Industrial Policy, the Manufacturing Sector and Black Empowerment in South Africa

Goga, Sumayya
Avenyo, Elvis Korku
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Southern Centre for Inequality Studies (SCIS)
University of the Witwatersrand, Johannesburg
Black economic empowerment (BEE) in South Africa has undoubtedly been ambitious in seeking to transform ownership, control, and management of the economy’s productive assets and resources. It is ambitious because the changes that are needed to reverse decades of entrenchment of economic power in the hands of a few are far-reaching. Extensive transformation means challenging the position of incumbents in the economic system and the interests that work together to maintain those positions, in the context of a decidedly liberal economic policy context. While BEE policy has been applied as the African National Congress government’s primary strategy for bringing about transformation in the ownership and control of productive assets in the economy, the outcomes in key sectors of the economy have been poor in terms of inclusion. This paper considers the interrelations between the black empowerment programme and industrial policies in South Africa, with specific reference to transformation in the manufacturing sector. The paper examines the extent of transformation in the manufacturing sector in South Africa. The paper seeks to understand why South Africa has not seen the emergence of a large, economically significant black industrialist class that owns and controls economic assets and resources that are competitive at different levels in the manufacturing sector. The paper further explores the extent to which South Africa’s industrial policy strategies have contributed to or undermined deep transformation in the manufacturing sector. The paper identifies key limitations of BEE and South Africa’s industrial policy framework, and the gaps between these policies in terms of addressing the factors that restrict the inclusion of black-owned firms in manufacturing. It further considers how industrial transformation could be accelerated in South Africa
Black Economic Empowerment, Black economic empowerment (BEE), Economy’s productive assets and resources, Liberal economic policy context, Manufacturing sector, South Africa’s industrial policy strategies, South Africa’s industrial policy framework, Economic system