MONWABISI RHWEXU | Nissan exit sparks fresh debate over BEE and investment

A recent article in BusinessTech titled “South Africa losing to one of the biggest competitors because of BEE [Black Economic Empowerment]”, has put a blame squarely on BEE policies. It clearly states that “BEE is seemingly becoming a source of policy uncertainty that is actively driving investment away”. Business Leadership SA (BLSA) CEO Busi Mavuso, has been saying “Nissan’s decision to expand manufacturing in Egypt rather than SA reflects how global companies view local business conditions and accessibility”.

The article misrepresents what appears to be a global restructuring business decision. Multiple reports, including from Reuters in January, indicate that Nissan’s exit from manufacturing at the Rosslyn plant formed part of a broader global restructuring strategy rather than a uniquely SA policy failure. Reuters reported that Nissan was closing or consolidating seven plants globally as part of a turnaround plan after major financial losses.

The Rosslyn plant had already been struggling with declining production volumes after the discontinuation of the NP200 bakkie, leaving the Navara as the only model produced there. Output reportedly fell sharply from over 50,000 vehicles annually a decade ago to around 17,000 units in 2024. Rather than simply shutting the factory, Nissan, a Japanese manufacturer has sold the plant to Chinese automaker Chery, which plans to recommission and expand production in SA.

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Reuters reported that Chery intends to retrofit the plant for hybrid and electric vehicle production, export vehicles into Africa and Europe, and potentially create thousands of jobs through local supply chains. If SA’s policy environment were fundamentally unworkable, it would be difficult to explain why Chery is simultaneously increasing investment in the same facility and positioning the country as part of its global manufacturing strategy. SA’s history makes it impossible to discuss economic policy without confronting the legacy of exclusion.

Under apartheid, the majority of black South Africans were systematically denied access to land ownership, quality education, skilled professions, business opportunities, and capital. The economy was deliberately structured to benefit a racial minority while excluding the majority from meaningful participation. To this day we are the most unequal society in the world.

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