Arecent research paper jointly published by South Africa’s Public Investment Corporation (PIC) and the University of Oxford has projected that accelerated re-industrialisation efforts could generate over 250,000 jobs and contribute an additional 100 billion rand (approximately US$5.72 billion) to South Africa’s real economic output over the next five years. The findings form part of the PIC’s latest G20 research initiative, offering a detailed analysis of how institutional capital can be leveraged to support sustainable industrial transformation in the country.
Titled “Re-industrializing South Africa: Can Institutional Capital Spark South Africa’s Next Industrial Boom”, the paper was released last week and highlights the potential for long-term investment in industrial sectors that are seen as both economically viable and strategically significant. The research does not suggest that industrial revival is guaranteed, but rather that conditions exist for meaningful expansion if supported by appropriate financial, policy, and governance frameworks.
Currently, South Africa’s industrial sector produces around 2 trillion rand in real output, supporting an estimated 1.3 million formal jobs. According to the study’s economic modelling, scaling up investment in targeted industrial activities could increase output by 5% and employment by nearly 20% relative to current levels by 2030. The report is careful to note that such projections are contingent on sustained reforms, infrastructural improvements, and political commitment to long-term planning.
The sectors identified as most promising for catalysing this transformation are agro-processing, mineral beneficiation, and the automotive industry. These were selected not simply based on their historical contribution to the economy, but rather due to their alignment with South Africa’s natural endowments, competitive positioning, and emerging investor interest. The paper emphasises that these sectors sit at the intersection of economic feasibility and developmental impact, making them prime candidates for institutional capital deployment.
Geoffrey Nolting, a senior economist at the PIC, explained that the study seeks to demonstrate how re-industrialisation can be approached pragmatically. “Our analysis shows that we are not starting from zero. South Africa has an existing industrial foundation that, if leveraged strategically, can be rebuilt and expanded to deliver both social and economic dividends,” Nolting said.
The report calls for a recalibration of how industrial risk is assessed. According to co-author Dr Brian O’Callaghan from the University of Oxford, investment opportunities within South Africa’s industrial ecosystem remain “mis-priced,” and could yield differentiated returns for investors prepared to engage with long-duration, reform-aligned strategies. “South Africa is in a phase of policy reform and realignment. This moment presents a window for forward-looking investment that is both economically rational and socially catalytic,” he noted.
Importantly, the paper does not frame industrial policy as a panacea. It recognises the complexity of structural economic transformation in South Africa, particularly in a context of high youth unemployment, energy supply constraints, and persistent inequality. Rather than presenting industrialisation as a silver bullet, the authors argue for its role as one part of a broader development strategy—one that integrates infrastructure development, education, regional trade, and institutional reform.
The report is also cautious in how it treats the concept of “Africa’s industrial future.” Instead of positioning South Africa’s re-industrialisation as a lone national project, it emphasises its potential contribution to broader continental goals, including the African Continental Free Trade Area (AfCFTA) and SADC industrial policy frameworks. Industrial growth in South Africa could enable greater regional integration by facilitating intra-African value chains, enhancing regional supply capacity, and reducing dependence on extra-continental imports.
Furthermore, the authors make a deliberate effort to distance their analysis from industrial paradigms historically imposed by external actors. The report instead situates industrialisation within an African-centred framework, emphasising local capital, regional knowledge systems, and indigenous industrial capabilities. It promotes a vision of development in which African countries lead their own industrial trajectories without relying excessively on imported models or external validation.
The study also discusses the enabling role of public and semi-public capital, such as pensions and sovereign wealth funds, in seeding the early stages of industrial reinvestment. According to the PIC, these sources of institutional capital are well positioned to absorb longer time horizons and could serve as catalytic financiers of initial industrial re-entry—particularly in sectors where private capital remains hesitant due to perceived regulatory or macroeconomic uncertainty.
While the study does not offer prescriptive policy solutions, it provides a data-backed framework that policy makers, development institutions, and investment managers can use to assess the viability and impact of re-industrialisation strategies. It encourages collaboration between state actors and institutional investors, while also calling for improvements in infrastructure, industrial policy coordination, and investment facilitation mechanisms.
In its concluding remarks, the paper reiterates that South Africa stands at a pivotal economic juncture. Whether the country can reclaim its role as a leading industrial hub on the continent will depend not only on the quantity of investment but also on the quality of governance, vision, and commitment to long-term, inclusive development.
As African economies seek to define their futures in ways that affirm agency, sustainability, and continental cooperation, South Africa’s re-industrialisation journey may well serve as a test case for what is possible when development is driven from within—rooted in the continent’s own institutions, resources, and strategic imperatives.
