ADDRESS BY MINISTER RADEBE AT THE INVEST AFRICA COCKTAIL RECEPTION
Good evening honourable guests, I thank you Mr Rob Hersov for inviting me to this event and to share some of my thinking here with you tonight.
As you are aware, tomorrow President, Jacob Zuma will provide an update on the implementation of the Programme of Action based on the National Development Plan (NDP) at the State of the Nation Address. The 2017 address, will be delivered within the context of the current strides made by government to respond to the various challenges that our country is facing
These include among others a challenging local economic environment, continued drought conditions in certain parts of the country, the #FeesMustFall student protest, continued acts of racism and state capture investigations.
Global events this year have reminded us that the more complex a system, the greater a community’s concern about its future. The weakening of multiple systems has eroded confidence at the national, regional and global levels. And, in the absence of innovative and credible steps towards their renewal, the likelihood increases of a downward spiral of the global economy fuelled by protectionism, populism and nativism.
All the while, we heard at the World Economic Forum, in Davos that the Fourth Industrial Revolution continues to drive the convergence of technologies that blur the lines between physical, digital and biological systems. Our interdependence will not diminish, but more agile, inclusive and collaborative responses are urgently needed to address the complexity and uncertainty in people’s lives. We, as South Africa continue to hone our capacity to manage the systems that underpin our prosperity and security.
Let me share the exceedingly good news with you as investors. We now have the necessary blueprint: the National Development Plan (NDP), which sits under my purview and control, as Minister in the Presidency: Planning, Monitoring and Evaluation. The NDP offers a long-term perspective. It defines the desired destination and identifies the role different sectors of society need to play in order to ensure that we as South Africa reach that goal of a more prosperous, inclusive and growing country.
Why invest in South Africa
South Africa’s economic growth is projected to rise to 1.3% in 2017. We are committed to do the right things to support investment and confidence. This will ensure that our economic recovery will be more rapid.
Infrastructure investment, mainly in energy, transport and telecommunications, will amount to over R900 billion over the next three years. Efforts to improve supply chain management and ensure greater value for money in public service delivery will continue to be prioritised.
South Africa’s macro-economic environment remains resilient. Our central message to you, as investors, is that stable and sustainable public finances, alongside economic reforms and a transparent monetary policy, will support a return to the higher growth rates needed to achieve the National Development Plan, our master plan’s objectives and goals.
Reasons for renewed confidence
The South African economy has more than doubled since 1994 and the tax base has been substantially broadened. Confidence in our macro-economic stability is attested to by our ability to raising debt in international capital markets. We have been recognised as the best sovereign debt management operations and issuer in Sub Saharan Africa by the Global Markets Publication.
Debt management initiatives over the past year have reduced government’s refinancing risks and were supported by investors across all the major financial centres in Asia, Europe and the United States. Additionally, there is continuity and coherence in our leading policies and programmes. The architecture of government is sound, pivoted on the National Development Plan, and there is progress in public management. Our Constitution, the rule of law and social justice underpin our plans and budget proposals.
As South Africa we are a competitive, investment friendly destination that is open for business. There have been a number of expansion projects announced in mining and manufacturing. Allow me to site just a few significant ones:
· The first steps have been taken to attract natural gas infrastructure investment into Richard Bay and Coega;
· The City Support Programme is bringing together urban planners, business leaders and government officials to strengthen investment incentives and address development challenges in major metropolitan areas;
· Invest SA has established a facility to assist potential investors with the procedures required to meet regulatory requirements. We aim to coordinate investment promotion and facilitation and also to ease delays for investors in obtaining visas, licences, permits, registration and approvals;
· The national science and technology infrastructure is contributing to the international competitiveness of South African industrial innovation, including fuel cells, titanium powder, medical devices and composite materials. Construction of the Meerkat array is due for completion at the end of 2017;
· Over the medium term, resources have been re-prioritised for the Small Business Department, including efforts to strengthen agencies that support small enterprises.
