WATCH: Why imports don’t explain our decline

South Africa’s manufacturing industry is struggling because of broken infrastructure, Donald Mckay tells Peter Bruce

1 min read
The DA says residents queue at water tankers while money that should have been directed to repairing broken infrastructure was moved to cater for 'general financial obligations'. Stock photo.
The DA says residents queue at water tankers while money that should have been directed to repairing broken infrastructure was moved to cater for 'general financial obligations'. Stock photo. The DA says residents queue at water tankers while money that should have been directed to repairing broken infrastructure was moved to cater for 'general financial obligations'. Stock photo.Picture: 123rf/CHAYATORN LAORATTANAVECH

One of the best industrial minds in South Africa, XA Global Trade Advisors MD Donald Mackay, tells Peter Bruce in this edition of Podcasts from the Edge that using import tariffs to protect local industry is a losing strategy. “We assume that the reason our manufacturing sector more broadly struggles to compete is that we assume that an import tariff will fix it, whereas the reason we struggle to make things is that we’ve got broken infrastructure. We don’t have electricity ... the ports are broken.

“The reason we’re not competitive has nothing to do with what other people are doing. Many of our imports are just the importation of [other countries’] electricity that is working consistently and functioning infrastructure and a safe environment to invest in. That is what you’re effectively importing.”