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Wednesday, 30 October 2024

Localisation for Industrialisation: Implementation Options and Risks

South Africa has not fully realised the benefits of localisation as a tool for reindustrialisation. A number of issues contribute to this: a) failure to consolidate demand across the state due to fragmentation of procurement plans; b) the influx of cheaper imports which threatened industries such as steel and the clothing, textiles, leather and footwear sector; and c) disagreement on the economic logic of localisation as a tool to support economic growth and reindustrialisation, resulting in fragmented implementation.

This brief aims to provide an analysis of localisation and procurement in South Africa. This includes an analysis of the import intensity in major industries and a review of existing policies and resource allocation for localisation, and proposes options for improving outcomes and implementation. 

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