CAPE TOWN, Nov. 4 (Xinhua) -- South Africa can create 250,000 jobs and 100 billion rand (about 5.72 billion U.S. dollars) in additional economic uplift if it doubles down on re-industrialization efforts over the next five years, according to a new study.
The findings come from the Public Investment Corporation's (PIC) latest G20 Research Paper titled "Re-industrializing South Africa: Can Institutional Capital Spark South Africa's Next Industrial Boom," produced in partnership with the University of Oxford.
Released last week, the PIC paper argues that institutional investors have and can achieve competitive, risk-adjusted returns while driving measurable economic growth and job creation through investments in new opportunities to re-industrialize South Africa.
"In South Africa alone, we calculate that doubling industrialization investment by 2030 can add 100 billion rand in real output and create more than 250,000 jobs from current levels of about 2 trillion rand in real output, which presently sustains 1.3 million formal jobs," the research paper says.
The study identifies opportunities for institutional capital across three priority sectors -- agro-processing, mining beneficiation and the automotive industry -- where "reform momentum, natural endowments and investor appetite intersect," placing them at the center of the country's next industrial wave.
Geoffrey Nolting, senior economist at the PIC, said the research was inspired by the need to revive South Africa's industrial base.
"Our analysis shows that we have an excellent industrial base. By re-investing in key sectors, we can lay the groundwork for our economic growth well into the future and reclaim our position as the most industrialized country in Africa," he said.
Co-author Brian O'Callaghan from the University of Oxford noted that reform momentum and investor appetite were aligning in South Africa.
"South Africa is reforming, it's re-industrializing from a strong base, and in our view, opportunities are mis-priced. This paper considers opportunities available to investors, and, on a risk-adjusted basis, demonstrates that differentiated returns are on offer for smart investors," he added.
According to the PIC, the roadmap outlined in the study shows that "the building blocks to stimulate real investment are in place" and that now is the time for bold action by long-term investors to unlock the next phase of sustained industrial growth.
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