MEC Lebogang Maile Archives

Future of auto industry at centre of national discourse – MEC Maile

By Mandla Mpangase The discussion on the importance of new energy vehicles is taking place at a critical time in South Africa, where the future of the automotive industry is at the centre of national discourse, Gauteng MEC for Economic Development and Finance Lebogang Maile told the New Energy Vehicles Summit in Midrand today. The summit comes at a time when Gauteng is positioning itself as the automotive industrial hub for Africa, leveraging its existing automotive base, advanced logistics, and skills ecosystem. Critical to this positioning is the need to embrace the revolution that is the new energy vehicles (NEVs). Gauteng is determined to lead South Africa’s transition to electric and low-carbon mobility in line with global decarbonisation imperatives and the South African Automotive Masterplan 2035. “The South African automotive industry is facing a tough operating environment, heightened by the imposition of a unilateral 30% reciprocal trade tariff by the government of the United States, which has consistently been South Africa’s second-largest trading partner and key export destination for South African-manufactured vehicles,” Maile said, adding that on the manufacturing side, Original Equipment Manufacturers (OEMs) also face mounting challenges. South Africa’s automotive sector is particularly vulnerable to the 25% sectoral tariff imposed under Section 232 of the United States Trade Expansion Act of 1962, which specifically targets automotive exports. Key sector “The South African automotive industry is a cornerstone of the economy and contributes 22.6% to total domestic manufacturing output. It also directly supports over 110 000 formal sector jobs – a significant number in an economy that is battling with the creation of sustainable employment.” The MEC noted that a few months ago, naamsa (the Automotive Business Council) noted that the tariffs, and the broader uncertainty in our trade relations with the United States strike at the heart of South Africa’s industrialisation agenda and threaten future investment in high-value manufacturing. Mercedes Benz in East London, for example, exports at least 90% of its vehicles to the United States, making evident the impact of such an uncertain economic climate on the East London Special Economic Zone. “Tariffs have had a severe impact on South Africa’s automotive industry, leading to a sharp drop in exports to the United States, job losses, company closures, and reduced GDP contribution of the automotive sector.” Vehicle exports to the United States have fallen drastically, with one report noting an 82% drop in the first half of 2025 compared to the previous year. Challenges “The industry has also experienced layoffs and job losses, with thousands of positions under threat due to companies losing contracts and reducing production,” the MEC said, adding that at least 12 company closures have been linked to these pressures, impacting the component manufacturing sector and its over 80 000 employees. Communities like those in East London, and the broader Eastern Cape, which are heavily dependent on the automotive sector, are at risk of economic destabilisation. Beyond job losses, the National Union of Metal Workers of South Africa (NUMSA) has also highlighted the risk of short-time that has been introduced at 26 companies in the Eastern Cape – many based in Gqeberha. “Various economists have identified three structural challenges that are currently confronting the automotive industry, specifically, navigating South Africa’s exposure to tariff barriers in the United States as outlined, the danger of dumping, and adapting to the global shift towards new energy vehicles,” said Maile. However, he noted, while these are real challenges with far-reaching implications, critical interventions can transform them into opportunities – particularly in relation to new energy vehicles. “New energy vehicles are crucial for South Africa’s future as they offer significant economic and environmental benefits, including reducing greenhouse gas emissions and lowering fuel costs, while supporting industrial growth and job creation through local manufacturing and infrastructure development.” New energy vehicles produce significantly fewer greenhouse gases and pollutants compared to internal combustion engine vehicles, which can help in combating urban air pollution and climate change. The place of new energy vehicles is also clear with their lower operating costs and potential for industrial growth, the MEC said: “Electricity is cheaper than petrol and diesel, and energy vehicles have fewer moving parts, reducing overall maintenance costs.” Additionally, as South Africa’s automotive industry contributes over 4% to GDP and 12.5% to exports, transitioning to new energy vehicles can safeguard this sector’s global competitiveness, especially with European Union bans on internal combustion engine vehicles by 2035. New energy vehicles are also key to a Just Energy Transition, reducing reliance on fossil fuels, which can help reduce reliance on imported fossil fuels that are increasingly subject to price volatility. Recognising potential NEVs could position South Africa to become a hub for regional battery production and new energy vehicle technology. Recognising this potential, the national government has developed policies covering for NEV production, infrastructure, and skills development. “As a result of this intervention, a 150% tax rebate for new energy vehicle production starts in March 2026, with over R1-billion having recently been allocated to support local new energy vehicle and battery manufacturing.” The MEC said that such investments in local battery production address the salient challenge that new energy vehicles pose – mainly that they are significantly more expensive than internal combustion energy vehicles due to import duties and more importantly, a lack of local battery production. A strategy is currently being finalised to secure supply chains for critical minerals like cobalt, lithium, and nickel, which are essential for battery production. “This is part of a larger plan to beneficiate these materials locally instead of exporting raw forms.” This is in alignment with the Gauteng’s mineral beneficiation strategy that focuses on adding value to raw materials by transforming them into higher-value products, with a key role in refining precious and base metals. Developing local battery manufacturing capacity for NEVs, and mineral beneficiation broadly, will address economic diversification, ensuring that the province moves beyond raw material extraction to creating a more value-added mineral economy and to retain more wealth within the province and the country

