433369666-The-Case-for-Investing-in-South-Africa

| 75
MANUFACTURING SECTOR
• South Africa has a well-established, diversified and generally technologically-advanced manufacturing sector,
which accounted for 13.2% of national GDP in 2018.
• South Africa ranked 27 th in Deloitte’s 2016 Global Manufacturing Competitiveness Index, ahead of Italy, BRICS
peers Brazil and Russia, as well as Ireland, Portugal and, among others, Egypt and Argentina. Deloitte expects
the country will be positioned two spots higher, in 25 th place, by 2020.
• The manufacturing sector ranks highly in the government’s economic development agenda and, as such, is
strongly supported by national industrial strategy, action plans and associated incentives.
• South Africa’s reinvigorated industrial strategy aims to galvanise investment and development in specific
manufacturing sub-sectors, among other economic sectors, based on their potential for growth, employment
creation, export earnings generation and diversification.
• The manufacturing sector is one of the main beneficiaries of the public sector’s procurement requirements,
SA GDP, 2018
including input supplies for the ongoing infrastructure development programme.
13.2%
SA GDP, 2018
SA GDP, 2018
Sub-sectoral contributions to manufacturing sector's GDP, 2018
13.2%
86.8%
86.8%
1
Other sectors Manufacturing share of GDP
1
Other sectors Manufacturing share of GDP
Source: IDC analysis, compiled using Quantec data
Contribution to the
economy
Structure
Extensive sectoral
linkages
The manufacturing sector contributed 13.2% to South Africa’s GDP and 57.2% to total
merchandise export earnings in 2018. The sector employs 1.23-million people in its
formal sector, or 12.1% of total employment in the country.
The largest manufacturing sub-sectors in terms of value-add (GDP) are those
producing food products; chemicals; basic iron and steel; metals products; motor
vehicles, parts and accessories; as well as machinery and equipment.
The sector has strong linkages with numerous other sectors of the economy through
its procurement of goods and services, as well as with end-use markets for its own
products.