Lost your password? Please enter your username or email address. You will receive a link to create a new password via email.Lost your password? Please enter your username or email address. You will receive a link to create a new password via email.ate last year, a colleague and I published a peer-reviewed journal article trying to identify whether Southern Africa was afflicted by “premature deindustrialisation”.
In our paper last year, we found econometric evidence for premature deindustrialisation in Southern Africa: “There is good reason to believe that the Southern African Development Community group of countries is emerging as a region where deindustrialisation in both employment and output terms is growing more distinct.”
It can also generate unearned income for the ruling class. Concomitantly, the extractive industries can draw resources away from the manufacturing sectors , which further impairs industrial competitiveness. When we interact a South African dummy with mineral rents , we find a strong negative effect on manufacturing output that is significant at a 90% confidence level. Critics of models such as the ones we’ve run suggest that it’s impossible to isolate and specify the impact of a country’s mineral rents in such a small sample of countries.
Another possibility is that the electricity crisis, starting in 2008 and climaxing last year might be the primary factor explaining manufacturing decline. So, what can we do about it? Two things, which are in turn dependent on two prerequisites. First, we need an industrialisation strategy that begins — perhaps ironically — with strengthening the investment attractiveness of the mining industry. We need more money to flow into exploration and production expansion.