Gauteng assesses its readiness for a transformed automotive sector

News / By Jenny Tennant

By Mandla Mpangase Gauteng has ambitious plans to turn the province into the automotive hub of Africa. So serious is the intention, that the leading role players in the South African automotive sector gathered in Johannesburg to share insights into what is needed to make that happen. This comes amidst a rapidly evolving global automotive sector, the looming carbon neutral targets for vehicle imports into the European Union by 2035, and the current turmoil surrounding increased tariffs being imposed on goods entering the United States. Addressing the participants at the Automotive Sector Policy Dialogue, Gauteng’s MEC for finance and economic development, Lebogang Maile, emphasised the significance of the sector to the country’s economy. In 2024, the automotive industry contributed 5.2% towards the GDP of the country, with 110 000 direct jobs – 33 154 in the original equipment manufacturers and 81 860 people employed by component manufacturers. Gauteng is home to three original equipment manufacturers, Nissan, Ford, and BMW – all based in the City of Tshwane along with the Tshwane Automotive Special Economic Zone and the Automotive Industry Development Centre. Together, the three OEMs produced 1.8 million vehicles between 2014 and 2023, accounting for 32.8% of South Africa’s vehicle production. “According to the National Association of Automobile Manufacturers of South Africa (Naamsa), Gauteng’s automotive sector is expected to gain momentum, especially with the establishment of the Tshwane Automotive City (TAC), which will serve as an integrated logistics framework focusing on inland ports and manufacturing hubs linked to rail corridors linking Tshwane with strategic ports in South Africa and SADC (the Southern African Development Community),” MEC Maile noted. A different-looking automotive sector Speaking on the shift from internal combustion engines towards new energy vehicles (NEVs), Maile spoke of the urgency required by the automotive sector to adjust its production value chains and technologies to transition towards NEVs to retain and grow its existing markets share. He also identified the challenges the automotive sector faces, including: Gauteng being a landlocked province far from regional seaports, faced with logistical challenges that often lead to expensive transportation costs to reach global markets; Congestion at South Africa’s ports has a negative impact as the automotive sector relies on international trade in terms of sourcing manufacturing components and shipping the final product; Inconsistent electricity supply; A lack of support for Tier 2 and Tier 3 manufacturers; OEMs battling technological challenges that come with transitioning to NEVs, which require high technical and technological skills; The recent 30% tariffs imposed by the United States on South African exports poses a risk to the sector, puts pressure on the local OEMs, and poses a risk to jobs; and Transformation is happening at a snail’s pace, which stifles the growth of township businesses. What this all means, Maile told the participants, is that a different approach was needed to support and develop the sector. “There is a need for an inclusive approach towards transforming the sector.” While the province had made progress in terms of establishing the AIDC supplier park and the development of TASEZ, much more needed to be done to make the sector competitive, MEC Maile said. The dialogue was held to assess the province’s readiness for the NEV transition; to identify the infrastructure investment requirements for the transition; gather information into the support requirements for Tier 1, Tier 2, and Tier 3 component manufacturers; highlight skills requirements, funding collaborations and partnerships to support the transition; and understand the implication of US tariffs and potential new markets for South African OEMs. In line with the discussion on NEVs, the province will host the inaugural NEV Summit in October, where industry players will share further knowledge on the sector. For further information on the NEV Summit visit the AIDC website.

