspire to become the engineering workshop of the African continent”.
“We should be exporting transformers to the continent. We should be exporting mining machinery. We should be exporting railway equipment. We should be exporting pumps and valves, fabricated steel and electrical equipment,” he said.
Using a need we’ve known about since 2013 — 14,000km of new electricity transmission lines — to kick-start a much-promised “reindustrialisation” of the economy, Ramaphosa said: “We cannot accept the continued erosion of South Africa’s industrial base. Manufacturing is not simply another sector of the economy; it is fundamental to our economic sovereignty.”
Fine words, but he and the ANC have been declaiming a new industrial revolution here for 30 years while doing almost everything they can to make it impossible. And now it may genuinely be too late. We’re a significant manufacturer already but become less so every year.
Even if we were to alight on something, manufacturing is no longer creating jobs. China installed almost 300,000 robots in factories in 2024. Globally, robot density has more than doubled in the past decade
Five things make reindustrialisation difficult:
First, China, which has countered a collapse in domestic demand by flooding the world with manufactured exports, from electric vehicles to corrugated iron. China’s is no ordinary industrial economy where you start with simple cloth and nails and gradually progress up the technological ladder while Bangladesh, Vietnam and Ethiopia pick up the simple stuff to begin their own industrialisation. Instead, China has hung on to the simple stuff while making high-speed trains and chips for large-language AI models.
Second, the ANC wants to emulate the Afrikaner industrial model that grew Eskom and Iscor and built an automotive industry here to cope with apartheid’s gradual isolation from the world. But that success, much of it built around an arms industry, was built on cheap black labour, and that no longer exists. That labour gave us some of the cheapest electricity in the world.
Third, the more desperate the ANC becomes about industrialisation, the more barriers it puts in its way. Requiring any international industrial investor to make 30% of their investment here available to black shareholders is a significant barrier in a world where dozens of countries chase the same project. A more recent demand that fully black-owned companies be given preference over merely majority-owned black companies in government tenders — like the 14,000km of transmission lines — is borderline insane.
Add to these the fact that, like many policy-driven industrial programmes, ours chooses to pick “winners” (check out the industrial master plans) and your recipe for routine disappointment is almost complete. We don’t know what to make that we don’t already make. And what is it that’s new that we can produce at the right quality and the right price that other people might want to buy?
Even if we were to alight on something, manufacturing is no longer creating jobs. China installed almost 300,000 robots in factories in 2024. Globally, robot density has more than doubled in the past decade.
And while we hallucinate about industry, we wilfully ignore the huge opportunities under our natural control — mining and agriculture and, increasingly, tourism and services such as banking, call centres and data centres. We’re good at this stuff.
Mining, we know, is a disaster. Since 2015 our mining ministers have been Mosebenzi Zwane and Gwede Mantashe, neither of whom should be anywhere near the economy. In agriculture we are brilliant, now the biggest citrus exporter in the world, and we could do so much more. The state sits, meanwhile, on 2.5-million hectares of farmland bought from whites and does nothing with it.
But if you planted fruit on those farms you could almost double the amount of fruit we produce and could export. The state should simply give the land away, freehold. People would farm it or sell it; it doesn’t matter. But you take a million people out of poverty that way and at the same time ignite an infrastructure boom in exactly the industrial goods we already make — pipes, valves and pumps.
Reindustrialisation is a pipe dream here, but even as the state tries and inevitably fails again, our natural endowments lie fallow and untended. And fine speeches don’t put food on the table.
