The revival and expansion of the manufacturing sector could play a critical role in South Africa’s challenging battle against deepening levels of inequality.

High levels of manufacturing value add (MVA) can unlock opportunities for employment and greater equality in a country that suffers high unemployment levels, a rapidly reducing MVA at 13.4% of gross domestic product (GDP), and one of the highest Gini coefficients in the world.

“We need to arrest the erosion of our position,” said Deloitte Africa emerging markets and Africa MD Dr Martyn Davies at the Southern African Metals and Engineering Indaba on Thursday, noting the global average of MVA of about 18% of GDP and South Africa’s position two decades ago, with an MVA at over 20% of GDP.

There was no comparative industry that could generate and support extensive intellectual property, require a greater demand for services or best absorb the unemployed like a thriving manufacturing sector, he said on the first day of the two-day conference held in Sandton.

“The more manufacturing you have in your country, the more equality,” he said, adding moreover that much-coveted industrialisation supported democratisation.

However, South Africa, and Africa, is still stuck in the "industrialisation aspiration 1.0", with the rest of the world having its sights set on industrialisation 4.0, and the region remains a price-taker on the back of a lack of beneficiation and value add.

Further, South Africa is not so much an aspiring industrialising economy as an aspirant reindustrialising one, having lost its industrial edge some years ago.

An overreliance on the resources industry persisted and it was failing to bolster competitiveness and productivity – the two critical elements left out of the National Development Plan (NDP), Davies noted – without which no industry or company will survive.

“Why are these not the core components of the NDP?” he questioned.

Manufacturing, Engineering and Related Services Sector Education and Training Authority CEO Dr Raymond Patel questioned what the missing link in South Africa’s uncompetitiveness was, noting that South Africa’s GDP was largely resources and agriculture-based, with very little beneficiation.

“We will constantly rely on imports, instead of beneficiating,” he said, referring to South Africa’s tendency to “stick to the same things” in relatively undiversified economies.

The country’s productivity capacity was very low, with policy cooperation between the Southern African Development Community countries mostly just “lip service” bogged down in bureaucracy, making it likely that South Africa would remain plagued by a skills shortage exacerbated by outdated technologies and old curriculums unless urgent action was taken.