Reindustrialisation and renewed manufacturing capacity — with more job opportunities — will occur much faster in an economic context of reliable, cheap electricity supply, lower taxes and less red tape, and secure property rights. Absent those ingredients, no number of localisation plans will achieve sustainable, long-term economic growth.
Instead of new initiatives and yet more interventions in the economy, government should rather focus all resources and energy on removing as many barriers to economic activity as possible. Freer trade is strongly correlated with higher GDP, but also with concrete improvements in most people’s quality of life. At the very least, when tariffs are lower citizens have easier access to cheaper goods and services, which in turn allows them to have extra income that they can spend on other priorities.
The very spirit of the newly adopted Africa Continental Free-trade Area is focused on making trade between countries easier and ensuring that goods and services can flow better. SA’s localisation plans stand to make the area itself, as well as its intended goals, pointless in practice. Localisation plans could well result in short-term job creation for those businesses and sectors deemed worthy of government support.