South Africa: Lobby group calls for government to weaken rand

South Africa: Lobby group calls for government to weaken rand
Published: 24 June 2010

The Manufacturing Circle, a lobby group made up of companies such as Pretoria Portland Cement, the PG Group, Hulamin and ArcelorMittal, has urged the government to intervene and reduce the value of the rand.

Stewart Jennings, CEO of glass manufacturer PG Group and chairman of the Manufacturing Circle, said yesterday that a stronger rand was compromising the growth of the important and job-creating manufacturing sector.

The group cited the examples of Germany, the UK and southeast Asia, which were emerging from the global recession, creating wealth and employment, due to weaker currencies.

The group met Finance Minister Pravin Gordhan on June 8, and had what they described as an “earnest discussion”.

They hoped to continue meeting Mr Gordhan, and also to meet Trade and Industry Minister Rob Davies, regularly.

Mr Jennings felt that banking economists wanted to keep the currency strong, without careful consideration of the needs of a developing country such as SA.

“The real question is how to create immediate employment opportunities in labour-absorbing sectors such as manufacturing.”

If there was a “competitive” currency, such as the Manufacturing Circle desired, there was a stronger possibility of attracting foreign direct investment, with all its benefits.