Address to Black Business Forum, Eastern Cape
Minister Jeff T Radebe
8 June 2017
The leadership and members of the Black Business Forum; Distinguished guests, Ladies and gentlemen.
I am indeed honoured to be present at this august gathering to be a witness to this ground breaking launch of the first Black Business Forum here in East London today. We are here with you Mr Buya, your leadership team and everyone gathered here because we want to be an integral part of your journey in discussing and crafting a Programme of Action for this very important organisation in our country. The Black Business Forum must be a platform to address the development and growth of Black Owned Business.
You are at the coal face and at the forefront of the struggle for economic liberation. You have dared to champion not only the interests of your members, but indeed the interests of the majority of South Africans as they continue to struggle to liberate themselves from the burdens of our historical past. Long may the struggle continue!
Colleagues, allow me to bring assurance to you today - there should be no doubt in anyone’s mind - least of all those of you who are gathered, seated and standing here with me today - your government is fully behind you! About our support and conviction as to your importance we are entirely unapologetic and our commitment is unrelenting and unyieldingly so. Radical socio - economic transformation is here, alive and well. Do take strength from this as you continue the struggle. I will give you evidence and share some of our efforts in that regard, shortly.
Allow me just a moment to pause and reflect on what we are living through first globally and then nationally in Mzansi. As I do so, allow me to bow my head, befittingly so, and recognise one who was was born in the village of NKantolo in the Eastern Cape. Had he lived to 27 October 1917 we would have all danced to celebrate his centenary. Teacher, Lawyer, President and National Chairperson of the ANC, Oliver Reginald Kaizana Tambo (Comrade OR).
Comrade OR’s words ring loud in my ears, still, when he said almost 30 years ago: “We seek to create a united Democratic and non-racial society. We have a vision of South Africa in which black and white shall live and work together as equals in conditions of peace and prosperity. Using the power you derive from the discovery of the truth about racism in South Africa, you will help us to remake our part of the world into a corner of the globe on which all -- of which all of humanity can be proud.” (Speaking at Georgetown University on 27 January 1987).
Thus, we have our marching orders: it is to remake our part of the world into a corner of the globe on which all - of which all of humanity can be proud.
Global trends and developments
The world today is going through turbulent times. There is unprecedented technical progress which promises rising standards of living. Yet, simultaneously, it holds out the peril of displaced and less labour and youth unemployment. The general expansion of trade and global investment have certainly served to propel growth and moved several low-income countries to middle-income status. Yet, too, at the same time, many groups in these countries have been “left out and left behind”.
To add to this, globally living standards have actually deteriorated. Rising inequalities within countries are now a threat to social cohesion and economic progress. At the environmental level, degradation and climate change imperil the globe, and we await concerted, responsive and responsible leadership and action to address the looming dangers.
None of these should detract from the enormous progress the world has seen and we must celebrate these achievements.
But the lesson is this - a successful response to these challenges lies in designing policies to harness global and domestic forces for development and steering a course towards the promise, rather than the peril. Our domestic policies therefore require a clear vision of the goals of development and must learn from the successes and mistakes of the past.
Colleagues - this is precisely why it is so, so crucially important for all of us to appreciate the National Development Plan, Vision 2030, our lodestar and bedrock for the South Africa we want by 2030.
We all know the self-evident truth: high inequality tends to rob the black and poor of voice and so results in a weakening of our hard fought democracy. Also, the empowerment of women and of historically discriminated groups is a priority in its own right, but it also provides a sound basis for economic efficiency.
Just last week Fitch Ratings affirmed South Africa’s long term foreign and local currency debt ratings of ‘BB+’ with a stable outlook.
Moody’s, at last count, has us on review for a downgrade. At the time of writing, it has not yet announced its decision.
Thus, the risks are stark. We now really need to rally and factor in a much vaunted “response strategy”. This should include one in which government, together with all the relevant critical stakeholders, work more deliberately together, in partnership, and in a much more stronger and co-ordinated manner. The time to act is now!
As a matter of exceeding urgency, we need to exert every effort at ensuring that South Africa is not downgraded any further. Thus, to this end, a “low hanging” action must be for the highest echelons in government to re-engage with more urgency, seriousness and commitment our social partners – more especially, the private sector. This should be done to ensure that the joint work of government, business, labour and broader civil society continues with resoluteness and with strongest leadership. This “hour” calls for that, and more!
