Africa’s largest economy is deindustrialising

South Africa’s manufacturing and heavy industry sectors are contracting, and the economy is simplifying towards raw-material exports, services and agriculture. Economists describe the country as a case of “premature deindustrialisation” – the loss of industrial capacity before reaching high-income status. 

The consequences are visible in the Vaal Triangle, south of Johannesburg. Since the 1920s, the Vaal’s steelworks, smelters and power stations have provided stable work and shaped entire communities. But now the factories are closing.

The job losses have been enormous, especially within the metals sector and heavy industry. Over the last two decades, hundreds of thousands of manufacturing jobs have disappeared, including 61,000 in the last quarter of 2025 alone.

Kabelo Ramkgathadi of the National Union of Metalworkers of South Africa (NUMSA) has worked in the metals sector for nearly 25 years, rising from general worker to drill operator. Today, he represents union members across the Vaal Triangle.

“When I joined the industry,” Ramkgathadi says from across his desk at NUMSA’s Vanderbijlpark office, “it was not difficult for any individual to get a job. You would resign or be dismissed from one company and get the job next door.”

At the end of 2025, the global steel giant ArcelorMittal shut down its Vereeniging steelworks – cutting 3500 jobs – and gave notice of retrenchments at its Vanderbijlpark steelworks. These job losses are on top of the region’s 55.2 % unemployment rate.

Thirty-seven-year-old Bongani Mokoena (name changed) confirms that the post-apartheid social mobility that Ramkgathadi hinted at above is faltering. Mokoena first joined a steel manufacturer as a general worker. Later on, he was able to, as he puts it, “set the broom aside” and become a specialist machine operator earning $ 3.16 an hour. With overtime, he earned $ 480 to $ 600 a month but is now unemployed. He finds it hard to find a job and reports that his friends in the metal industry are telling him that they too “don’t get jobs anymore.”

As for those who recently matriculated from high school, Mokoena states that “it’s bad. You’d be very lucky to get a spot in retail.”

High electricity prices and artificial economics

The immediate cause of the closure of heavy industry is that electricity and rail transport prices have risen to uneconomic levels, making it cheaper to import goods instead.

According to the Energy Intensive Users Group of Southern Africa, electricity prices rose from $ 0.012/kWh in 2008 to $  0.10/kWh in 2024. The price increases for both rail and power stem from the government’s failure to make infrastructure investments in the 2000s and two decades of widespread corruption. Blackouts and rail disruptions are frequent.

The underlying cause of the deindustrialisation is a clash between two economic policies. When the National Party came into power in 1948 and started apartheid, it embarked on an industrial policy that aimed to uplift Afrikaners and defend Christian nationalism. Steel, minerals, power and rail were all in the state’s hands and weren’t required to make a profit.

Etienne Rousseau, the founding managing director of the state-owned petrochemical firm Sasol, described the industrial ethos in 1948 as “artificial economics and government protection.”

After apartheid came to an end in 1994, and especially during the presidency of Thabo Mbeki (1999-2008), government policy focused on privatising industry. The hope was that competition on the global market would grow the economy. 

The state-owned South African Iron and Steel Industrial Corporation (ISCOR) was fully privatised in 2001 with the unbundling of its iron ore assets. A few years later, the Indian billionaire Lakshmi Mittal took over the steel side. 

“ArcelorMittal now, their main objective is to maximise profit,” Ramkgathadi says. He points out that this is a move away from the objective of ISCOR, which was not necessarily to maximise profit but to ensure stability.

NUMSA, the metalworkers’ union, argues that the only way to save the steel industry is to renationalise it.

ArcelorMittal South Africa refused to be interviewed for this article.

Debt and drugs

Vincent Ndemande lives in Sebokeng, a major township within the Vaal Triangle. He’s a chef, but his position isn’t permanent. “A lot of people now are working short shifts,” he says. “Before, you could support your family and pay your debts. Now people take out loans and end the month deeper in debt.” 

Sewage runs down both unpaved and paved roads in Sebokeng. But the decay of infrastructure isn’t only affecting poor townships. The formerly prosperous cities of Vanderbijlpark and Vereeniging are also in a dire state due to the decades-long collapse of the local municipality.

Faatema Patel works as a pharmacist on a main street in Vereeniging’s central business district. Dirt, rubbish and potholes define the road. After the steel mill closed and workers subsequently lost their medical insurance, Patel’s pharmacy’s revenue declined 20 % over the course of a month, she says.

Retrenched workers, according to Patel, will enter “the public health system, which is really struggling. We see patients from the public health system every day that come to us looking for medication that is just not available in the public health sector.”

Some of those medications are HIV antiretrovirals, for which, according to Patel, the private sector provides a month’s supply for about $ 22. To compare, the Social Relief of Distress grant, the government’s basic welfare measure that provides short-term aid to South Africans in need, gives recipients $ 23 a month. About nine million people rely on this grant.

From township to affluent suburb, Vaal Triangle residents complain about drugs, particularly nyaope: a cheap mixture of heroin, cannabis and household chemicals like pool cleaner and rat poison. The social fabric is being torn apart.

Selina Marilitsi was a cleaner at a manganese smelter, which supplied alloys for the steel industry. The smelter closed in 2020, and she hasn’t had a job since. Though her entire life has become a struggle, her greatest concern is her two boys, both at school.

“We don’t want drugs,” she says. “Drugs are killing our kids.” Marilitsi argues that kids should go to school, get an education and help their parents. “We ask that this gets fixed,” she says.

Faatema Patel’s pharmacy stopped selling over-the-counter codeine medication because teenage boys were constantly coming in to buy it, often making the excuse that their younger brothers were ill. Codeine is an opioid drug, which can cause addiction and poisoning, among other things.

Civil society responds

Communities are trying to compensate for the collapse of public services. In Roshnee, a suburb on the edge of the Vaal developed under apartheid for Indian South Africans, residents have taken responsibility for basic infrastructure and security. They repair potholes, organise patrols and support local schools. Residents say crime within the suburb has effectively disappeared.

In nearby Sebokeng, residents also fight crime. Jeanette Vis volunteers with the Community Policing Forum, which organises patrols because police presence is sparse. The Forum also tries to keep drugs and weapons out of schools.

Yet these efforts are too limited to fully replace the services the state should provide.

Political disillusionment

A commonality across the Vaal is the sense of being cast aside. In the view of more than a few residents, the Vaal built up the nation’s economy, and in return, the governing African National Congress sank the region into poverty. 

“I feel betrayed. I know what they promised,” Bongani Mokoena says in front of a train station that no longer operates. “And I know what they are still promising, and none of that is happening. And it’s scary because I have kids in this broken country.”

Unionist Kabelo Ramkgathadi predicts that “there will be an uprising at some point, where people will say, no, away with the government. I don’t know how they are going to do that. But you can see it coming, slowly but surely.”

This story was supported by the Henry Nxumalo Foundation and the Pulitzer Center.

Nathalie Bertrams is an investigative journalist, documentary photographer and National Geographic Explorer reporting on environmental crime, wildlife trafficking and natural resource conflicts with a focus on Europe and Africa.
nathaliebertrams.de
Instagram | @nathaliebertrams

Tristen Taylor is a South African investigative journalist. He is a member of the International Press Institute and a research fellow in philosophy at Stellenbosch University.
tristen@thanatos.co.za