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Economy, Manufacturing

protective tariffs, largest industries, South African economy, Witwatersrand, engineering industries

Since the mineral discoveries of the late 19th century, the South African economy has gradually changed from an agricultural to an industrialized economy. After exceptional growth in the 1960s, the performance of the manufacturing sector weakened in the 1970s and actually registered a marginal decline of 0.5 percent between 1980 and 1993. Manufacturing contributed 19 percent of GDP in 2000. The largest industries in terms of output are, in order of importance, chemicals, food processing, transport equipment, and iron and steel. All metal and engineering industries, taken together, account for one-third of industrial production. Much of South Africa’s industry is concentrated on the Witwatersrand, although Durban, Port Elizabeth, and Cape Town are also major industrial cities.

Export-driven manufacturing is considered the key to sustainable growth. Much South African manufacturing has been sheltered behind protective tariffs and is not internationally competitive. The end of international sanctions and the decline of the rand after 1994 helped exporters, and levels of protection are now being reduced substantially. Ambitious plans exist for an industrial renaissance based on channels of roads, railways, pipelines, and power cables that will draw industry closer to the country’s natural resources and strengthen its links to the outside world.

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