SMMEs – engines of economic growth and regional trade

News / By Jenny Tennant

By Mandla Mpangase Small, medium, and micro enterprises stand poised to become powerful catalysts for regional trade and economic growth. This was one of the key messages of Gauteng MEC for Finance and Economic Development Lebogang Maile to the delegates at the African Continental Free Trade Area (AfCFTA) Conference taking place on 24 July 2025 in Johannesburg. “Micro, small, and medium enterprises (SMMEs) represent the heartbeat of Africa’s economy,” the MEC said. SMMES across Africa create the most employment, drive innovation and provide much-needed goods and services that sustain communities. In South Africa SMMEs account for 80% of the country’s workforce and create an estimated R5-trillion turnover annually. It is estimated that there are three million SMMEs in South Africa, which employ some 13.4 million people. Of those, 2.5 million are micro-enterprises. Of these micro-enterprises, 72% operate in the informal sector. The SMME sector is vitally important to the Tshwane Automotive Special Economic Zone, which, from its inception, committed to building the local township economies of Eersterus, Mamelodi and Nellmapius. During its Phase 1 development, Africa’s first automotive city ring-fenced R1.7-billion of its procurement spend for SMMES and emerging entrepreneurs. As it expands Phase 2 of its development, TASEZ is planning to increase the numbers of SMMEs it supports through infrastructure projects, the creation of job opportunities, and skills training in both business development and in technical training for the automotive manufacturing industry. SMMEs as catalysts Speaking at the AfCFTA Conference, MEC Maile also noted: “In light of the African Continental Free Trade Area – the largest free trade area in the world by the number of participating countries – SMMEs stand poised to become powerful catalysts for regional trade and economic growth.” The responsibility of the Gauteng Provincial Government, and all the stakeholders attending the conference, is not only to explore the pivotal role of SMMEs in shaping Africa’s economic landscape, but to outline their opportunities and challenges under AfCFTA, the MEC added. It was important to identify the strategies needed to harness the full potential of SMMEs for sustainable development. SMMEs in Africa operate across diverse sectors, from agriculture and manufacturing to services and digital innovation. They drive local value addition, foster entrepreneurship, and serve as engines of social mobility, particularly for youth and women. The latest FinScope MSME South Africa 2024 Survey, launched a few months ago, found that in the South African context of high unemployment rates, particularly among the youth, 30% of SMME-owners are 35 years old or younger. “While this may be considered too low, given that 50% of the adult population are youth aged 16-35 years, and that this demographic constitute 60% of the unemployed population, it indicates the important role that the SMME sector can play in turning the tide of youth unemployment in a continent with the world’s youngest population,” MEC Maile said. SMMEs creating jobs SMMEs are vital for job creation, notably absorbing the continent’s rapidly growing workforce. Their size also allows them to adapt quickly to market needs and to experiment with new products and services, facilitating innovation and flexibility. They also play a significant role in poverty reduction on the African continent, the MEC said, adding that by offering livelihoods to millions, they also play a direct role in reducing poverty and enhancing inclusive growth. The AfCFTA promises to reduce tariffs, eliminate barriers to intra-African trade, and stimulate industrialisation and investment. In doing so it will allow the SMMEs to access a much larger market beyond their national borders and creating unprecedented opportunities for growth by tapping into regional value chains, supplying components, services, or finished goods. “This not only promises gross domestic product growth across the African Union but also sets parameters for attracting investment in a depressed and volatile global economy.” A harmonised market environment would make African SMMEs more attractive to investors, both domestic and foreign, like the European Union. “The integration of markets through AfCFTA empowers SMMEs to play a transformative role in regional trade.” They can do this through enhancing of cross border trade, leveraging AfCFTA to expand their reach. “Reduced tariffs and simplified customs procedures lower the cost of doing business across borders, Maile added. This enables SMMEs to diversify their customer base, mitigate risks, and benefit from economies of scale. SMMEs as innovators In addition to this, they can also act as catalysts in driving innovation and competition. “Exposure to a broader market compels SMMEs to innovate and improve their competitiveness. This, in turn, stimulates higher quality standards, greater efficiency, and the adoption of new technologies,” Maile said. The AfCFTA facilitates the creation of regional value chains, where SMMEs can serve as suppliers, assemblers, or distributors. “By collaborating with firms in other African countries, SMMEs can access raw materials, expertise, and markets otherwise beyond their reach.” Such integration boosts industrialisation and intra-African trade, which remains concerningly low. “Intra-African trade still represents a relatively small portion of Africa’s overall global trade. In 2022, a year after the implementation of the AfCFTA, it reached $102-billion but only accounted for 15% of Africa’s total trade. “However, in 2024, intra-African trade reached $208-billion, representing a 7.7% increase compared to the previous year.” This growth could be attributed to the implementation of the AfCFTA and improved trade policies. The final key catalyst of SMMEs in the context of the AfCFTA is the promotion of inclusive economic growth. SMMEs are often owned or led by women and youth. “Their participation in regional trade under AfCFTA ensures that the benefits of integration are broadly shared. This inclusivity promotes equitable development and reduces inequalities within and between countries,” said MEC Maile. He also noted the AfCFTA creates a fertile environment in which SMMEs could survive, providing opportunities to access to new markets, an improved business environment, technology and knowledge transfer, and finance and investment. However, SMMEs also face hurdles that could hinder their ability to capitalise on AfCFTA such as a lack of information, inadequate access to finance, poor infrastructure, capacity constraints, and a complex regulatory environment. “To

