Industrialisation, Black Equity and Community Involvement in the Energy Sector

Economic growth, industrialisation, infrastructure and energy are essential for sustainable development and are closely connected and interlinked.

To be competitive, the South African economy requires well-functioning infrastructure and access to sustainable energy – crucial in eradicating poverty.

Industrialisation, Black Equity and Community Involvement in the Energy Sector

Unemployment is still a major limiting factor to economic growth in South Africa.

Radical Economic Transformation, Inclusive Growth and Land Expropriation are the new buzz words in the South African political rhetoric for resolving the country’s problems insofar as the involvement of the majority of the population in the economy.

This involvement has been on the menu since the dawn of democracy and includes economic policies such as RDP, GEAR, AGISA, MDP, NGP, NDP and the 9-point Plan.

The South African economy needs a “kick-start”

As many countries have discovered and experienced, infrastructure spend can kick-start an economy, providing jobs and economic growth. The “Marshall Plan”, and variations of it,  was enacted in many post-war economies with great effect. In South Africa, a lack of government policy is hindering investment in infrastructure and a clear policy direction is urgently needed.

“Jobs, jobs, jobs” is the perennial call by the unemployed and economic analysts, particularly in the less skilled area of the job market. This is where industrialisation and infrastructure spend comes to the fore, inviting investment and generating confidence in the economy. Although the DFI (Developmental Funding Institutions) are ineffective in the long term, they can be a boost to the economy in the short term, however we cannot leave it to Government alone.

Infrastructure projects produce three times as many jobs as those in the manufacturing sector. For every job in manufacturing three jobs would be required in the building phase of projects. It is also imperative that the country creates Black Capital and promotes Black Economic Empowerment (BEE) as an important factor in any infrastructure spend. The skills learnt by the labour force can be expatriated bringing much needed income in to the local economy.

Infrastructure projects produce three times as many jobs as those in the manufacturing sector.

To this end, future projects should specify these requirements, thus minimising the need for the importation of expatriate skills. This will ensure that three out of the four jobs are sourced locally, creating a multiplier effect by circulating local wages through the economy, and translating in to more tax for the government and less reliance on social grants.

Since the 1880’s, governments, through their utility companies, have manufactured and distributed energy. The shift from high to low, and even to extra low carbon energy generation, has transformed the industry and created a highly competitive renewable energy sector. Although financed by private investors they are invariably guaranteed by governments with a suite of documents ensuring the payment and keeping the costs down.

The trend from rigid base-line capacity to flexible energy generation has attracted new players and technologies. This has opened up opportunities for smaller producers, black equity, industrialisation and community involvement in the energy value chain.

The rest of the world is here to take advantage of these opportunities, it is therefore our time to use these opportunities to industrialise, create black capital, involve communities and grow the economy.

Africa is a “Sleeping Giant” and requires sustainable energy, fossil-based or renewable, to stimulate industrialisation and economic growth. This will catapult Africa in to a position where it can compete favourably with the rest of the world.

2017-10-09T13:24:14+00:00 August 20th, 2017|