OPENING ADDRESS OF THE EMPOWERED ENGINEERING & MANUFACTURING INITIATIVE
By Kaizer M. Nyatsumba, Chief Executive Officer, SEIFSA
Date: Wednesday, 20 September 2017
Thank you very much, Programme Director, for that introduction.
Greetings, Ladies and Gentlemen – and welcome to the launch of the Empowered Engineering & Manufacturing Initiative, brought to you by Smart Procurement World in Partnership with the Steel and Engineering Industries Federation of Southern Africa (SEIFSA). It is so good to see so many of you attending this important event, and I am pleased to acknowledge each one of you, from those representing different arms of government, through to industry players and other stakeholders. I am glad you could make it.
When we were approached by Smart Procurement World to be an anchor partner for the Empowered Engineering & Manufacturing Initiative, we agreed readily not only because we are the authoritative body representing employers in the sectors covered by this conference, but, more importantly, because we share its vision and philosophy. The Federation that I represent is 74 years old this year, and it is an enthusiastic supporter of business transformation in general and of small business as significant players in our economy and as job creators.
Our philosophy is simple: we believe fervently that our beautiful country, South Africa, will not realize its full potential unless all relevant stakeholders – but especially the democratically-elected Government, business and labour – work together cooperatively and collaboratively as partners. We believe very firmly that all of us need to work much, much closely together than we have done hitherto if South Africa is to prosper economically and reclaim its place as the biggest economy on this continent.
As you may know, SEIFSA represents all sizes of companies in the metals and engineering sector, ranging from the largest, listed multi-nationals through to the smallest which employ no more than a handful of individuals. Only yesterday, a company that employs four people took membership of one of our member Associations and became part of SEIFSA. In fact, the vast majority of the companies that are members of our affiliated Associations are small in size: at least 66% of them employ no more than 50 people.
Therefore, partnering with Smart Procurement World on the Empowered Engineering & Manufacturing Initiative was the most logical thing for us to do. The purpose of this Initiative is very much consistent with that of our Small Business Hub, which renders expert services to SMMEs at a more discounted fee than normal and offers a service to large companies that sees us project managing their Enterprise and Supplier Development Programmes for them for a fee so that they can improve their Broad-Based BEE scores.
I am pleased to see that many of our member companies are present here today, including on the programme. We stand ready to partner with them – and all of you – in our efforts to encourage more established, big business to embrace and support smaller enterprises. We also encourage them not only to embrace transformation, but also to champion it in all its forms, including through developing and mentoring SMMEs and giving them greater access to their various domestic and international supply chains.
As you may recall, former US President John F Kennedy once said: "For of those to whom much is given, much is required", paraphrasing, of course, Luke 12:48, which was his inspiration and reads as follows: "For unto whomsoever much is given, of him shall be much required."
Engineering and Manufacturing are very important parts of the economy of any advanced country. No country that is lagging behind in either can ever be said to be developed. Therefore, it is crucially important that South Africa continues to make strides in Engineering and that it performs much better in Manufacturing than it is doing at the moment. For that to happen, the Government would have to do much more to create a climate conducive to domestic and foreign direct investment in the country and, thus emboldened, local companies would have to make the necessary investments in cutting-edge technology as well as in research and development.
Unfortunately, manufacturing in South Africa has been under considerable pressure for many years now. Its contribution to the GDP has declined from around 20% over the past three decades to 13% - and it looks set to continue to decline. This is most regrettable, especially when one considers manufacturing’s enormous job creation potential and its positive contribution to the balance of payments as a foreign exchange earner.
At the Southern African Metals and Engineering Indaba in Sandton last week, Economic Development Minister Ebrahim Patel catalogued various Government initiatives to support manufacturing in general and the metals and engineering sector in particular. These include such commendable interventions like the Manufacturing Competitiveness Enhancement Programme and designation of locally-manufactured products.
Like many others, we welcome these Government interventions, but we believe that more still needs to be done. We also contend that more should be done to ensure that, once certain products have been designated, effective monitoring of compliance by all Government departments and State-owned companies takes place, with drastic punitive measures taken against those who fail to comply.
Similarly, we believe that everything possible should be done to end this terrible practice by some Chinese companies investing in or winning local tenders bringing not only employees from China, but also the materials used for those capital projects.
