Manufacturing Indaba at Emperors Palace, Gauteng

Manufacturing Indaba at Emperors Palace, Gauteng

I wish to express my thanks and humility, on behalf of our government, for having been extended the opportunity today to address this important forum. It is among our important approaches to governance that we constantly share ideas with all sections of society on matters of national importance. Our intention is to share our strategic plans with the public and to draw what are obviously valuable insights from members of the public, industry and other stakeholders.

The idea of the National Development Plan derives from the understanding that the progress of society must be guided by an agreed upon framework that enables all social forces to set achievable objectives over a given time frame. This is because for national development to succeed, all social partners should accept responsibility for development and pledge common efforts for the realization of those developmental objectives.

The NDP thus sets out a vision 2030 that outlines what sort of social relations and development outcomes we wish to achieve. It asserts a vision of a society that is radically different from the past that we are actively trying to overcome. In this regard, it projects a society that is truly non-racial, non-sexist, democratic and prosperous society.

Among its attributes will be high levels of employment, an improved standard of living for all citizens, high rates of economic growth and equitable redistribution. This also relates to the question of equal access to social assets like education, healthcare and infrastructure.

In the context of this summit on Vision 2030, we were asked to specifically address the question of fixing the economy in order to realise the vision of the NDP. This topic correctly assumes that the state of the economy has a direct bearing on the ability of government and the country to achieve the specific outcomes outlined by in our Vision 2030.

As I had already indicated, critical to the achievement of the objectives of Vision 2030 is the achievement of high rates of economic growth. This must be accompanied by a restructured economy that achieves inclusive growth and equitable redistribution.

Thus the first principal task in fixing the economy lies in restructuring it to work for the majority of South Africans. This means that we need to set the economy on a platform of industrial growth and massive job creation. Our pursuit of reindustrialisation is centred on the understanding that the creation of more industrial assets especially in manufacturing industries is a strategic medium term means of absorbing higher levels of labour.

This requires that we create a dynamic industrial value-chain between the primary and secondary sectors of the economy. These linkages are related to the question of promoting local value-addition and beneficiation of such as assets as our minerals. This essentially means we must break with the pi-to-port structure of minerals exports and add value locally for the exportation of finished products. This will improve the scale of local production and will open up a wide chain of new industries and employment opportunities.

This also includes the creation of functional industrial relations that will limit disruptions to productivity. This requires cooperation between labour and capital, systematically building a relationship that incrementally improves the condition of workers in the workplace and improves their wages; balancing real wages with the social wage. Of course government will play a leading role in fostering a social compact to get this relationship going.

Secondly, we need to create systematic global partnerships that will provide diverse market networks that will reinforce our ambitions for reindustrialisation. In this context, the consolidation of African economic integration is critical. The market potential of Africa has hitherto been underutilise and we have now pursued new regional partnerships to unlock this potential.

The participation of South Africa in BRICS is also underpinned by this strategic goal of building diverse global networks. Our view is that the pursuit of high impact industrialisation and new industries requires a systematic shift from reliance in traditional markets like the Eurozone so as to avoid devastating effects on our local economy when such markets experience crippling shocks.

Thirdly, the objective of equitable redistribution relates among other things to the demographic composition of asset ownership in our economy. Our economy needs to overcome its structural trappings of racial domination in the same way that it must overcome its pit-to-port export structure as referred to earlier.

It is in this context that government is pursuing the Black Industrialists programme that is overseen by us as the department of Trade and Industry. The thrust of this programme is to facilitate the emergence of new entrepreneurial forces that will help achieve the twin objectives of overcoming the legacy of racial profiling of asset ownership and the building of more industrial assets that can help us achieve high growth.

This is premised from the observation that black entrepreneurs and industrialists cannot emerge and play a more meaningful role in the economy without special support measures dedicated exclusively to them.

Feedback from some of our DFIs suggests that black owned manufacturing entities have substantially less equity investment. They also have access to fewer loans for start-up capital and for their growth than compared to their counterparts. They have limited capacity to finance their industrial ambitions and have difficulty accessing private credit without productive assets to use as collateral.

They are likely to pay higher interest rates on loans than their peers. This is added to the likelihood of being denied loans by funding institutions. It is in this context that we intend on using this Black Industrialists scheme to provide various support mechanisms to transcend these barriers to entry and growth.

In summing up all of this, I wish to assert then that the achievement of the NDP Vision 2030 is heavily reliant on the extent to which the economy remains functioning at optimal levels. Our understanding of a functional economy must be based on the extent to which it practically promotes high employment, a high standard of living and overcomes the structural machinations of Apartheid social engineering.

As with all other elements of the NDP the success in fixing the economy and keeping it on a functional path will requires a commitment by all social partners to undertake and fulfil certain commitments. This cooperation requires shared risks, shared burdens and shared long-term gains.

I thank you!