South Africa’s status as this region’s industrial anchor and lead global diplomat continues to slip. Wobbling economic development, alongside bruised foreign relations, presages a re-reckoning with a world busy reconfiguring itself.
Last year Morocco became Africa’s top auto manufacturer. Stalled by high costs tracing to infrastructure mismanagement, South Africa’s momentum for a supportive industrial ecosystem is sputtering. As global competition intensifies, our base of component suppliers risks slipping into reverse.
Our government’s favoured alignment partners, particularly Russia, Iran, Hamas, Venezuela and Cuba, were never well positioned to advance South Africa’s interests. Now, each of them faces dire challenges.
China’s relationship with South Africa is that of a formidable competitor. It will continue buying our raw materials while selling us finished goods. Like South Africa, China has high youth unemployment and it will prioritise creating jobs for Chinese school leavers.
The ANC drinks from a fountain that mixes failed and outdated thinking. President Cyril Ramaphosa wants greater government involvement in the economy, as illustrated by his mineral & petroleum resources minister, Gwede Mantashe, advocating for the establishment of a state-owned national petroleum company.
Speaking about mineral processing at last week’s Mining Indaba, Mantashe argued for a “shared vision” and the need to “deepen collaboration”. But when choosing groups to share a vision with, the ANC’s qualifications are acceptance of its misguided thinking.
Last year’s G20 was the ANC’s last hurrah at selling a vision that has entrenched world-topping youth unemployment. The expiration date has passed for using justice-laced rhetoric and anti-Western diatribes to camouflage patronage politics. Our neighbouring governments are becoming increasingly realistic about the need to integrate meaningfully with Western economies.
This region’s growth rate is far faster than South Africa’s. Nonetheless, Africa’s share of the world’s extreme poverty was about 15% in 1990, versus 67% last year. It is expected to reach 75% within a decade.
Asia, particularly China, benefited extraordinarily since the early 1990s by adding value within manufacturing supply chains. Now, though, global manufacturing employment is expected to stagnate and then decline due largely to AI empowering robotics.
We are entering a highly disruptive era where job growth will be concentrated in service sectors. Many of these will be “location-independent” jobs. As Africa has become the world’s “youth hub”, this region will benefit from large-volume demand for low-cost remote workers to personalise many AI-supported services.
Just as Asians integrated into global manufacturing supply chains, Africans must integrate into emerging services supply chains. It is too early to be confident about such future job descriptions, but we can loosely sketch the basic backdrop. Distance, borders, governments, and the costs of internet access and the necessary devices will become less relevant. Conversely, individual initiative will become increasingly essential.
Some high-volume job categories are certain to emerge. One such candidate is online AI teaching algorithms being enhanced by online tutors. Such tutors can rely heavily on AI expertise while adding human empathy. Much evidence suggests this enhances learning outcomes. Some people can even make learning fun.
Would South Africans be more competitive than those from neighbouring countries at balancing AI expertise with human empathy? The views of customer-facing service sector workers in Cape Town are not encouraging. My experience has been that such local and foreign-born workers see most young South African adults as being insufficiently motivated.
Johannesburg became a major city due to its geological wealth. Its declining relevance and living standards trace to poor governance. ANC elites seek a common vision around the resource extraction that is central to funding patronage politics. It is heartening to see other African leaders push back.
Of course we have to remedy our infrastructural constraints and seek to rapidly grow commodity exports. But this path cannot noticeably redress the unemployment crisis, which leads to an easily manipulated electorate.
None of us, least of all our school leavers, must look to our political leaders to show the way. The world is evolving to make individual initiative the most valuable of commodities.
• Hagedorn (@shawnhagedorn) is an independent strategy adviser.
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