As you know, Ladies and Gentlemen, we read with monotonous regularity each day about various scandals and forms of corruption wrecking our beautiful country. Given that unfortunate reality, it is tempting – if not easy – for some among us to throw our hands in the air and despair. I would like to suggest that we are not as powerless as some politicians may believe us to be. As individual men and women, as business and labour leaders and as organized business, we are far more powerful than we sometimes believe ourselves to be.
That is why, as I said when we signed the 2017-2020 Wage Agreement in the metals and engineering sector on 23 August, we at SEIFSA recommit ourselves to working closely with our labour partners to lobby the Government for policies that will enable business to thrive in order to create jobs and to make the country an attractive investment destination.
Like everybody else, we are deeply troubled by the way in which our beautiful country is currently misgoverned and by the corruption which has become so endemic. We support calls for President Jacob Zuma to move swiftly to establish a commission of enquiry into the rampant State capture allegations, and we call on everybody in Government to offer ethical leadership and to ensure greater policy coordination within their ranks in order to eliminate the embarrassing situation which often sees Cabinet Ministers publicly championing often contradictory, sometimes market unfriendly policies.
In our humble view, South Africa desperately needs much better leadership from our political leaders than it is receiving at the moment, and a strong partnership involving the Government, business and labour if it is to realize its full potential. We at SEIFSA stand ready to play our part, however, small.
Ladies and Gentlemen, I wish you well with your Empowered Engineering & Manufacturing Initiative conference. I would like to encourage you to engage robustly with one another in order to ensure that this day is put to good use.
Thank you very much.
SEIFSA WELCOMES GOVERNMENT INTERVENTIONS IN MANUFACTURING AND CALLS FOR STRICT ENFORCEMENT OF DESIGNATION
Johannesburg, 20 September 2017 - The Steel and Engineering Industries Federation of Southern Africa (SEIFSA) has thrown its weight behind the Empowered Engineering and Manufacturing Initiative.
SEIFSA has partnered with Smart Procurement World to launch the initiative which is aimed at driving economic transformation and industrial progress in engineering and manufacturing.
Delivering a keynote address at the 11th Smart Procurement World Indaba at the Gallagher Convention Centre in Midrand today, SEIFSA CEO Kaizer Nyatsumba said partnering with Smart Procurement World was logical.
"The purpose of this Initiative is very much consistent with that of our Small Business Hub, which renders expert services to SMMEs at a more discounted fee than normal and offers a service to large companies that sees us project managing their Enterprise and Supplier Development Programmes for them for a fee so that they can improve their Broad-Based BEE scores," Mr Nyatsumba said.
He said the initiative was in line with the organisation's vision and philosophy. The Federation, which is 74 years old this year, supports business transformation in general and considers small business as significant players in the South African economy and as job creators, he said.
"Our philosophy is simple: we believe fervently that our beautiful country, South Africa, will not realize its full potential unless all relevant stakeholders - but especially the democratically-elected Government, business and labour - work together cooperatively and collaboratively as partners. We believe very firmly that all of us need to work much, much closely together than we have done hitherto if South Africa is to prosper economically and reclaim its place as the biggest economy on this continent," Mr Nyatsumba said.
SEIFSA represents all sizes of companies in the metals and engineering sector, ranging from the largest, listed multi-nationals through to the smallest which employ no more than a handful of individuals. The vast majority of the companies that are members of the Federation's affiliated Associations are small in size: at least 66% of them employ no more than 50 people.
Mr Nyatsumba highlighted the significance of engineering and manufacturing, saying no country lagging behind in either could develop.
"Therefore, it is crucially important that South Africa continues to make strides in engineering and that it performs much better in manufacturing than it is doing at the moment. For that to happen, the Government would have to do much more to create a climate conducive to domestic and foreign direct investment in the country and, thus emboldened, local companies would have to make the necessary investments in cutting-edge technology as well as in research and development," he added.
Unfortunately, manufacturing in South Africa has been under considerable pressure for many years now. Its contribution to the GDP has declined from around 20% over the past three decades to 13% - and it looks set to continue to decline. He said that was regrettable, given manufacturing's enormous job creation potential and its positive contribution to the balance of payments as a foreign exchange earner.
