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03/05/2026 | By Busiswe Mavuso
Any aspiration that South Africa has to rebuild its industrial base is disappearing before our eyes. The Department of Trade, Industry and Competition should take the lead in changing that, if they indeed regard industrialisation as strategic to the growth of the South African economy. If it fails, a generation of South Africans will pay the price.
Manufacturing contributes roughly 12% of GDP and supports more than 1.5-million jobs directly, with multiples of that in supply chains. But we are watching this foundation erode. In the last two years alone, Bridgestone and 13 other automotive component manufacturers have shut down operations. Now Nissan has effectively exited manufacturing here, maintaining only marketing and sales functions after selling its Rosslyn plant, which had built bakkies for over 60 years, to Chinese manufacturer Chery. And the problems go far beyond the automotive sector – to cite just one example, British American Tobacco closed its remaining South African factory last year.
Last week Nissan announced a $45-million investment to expand manufacturing capacity in Egypt. Not South Africa. Egypt. That decision speaks volumes about where we stand in the global competition for manufacturing investment.
The DTIC should be the part of government that welcomes manufacturers and helps them succeed. Instead, Minister Parks Tau’s department is seemingly becoming a source of policy uncertainty that is actively driving investment away. The proposed amendments to B-BBEE regulations are a recent example.
Original equipment manufacturers have spent years building local supply chains, deliberately including majority black-owned businesses as part of their transformation commitments. Now the DTIC’s proposed amendments threaten to strip them of their BBBEE status because many suppliers are not 100% black owned. But this raises some fundamental questions:
In assessing the outcomes of BBBEE policy, these questions must also be answered. It will allow for more coherent solutions, rather than sudden changes that risk damaging businesses that are large employers.
Automotive components for specific models cannot simply be swapped out when the BBBEE rules change. Developing new suppliers takes years, requiring testing, certification, integration into production lines. The government-backed interventions should be providing a pipeline of strong black-owned businesses who can compete – if they are not, we should ask why not? Under the proposed amendments, OEMs would lose their BBBEE status immediately. That status is critical to accessing the tax incentives and support schemes that government has established for the industry. No one knows how this could possibly be managed. Boards of directors, many sitting in capitals around the world, are looking at this regulatory uncertainty and comparing it to other markets. We want South Africa to win in the comparison.
I hope the DTIC reverses course on the BBBEE amendments after comments on the drafts were received last month. That would be a signal that it understands the imperatives of businesses and investors.
Of course, there are several initiatives the DTIC has succeeded in delivering. The Automotive Masterplan has kept some investment flowing, with manufacturers like Toyota, BMW and Mercedes-Benz expanding operations over recent years. But we need to see consistency across policies to ensure investors feel there is a government department that is on their side.
Faced with expensive logistics, high energy costs, security concerns, Asian dumping, illicit products and regulatory instability, manufacturers are making rational decisions to invest elsewhere. Egypt offers proximity to north African and European markets, policy stability and governments actively courting their investment.
Government needs a coherent strategy to rescue our industrial base as a matter of urgency. This requires specific, immediate action.
First, the DTIC must withdraw the proposed B-BBEE amendments and commit to regulatory stability. Transformation is essential, but policy changes cannot happen overnight in sectors where supply chains take years to build.
Second, Minister Tau must establish a manufacturer task force with monthly reporting directly to the president. This cannot be resolved through bilateral negotiations with individual businesses. We need a macro-level understanding of obstacles and coordinated government action to remove them.
Third, the entire cabinet must recognise that manufacturing is everyone’s responsibility. Energy reliability, logistics costs, ports performance, crime and security – these affect manufacturers’ ability to compete globally. When a factory closes, it’s not just the DTIC’s problem.
BLSA is constantly engaged with many manufacturers and we can document specific obstacles and present them directly to the presidency. We cannot watch deindustrialisation happen passively while government departments add to manufacturers’ challenges instead of solving them. Business will make the case for what must change.
The urgency cannot be overstated. Every month that passes without action means more boardroom decisions in Detroit, Tokyo, Stuttgart and Shanghai choosing Egypt, Vietnam, Mexico over South Africa. More factories closing, jobs lost, supply chains dismantled.
We have manufacturers still operating here who want to succeed. The question is whether government will be their partner or their obstacle. Minister Tau must make his department the manufacturer champion it should be. The industrial base we still have depends on it.
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BLSA is a business organisation that believes in South Africa’s future and shares the values set out in the Constitution. BLSA is committed to playing its part in creating a South Africa of increasing prosperity for all by harnessing the resources and capabilities of business in partnership with government and civil society to deliver economic growth, transformation and inclusion.
