We all love a good bargain. But does a successful “Black Friday” really signal economic recovery and create jobs locally?
While it can be argued that a healthy retail sector supports a healthy manufacturing sector, necessary for job creation all round, somehow the numbers just don’t add up.
The reality is you need disposable income to participate in “Black Friday” hysteria.
Early data from FNB suggests South Africans spent between 15 – 19 % more on Black Friday this year than in 2020. FNB cardholders spent R2,5 billion on Black Friday alone (a 15% increase), while over R2 billion in other card transactions was processed on their Speedpoints (an increase of 19%). Online payment portal PayFast reported an increase of 30% in sales value, but a lower average basket value at R1208, down from R1243 last year. More online shoppers, less individual spend. Big ticket electronics saw the most phenomenal growth of 120% while overall figures point to a 25% year and year increase in sales over the extended shopping period of November.
Yet unemployment rose by a further 0,5 percentage points to 34.9% in Q3, the highest rate recorded since the start of the Quarterly Labour Force Survey in 2008. The staggering number of Not Economically Actively (NEA) individuals (988 000) suggests a widening disparity between the “haves” and “have nots”.
Perhaps the answer lies in South Africans’ ”over-propensity to import goods” at 25,1% of GDP with promotions such as Black Friday driving demand. Just imagine what FNB’S R4,5 billion in Black Friday sales could do for South African businesses!
Since the start of the democratic era in 1994, the manufacturing sector has underperformed the South African economy declining from 19,4% to 11,8% in 2020. This de-industrialisation has a negative impact on many ancillary industries such as packaging, logistics and transport, component manufacture. According to the Industrial Development Corporation (IDC), for every job in the manufacturing sector, nearly four jobs are created or sustained in the direct and indirect supplier industries across the economy.
So while sales figures may be increasing, our declining employment figures clearly indicate that these products are not being produced in SA.
We should be supporting local brands and businesses, struggling to recover from the effect of lockdown restrictions and social unrest to sustain jobs, and expand our economy.
The Government’s “localisation” programme, a key component of their Economic Reconstruction and Recovery Plan, prioritised 27 local products for procurement by the state.
Why don’t the South African Chamber of Business, retailers and corporates adopt similar policies, issuing procurement directives to #BUY LOCAL, #SPECIFY SOUTH AFRICA? Why are there not more disincentives to purchase imported products?
Imagine the stimulation and growth that would occur!
The benefits of buying local are obvious: Stimulation of the manufacturing sector and associated industries, job creation and skills transfer, Product development and increased GDP, wealth creation and faster national development. Who wouldn’t want that? Specify SA. Everyone wins.
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