"At the Southern African Metals and Engineering Indaba in Sandton last week, Economic Development Minister Ebrahim Patel catalogued various Government initiatives to support manufacturing in general and the metals and engineering sector in particular. These include such commendable interventions like the Manufacturing Competitiveness Enhancement Programme and designation of locally-manufactured products," he said.
Mr Nyatsumba said that more needed to be done to ensure that, once locally-manufactured products are designated, effective monitoring of compliance by all Government departments and State-owned companies takes place, "with drastic punitive measures taken against those who fail to comply".
He said that it was important that the Government does everything possible to end "this terrible practice by some Chinese companies investing in or winning local tenders of bringing not only employees, but also the materials used for those capital projects," from China.
Issued by:
Siseko Njobeni
Communications Manager
Tel: (011) 298 9411 and 082 602 1725
Email: siseko@seifsa.co.za
Web: www.seifsa.co.za
INVESTIGATE STATE CAPTURE URGENTLY, SAYS ANC’S MKHIZE
Johannesburg, 14 September 2017 – The judicial commission of inquiry into allegations of state capture should be set up without delay, African National Congress (ANC) Treasurer-General Dr Zweli Mkhize told delegates at the 3rdSouthern African Metals and Engineering Indaba in Sandton today.
Delivering an Opening Address at the two-day conference, Dr Mkhize said: “There are concerns around issues of clean governance and the fight against corruption. In this case, we must always state our commitment to deal with those issues and accept that, where there is criticism in that front, it is not necessarily misplaced,” Dr Mkhize said.
He said there were various allegations that the government and the ANC were soft on corruption. “Of late, looming large has been the issue of state capture. This terminology came from the ruling party. An attempt initially by the ANC to investigate this quickly proved that this issue is too large for the ANC to investigate. It was quickly abandoned. We agreed that it needed to be taken up by various institutions with the necessary capability and resources,” he said.
Dr Mkhize said, as far as the ANC was concerned, there was a need for a judicial commission of inquiry. He said the commission should be set up expeditiously andacknowledged the delay in the finalisation of the Commission’s terms of reference. He said the commission was an opportunity to deal with all the allegations of state capture, saying such an investigation should be open to public scrutiny. Dr Mkhizesaid statements and allegations against the Gupta family and the recent emails with alleged details of the family’s improper business dealings needed to be investigated properly “so that we do not have to contend with the speculation about the veracity or lack thereof of such emails.”
In his address, Dr Mkhize also commented on the upcoming ANC national conference in December. He said the ANC acknowledged its weaknesses. These, he said, included divisions within the party, factionalism, and the manipulation of the organisation’s structures. “It is not what happens within the party that becomes a challenge. It is when the issues inside the party spill over into the instruments of governance,” he added.
Meanwhile, in his address at the conference, Minister of Economic Development Ebrahim Patel highlighted the need for a new national deal with four components – a credible growth story that places emphasis on sectors with high growth potential,integrity in governance and decision making, transformation and prudent fiscal management that inspires confidence.
Mr Patel told the conference of the various steps government had taken to support the metals and engineering sector. These included industrial funding, local procurement, beneficiation and actions against cartels, transformation and collusion as well as connecting people with opportunities.
ENDS
Issued by:
Siseko Njobeni
Communications Manager
Tel: (011) 298 9411 and 082 602 1725
Email: siseko@seifsa.co.za
Web: www.seifsa.co.za
SOCIAL PARTNERS MUST UNITE AGAINST CORRUPTION AND STATE CAPTURE
Johannesburg, 14 September 2017 – Business, labour and other social partners should work together to punish those involved in corruption and state capture, Mapungubwe Institute for Strategy Reflection (MISTRA) CEO Joel Netshitenzhe said today.
Netshitenzhe was among a list of high-profile speakers at the two-day 3rd Southern African Metals and Engineering Indaba which is currently underway at the Industrial Development Corporation (IDC) conference centre in Sandton.
