Buying local critical to economic growth - DP Mashatile

Wednesday, March 29, 2023

Deputy President Paul Mashatile says buying locally made products and supporting the small businesses which produce them can lead to much needed boost in local economies and stimulate national economic growth.

The Deputy President was addressing the Localisation Gala Dinner of Proudly South African's Buy Local Summit and Expo held in Sandton on Tuesday.

“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 things 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 SA economy could benefit from an increase of just 10 percent in investment spending in the manufacturing sector,” he said.

Government procurement

The Deputy President highlighted that government has, in its own right, 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,” Deputy President 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.

“During this 11th edition of the Proudly SA Buy Local and Expo, a public-sector procurement session was hosted. An engagement in this regard was held with senior representatives from all public sector spheres, and we have been assured that this work will continue beyond this conference.

“If we keep moving in this direction, our economy will reap the rewards not just in terms of new jobs, but also in terms of new tax income collected from citizens and the businesses that stand to gain from increased local procurement by the public and private sectors,” he said.


Deputy President Mashatile acknowledged that businesses still face several challenges in doing business in the country.

He assured those at the gala dinner that for its part, government is working hard to ensure that regulatory challenges are resolved.

“[Urgent] work is being finalised by Government to create an enabling regulatory framework, attract foreign investment, reducing red tape, and improve ease of doing business.

 “Further, the Red Tape Reduction Team, which resides in the Office of the President has made headway in reducing complex regulations, procedures and processes that impede economic growth and job creation in important sectors of the economy,” he said.

Turning to the current electricity challenges facing the country, the Deputy President laid out government’s ongoing work to address both issues.

“As we all know, businesses rely on a consistent supply of energy to run their operations, and the availability of electricity is a significant element in determining where companies choose to invest.

“To address this issue, the Government is investing in reliable energy infrastructure, such as renewable energy sources, to give businesses the electricity they need to grow.

“President Cyril Ramaphosa presented solutions in the 2023 State of the Nation Address. They include declaring a national state of disaster and creating a Ministry within the Presidency to accelerate the implementation of the agreed-upon strategy to reduce and terminate load-shedding,” he said.

Mashatile said in the midst of the electricity crisis, opportunities are arising that local businesses can take advantage of.

“While the grid’s energy constraints threaten businesses and regional development, they also present an opportunity. This pertains to the production of wind turbines, solar panels, and other forms of energy storage, among other things.

 “By producing it domestically, we may avoid paying import taxes on similar machinery, and the current energy crisis presents an opportunity to expand employment opportunities in a field with significant demand,” he said. –