Industrial Policy in South Africa

Manufacturing in South Africa has been the subject of strong industrial policy support. Since 1994, the sector has undergone major structural shifts but the sector has performed poorly. Trade liberalization, which started to take effect before 1994, led to rapid import penetration across a wide range of sectors. For the most part the export response was disappointing. From 2007, there has been a shift to more intensive sectoral industrial policy. But this coincided with a number of very negative developments including the global financial crisis as well as serious infrastructure constraints. The specifics of industrial policy are examined in heavy industry, the automotive sector, and light manufacturing as well as in the outcomes of regional industrial development policies. The chapter concludes that South Africa needs to be on a more labour-absorbing growth path which requires appropriate industrial as well as other policies.

Trade Liberalization and Manufacturing Sector Performance in Nigeria

This study examined the impact of trade liberalization on manufacturing sector performance in Nigeria from 1970 to 2018. A multiple regression model was developed to achieve the study’s objectives with real manufacturing growth rate (RMGR) as proxy for manufacturing sector performance. Import penetration, export penetration, dummy variable for structural adjustment programme alongside other control variables were used. Using the Autoregressive Distributed Lag (ARDL) bound testing for cointegration approach, it was found that all the variables for the model had long run relationship. Furthermore, the ARDL results revealed a mixed impact of trade liberalization on the performance of the manufacturing sector. Specifically, while trade liberalization exerted insignificant positive impact on RMGR in the short run, the impact was positive and statistically significant in the long run. Consequently, the study recommended policies that would encourage the importation of capital goods to enhance manufacturing productivity in Nigeria.