Speech by Minister in The Presidency, Mr Jeff Radebe, Minister for Planning, Monitoring and Evaluation and Chairperson of the National Planning Commission, on the occasion of the Business Dinner hosted by CCI South Africa in conjunction with the Mandela Legacy , Oysterbox, Durban, 02 February 2018
It gives me great pleasure that we are here today on an occasion that brings together leaders of business from various sectors to deliberate on the common challenges between government and the private sector in spearheading economic growth and development.
As government, we have considered it one of our utmost priorities to create an environment where economic activities can thrive as basis to address the trio challenges of poverty, unemployment and inequality, as stated in the National Development Plan (NDP). The NDP remains our blue print to bring harmonious working relationship across the spectrum of government, business, labour and the entire non-governmental sector.
As a way of indicating the seriousness of our intention to bring parity between the fiscal expenditure by government and the NDP development targets, the department was entrusted with planning and the implementation of the Mandate Paper. What this summarily means is that the Department of Planning, Monitoring and Evaluation, working in conjunction with Treasury and all other departments, will lead on setting fiscal expenditure priorities. This will give teeth to the Department of Planning, Monitoring and Evaluation’s task in overseeing the implementation of the NDP as a whole.
Ladies and gentlemen
The poverty, unemployment and inequalities we experience today are consequences of deliberate socio-economic engineering. For the same reason, we need radical socio-economic transformation not only to reverse this legacy of inequality but also to put our country on a development trajectory that will meet all our people’s needs.
I am happy on this occasion, that meeting here are business leaders who are conscious of the challenges of unemployment. It is the duty of entrepreneurs to find business opportunities, it is government duty to create the enabling environment for such opportunities to exist. Undoubtedly therefore, working together we can do more!
I have been informed that through the Call Centre South Africa initiative, a collaboration between the Mandela Legacy and Career Box, over 6000 employees have fulltime jobs and an average of 384 students are enrolled monthly on short term contracts. I have also been reliably informed that a new business initiative has a potential of a further 3000 fulltime jobs.
This is what we need from entrepreneurs, the ability to see a business opportunity and accordingly craft an initiative that would help reduce unemployment, poverty and inequality.
I know too well that the business environment has undergone serious challenges, including the 2008 global financial meltdown that affected all countries of the world and put the global economy on a downward spiral. Certain mitigating factors such as our massive infrastructure investment in the built industry sector helped cushion the adversity of some of those global factors.
Just as a background, it may be relevant to remind you of the stark challenges we face, and the historical context of their gravity.
Between 1980 and 1994, the economy grew at 1.2% per year and later a negative GDP growth between 1990 and 1992.
The share of investment in GDP dropped from 27% in 1981 to 15% in 1993. Investment by the public sector shrank from 12% to 4 % of GDP between 1981 and 1993. The private sector investment fell from 15% to 10 % of GDP during the same period. The national budget deficit reached 7.3% in 1993 as the apartheid government escalated borrowing. Consequently, it was estimated that by 1995, 28% of households were living below the poverty line.
Over the era of our democratic dispensation, we sought to repay the apartheid debt, which hampered expenditure on other important development needs. Due to the legacy of racially premised poverty, unemployment and inequality, we are obligated by the constitution to heal these historical socio-economic divisions.
Some positive strides since 1994 includes an average economic growth of 3.2% per annum between 1994 and 2012. The GDP grew from R1.6 trillion in 1994 to just over 3 trillion by 2015. The tax revenue base was increased from 3 million taxpayers in 1996 to almost 20 million by 2014. The middle class grew substantially since 1994, with increased inclusion of blacks and therefore helping reduce poverty, unemployment and to some extent inequality. In the meantime, the social security system was increased to attend to poverty with over 16.8 million beneficiaries by 2011.
Ladies and gentlemen
As I have indicated, we consider it the role of entrepreneurs to seize business opportunities and government responsibility to establish the enabling framework. This is the basis for partnership in the implementation of the NDP with the aim to reduce poverty, unemployment and inequality. Amongst the initiatives by government was the legislation of the Mineral and Petroleum Resources Development Act, which now vests the rights of all minerals in the hands of the State. Licensing as well as BBBEE and transformation charters are yet other tools to create an environment that would attend to the objectives of reducing racially skewed unemployment, poverty and inequality.
As I have indicated, through the Mandate Paper, we are now in a position to direct through the National Budget and procurement expenditures to redress the imbalances of the past whilst enabling vibrant economic growth.
As the ruling party, we have not minced our words on radical socio-economic transformation as the second phase of our democratic transition. If we fail to address the socio-economic challenges and heal the divisions of the past as directed by the Constitution, we would have inevitably subverted the text and spirit of the most supreme founding laws of our democracy.
It is within this context that we have spoken of the need to have a Developmental State at the heart of our national transformation programme. As I have indicated more than once now, government must create the enabling environment and business or entrepreneurs must seize the business opportunities. We have said that monopoly capital crowd out greater participation and therefore impedes the objectives of the NDP to reduce poverty, unemployment and inequality.
I am therefore happy that big business is coming to the party, as indicated by tonight’s event, to help enrol more people in economic activities. Your initiatives through partnership with established business such as Virgin Mobile, Standard bank, Vodacom and Bloomberg, is indicative of the desire to share business opportunities with smaller companies whilst increasing employment opportunities.
I am certain that there is more that can be done to enable a thriving SMME sector, which in many economies is responsible for high employment levels.
Now, as government we will seek to strengthen planning and implementation of the NDP as well as improve coordination across departments and the three spheres of government. We will also continue to improve monitoring, particularly as enabled through the opportunities of the 4th Industrial Revolution, which is IT based. We will accelerate the professionalization of the public sector. On our part, we are developing a consistent engagement strategy with the private sector and other role players in the implementation of the NDP. One important tool to ensure the realisation of the NDP targets on poverty, unemployment and inequality is the procurement by government of private sector services and goods.
Tonight is an occasion to communicate the unequivocal message that South Africa considers itself part of the global community. I am happy that international businesses such as Bloomberg, Apple, Amazon, Microsoft and many more, may realise that South Africa has the expertise, experience, human talent and ability to support their administrative requirements.
Ladies and gentlemen
What is very clear is that all of us must put our shoulders on the wheel to make real the NDP development targets. Working together we can indeed achieve more!
Allow me to take this opportunity to thank you once more for this invite to participate in the esteemed Business Dinner and to share perspectives on the common tasks to development our country and empower our people.
I thank you!