Addressing the delegates, Mr Netshitenzhe said: “If you looked at the National Industrial Policy Framework, the Industrial Policy Action Plan and the outcome of the recent ANC policy conference, you will find that there are very rational ideas about how to ignite growth, how to eliminate weaknesses in state-owned enterprises, how to ensure close cooperation among social partners and how to punish those who are involved in corruption and state capture. In the South African context, there is no shortage of visions, policies and rational articulation on what needs to be done. The challenge is with implementation.”
Mr Netshitenzhe said there were numerous deficits in political leadership in South Africa and across the region and this applied to state capacity and political legitimacy.
“We need to pose the question – in instances where the state is weak, where government has got serious deficits, what should business, labour and other social partners do? It would be wrong in my view of us to throw our hands up in despair. Rather we need to soldier on and pursue what is in the best interest of our companies, sectors and the economy as a whole. By doing so, we will be strengthening the healthy forces in government and making life difficult and uncomfortable for those who are bent on illicit accumulation. South Africa is fortunate because we have got a noisy civil society and an independent and autonomous private sector,” he said.
In her address to the conference, ANC Member of Parliament Dr Makhosi Khoza called for a brutally honest engagement about the problems facing South Africa especially with regard to the restoration of human dignity and unemployment in South Africa. Khoza said the extent to which local industries were protected and the content of trade agreements depended to a large extent on political leadership.
“Political leadership matters because behind the unemployment statistics are people. There is no way our people can have their restored for as long as long as they are unemployed. There is no dignity in unemployment,” Dr Khoza said. She said the country’s political leadership was indifferent about the plight of the unemployed.
She said South Africa should go back to some of the trade agreements and ponder if these were in the interest of South Africans. “Are they serving the interest of our people?” she said.
Commenting on the influx of cheap imports mainly from China, Dr Khoza said local entrepreneurs felt let down by authorities. “We do not seem to understand the extent of the impact of the Chinese imports,” she said.
Speakers in the first day of the conference included independent director of companies Dr Mamphela Ramphele, Manufacturing, Engineering and Related Services Sector Education and Training Authority (merSETA) CEO Dr Raymond Patel, Manufacturing Circle CEO Philippa Rodseth and Aurik Business Accelerator CEO Pavlo Phitidis.
ENDS
Issued by:
Siseko Njobeni
Communications Manager
Tel: (011) 298 9411 and 082 602 1725
Email: siseko@seifsa.co.za
Web: www.seifsa.co.za
AUTOMOTIVE PLAYERS LAUD APDP AT INDABA
Johannesburg, 14 September 2017 – Major players in the South African automotive industry today lauded the success of the Automotive Production and Development Programme (APDP), saying it had contributed to the resilience of the sector.
Speaking at the 3rd Southern African Metals and Engineering Indaba in Sandton, Renai Moothilal of the National Association of Automotive Components and Allied Manufacturers said the APDP was a success despite difficult global economic conditions. “The APDP stabilised production that could have gone significantly south if there was not that kind of support,” Mr Moothilal said.
He said the programme was designed in 2007/08 when there was a view that automotive production in South Africa could grow to 1.2 million. “It did not turn out that way. We all understand what happened in the global economy,” he said, referring to the global economic crisis.
Speaking during a session on the APDP at the two-day conference, National Association of Automobile Manufacturers of South Africa (Naamsa) Director Nico Vermeulen said the automotive industry had grown significantly since 2000. He said the industry represented one third of all manufacturing in South Africa. “The industry is heading for a million vehicles produced in this country, the bulk of which will be exported, within the next four to five years.
“The important point is, as the automotive production expands and as exports expand, the metal and engineering sector will benefit. As localisation deepens, the metal and engineering industry will benefit,” Mr Vermeulen said.
He said the automotive industry was fortunate that government had provided support and policy certainty, enabling multinational companies to make significant investments. He, however, highlighted the importance of labour stability for the industry to reach the one million units mark.
Mr Vermeulen was also optimistic about prospects of exports to the rest of Africa. Most African countries were reeling from the effects of the low oil price and poor policy choices. “That will change. Africa will offer opportunities going forward,” he said.
Speakers in the first day of the conference included ANC Treasurer-General Dr Zweli Mkhize, Minister of Economic Development Ebrahim Patel, ANC Member of Parliament Dr Makhosi Khoza, independent director of companies Dr Mamphela Ramphele, Manufacturing, Engineering and Related Services Sector Education and Training Authority (merSETA) CEO Dr Raymond Patel, Manufacturing Circle CEO Philippa Rodseth and Aurik Business Accelerator CEO Pavlo Phitidis.
