TRISTEN TAYLOR | Neglect is at the heart of SA’s industrial collapse

The de-industrialisation plague continues to unravel the country’s economy and social fabric. Factories, smelters and steelworks have either closed or are on the brink of shuttering.

The job losses have been enormous: an apocalyptic scythe slashing through cities and townships, places such as Vereeniging and Sebokeng, leaving behind nothing but fields of hopeless poverty.

Over the past two decades 600,000 manufacturing jobs have disappeared, and 61,000 of those were in the last quarter of 2025 alone. To put those figures into perspective, that’s the same as if every healthcare worker in the country had lost their job or as if almost every gold and platinum miner had been turfed onto the street.

In 2001 South Africa produced 50% of the world’s ferrochrome. Most of the ferrochrome smelters are now closed, and companies such as Glencore that used to beneficiate are simply exporting the chromium ore.

Falling back to an economy geared for raw material exports doesn’t engineer growth and reduce unemployment. Rather, losing the ability to beneficiate and manufacture undermines just about every aspect of the real economy.

ArcelorMittal South Africa (Amsa) closed down its steelworks in Vereeniging and Newcastle last year, and 3,500 jobs went. And those were good jobs. Union jobs with medical aid and pension. Skilled work that feeds families, pays school fees and builds intergenerational wealth.

Falling back to an economy geared for raw material exports doesn’t engineer growth and reduce unemployment. Rather, losing the ability to beneficiate and manufacture undermines just about every aspect of the real economy.

The Vanderbijlpark plant is likely to be next on the chopping block: some of the coking ovens have been turned off and workers are on short shifts. Make no mistake, ArcelorMittal isn’t leaving South Africa. It has already left.

While economists and other elites debate the merits of long steel, tariffs, Chinese imports and their worst nightmare ― nationalisation ― they miss the single most important point. When working-class jobs go, they’re gone and they don’t come back. The brutal truth is that machine specialists will never be upskilled to structural engineers. Mill workers don’t become coders. What many recently unemployed workers will become is grant recipients.

To understand how and why our economy has unravelled, it is worthwhile to examine the notion of natural de-industrialisation. To whittle the concept down, the idea is that as an industrialised economy advances up the economic ladder it comes to a natural point at which de-industrialisation occurs and the economy transforms into a knowledge and services economy. A strong, large and wealthy middle class comes to dominate society. Industrial materials and goods are sourced from the global market.

Recent economic history illustrates the idea. Since the 1980s, industries have moved out of Western Europe and North America. Manufacturing and heavy industry went to Japan, South Korea and China. Given that the first industrialisation revolution (1760-1840) was in Europe and the US, Western countries transitioned into the uncharted territory of high-tech knowledge and service economies, with a hefty amount of societal and intergenerational wealth.

Western countries’ skies and waterways cleared of toxic pollution, their stock markets rose and the middle class went on a decades-long spending spree of exotic holidays and low-cost electronics. While there were victims ― for example, northern England and the American rust belt ― economists preached that the benefits of cheap goods outweighed the costs.

However, Western countries have now discovered, much to their chagrin, that their treasure chests of societal and intergenerational wealth have faded away. Their service and knowledge-orientated economies haven’t generated wealth but have rather accumulated the pre-existing wealth into the hands of financiers, IT tycoons and gigantic retailers such as Amazon. Put another way, the profits of industrialisation weren’t used to create new and equitable societies. Instead, the profits were handed over to the new robber barons. Social mobility has ground to a halt.

To keep their consumerist economies flowing, Western politicians have turned to debt — an economic policy that both delays and worsens the inevitable reckoning. “Quantitative easing” is just a fancy way to say “printing money”. Post-industrial societies have mucked up whatever happens after de-industrialisation.

Andrés Fortunato, a Harvard University researcher, has done a considerable amount of research into where South Africa sits on the de-industrialisation timeline. The data indicates that the country’s manufacturing sector experienced a structural break in 2008. The sector’s post-2008 decline is way beyond the global norm. We are exceptional but in a rather unpleasant manner.

South Africa is not de-industrialising because of global trade factors or the comparative cost of labour. We should be manufacturing and exporting beneficiated goods. There is, after all, a huge and growing market just to the north of us. Millions should not be unemployed. We should have a thriving economy and be close to becoming a middle-class country. A generation of solid and somewhat equitable growth is all that it takes.

So, what happened? There are the usual suspects. Eskom somehow managed to make coal-fired power stations produce expensive electricity. Politely put, Transnet turned into an ungodly mass of wilful incompetence and sheer idiocy. Former president Thabo Mbeki and then finance minister Trevor Manuel spectacularly botched the ill-advised privatisation drive of the late 1990s and early 2000s.

But none of these factors tells the complete story: for example, take corruption. If he were still alive, Mobutu Sese Seko would not only be impressed by our level of brazen looting; he’d be taking notes. Yet as China has conclusively proved, rapid industrialisation and moving millions out of poverty can go hand-in-hand with widespread corruption. The ultimate causal factor is something much worse: neglect.

The signs of great unemployment and industry contraction have been apparent in the data since at least the 2008 financial crisis. Year after year, Stats SA’s quarterly labour force surveys have told the story. Business, labour and civil society have been telling government in official forums for decades that disaster is approaching and solutions must be implemented.

And it isn’t like the government disagreed. There’s been an absolute plethora of speeches and reports, from national to local, pointing out that unemployment is an enormous and growing problem, and there is a pressing need to revitalise the economy.

Yet nothing happened. The major investments that were required did not happen, nor were appropriate policies enacted. This is neglect. Mbeki ignored the 1998 white paper on energy and neglected to make the required investments into the electricity sector. Then vice-president Cyril Ramaphosa neglected to notice that his boss, Jacob Zuma, was neglecting everything but his own pocket.

In fact, much of the economic carnage comes from Ramaphosa’s ongoing neglect. For example, we are about to fall off the gas cliff. Sasol’s Mozambique gas fields are almost depleted, and if we don’t find an alternative source both Sasol and downstream industries will descend into chaos. The jobs bloodbath will continue. Depending on how you count it, Sasol’s contribution to GDP is up to 5%. This is a national emergency of epic proportions, yet nothing has happened. Solutions haven’t even been attempted.

The country’s de-industrialisation comes down to the government simply not doing anything. An economy utterly abandoned to ruin, and there’s not much in the way of hope. Unless the government and society embark on revolutionary change ― possibly even including nationalisation, subsidisation and bans on certain exports and imports ― the coming decades are going to be exceptionally tough for South Africa.

• Dr Taylor, a freelance journalist and photographer, is a research fellow in environmental ethics at Stellenbosch University. Research for this article was supported by the Henry Nxumalo Foundation and the Pulitzer Center.