ActionSA called on the coalition government to prioritise genuine economic reform when Finance Minister Enoch Godongwana tabled what the party described as “Budget 3.0” on May 21.
In a statement released on Sunday, ActionSA Member of Parliament Alan Beesley emphasised the critical state of South Africa’s manufacturing sector and the urgent need for decisive action.
“After over a decade of [African National Congress] ANC-driven policy failure, South Africa’s manufacturing industry is bleeding,” Beesley said.
“Unless bold steps are taken, the Minister might as well include an annexure to his Budget Speech listing the companies likely to follow ArcelorMittal in closing their operations and shedding thousands more jobs.”
Godongwana is expected to re-table the 2025 Budget Review on 21 May, following the announcement by the National Treasury that it has withdrawn the proposed 0.5% Value-Added Tax (VAT) increase, which was scheduled to be implemented on May 1, 2025.
He said the latest insights from the Absa Purchasing Managers’ Index (PMI), released last week by the Bureau for Economic Research, paint a grim picture.
The index fell to 44.7 in April, marking the sixth consecutive month of contraction and indicating continued economic decline.
“More troubling is the sub-index tracking expected business conditions over the next six months, which plummeted by 9.4 points to 48.6, falling below the neutral 50-point threshold for the first time since November 2023,” Beesley said.
“Respondents cite global uncertainty, political instability within the coalition government, and ongoing political grandstanding as major factors fuelling pessimism in the sector.”
He criticised the Government of National Unity (GNU), arguing that almost a year into the arrangement, South Africa’s economy remains stagnant, with growth under 1%, unemployment at record highs, and critical infrastructure in disrepair.
Beesley expressed concern that if “Budget 3.0” asks ordinary South Africans to shoulder higher personal income taxes to fund a government plagued by inefficiency and corruption, it would be a “slap in the face” for working families and struggling businesses.
“The manufacturing sector, vital for employment and economic growth, is in crisis. According to recent reports from Business Day, the industry has seen negligible growth since 2010, a mere 1%, or roughly 0.07% annually,” Beesley said.
“In a middle-income country like South Africa, industrial production should be a key driver of economic development.
“Instead, manufacturers are battling persistent economic weakness, crumbling logistics and energy infrastructure, and unfair competition from low-cost imports.”
He stated that these issues are symptomatic of the government’s failure to address fundamental institutional problems that choke the economy.
In response, ActionSA proposed a comprehensive overhaul of industrial policy.
“This includes prioritising key industries like steel, fixing freight and electricity infrastructure, building a truly business-friendly regulatory environment, and establishing a high-level public-private Industrial Council to support domestic manufacturing and reduce reliance on imports,” Beesley said.
The party noted that while it is not part of the coalition government, it remains committed to pushing for these vital reforms.
“As a rational and constructive opposition, we will continue to advocate for policies that protect South Africans from further tax hikes, restore fiscal integrity by closing corruption loopholes, and lay the groundwork for genuine economic recovery,” Beesley said.
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