Reserve Bank governor Lesetja Kganyago says South African businesses should not be limited to adding value to locally produced raw materials but should also consider global trends and the capacity of local expertise.
Addressing members of the Mangaung Chamber of Commerce and Industry in Bloemfontein this week, Kganyago said some of the biggest producers of fine jewellery and mobile phones in the world today do not have vast mineral resources but used their expertise to add value to the little they have.
“Benefitiation . . . itself is a very good idea,” said Kganyago.
“But Switzerland produces world-class watches yet they do not have gold . . . Israel polishes diamonds but they do not have diamonds.
“And guess what, Finland has got a big forestry industry but they do not have a (significant) furniture industry. But the biggest product to come out of the Finnish industry is the cellphone.”
Kganyago said the Finnish realised there was a need for cellphones because they were using them for communication and realised they could make their own and grow the industry.
Finland entered the world stage when it started manufacturing Nokia cellphones in the 1990s.
“So, benefitiation, we have got to do it. There are things we have done well. We benefitiate coal very well in this country. We use coal to produce diesel, we use it to produce electricity . . . plastics and so forth. But there are things we are unable to benefitiate. We cannot benefitiate everything,” said the central bank governor.
South Africa is seeking effective ways to boost the economy after it slumped for a second consecutive quarter at the end of 2019 to enter into a recession.
The country’s gross domestic product decreased by 1.4 percent in the fourth quarter.
The manufacturing sector recorded a disappointing -1.8 percent growth. – Staff Reporter