ENDS
Issued by:
Siseko Njobeni
Communications Manager
Tel: (011) 298 9411 and 082 602 1725
Email: siseko@seifsa.co.za
Web: www.seifsa.co.za
MEDIA INVITATION - 7 SEPTEMBER 2017
HIGH-PROFILE SPEAKERS FOR THE 3rd SOUTHERN AFRICAN METALS AND ENGINEERING INDABA
DATE: 14-15 SEPTEMBER 2017
VENUE: The Industrial Development Corporation (IDC) Conference Centre, 19 Friedman Road, Sandton
TIME: 07:00
The two-day Southern African Metals and Engineering Indaba kicks off at the IDC Conference Centre, Sandton on Thursday next week (14 September).
The Indaba is a platform to address challenges currently facing the manufacturing sector in general and the metals and engineering sector in particular. It features high-profile speakers and panelists such as:
- ANC MP Dr Makhosi Khoza;
- Deloitte Emerging Markets and Africa MD Dr Martyn Davies;
- Business Leadership SA CEO Bonang Mohale;
- Small Business Development Minister Lindiwe Zulu;
- Labour Minister Mildred Oliphant;
- NUMSA General Secretary Irvin Jim;
- COSATU General Secretary Bheki Ntshalintshali;
- Turbo Voith MD Charl Folscher; and
- Business Leadership SA CEO Tanya Cohen.
ANC Treasurer Dr Zweli Mkhize will deliver the Opening Address and Former African Union Chairperson Dr Nkosazana Dlamini-Zuma will deliver the Closing Address.
Challenges facing the sector include unfair competition from highly-subsidized countries, weak exports and job losses.
You are invited to attend and cover the conference and the various plenary sessions (See attached programme).
Enquiries
Siseko Njobeni
Communications Manager
Tel: (011) 298 9411 and 082 602 1725
Email: siseko@seifsa.co.za
Web: www.seifsa.co.za
SEIFSA LAUDS SUPPORT FOR MOTOR SECTOR
Johannesburg, 7 September 2017 – The Automotive Production and Development Programme’s (APDP’s) impact on demand for South Africa’s metals and engineering sector will come under the spotlight in next week’s 3rd Southern African Metals and Engineering Indaba.
The APDP, a government programme to support and stimulate the growth of the South African automotive industry, came into effect in January 2013 following the end of the Motor Industry Development Programme (MIDP). The programme sets a vision for the local automotive sector until 2020.
Speaking ahead of the annual Indaba, Steel and Engineering Industries Federation of Southern Africa (SEIFSA) CEO Kaizer Nyatsumba said today that there were strong linkages between the automotive sector and the metals and engineering sector.
“Like most sectors in the South African economy, the automotive sector has been hit by low economic growth as well as weak consumer and business confidence. These factors continue to weigh heavily on the prospects of the automotive sector.
“We, therefore, support the Government’s efforts to enhance global competitiveness, growth and development of the automotive sector. We believe that ensuring the sustainability of job-creating sectors is a priority, given the unacceptably high unemployment levels. This is more pertinent in the current low-growth environment,” Mr Nyatsumba said.
The automotive sector is the largest manufacturing sector in South Africa. According to the Automotive Export Manual 2017, vehicle and components production accounted for 33% of South Africa’s total manufacturing output in 2016.
“From these statistics alone, it is clear that the automotive industry is fundamentally critical to South Africa’s growth and development agenda,” Mr Nyatsumba said.
The Metals and Engineering Indaba has an excellent line-up of speakers. They include ANC Treasurer-General Dr Zweli Mkhize and ANC National Executive Committee (NEC) member and former African Union Chairperson Dr Nkosazana Dlamini-Zuma, who will deliver the Opening and Closing addresses, respectively.
Speakers at the session on the APDP are National Association of Automobile Manufacturers of South Africa Director Nico Vermeulen, Renai Moothilal of the National Association of Automobile Components and Allied Manufacturers, SEIFSA Chief Economist Dr Michael Ade and Dineshan Moodley of the Automotive Industry Development Centre.
