CAPE TOWN, South African Trade and Industry Minister Rob Davies says there is a need to restructure the economy in order to ensure inclusive growth.
He also said the manufacturing sector, which has been faced with several challenges globally, has shown signs of being a creator of jobs through its linkages with several service sectors.
The Minister said this when he met journalists here Tuesday after briefing the Parliamentary Committee on Trade and Industry on the state of manufacturing in the country, the Industrial Policy Action Plan (IPAP) and the World Trade Organization.
The discussion that we had [when presenting to Parliament] we reiterated that the term 'radical economic transformation' means we have to bring about changes in the structural characteristics of our economy as well as in the patterns of ownership," Davies said.
We will not be able to achieve higher levels of inclusive economic growth unless we move away from where we are, where colonialism left us as producers and exporters of primary commodities.
The Minister said despite several technological advances having taken place, including in the area of food technologies, the manufacturing sector had remained buoyant and had been able to continue to sustain jobs through linkages to other services sectors.
Where worldwide we are seeing that manufacturing is not creating as many jobs as it used to create, it has very strong linkages to service sectors and multiplies through service sectors which means that manufacturing is critical and that linkage is critical to ensure that there are more jobs in an economy.
In the presentation to the committee, Members of Parliament were told that the manufacturing sector had the highest economic multipliers because of its value addition, linkages to the upstream production sectors of the economy, like mining and agriculture, as well as downstream services.
The sector continues to contribute directly to the Gross Domestic Product, employment, exports and human capital development.
The Minister said, meanwhile, that work was being done in several sectors, especially among manufacturers, to bolster investor confidence. In several meetings held with investors, he has tried to persuade them that despite the lower than desirable economic growth, there is value to be added to the economy.
He also said that while the country was faced with a low level of investor confidence, the Industrial Action Policy Plan speaks directly to challenges that are seen as obstacles for investors through the actions that are envisaged in the Nine-Point Plan.
What we do is to try and convince those investors that one, there is value to be added to this economy. Two, holding back and waiting for miracles is not necessarily solving the problems, he said.
He said the department has also assured investors that there will be meaningful support to assist investors to roll-out their investment.
Source: NAM NEWS NETWORK