The future of the South African steel and sugar industries will be in serious jeopardy if the government does not lift its irrational lockdown regulations and put healthy business principles before ideology.
The luxury of subsidising impractical government policy and non-competitive practices is not sustainable because taxpayers have been stripped of their income and the country's reserves are low too.
The contraction of both the international and the South African economies has drastically reduced the demand for steel and sugar, which in turn, necessitates the restructuring of these industries.
The recovery plans that the Minister of Trade, Industry and Competition, Ebrahim Patel, tabled in the parliamentary Portfolio Committee today outline specific rearrangements of the industries, but these are complicated by transformation targets and the impact of the lockdown regulations.
The South African sugar industry has been under pressure for quite some time now, even from before Covid-19, mainly due to drought, the importation of cheaper sugar as well as the sugar tax that was implemented by the Department of Health in 2018.
The reduced international demand for sugar and the non-competitive nature of the local industry hamper the recovery of the South African sugar industry.
Likewise, the steel industry has also been under pressure due to a reduced international demand, China dominating the market and the importation of cheaper steel. The sustained and stringent lockdown regulations are causing the South African economy to keep contracting and that, in turn, decreases buying power and the demand for manufacturing.
The government must put aside its irrational policy directions that are not in line with healthy business principles to ensure the survival of sustainable and competitive steel and sugar industries in the country.
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