“People who loosen their purse strings during the upcoming holiday season and buy local instead of imported products could help improve South Africa’s economic outlook by making a dent in the R 1.1 trillion per annum presently spent on imports. At the same time, they would be contributing to developing a stronger job market and rebuilding South African businesses a win-win for all, says Proudly South African,” said the Chief Executive Officer of Proudly South African, Mr Eustace Mashimbye.
Mashimbye said that even though 2020 has been tough and the Covid-induced economic situation contributed to a 48.9% drop in household spending, the festive season’s direct spending could help the hotel, restaurant, and recreational sector, where income plunged by 99.9%. He said spending can immediately help the sector regain some of its lost ground.
“Most important, however, is reducing the R1.1 trillion spent annually on imported products. As pointed out recently by President Ramaphosa, if we redirected some of this spend to locally manufactured goods, we could add 2% to national GDP. This will enable our local manufacturers to supply just 2% of Africa’s imports (about R2.9 trillion annually) would add another 1.2% to GDP” he said.
Mashimbye further said that spending on local goods may seem like taking a small chip out of a mountain, but it will help reduce the pain of the ‘severe punch in the gut’ (StatsSA) which saw GDP drop by 16% between the first two quarters of 2020, giving an annualised growth rate of -51%.
“The lack of demand for South African goods, and our reliance on imported instead of locally manufactured items are dragging down local manufacturing. Purchasing locally-made clothing instead of items made in Asian countries would help the local textile and clothing industries, in which about six people lose their jobs per day,” says Mashimbye.
He said that traditionally, South Africans spend most between November and January and retail sales spike. He said the drivers of this activity are payments of bonuses and the Black Friday sales campaigns which have now been extended from a once-off event to cover a month or more of discounted sales.
Mashimbye further explained that 2018 statistics have shown that 66% of all local shoppers who take advantage of Black Friday sales spend at least R 1 600 each on Black Friday bargains, ultimately spending billions of Rands during this period.
According to Mashimbye, if many bargain-hunters took the time to examine the ‘made-in’ labels on the goods for sale and opted for locally manufactured and produced goods, the impact would be positive for the economy as a whole. He said for many South Africans, this would equate to jobs retained and the opening of new opportunities. He added that during the Covid-19 crisis, the focus on buying local had increased as ports of entry were closed, and the movement of goods and services was restricted.
“This had the effect of introducing local buyers to the high-quality local options available at retail outlets. We need to emphasise that our economy and people need this buying trend to continue. If we can make the return to local goods permanent, we will benefit. There is no time like the present, as our ‘game time’ campaign emphasises, the time for buying local is more important than ever. We are in the second half of the game; we need action if we are to win and build a strong future. We need committed, proud South Africans to take action through their purses and wallets,” said Mashimbye.