South Africa Bets on Manufacturing to Drive Economic Growth

Steenhuisen said successful industrial economies across the world have achieved sustained growth by investing in competitive manufacturing industries rather than relying solely on raw material exports.

Manufacturing remains central to South Africa's economic future, with the government positioning the sector as a key driver of jobs, innovation and industrial growth. Speaking at the 2026 Manufacturing Indaba in Sandton, Deputy Minister of Trade, Industry and Competition John Steenhuisen said stronger manufacturing capabilities are essential if the country wants to build a more resilient and competitive economy.

Manufacturing seen as the engine of industrial growth

Steenhuisen said successful industrial economies across the world have achieved sustained growth by investing in competitive manufacturing industries rather than relying solely on raw material exports. He noted that manufacturing contributes around 13% of South Africa's gross domestic product, provides more than 1.6 million direct jobs, and supports millions more across sectors such as mining, agriculture, logistics and business services.

According to the Deputy Minister, the value of manufacturing extends beyond factory floors because every industrial job generates additional opportunities throughout local supply chains. Producing higher-value goods instead of exporting raw materials also strengthens domestic capabilities and creates a more resilient economy.

He stressed that governments worldwide actively support manufacturing through financing, infrastructure development, localisation policies, public procurement, skills development and innovation incentives because industrial growth cannot be left entirely to market forces.

Government focuses on diversification and innovation

Steenhuisen said South Africa's industrial strategy is being shaped around three priorities: diversification, decarbonisation and digitalisation. The government wants to broaden the country's industrial base beyond traditional resource extraction by encouraging investment in sectors such as machinery, chemicals, pharmaceuticals, automotive components and electro-technical products. At the same time, businesses are being encouraged to adopt cleaner production methods while preparing for rapid technological changes, including artificial intelligence and digital manufacturing.

He said the changing global economy presents both challenges and opportunities as geopolitical tensions, shifting supply chains and climate-related pressures continue to reshape international trade.

Special Economic Zones and partnerships remain key

The Deputy Minister highlighted the role of Special Economic Zones (SEZs) in attracting investment and building globally competitive industrial clusters. These zones, he said, provide modern infrastructure that helps manufacturers connect with regional and international markets while improving South Africa's export competitiveness.

Steenhuisen also called for stronger collaboration between government, industry and organised labour to support industrial expansion. He said partnerships will remain vital in boosting localisation, encouraging investment and improving competitiveness across industries including automotive, steel, clothing and textiles, poultry, sugar, cannabis, furniture, chemicals and medical devices.

He added that strengthening manufacturing should be viewed as a long-term investment in productive capacity, technological capability and national prosperity rather than simply a government expense, as the sector continues to play a critical role in creating sustainable employment and supporting broader economic development.