The Indaba will also feature sessions focusing on:
· Political Leadership in Southern Africa: Does it Advance or Hamper Economic Growth?
· The Continental Free Trade Area: A Reality Before The End of 2017?
· Winning Together: Can Government, Business and Labour Conclude a Social Compact in the interest of Labour Stability and Foreign Investment?
· Seven years of BRICS membership: Has South Africa benefitted commercially?
· The Future of Collective Bargaining
· Do Steel Import Tariffs Benefit or Hurt the South African Economy?
(The programme for the Metals and Engineering Indaba is attached)
ENDS
Issued by:
Siseko Njobeni
Communications Manager
Tel: (011) 298 9411 and 082 602 1725
Email: siseko@seifsa.co.za
Web: www.seifsa.co.za
SOUTH AFRICA NEEDS A SOCIAL COMPACT FOR STABILITY AND INVESTMENT
Johannesburg, 3 September 2017 – In the face of slow economic growth and rising unemployment, South Africa needs a social compact between the government, business and labour to foster labour market stability and foreign investment, Steel and Engineering Industries Federation of Southern Africa CEO Kaizer Nyatsumba said today.
Speaking ahead of this month’s Southern African Metals and Engineering Indaba, to be held at the IDC Conference Centre in Sandton on 14-15 September, Mr Nyatsumba emphasized the importance of a social dialogue on matters affecting the country’s social partners.
“The recent conclusion of the three-year wage settlement in the metals and engineering sector bears testimony to the commitment to collaborate and cooperate for social benefits. SEIFSA is delighted that the wage agreement was reached without an industrial action. Companies in this sector are taking strain from various factors, including the influx of cheap imports and soft demand for exports.
“There is no doubt that any form of industrial action would have brought the sector to its knees. With the negotiations behind us, we now look forward to further collaborations with government and labour to ensure the sector’s sustainability and global competitiveness. The cooperation which led to the successful conclusion of the negotiations sent the right signals because there is a correlation between labour stability and foreign investment,” Mr Nyatsumba said.
In its third year now, the Metals and Engineering Indaba has an excellent line-up of speakers. They include ANC Treasurer-General Dr Zweli Mkhize and ANC National Executive Committee (NEC) member and former African Union Chairperson Dr Nkosazana Dlamini-Zuma, who will deliver the Opening and Closing addresses, respectively.
In one of the sessions, delegates will grapple with the significance of a social compact in the quest for stability and investment. Speakers in that session are Minister of Labour Mildred Oliphant, Director at the Centre for the Study of Democracy at Rhodes University Steven Friedman, Southern African-German Chamber of Commerce and Industry CEO Matthias Boddenberg, Cosatu General Secretary Bheki Ntshalintshali, International Labour Organisation Director Dr Joni Musabayana and Business Unity South Africa (BUSA) CEO Tanya Cohen.
The 2017 Southern African Metals and Engineering Indaba will also feature sessions focusing on:
- Political Leadership in Southern Africa: Does it Advance or Hamper Economic Growth?
- The Continental Free Trade Area: A Reality Before The End of 2017?
- Winning Together: Can Government, Business and Labour Conclude a Social Compact in the interest of Labour Stability and Foreign Investment?
- The Automotive Production and Development Programme and the South African Metals and Engineering Sector
- The Future of Collective Bargaining
- Do Steel Import Tariffs Benefit or Hurt the South African Economy?
ENDS
Issued by:
Siseko Njobeni
Communications Manager
Tel: (011) 298 9411 and 082 602 1725
Email: siseko@seifsa.co.za
Web: www.seifsa.co.za
PPI BLOW FOR MANUFACTURERS
Johannesburg, 31 August 2017 – The 1.5% annual decrease in the Producer Price Index (PPI) for intermediate manufactured goods in July 2017 does not augur well for producers in an economy stuck in low growth and generally rising input costs, Steel and Engineering Industries Federation of Southern Africa (SEIFSA) Economist Marique Kruger said today.
This reflects a fifth consecutive year-on-year decrease, which is indicative of prolonged subdued domestic demand. From June 2017 to July 2017, the PPI for intermediate manufactured goods decreased by 0.9%.
