While it was important for South Africa to grow its manufacturing output, the sector was unlikely to be a major source of employment in future, National Planning Commission commissioner Dr Miriam Altman said on Wednesday.

Speaking at a Frontier Advisory forum, held in Sandton, under the theme ‘Projecting the Future: Two Decades Ahead – South Africa in 2034’ she said it was unlikely that more than 0% to 3% of employment created in South Africa over the next 20 years would come from the manufacturing sector.

Altman explained that, for the manufacturing sector of a middle-income country, such as South Africa, to compete on a global scale, productivity had to be increased, as middle-income countries were generally not truly competitive from a pricing point of view.

However, increased productivity usually meant fewer people were employed, she added.

“That doesn’t mean that we shouldn’t promote manufacturing, but it is very unlikely [that it will create more jobs] because a successful manufacturing sector in South Africa would require substantial productivity improvement,” she asserted.

Further, the country also had a volatile exchange rate, which also made it difficult to expand the manufacturing sector, much less a labour-intensive manufacturing sector, she added.

Globally, however, 70% of employment was created in the services sector and, therefore, South Africa also had to look at this sector to increase employment opportunities.

“Most jobs come from services and we need to get a much greater sense of how we promote dynamism in services and how we stimulate services employment,” Altman noted.

However, while nontraded sectors offered the easiest route to job creation, it was in traded sectors that higher wages could be obtained and, therefore, the country was facing a dilemma in terms of creating employment and realising higher wages, she added.

“The future of work is in low-paid work,” she stated, adding that if cash wages were low, there would have to be a social security system in place to reduce the pressure on cash wages.

Meanwhile, speaking as part of a panel at the forum, Jonah Capital executive director Fidel Jonah said South Africa had a significant opportunity in terms of providing skills for development on the African continent.

“South Africa has skills that the rest of Africa does not have and, as the country becomes more confident with its role as the driver of the African economy, there will be a lot more opportunities for South African businesses and skills,” he said.

However, Synergy Global Consulting director Paul Kapelus said the country’s ability to advance into other African countries was, to an extent, being prevented by internal tensions and the fact that the “confused face of South Africa” was being taken into Africa.

Jonah agreed, stating that South Africa had the worst ambassadors in its own people, who were negative.

“There are so many successes around but we focus on the negative,” he said.

World Economic Forum head of Africa membership Jesmane Boggenpoel said South Africa had to have a more balanced narrative, adding that, for this to happen, the country had to create a more equitable society.