Service Issue 85

S
economy
Buying local is critical to
economic growth
Deputy President Paul Mashatile says buying South African made products and supporting the small businesses which
produce them can lead to a much-needed boost in local economies and stimulate national economic growth.
T“This is because every local transaction has a ripple effect that
extends beyond our comprehension. By purchasing locally produced
food and other goods, consumers support their local economy,
families, communities and promote the culture of entrepreneurship.
“Moreover, supporting local businesses can stimulate the local
economy, since it redirects funds back into the community rather
than into the coffers of ambiguous national chains and corporations,”
he said.
Mashatile highlighted local production’s critical role in the
domestic economy.
“We cannot have economic growth without localisation. [A] study
commissioned by Proudly SA and done by Dr Iraj Abedian’s PAIRS
outfit, confirms the link between localisation and economic growth
and the different steps that the private and public sectors need to
take in this area.
“Some of the most important points in the report are the positive
effects of domestic manufacturing investment on the GDP, fiscal
revenue, real wages and consumer inflation. Moreover, the report
showed that the South African economy could benefit from an
increase of just 10% in investment spending in the manufacturing
sector,” he said.
GOVERNMENT PROCUREMENT
The deputy president highlighted that government has committed
to supporting local businesses.
“Government, during the 2018 Presidential Summit, together
with our social partners, reaffirmed the commitment to localisation.
We need to ensure that we support the investments being made
in the country by improving the uptake of those products and
services that will flow from these investments in new and existing
production plants.
“By encouraging the use of local products in government
contracts, we can create jobs in areas critical to economic growth,
such as manufacturing and agriculture, which have historically been
vital to economic progress. We support local businesses because
they offer the most significant untapped potential for growth and
economic transformation,” Mashatile said.
He assured local producers of government’s dedication to ensuring
that the policy of local procurement is implemented at all levels.
“We are making a concerted effort to ensure that we remind all
procurement authorities and decision-makers in the public sector
of this dynamic. As part of this effort, we ask them to maintain local
content standards in their preferential procurement policies.
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