Ms Kruger said the 1.5% decrease in the PPI for intermediate manufactured goods left no leeway for manufacturers to pass cost increases onto the market.
“On an annual basis, SEIFSA’s composite input cost index, which tracks the average costs structure for the metals and engineering (M&E) sector, recorded a -1% decrease in July 2017, largely due to a stronger rand which has helped mitigate costs. Although the index depicts a decreasing input costs scenario, the rate of decrease was better than the annual figure previously recorded (-4.1) in June 2017, despite the weak economy and additional costs incurred from the conclusion of a new wage deal by the metals and engineering sector,” she said.
“Even though currently the differential between the selling price and input cost remains positive, the gap is decreasing as the volatile rand and structural rigidities prevent local companies from benefiting from low international commodity prices,” she added.
Despite South Africa’s junk credit status, the rand has been stronger against most currencies over the past two months compared with a year ago, she said. Ms Kruger said the exchange rate effect on prices appears to be diminishing and that this would be beneficial for inflation, input costs and margins of companies in the sector.
Ms Kruger said she expected a positive trade balance for July 2017 on the back of a good month in June 2017.
“A positive trade balance augurs well for exports and generally provides clues on the health of the manufacturing sector. This, together with the anticipated increase in domestic demand from the current expansionary monetary policy stance, provides hope for a reversal in the fortunes of the M&E sector in particular.
“We are hopeful that the next release of the PPI for intermediate manufactured goods will be more encouraging, since the lag effects of increased domestic demand starts filtering through. We will continually monitor the trend,” Ms Kruger concluded.
ENDS
Issued by:
Siseko Njobeni
Communications Manager
Tel: (011) 298 9411 and 082 602 1725
Email: siseko@seifsa.co.za
Web: www.seifsa.co.za
CONTINENTAL FREE TRADE AREA TO BOOST INTRA-AFRICA TRADE
Johannesburg, 27 August 2017 – The creation of a single market for goods and services through the much-anticipated Continental Free Trade Area will create enormous opportunities for manufacturers in the continent, Steel and Engineering Industries Federation of Southern Africa (SEIFSA) CEO Kaizer Nyatsumba said today.
The 18th Ordinary Session of the Assembly of Heads of State and Government of the African Union (AU), held in Addis Ababa, Ethiopia in January 2012, adopted a decision to establish a Continental Free Trade Area (CFTA) by an indicative date of 2017. At the Summit, the AU also adopted the Action Plan on Boosting Intra-Africa Trade (BIAT) with seven clusters – trade policy, trade facilitation, productive capacity, trade related infrastructure, trade finance, trade information, and factor market integration.
Speaking ahead of the 3rd Southern African Metals and Engineering Indaba – to be held from 14 -15 September 2017 at the IDC Conference Centre in Sandton – Mr Nyatsumba said if African leaders were serious about trade and economic integration, they should act with speed in the implementation of the Continental Free Trade Area.
“The Continental Free Trade Area is an important step in the continent’s desired transition from reliance on exports of raw materials to manufactured products. The downturn in commodities has exposed the fragility of some of the African economies. The Free Trade Area is also critical for the rapid industrialization of the continent and Southern Africa, in particular.
“The agenda to advance Africa’s economic transformation through, among others, economic diversification, makes elimination of tariff and non-tariff barriers among African countries urgent. Therefore, the creation of a single and functional continental market for goods and services must be a priority,” Mr Nyatsumba said.
In one of the sessions, the 2017 Indaba will critically assess the progress that has been made in the implementation of the Continental Free Trade Area and the implications that it will have on manufacturing in Southern Africa. Speakers on this topic include Department of Trade and Industry Chief Director for Africa Multilateral Relations Mr Wamkele Mene, Africa House Director Duncan Bonnett and University of Stellenbosch Emeritus Professor Collin McCarthy.
Other speakers at the conference include ANC Treasurer-General Dr Zweli Mkhize and ANC National Executive Committee (NEC) member Dr Nkosazana Dlamini-Zuma, who will deliver the Opening and Closing addresses, respectively.
ENDS
Issued by:
Siseko Njobeni
Communications Manager
Tel: (011) 298 9411 and 082 602 1725
Email: siseko@seifsa.co.za
Web: www.seifsa.co.za