As I sit and eat my chicken mayonnaise bread roll on another day where we will be hearing the “My fellow South Africans” lecture I wonder how many lives were touched through the production, delivery and selling of this one roll. I am grateful that I can still get the bread roll to eat and the mayonnaise and chicken that accompany it. For health reasons I don’t have butter or margarine on my roll anymore and no I did not shred the chicken, so that eliminated a number of other people who could have been involved in the making of the roll. But I did use a knife to cut the chicken and a spoon to spread the mayonnaise. And then I must not forget that the chicken is leftover chicken from our braai, which was cooked on a Weber braai unit, and as there were leftovers, they had subsequently been kept in the fridge so as to eat at a later stage.
I could go on and on but I won’t because right now, in a pandemic driven world, there are many that are not so fortunate to be involved a production chain of goods and services to deliver to fellow citizens because the government, in their wisdom, decided to put a complete ban on the sale of alcohol. The effect all along the value chain is devastating and has caused added-on disruption and brought misery and hardship to many others connected to the alcohol industry. The entertainment, hospitality, restaurant industries and many others have had consequences thrown at them that are distressing and disturbing. The fact that so few can make a ludicrous decision for millions, and the fact that your constitutional right has been taken away from you, is even more distressing.
It is not about whether you can get your alcohol fix or not. It is about the vast amount of people and businesses in the whole of South Africa that are involved in the value chain and not just the industries I mentioned. Who does not have more than one family member or friend that has been affected? And then of course there are the lost taxes and the over R12 billion that was going to be spent on expansion plans by some of the companies involved in the alcohol industry.
The production chain, in economics, is an analytical tool used to understand the nature of the production process, and is often very loosely used in description. There are many factors that have to be taken into account as is the case with a supply chain. A supply chain is a system of organisations, people, activities, information and resources involved in supplying a product or service to a consumer. Something we don’t often think of. As hinted with the eating of my chicken mayonnaise roll there are sub supply and production chains that are also involved. For example, the manufacture of the knife I used.
That particular knife is made of stainless steel, a metal that is extensively covered in this issue through the proposed implementation of an export tax by our now infamous government, on the raw material – chrome ore – that is used to make the ferrochrome and is then used in the manufacture of the stainless steel.
South Africa is blessed in that it accounts for 50% of global chrome ore production and holds about 75% of the world’s reserves. It also manufactures a sizeable amount of ferrochrome. Many will agree with the proposed export tax because it will force local companies to beneficiate and add value to the chain rather than send our material to China who then benefits from the high-value beneficiation.
But then what about all the other raw materials that are being exported, mainly to China? Why aren’t forced value chains being implemented? And what about all those T-shirts that are being imported from China and sold in one of our main retailers. Surely there should be an import tax put on those goods so the retailers are forced to buy local? Imagine all the value chains and employment we would then create. And of course we would have tax money to compensate all those that have been forced out of work and some left to buy the vaccines!!