Budget vote a commitment to economic justice, inclusion and transformation

News / By Jenny Tennant

By Mandla Mpangase Sustainable economic growth requires significant investment in economic infrastructure. With that in mind, Gauteng Finance and Economic Development MEC Lebogang Maile identified eight areas that will help drive inclusive growth and job creation in his budget vote speech presented to the Gauteng Legislature today, 16 July 2025. MEC Maile presented a R1.71 -billion budget for the 2025/26 financial year “We are prioritising projects that drive industrial expansion, urban renewal, and township revitalisation, fostering an environment in which businesses can flourish and contribute to local economic development,” Maile said. In keeping with the national directive to drive inclusive growth and job creation, reduce poverty, and build a capable developmental state, the Gauteng Department of Economic Development has developed a comprehensive five-year strategy and an Annual Performance Plan with these three strategic frameworks front as its focus areas. A decade of economic challenges South Africa’s economic engine – the Gauteng province – has faced a decade of ongoing challenges, including a listless economy, rising unemployment, sluggish investor sentiment, and economic sectors that remain untransformed. In the decade 2014 to 2024 Gauteng’s economy grew by an estimated 8%, rising from R1.313-trillion in 2014 to R1.419-trillion 10 years later, an average of just 0.8% yearly. At the same time, however, the population grew by some 25%. The province’s economy also underwent structural changes, with finance growing to contribute 34% to provincial gross domestic product (GDP), up from 29.2% in 2013, while manufacturing dropped to 14.8%, from 17.9% in 2013. This shift is a significant one. “The manufacturing and construction sectors are crucial employers for our low-skilled workforce cohort,” MEC Maile noted. Like manufacturing, construction too is on a downward trend. Unemployment remains the most urgent socio-economic crisis. Quarter 1 of 2025 showed that Gauteng’s unemployment rate stood at 34.7%, with youth unemployment at 48.4%. However, Maile noted, the South African Reserve Bank projects a promising GDP growth of 1.3% for 2025. “Despite several headwinds threatening this forecast, including the risk of electricity constraints, infrastructure challenges, and trade tariffs concerns, there is potential for significant growth in the South African economy,” MEC Maile said. Eight focus areas The Department of Economic Development will focus on eight areas: Revenue enhancement. Strengthening the province’s fiscal capacity is at the heart of the department’s strategy. Economic infrastructure. Sustainable economic growth requires significant investment in economic infrastructure. Support for SMMEs and cooperatives. SMMEs play a vital role in job creation and economic transformation and need to be supported through financial assistance, capacity building, and expanded market access, ensuring their meaningful contribution to economic growth and employment. Structural transformation. This is about transforming historically marginalised sectors, creating opportunities for disadvantaged groups with a strong focus on Broad-based Black Economic Empowerment compliance and promoting inclusive growth. Building a capable state. Ensuring the provincial government has the institutional capacity, technical expertise, and governance systems necessary to drive inclusive economic growth. Revitalising the township