The Decline of the South African Economy

The Decline of the South African Economy

Edited by Stuart Jones

South Africa’s leading economists adopt within this volume a sectoral approach in their analysis of the drastic changes that have occurred within the South African economy since 1970. The book illustrates how, despite its sophisticated infrastructure, the South African economy has shared in the economic decline – resulting from misguided economic policies – that has been the experience of Sub-Saharan Africa.

Chapter 6: The manufacturing industry, 1970-2000

Trevor Bell and Nkosi Madula

Subjects: development studies, development economics, economics and finance, development economics


Trevor Bell and Nkosi Madula* INTRODUCTION 6.1 At the end of the 1960s, after a half century of rapid industrialization, South Africa had a relatively advanced and diversified manufacturing sector. By the standards of today’s advanced industrial countries, which feature in Gerschenkron’s (1952) seminal analysis, South Africa was a very late industrializer, but it was a very much earlier industrializer than those East Asian countries which have been the stars of the manufacturing growth firmament since the 1960s. Since the early 1970s, however, South Africa’s manufacturing growth performance has deteriorated greatly, and has been especially poor since the early 1980s. This is the central fact which any account of South African manufacturing in the 1970-2000 period must seek to explain. An account of how South Africa industrialized in the decades before 1970 is necessary for understanding subsequent developments, and the forces which dislodged South Africa from its earlier, robust growth trajectory. Section 6.2 of this chapter thus provides a short description of the main features of South African industrial development from the eve of the First World War through to the beginning of the 1970s. Section 6.3 deals with developments during the 1970s, a decade notable for the great gold-led commodity price boom which began in 1972; and Section 6.4 with the period from the early 1980s through to the late 1990s, during which manufacturing output stagnated and employment declined. In the light of the discussion in earlier sections, Section 6.5 considers some further perspectives on the problems of South...

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