We have proven over the last while that where there is trust and confidence, ratings agencies tend to give us the benefit of their goodwill. We should have no doubt that part of the task at hand is about forging an entirely new social compact. Both leadership in government and the ruling party, the ANC, have openly committed to improving business and investor confidence in South Africa. The importance of this should not be under-estimated.
And just as we thought that things could not get any worse, news released by Statistics South Africa, a few days ago, revealed that we have effectively slipped into a technical recession. GDP declined 0.7% during the first quarter of 2017, coming short on the heels of a 0.3% contraction in the fourth quarter of 2016. Two quarters of consequent negative growth means that the next few months are bound to be tough times.
For us, this is particularly disconcerting because the country, as the National Development Plan, Vision 2030 argues, requires strong economic growth to make inroads and deal decisively with poverty, unemployment and inequality. If truth be told - living standards of our citizens cannot improve in the absence of strong and inclusive economic growth. Additionally, our economy needs to grow faster in order to increase revenue in order for us to continue to meet our pro-poor policy stance and thus meeting our growing social welfare expenditure. Two important challenges must now be dealt with head-on:
· One: restoring, as a matter of critical import South Africa’s credit rating to investment grade is the one critical pivot.
· Two: more investment is required to get South Africa out of the current doldrums.
To achieve our overarching goals, the NDP lists the critical requirements for success, which include focused leadership that provides policy consistency; ownership of the plan by all layers of society; strong institutional capacity at technical and managerial levels; efficiency in all areas of government spending, including management of the public service wage bill and making resources available for other priorities; and prioritization and clarity on levels of responsibility and accountability in every sphere of government, as well as a common understanding of the roles of business, labor, and civil society. It is a framework for partnership and coordinated and consistent action, and for forging the necessary social compact(s) to cement the consensus we require to propel us forward and stay the course, because the changes we seek are long-term.
Indeed, government has to play a leading role in the implementation of the NDP, relying on the strategic levers at its disposal, which it must fully exploit. However, it must be underlined-the NDP was conceived of and endorsed as a plan for ALL of South Africa – ie it is not just a government plan! Thus, we require all hands on deck, now more than ever. In this regard, government has acted. It has ensured that the goals and targets of the NDP are integrated into government’s Medium-Term Strategic Framework (MTSF) for the electoral period 2014-2019, as the first five-year implementation programme for the NDP.
Radical socio-economic transformation
Colleagues, it is now 23 years and our long walk to freedom is far from over! For as long as poverty remains endemic, for as long as large swathes of our youth remain unemployed, and for as long as levels of inequality remain among the highest in the world, our people will not be free. The face of poverty remains black and, in particular, African. The call for radical socio-economic transformation seeks to address this fundamental issue. It is a response to the needs of our people and it is a national imperative.
And, please let me assure you - there is nothing abstract about radical socio economic transformation - it is fundamentally about inclusive growth; about building a more equal society; about drawing into meaningful economic activity the one-third of working age South Africans who currently languish on the outside of the economic mainstream; about a massive skills development drive that prepares our youth for the workplace of the future and it is about fundamentally changing the ownership patterns of the economy, at a faster rate and in a more meaningful manner than at present. Put simply-it is about giving effect to the demand of the Freedom Charter that the people shall share in the country’s wealth.
To date, the Department of Trade and Industry has approved over R1 billion in grant finance to 36 projects undertaken by black-owned and managed businesses. Together, these projects have a combined project value of over R3 billion. The private sector needs to support this programme, whether through provision of additional funding, the transfer of skills and technology, or providing access to supply chains. Once it reaches scale, it will both contribute to the re-industrialisation of our economy and help redefine our approach to black economic empowerment. Black business people should no longer be mere minority shareholders in established business. They must be producers and financiers. They must start their own businesses and they must be equipped to run them.
De-racialising the economy also means leveraging the procurement spend of the state – and of the private sector – in a fair and transparent manner to promote black and women-owned businesses. Priority must be given to ensuring black ownership in emerging sectors of the economy, such as in natural gas and the ocean’s economy. Underpinning all these measures is a concerted effort to significantly increase the level of investment in the economy. In truth, the work of radical socio economic transformation is already underway and playing itself out in every-day life.
Among the top priorities we are looking at are ways of expediting transformation in the following areas Ownership of the economy by black people; Mining and beneficiation; Agriculture and land redistribution; Manufacturing and Small, Medium and Micro Enterprises
Radical socio-economic transformation is the undergird of the NDP. It serves as the bedrock of all government programmes in our journey towards building a better and more prosperous South Africa by 2030. Let me share specifics in two areas with you:
(i) The Land Question
The land question is an albatross that has been around our necks for a very long time. Land dispossession was one of the critical tools that the colonisers used to prevail over the indigenous peoples of the African continent. For when you take over the land, you take ownership of the people who reside in it, their heritage and their resources. A dispossessed people is a powerless people.
