In this insightful column, we dissect the claims surrounding Operation Vulindlela and reveal the stark realities of South Africa's manufacturing sector. Discover how energy constraints and strategic privatisation are hindering economic recovery and what it means for the future.
Image: Leon Lestrade/Independent Newspapers
In this column, The myth of Operation Vulindlela: de-industrialisation and the delusion of greenshoots, I explore the manufacturing under-utilisation floor, energy constraints and strategic privatisation faults, and the rejection of sub-optimal capital loops.
There is a persistent narrative propagated by state bookkeepers and neoliberal commentators that structural reforms, under initiatives such as Operation Vulindlela, are yielding early "greenshoots" of economic recovery.
They point to micro-level adjustments in logistics and private electricity generation as proof of a changing trajectory.
However, the raw data released by Statistics South Africa exposes this narrative as an elite delusion.
According to the official indices, national manufacturing production and sales continue to reflect a systematic hollowing out of the secondary sector.
The national utilisation of production capacity by large manufacturers remains stagnant at a dismal 77.7%, revealing an immediate structural under-utilisation level of 22.3% across major industrial divisions.
This under-utilisation is not a temporary market fluctuation; it is a permanent structural cap driven by system design.
The primary constraint driving this capacity loss is a persistent lack of intermediate demand, accounting for 12.2% of total capacity loss, coupled with raw material shortages at 3.2% and labour constraints at 1.4%.
Large factory floors are trapped beneath a historical ceiling because the domestic market lacks the depth to absorb production at scale, and fragmented regional networks allow core inputs to be drained away before local value addition can occur.
The grid friction recorded in the electricity generation and distribution metrics provides physical proof of this industrial decline.
The spatial allocation of infrastructure spending remains profoundly misaligned with localised demographic density.
Instead of executing state-led industrial policies to construct localised production grids, the state is pursuing an orchestrated unbundling and strategic privatisation of public infrastructure systems.
This privatisation drive is not a motive force for positive change; it is an acceleration of structural degeneration. The unbundling of transmission and distribution networks completely ignores the historical role that large state-owned enterprises played as national training platforms.
The deliberate destruction of training capacity within these large utilities has drastically undermined the domestic skills base.
In the past, these institutions created a structured workforce that de-risked the private sector because anyone holding recognised trade qualifications was immediately employable.
Today, by replacing these industrial training giants with a small class of private consultants and outsourced contractors, the state has broken the link between infrastructure delivery and human capital development.
The Lehohla Ledger framework completely rejects these unscientific, sub-optimal infrastructure expenditure loops, such as spending R400 billion on sprawling transmission lines to wheel power across sparsely populated areas from centralised generation fields.
Instead, data-driven planning mandates localised renewable energy capture models calibrated by the Central Place Index, aligning infrastructure spending directly with demographic clusters.
The illusion of greenshoots serves no real purpose other than to protect neocolonial institutions and white minority capital enclaves.
Unless the state implements aggressive, state-led industrial policies that actively defy restrictive global trade rules, similar to the industrial policies that helped build Southeast Asia and China, the economy will continue to de-industrialise.
We must move beyond the bookkeeper mentality that seeks smaller government and understand that infrastructure must be used as an engine for regional value chains and domestic value retention.
Dr. Pali Lehohla is the former Statistician-General of South Africa, Director of the Pan African Institute for Evidence (PIE), and the founder of the Lehohla Ledger. He is a Professor of Practice at the University of Johannesburg and a Research Associate at Oxford University.
Dr. Pali Lehohla is the former Statistician-General of South Africa, Director of the Pan African Institute for Evidence (PIE), and the founder of the Lehohla Ledger. He is a Professor of Practice at the University of Johannesburg and a Research Associate at Oxford University.
Image: Supplied
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