By Amith Singh, National Manager: Manufacturing, Nedbank Commercial Banking
South Africa’s manufacturing sector remains one of the country’s most powerful levers for economic transformation, yet for over two decades, it has been under pressure. From its once-commanding share of GDP in the 1980s to its more constrained position today, the industry has faced sustained headwinds: energy instability, logistics backlogs, policy uncertainty, and rising input costs. But while the challenges are real, so too are the opportunities.
At Nedbank Commercial Banking, we work with manufacturers across various sectors, including automotive, high-precision equipment, food processing, and the clothing industry. And what we’re seeing now is a shift in mindset: many businesses are no longer waiting for perfect conditions. Instead, they’re asking how to build resilience, sharpen competitiveness, and seize the opportunities presented by regional integration and a maturing industrial base.
What’s holding the sector back?
Policy and regulatory uncertainty remain one of the most consequential barriers to growth. Over the past few years, unpredictable shifts in industrial policy, red tape, and a lack of long-term infrastructure planning have left investors hesitant. But there are early signs of stabilisation. The establishment of the Government of National Unity (GNU), renewed attention on grid stability, and a clearer logistics reform agenda are all steps in the right direction.
However, manufacturers still need clarity, not just in words, but in action. A consistent industrial policy framework is critical. This also includes faster decision-making on energy generation, rail reform, and trade policy. Manufacturing is a long-cycle business; capital is patient, but only when the ground is firm.
Localisation vs global competition. It’s not either-or
There’s been debate around whether localisation is a viable path in an era of global oversupply and low-cost imports. But the question is not whether we should localise, it’s how and where. Every major industrialised country today localises strategically, not blindly. South Africa must do the same.
We already have pockets of excellence, including automotive, textiles, and food processing. These sectors consistently deliver world-class quality and generate value across the supply chain. Instead of questioning localisation, we should be expanding and replicating what already works, and backing it with investment, skills, and smarter procurement policy.
We also need to challenge the myth that South African manufacturing can’t compete globally. In many verticals, we already do. The task now is to scale selectively, with a focus on value-added manufacturing and strong aftersales capability, not just volume or cost.
Industrial strategy
Sector-specific master plans (automotive, textiles, plastics) exist and have shown some success. However, what is missing is a clear, cohesive national vision for the manufacturing sector.
What is our industrial North Star? Where do we intend to lead, and where should we partner or import? Until those questions are answered at a policy level, the private sector response will remain cautious. Manufacturers and financiers alike need that strategic direction to guide investment, risk, and growth planning.
The upside is that we’ve been here before. In the late 1970s and early 1980s, manufacturing accounted for a quarter of the economy. Reaching those levels again will take time, but the infrastructure, skills, and institutional memory are still in place. Getting back there is not an impossible task, but it does require bold, coordinated action.
Green shoots and the rise of diversification
Rather than sector-specific surges, what we’re seeing in 2025 is something more strategic: diversification. Manufacturers are reconfiguring their operations, adding new production lines, broadening supplier networks, and rethinking offtake agreements to manage future risk more effectively.
This shift is a direct response to lessons learned from recent global disruptions, including COVID-era constraints and geopolitical tensions that impacted import reliability. South African businesses are demonstrating a strong commitment to future-proofing themselves by developing more adaptable and resilient manufacturing systems.
As bankers, we’re not just seeing capital requests; we’re seeing innovative strategies. Businesses want more than funding; they’re also looking for partnerships to support modernisation, sustainability, and market access.
The role of banks in reindustrialisation
At Nedbank Commercial Banking, we see our role as a conduit, not just of capital, but of strategy. We collaborate with our manufacturing clients to design customised financial solutions, support operational improvements, and integrate ESG standards into their core operations.
However, we also advocate for a more fundamental shift: we must stop treating manufacturing as a sunset industry. It is a strategic asset, a job creator, a technology enabler, and a growth engine. With the African Continental Free Trade Area (AfCFTA) opening new regional markets, now is the time to invest in scalable, export-ready capacity.
South African manufacturing has the technical depth, entrepreneurial spirit, and market access to lead again. What’s required now is confidence and courage. At Nedbank Commercial Banking, we believe this is the time to Think Bigger: to stop treating manufacturing as a sector in decline and start backing it as a national asset. With clear policy direction, strategic partnerships, and sustained investment, we can reindustrialise South Africa as a leap toward a resilient, inclusive, and competitive economy. We’ve done it before. We can do it again.
