ArcelorMittal South Africa’s (AMSA) closure of its long steel business, putting more than 80 000 jobs on the chopping block, underscores why our country must overhaul its industrial policies.
This news is truly heartbreaking to workers and is the result of three central policy failures:
• Departmental Master Plans that have chosen companies to ‘compete’ in the sector, including AMSA, creating dependency.
• Price Controls (or the Price Preference System), which mandate that scrap metal be sold locally first at drastically discounted rates, before exporters are allowed permits.
• A Scrap Metal Export Tax, designed to further disincentivise our exports.
To avoid further job losses and economic turmoil, the DA calls on Minister Parks Tau for their immediate scrapping and for the implementation of pro-market reforms, which include:
• Reviewing existing industrial subsidies in ensuring they guarantee growth, not dependency.
• Focusing interventions on growing exports to bring more revenue.
• Building the foundations for competition, not dictating who can compete. Government must invest in getting the basics rights to build our industries for the long term, including investments in infrastructure, energy affordability, safety and security, as well as education & training.
Time has long passed for politically convenient, narrow-eyed fixes. South Africa has the potential to grow into a significant trading economy, where we generate sufficient revenue to live well within our means. To do so, we must be led by evidence and political will.