Chair, clearly, the manufacturing sector in our country is under a lot of stress. You are correct that the contribution by the manufacturing sector has gone down over the many years, but so have others. Mining used to be at a high level and it has also gone down. Mining is supported by manufacturing. As soon as mining goes down, manufacturing will also go down.
We have seen tertiary going up, but at the same time, we have all been saying that we need to reindustrialise our country. When we reindustrialise our country, it will mean that manufacturing will be reboosted and we will be able to see firms making goods that are bought in the local market.
Now, our market is a small market in the broader scheme of things, but at the same time, we need to focus on manufacturing and also export. We should be looking more at making goods that can be exportable. It is for this reason that we are saying that the Africa Free Trade Area Agreement offers us a $3 trillion market almost on our doorstep that we can exploit. That then calls for precisely what you are saying - boost the manufacturing sector, support the firms and companies that can manufacture goods.
It is for this reason that we are supporting the Black Industrialist Programme. It is black industrialists who we are bringing into the industrialist sector and we are helping them to turn into manufacturers.
We are also focusing on small and medium enterprises that are manufacturing oriented. If you look at various countries like Germany, almost 67% of their firms are small firms, but they are manufacturing firms. They are not big mega firms, but they drive the economy of that country. That is precisely what we believe that we should do.
Government should act as a facilitator. It should facilitate, act as an enabler and as a regulator. Government should also provide the necessary incentives to let others be the real actors.
You cite a very good example of bed linen in hospitals. There is a company that government has supported that is run and managed by people with disabilities and they make bed linen for most of the hospitals. A number of provinces were no longer buying from it. We are now turning them around. They used to employ quite a lot of people. Then they went down. They are now being rebooted. We are supporting them more and more now, so that we buy linen locally.
The issue is localisation. We want to focus more and more on localisation to have goods that are made in South Africa, so that we are able to get more and more South Africans to buy.
The issue of demand in our market is low. One of the ways in which government can stimulate demand is to pump money into the economy. Last year, you will recall, when we introduced the economic recovery and stimulus package, we said that it is a package with South African characteristics because we did not have the billions and billions that other countries have to pump money into the economy in one fashion of the other that stimulate growth immediately.
For us to do so, we will have to go and borrow. Right now, our resources are so stretched. Our needs that we are supporting now are so numerous and in fact, if we want to pump money into the economy, we will have to borrow. Once we do that, our borrowing goes higher up and our interest rates also go up and deficit becomes unmanageable. Then we are downgraded and it just leads to more and more problems.
However, from an economic point of view, you are absolutely right that government should be able to stimulate demand. Right now, we don't have the resources. Last year, we reprioritised the budget of various departments and took money from this department, channelled it to farmers to support the farmers, the township businesses, the industrial parks. That money was meant to stimulate demand, but it was redirected. It was not money that was going directly into the pockets of people so that they can have a disposable income to buy goods that are made in our factories.
So, this happens because of the economic challenges that we are facing. Your economic logic is absolutely correct to a point, but we need much more leeway, which we don't have right now. Thank you. [Applause.]