The SA economy is set to grow in 2021. A bit. Recently, Rand Merchant Bank forecast a GDP growth rate of 3.3% for 2021, not enough to compensate for the catastrophic 7% fall that occurred in Covid-ravaged 2020.
A global analysis of incentives by monitoring group Wavteq shows that in the whole of North America in 2019 the value of incentives reached $7.4bn in programmes for manufacturing, especially for hi-tech, biotechnology and clean technology. The US film industry alone got $1bn in 2019. There was not much stimulation in Mboweni’s latest budget, though there was a welcome commitment to lower corporation tax. Unfortunately, this is something that will be of more benefit to established businesses than to the small business sector, from which almost all of the green shoots of economic growth are likely to emerge.
We may be, for instance with research & development . We talk about the fourth industrial revolution, and we want SA manufacturing companies to play in the global market, but our investment in R&D is not supportive of that.
However, with such tight control on spending, how do we ensure we don’t put what limited state support there is into the wrong areas? How do you select those industries that merit support and have a future? How do you prioritise? Meanwhile, it becomes increasingly hard to create manufacturing jobs as many modern industries become less labour intensive. This is why much of the automotive master plan emphasises supplier development, as smaller businesses are the ones that are best at job creation.
Must, should, could, would....