Business Leadership South Africa (BLSA) CEO Busi Mavuso says in her latest weekly newsletter that the biggest omission in President Cyril Ramaphosa’s February 12 State of the Nation Address (SoNA) is a plan to deal with the rapid deindustrialisation South Africa is facing.

She calls for a decisive response to the destruction of manufacturing capacity that took decades to build and remains key to employment creation.

“The scale of this crisis is stark. In the automotive sector, tyre manufacturer Bridgestone closed its Port Elizabeth plant in 2020, and Goodyear announced the closure of its Kariega tyre plant last year. Component manufacturers producing safety belts, airbags and other critical parts have scaled back or closed,” Mavuso points out.

She references data by industry body the National Association of Automotive Component and Allied Manufacturers in saying that 13 closures have occurred in the past two years, with more expected.  

Moreover, automaker Nissan is selling its Rosslyn plant while Volkswagen has warned of uncertainty over jobs at its Kariega facility.

Beyond the automotive sector, British American Tobacco South Africa announced the closure of its Heidelberg plant by the end of this year, following the destruction of the legitimate market by illicit cigarettes.

Mavuso determines the common thread as being competition from low-cost imports, including from China, that undercut local manufacturers. Chinese vehicle models alone now account for 22% of imports. “Yet, the SoNA offered no plan to address this.”

BLSA urges government to act with urgency in finalising a new energy vehicle policy that enables manufacturers to transition to electric and hybrid production for export markets.

The organisation also recommends deploying anti-dumping measures where imports, some argue, are being sold below cost.

Mavuso suggests that government should review tariff structures to protect local manufacturing while avoiding damage to local assemblers.

She also emphasises the need to intensify enforcement against illicit trade that is destroying legitimate businesses.

“We cannot afford to wait for more factory closures to force action. That day is coming if government doesn't work with industry right now.

“The President did briefly reference strengthening capacity for trade negotiations and expanding missions abroad to drive economic policy. This is necessary, but let's be clear about the challenge: South Africa maintains an extensive diplomatic network – one of the largest for a country our size – but the problem is effectiveness, not scale,” Mavuso says.

According to her, too many ambassadorial posts have been treated as rewards for loyal or difficult cadres rather than positions requiring serious economic and trade expertise.

Mavuso adds that many missions in substantial economies have been left without ambassadors or high commissioners for extended periods. She believes being South Africa's chief representative in a country must carry the weight it deserves.

Moreover, BLSA says a serious professionalisation effort is needed.

South Africa’s diplomats must be equipped to advance South Africa's economic interests, identify market opportunities and negotiate agreements that serve the country’s industrialisation agenda.

“This requires a partnership with business. BLSA stands ready to help identify priority markets, connect South African exporters with potential customers and provide input on trade negotiations. We've seen in countries like Vietnam and South Korea how business-government collaboration on trade delivers results,” Mavuso asserts.

Mavuso adds that international economic relations have never been as important as they are now.

“With the US disrupting established trading relationships, South Africa must diversify export markets and build partnerships on our own terms. Every trade agreement must be evaluated against clear criteria: does it support industrialisation? Does it create quality employment? Does it build export capacity?”

Our manufacturing industries must be on a path to becoming globally competitive champions through export-led growth, not permanently sheltered from competition, she notes, adding that international agreements must be laser-focused on what matters – the economy and the jobs these can create and support.

Mavuso stresses that the urgency applied to deliver electricity reform must be shown in assisting the manufacturing sector.

“The electricity reform clarity shows what a focused government-business partnership achieves when both sides commit to solving problems. We resolved policy confusion in weeks through direct engagement.”

For context, the SoNA clarified that the independent Transmission System Operator (TSO) will own and operate transmission assets and run the electricity market and not Eskom, despite Electricity and Energy Minister Kgosientsho Ramokgopa having proposed in December that the transmission assets remain with Eskom rather than transferring these to the TSO.

The President also committed to establishing a dedicated task team to manage the complex transition of these assets to ensure there are no missteps.

Meanwhile, the automotive crisis, the illicit economy destroying legitimate businesses and the need for effective trade diplomacy all demand immediate action.

Mavuso concludes that the SoNA delivered progress on electricity, but now a matching commitment to protect and build industrial capacity is necessary. “Without manufacturing, we cannot achieve the employment-creating growth South Africa desperately needs.”