economy. The township economy is a critical driver of employment and entrepreneurship yet continues to face systemic barriers such as limited access to finance, infrastructure deficits, and market exclusion. Re-industrialisation. This will enhance competitiveness, deepening localisation, and fostering sustainable manufacturing value chains. Research and development. This commitment will position Gauteng as a leader in innovation and the knowledge economy, driving long-term competitiveness. As part of its ongoing commitment to catalyse inclusive growth and regional industrialisation, the department has outlined key infrastructure development targets for the 2025/26 financial year, which are central to its objective of operationalising special economic zones across Gauteng by 2030. In addition, the department will also advance the Industrial Parks Programme which is designed to stimulate local manufacturing, support small, medium, and micro enterprises (SMMEs), and revitalise economic nodes across the province. Impact on TASEZ TASEZ is being allocated R122.5-million to continue its facilitation and provision of a secure high tech business environment for manufacturers within the automotive sector. The Gauteng Department of Economic Development is a strategic shareholder in TASEZ, along with the Department of Trade, Industry, and Competition, and the City of Tshwane. Gauteng’s funds go towards TASEZ’s internal bulk infrastructure. TASEZ is now in the process of rolling out its Phase 2 development. “During the next phase of our development, we will continue with our focus on supporting SMMEs through procurement spend and training opportunities and we will also be expanding our support to incorporate black industrialists,” TASEZ CEO, Dr Bheka Zulu, said. In addition, the budget vote also set an an ambitious investment target for Africa’s first automotive city – of attracting R1.5-billion. The growth of the SEZs and industrial parks is being led by the Gauteng Growth and Development Agency, with the aim of unlocking investment, driving innovation, and accelerating job creation. The department also plans to support 2 040 SMME beneficiaries across Gauteng during 2025/26. A total of R769.3-million will go to trade and sector development with a specific focus on SMMEs and cooperatives; R289.5 million will be directed towards integrated economic development services; R134.2 million goes to business regulation and governance; R275.4 million will be spent on economic planning, particularly in research and development; and R244.9-million has been allocated to corporate services and financial management. In his conclusion, MEC Maile said: “Economic development is crucial for improving living standards, reducing poverty, and enhancing the overall well-being of our society. “It drives job creation, attracts investment, and fosters innovation, leading to increased tax revenues and improved public services. “Ultimately, economic development strengthens communities and creates a more prosperous and sustainable future. It is for this reason that we must treat the work of this department as a crucial component of building a better Gauteng.” And in keeping with its own vision of being the benchmark for SEZs in South Africa, while contributing to the growth of the automotive sector, being a major creator of new businesses and a contributor to employment, transformation, and socio-economic development, TASEZ has taken the budget vote message to heart. “As a global role player, TASEZ is a catalyst for economic growth

