Building local industrial capacity for the South African market has become a priority for the Department of Trade Industry and Competition, and highlights a growing need for organisations to promote localisation within the manufacturing sector.This is a key step towards reducing unemployment, improving skills development, and enhancing local demand through high-quality services and solutions. In addition, it serves up local ingenuity and solutions to the global market as local capacity equals growth for export markets and encourages a move away from exclusive provision of raw materials. The government has had this focus in place for nearly 10 years and has, in that time, seen the development of solutions for the local market – the government has purchased 27 of these products and continues to drive this narrative in 2023. And it is an important narrative, particularly in light of the slow growth in the manufacturing sector which decreased by 2.3% in May 2022 as compared with the same time in 2021, and by 4.7% in December 2022 as compared with December 2021. These figures highlight a sector in distress, one that requires consistent investment and strategic support in order to ensure that it sees measurable growth in 2023. According to the President, localisation is a key part of economic reconstruction and recovery. This is echoed by the World Bank which pointed out that export-oriented industrialisation has failed to deliver on its economic and unemployment promise. In addition, the organisation underscored the value of driving structural transformation through the combination of localised policy development that aligns local challenges and complexities with global market demand. Ongoing global supply chain disruptions are affecting service delivery in South Africa, and actually highlight the need for the manufacturing sector to invest into localised products and services to bypass these limitations.
In addition, localisation has the potential to help the sector, and the country as a whole, overcome challenges around energy, sustainability, expansion and security.To aid this shift, the financial sector needs to provide critical advisory and support to the manufacturing sector to assist in building the industrial capacity required for a comprehensive localisation strategy. The past few years have been complex and even though South African businesses are resilient and have learned to be productive in spite of this complexity, they require robust financial support to ensure that they continue to gain moment in 2023. Says Nedbank’s National Manager Manufacturing, Amith Singh, “Nedbank has a clearly defined commitment to the manufacturing sector and in creating solutions that align with their unique needs and expectations. We know that there is no such thing as a one-size-fits-all approach with our clients and that it is important to understand the market they operate in, their off-takers, their trade partners and then provide services that sit firmly at the table with them.” Providing a strategic advisory and rich understanding ensures that Nedbank can guide manufacturers successfully down the road to localisation and help them to capitalise on its potential and the resultant growth. Concludes Singh As a result, Nedbank has developed agile funding systems and solutions that are easily tailored to what the manufacturing sector requires, offering multiple ways of looking at investment and solution development that will ignite growth and transform localisation.