Does South African Manufacturing Have A Problem?

This article is the reason we started Made In Workshop in 2017.

A walk down the isles of Makro is a monthly thing that most South Africans do. We have that one thing that we must get. Whether it be booze and snacks for a party, our monthly bulk shop or that piece of sporting equipment. In my case, I always look at the product’s country of origin. It is no surprise that it is often China, India, and Vietnam. South Africa does also feature in this “list” however I would like to emphasize that we are very low on the list. We are not a manufacturing nation. In the last 2 years especially during the pandemic, we can see just how dependent we are on imported goods.

Manufacturing in South Africa, in my opinion, is not encouraged. It is far easier to import goods from Alibaba than to tool up and manufacture them. The manufacturing industry has the potential to greatly reduce our unemployment rate, increase GDP and make us far less dependent on imported goods.

There have been many attempts to encourage manufacturing in South Africa albeit indirectly. The upliftment of unemployed youth is one solution. Uplift the youth, train them in new skills and teach them how to be entrepreneurial and we should get an increase in employment. I don’t think that worked too well and here I must get on to my “virtual” soapbox.

There are many youth empowerment programmes around, both private as well as the public. A quick Google search can confirm this fact. These programs are well thought out and executed. Many graduates are well versed in their chosen field. But there are no jobs for them.

Employment has 2 sides. Employee and employer. You can not improve one side without improving the other. The equation must balance. You can not improve one side of the equation without improving the other. Businesses need to be uplifted as well.

Now, this is the side that I sit on as the CEO of Made In Workshop. Made in Workshop is a coworking and shared fabrication studio and workshop. We purchase industrial tools and machines for other businesses to use to manufacture their product. Apart from a VAT refund, there are no further incentives. The real cost of the machine is not the capital cost but the running costs. Businesses are not sponsored to increase their capabilities.

For a business to grow it costs us more. Another Google search shows there are fewer upliftment programs for businesses. Going back to my analogy above, the equation is not balanced. But how do we fix it?

In no particular order; Reduce duties on manufacturing specific machinery. Encourage skill development of the businesses themself. If the equation balances and increases on both sides South Africa and its residents will benefit.

Increased employment means more PAYE and income tax for the government. More production means more VAT and company taxes. I won’t even mention the side industries that would benefit from an increase in manufacturing. In short, our GDP will increase. How do we start? I don’t have the answer to that question, but there have been too many good ideas that have been destroyed by greed. I think the comments on this article would agree with the problem here but how many would actually solve this problem.

This article is the reason we started Made In Workshop in 2017.

Made In Workshop is the largest DIY workshop and makerspace in South Africa. We provide the highest calibre of tools, machines and workshop space for our customers to use along with the instruction needed to use them safely and effectively. Whether you are completing a home project or starting a new high tech business, our friendly staff and a large community of makers are always here to support and help you.

Made In Workshop provides the perfect platform for prototyping, manufacturing and development of products in South Africa. Call us. Tour our facility. Take a class or a membership. See how easy it is to design and build your ideas and dreams. It does not matter how much noise you make, there is someone who makes more.

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