Manufacturing could transform the economy and create jobs

News / By Jenny Tennant

By Mandla Mpangase Expanding manufacturing is not merely a desirable goal for Africa, it is an essential foundation on which the continent’s economic transformation, job creation, and long-term prosperity depend. This strong message was shared by Gauteng Finance and Economic Development MEC Lebogang Maile at the Manufacturing Indaba 2025, taking place at the Sandton Convention Centre in Johannesburg. “This year’s gathering takes place under complex global economic and political realities where the African continent, and the entire global south, must re-think its place in the geo-political landscape,” the MEC said. “Re-thinking our place in this landscape also necessitates that we re-think how we are managing our economies and trade relationships,” Maile said. “It is becoming increasingly evident that the future of our continent lies in our ability to strengthen collaborations.” The message resonates strongly with the Tshwane Automotive Special Economic Zone (TASEZ), which has set out on a mission to be a catalyst for employment, transformation, and socio-economic development and industry growth by being a node attracting automotive suppliers and automotive manufacturers, assemblers and supporting services. The MEC noted that agriculture and raw material exports had long been the backbone of African economies, the future lies in a sector that has fuelled the rise of every modern economy: manufacturing. “The expansion of manufacturing is not merely a desirable goal for the continent. It is an essential foundation upon which Africa’s economic transformation, job creation, and long-term prosperity depend.” The manufacturing sector’s ability to absorb large numbers of workers, foster innovation, and build complex value chains, makes it a critical pillar for sustainable development, Maile added. The South African Automotive Master Plan Something that is important to the TASEZ efforts to support the South African Automotive Master Plan 2025, is that of localisation and by extension beneficiation of materials that are mined in the country. The master plan sets out several priorities to deliver on its vision of creating “a globally competitive and transformed industry that actively contributes to the sustainable development of South Africa’s productive economy, creating prosperity for industry stakeholders and broader society”. Included in the priorities is increasing local content used in manufacturing by 60% by 2035 – critical to this is the ability to beneficiate local minerals for use in manufacturing. “Exporting raw materials without adding value reinforces economic dependence on foreign nations that process and manufacture these materials for profit,” MEC Maile noted. Manufacturing offers an opportunity to move up the value chain, diversify economies, and reduce dependence on volatile international markets. “The continent’s demographic dividend could be the most important instrument in defining the future of the manufacturing sector,” he added. Manufacturing is also uniquely placed to provide the scale and diversity of jobs required for Africa’s youth – Africa has a young population that is growing. It is expected that the continent’s population will double by 2050 to reach 2.5 billion people, with the majority being under the age of 25. “Manufacturing can offer employment across a spectrum of skill levels, from low-skilled assembly to high-skilled engineering. Moreover, manufacturing jobs tend to offer higher wages, better job security, and more opportunities for advancement compared to informal and even agricultural work.” Adding value – and jobs Value addition not only increases export revenues but also fosters the development of supporting industries such as packaging, transportation, marketing, and financial services. These interlinked sectors create a multiplier effect, generating jobs and boosting incomes across the economy. “In the Gauteng Province, we see the value of our investment in the manufacturing sector,” Maile said. It is the largest sector in the provincial economy, employing more than 500 000 people, and is also the biggest in South Africa, contributing more than 33% to the gross domestic product. Manufacturing is also a powerful conduit for technology transfer. “As African firms engage in manufacturing, they gain access to new machinery, production processes, and management techniques.” Partnerships with foreign firms and integration into global value chains further accelerate the transfer of knowledge and skills. At the moment, Africa’s share of global manufacturing output remains less than 2%. “But the continent’s potential is enormous,” MEC Maile said. The African Continental Free Trade Area, which seeks to create a single market of over a billion people, offers an unprecedented opportunity for manufacturers to achieve economies of scale, access new markets, and increase competitiveness. “With the right policies, African manufacturers can integrate into global value chains, supplying not only regional markets but also Europe, Asia, and the Americas.” Despite its promise, the development of manufacturing in Africa faces significant hurdles, including inadequate infrastructure, unreliable energy supplies, limited access to finance, bureaucratic red tape, and skills gaps. “Addressing these challenges requires coordinated action by governments, the private sector, and international partners.” Key is investing in infrastructure. Reliable roads, ports, energy, and digital networks are essential for competitive manufacturing. “We must also prioritise improving the business environment. Streamlined regulations and transparent governance attract investment and foster entrepreneurship.” Skills are needed Another message from Maile hit home for TASEZ: making the building of human capital a key priority. TASEZ has launched its training academy to provide business-related skills to small, medium, and micro enterprises (SMMEs) as well as technical skills to workers who will be dealing with a changed automotive manufacturing sector that is focused on new energy vehicles. “Education and vocational training tailored to industry needs will ensure a skilled and adaptable workforce,” Maile told the Manufacturing Indaba. In addition, regional integration is one of the most critical priorities if the continent is to realise its manufacturing potential. “Strengthening trade ties and harmonising regulations across borders is crucial,” the MEC said. “Regional integration significantly boosts manufacturing economic development by expanding markets, fostering specialisation, and promoting innovation and efficiency. It allows countries to overcome limitations of smaller domestic markets, creating larger customer bases and facilitating economies of scale in manufacturing.” Integration also encourages specialisation within regional value chains, leading to increased efficiency and competitiveness. In his conclusion, the MEC reminded the audience: “The choices made today will