We recently announced the CEO Initiative -it has established a new fund to support the expansion of small firms, providing support through mentorship and market access. The business sector is also developing an internship programme to improve the job-readiness of young work seekers.
Some R17 billion worth of investment and 5 000 jobs have been unlocked in the Operation Phakisa oceans economy. Licences for oil and gas exploration have been issued as part of the sector growth strategy.
Active work by the Commission for Conciliation, Mediation and Arbitration has brought greater stability in the workplace this year.
So, my message is clear – we as South Africa are more than fully committed to creating the conditions for inclusive growth and transformation of the economy. Additionally, in 2015 we launched the Nine-Point Plan to boost economic growth and create much-needed jobs. It includes, inter alia:
· Resolving the energy challenge
· Revitalising agriculture and the agro-processing value chain
· Advancing beneficiation or adding value to the mineral wealth
· More effective implementation of a higher impact Industrial Action Policy Action Plan
· Encouraging private-sector investment
· Moderating workplace conflict
· Unlocking the potential of SMMEs, cooperatives, townships and rural enterprises
· Boosting the role of state-owned companies, information and communication technology infrastructure and broadband roll-out, water, sanitation and transport infrastructure, and
· Operation Phakisa, which is aimed at growing the ocean economy and other sectors
This structural transformation of the South African economy rests on an effective partnership that are flourishing between government, business, organised labour and all stakeholders who share our commitment to inclusiveness in our development path. We will intensify the national dialogue to seek common solutions and concrete actions to slow growth and poverty.
We are deeply committed to addressing the levels of inequality. We are committed to opening up opportunities and broadening participation in an expanding economy. Government and business is committed to creating decent work prospects for all, over time, and extending the frontiers of education to those who wish to learn. Furthermore, International best practice suggests that the best way to reduce inequality and increase inclusivity is to:
· Improve the quality of education
· Accelerate the pace and pattern of urbanisation and housing development
· Promote industrial development and the expansion of employment, trade and commerce
· Promote social protection services, including access to health care and social security
State Owned Entities are a key driver of national economic growth and development. We maintain the view that all state owned entities must be efficient and financially viable. A suite of measures will be implemented to strengthen State Owned Entities to enable them to meet their developmental objectives.
Importantly too, as government, we have endorsed a Private Sector Participation framework for infrastructure delivery which will guide collaboration between State Owned Entities and the private sector. We are prioritising infrastructure investment to ensure our competitiveness. Major infrastructure programmes over the next three years include over R300 billion in transport and logistics projects, R240 billion in the energy sector and R137 billion in water and sanitation.
Security of energy supply is a cornerstone of sustainable growth. Within the framework of the Integrated Resource Plan, it has been confirmed that Eskom will take the lead in the nuclear power initiative in respect of ownership and operations. Our approach to energy security and to meeting climate change commitments also includes a substantial renewable energy programme. A total of 64 projects are already in progress, bringing investment, jobs, clean energy and community development. A further 37 independent power projects have been approved. Once Eskom has signed the off take agreements, which they are required to do in terms of their commitment to government, a further R58 billion in investment and some 4 800 construction jobs will commence, bringing 2 354 megawatts of capacity to the electricity grid.
The NDP is anchored and builds on the notion of a public - private partnership. Government alone cannot do it. The Private Sector on its own cannot do it-we need each other to be both responsive and responsible partners to make it happen!
The NDP has been approved and adopted by government and has received strong endorsement from all sectors in the broader South African society, including, I must underline, the private sector. The focus now shifts to ensure that the NDP and its proposals are implemented, and importantly, it is my task, together with my cabinet colleagues, that this is done in the right order over the next 13 years. Thus, I pause to invite you all as investors, come and join us on this journey to help build a South Africa that is united, stronger, and more prosperous.
South Africa is open for business and partnerships for development.
I thank you.