The pace of land reform is much slower than the targets set in the NDP and this hinders progress in our developmental strategies. We have had to face the fact that the “willing seller, willing buyer” method does not help in fast-tracking transformation in land ownership. It would take at least forty years for us to attain the targets as set out in the NDP.
In pursuit of the prescripts of the Freedom Charter, we are accelerating our land reform programme to erase the footprints of colonial rule and apartheid that are deeply entrenched in the contours of our society.
(ii) Mineral Resources
At the core of the radical socio economic transformation programme must be the creation of decent work and accelerating shared and inclusive economic growth especially in the mining industry. It is regrettable that there is not enough diversity in the ownership of mining companies. One of the most striking clauses in the Freedom Charter reads:
“The mineral wealth beneath the soil, the Banks and monopoly industry shall be transferred to the ownership of the people as a whole;”
The positive impact of mining must be evident in the living conditions and economic prospects of mining related communities (including labour sending areas). We cannot be the perpetuators of a system where the people who toil the land are the most marginalised and the downtrodden.
This compels us to ask difficult questions about the injustices of our past and how we take the nation forward. How do we ensure that those who make profit out of mining in this area, leave behind more than just a Big Hole? How do we ensure that people in the mining areas, as well as those who work in the mines, are taken care of and that their towns are developed?
Since the discovery of gold and diamonds in the nineteenth century, the mining sector became the key engine of development in South Africa with large mining houses. Despite a number of setbacks in recent years, the sector remains extremely strategic to the South African economy.
Our objective as government is to promote active participation and support of key stakeholders in the mining sector in order to steer the industry towards a sustainable development trajectory. We need to ensure equity in terms of ownership in the mining industry so that we can make a difference in the living conditions of the majority of South Africans.
In 2015, government launched Operation Phakisa workshop for mining as a vehicle to enhance the implementation of the Radical Economic Transformation. Operation Phakisa has the underlying objective of unlocking investment in the exploration of mining activities whilst optimising the developmental impact of the sector on the economy, the work-force and on surrounding communities.
A mining company has stopped related imports and entered into an initial R160 million contract with a black owned underground equipment manufacturer with the objective of increasing the contract to R500 million.
Some R17 billion worth of investment and 5 000 jobs have been unlocked in the Operation Phakisa oceans economy. Licenses for oil and gas exploration have been issued as part of the sector growth strategy.
I am of course eminently aware that the rating agencies have explicitly cited that successful implementation of the NDP is a critical imperative for South Africa. The task then is to demonstrate, compellingly and far and wide, even to the rest of the world, how we are attending to addressing the challenges of low economic growth and the related issues of unemployment, poverty, and income inequality and skill shortages. The NDP sits at the cusp of the solutions.
As Minister in the Presidency Planning, Monitoring and Evaluation we can, and have consistently, demonstrated the very real and concrete efforts, across government, in implementing the NDP. But more is required. Perhaps, what is now required is more openness, more public engagement and more active and inclusive participation by all stakeholders in South Africa. This is after all, our NDP and it belongs to all of us. Let us agree to talk to a renewed set of milestones to ensure greater and more effective implementation of the NDP.
To advance radical socio-economic transformation we must rededicate ourselves to the NDP and its implementation. We must attend with a renewed sense of urgency to accelerating its implementation, paying due attention to the role of the private sector, organised labour and other actors in society. In this regard, we call on society as a whole, to join hands and actively engage and participate in the quest to implement the future we want for our country.
Together, we need to grow strong leadership across society and mobilise our people to be active and responsible citizens to address the challenges facing our country. We all have a responsibility, wherever we may be located, to ensure that we do not squander this opportunity through reckless or self-serving actions. Thus, it is to live out what Comrade OR pleaded with us and to remake our part of the world into a corner of the globe on which all - of which all of humanity can be proud. This is a time for remaking, of restoring, rebuilding and a time for building new bridges to ensure no-one, particularly if you are black, rural and poor shall be left behind. It is the time to unleash virtuous cycles of actions in the interest of delivering on our mandate and to give life to the expression that the ANC lives and the ANC leads-so that all of humanity may be proud!
I thank you.