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Put your money where your mouth is

by Madelein
Put your money where your mouth is

By FloorworX

Structural reforms and a business-friendly environment. These are two major take-outs from the President’s recent State of the Nation (SONA) address on the 10 February 2022. Not unexpected.

Ramaphosa provided insights into various initiatives to address critical impediments to sustainable growth and development. These include all-too familiar energy shortages, logistics network inefficiencies and the high costs of doing business.

However, analysts and political pundits have criticised Ramaphosa for appeasing business, with all the right rhetoric but very little action. Calls for “consensus”¹ in recognising the country’s challenging economic and unemployment situation – dah – and the need to create a “social compact” of shared responsibility through Public and Private Partnerships (PPPs) to “unleash the dynamism of the economy”, have been hailed as more lip-service.

Parties have decried the government’s lack of delivery and implementation. The President’s 24 (and counting?) task teams have proven very capable of identifying the problems but not solving them. Some say they ARE the problem, with cadre-deployment and obstructionism, not to mention corruption, complicating matters.

But let’s acknowledge that his address did indeed summarise the current State of the Nation. Let’s concede that he inherited a hornet’s nest in 2017 – post Zuma – to start with, compounded by the unprecedented impact of the Covid-19 pandemic. And let’s applaud his efforts to drill down into the minutiae of each issue with his task teams and advisory panels.

The time has come to “put your money where your mouth is”.

Four years down the line it’s now time to act on all those findings and recommendations, jail all those thieving criminals and roll out all those lofty plans. The country’s stability and prosperity depend on it!

FloorworX took a closer look at the President’s plans and we are cautiously confident on one specific point: Localisation.

The 2020 Economic Reconstruction and Recovery Plan (ERRP) proposed a 3-phase strategy to revitalise the economy and address unemployment and inequality post-pandemic: –
Phase 1: Engage & Preserve – to save lives and curb the spread of the virus,
Phase 2: Recovery & Reform – to restore the economy while managing health risks, and
Phase 3: Reconstruct & Transform – to build a sustainable, resilient and inclusive economy.

The plan outlines an optimistic strategy to boost our ailing economy and redistribute wealth for the benefit of all South Africans.

“We are determined not merely to return our economy to where it was before the coronavirus, but to forge a new economy in a new global reality,²” said Ramaphosa.

It prioritises the roll out of critical infrastructure projects and, amongst others, aims to revitalise the manufacturing sector, with all its job creation benefits.

Industrialisation through Localisation

A key focus is “Industrialisation through Localisation”. This will substantially increase local production, stimulate job creation and create globally competitive export industries.

Aside from shifting state procurement of key inputs to local suppliers (through the Preferential Procurement Policy Framework Act), “Industrialisation through Localisation” aims to build local manufacturing capacity to improve efficiency and reduce the proportion of imported intermediate and finished goods.

Ultimately, the plan is to develop the country’s export competitiveness to expand the sale of South African products. Music to our ears!

Certain local industries – capable of creating large numbers of jobs, or those located in economically depressed areas and those producing critical components for national infrastructural projects – will be aggressively driven through special measures. Key value chains such as in construction; agro-processing; healthcare; basic consumer goods; capital goods including equipment and industrial inputs used in infrastructure projects; and transport rolling stock focusing on automobile and rail assembly component production will be given priority.

These industries will be supported with access to preferential industrial financing (start-up loans at 0-2% interest), tax incentives, licensing and tariffs. In addition, strict measures to curb illegal imports will be implemented, while regulatory changes to reduce the cost of doing business and facilitate the ease of doing business are currently being reviewed.

It’s what we’ve been asking all along: 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?

But let’s really show you what happens if you Put Your Money Where Your Mouth Is:

FloorworX is the ONLY local vinyl flooring manufacturer in South Africa. Based in East London, one of the most economically depressed areas in our country, we have been supplying vinyl composite tiles (VCT) and sheeting to hospitals, clinics and education facilities for over 69 years.

Our factory employs 50 people for four-days a week, feeding on average eight people per household. That means 400 people directly benefit from the 50 jobs on offer!

But the benefit of buying local doesn’t end there.

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. That’s another 200 jobs! And using the multiplier effect of 1 job : 8 meals, potentially another 1600 mouths are being fed just by buying local!

If demand for our SuperFlex or FloorFlex vinyl doubled – say through multiple Public and/or Private hospital and education projects – the required output would add another shift to our operation, taking our employment capacity to 100 instead of 50, now feeding 800 people.

You do the maths. And put your money where your mouth is!

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.

For more information, contact FloorworX:
Tel: 0861 833 338
Email: info@floorworx.co.za
Website: www.floorworx.co.za

Sources:
¹ https://www.gov.za/speeches/president-cyril-ramaphosa-2022-state-nation-address-10-feb-2022-0000
² https://www.gov.za/sites/default/files/gcis_document/202010/south-african-economic-reconstruction-and-recovery-plan.pdf

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