Posted: February 14, 2023
Hon NCOP Chair,
Honourable members and fellow South Africans.
While our debate today rightly focuses on our local challenges, the world within which we navigate our economic prosperity is changing rapidly, with more uncertainty, volatility, complexity and ambiguity.
Several mega-trends are profoundly reshaping the global economy; they will impact on our lives. The State of the Nation Address sets out a number of steps that this Government is taking so that South Africa can respond to these.
These mega-trends include:
- 1st, the impact of climate change on societies and economies, that limits carbon-intensive growth but brings opportunities with green industrialisation
- 2nd, the new geo-politics of a sharply polarizing world, which will shape decisions on investment and procurement, and
- 3rd, technological innovations particularly in artificial intelligence that will change the skills needed, the jobs that will decline and those that will grow.
These developments occurred simultaneously with the most severe disruptions in supply-chains in decades, impacting on factories in South Africa and elsewhere. They highlight the greater importance of what the President referred to on Thursday night as resilience.
In their eagerness to point-score and electioneer, the Opposition speakers this morning missed these major changes in the world; the State of the Nation Address in contrast set out key elements to build South Africa’s resilience. Six of these measures are
- addressing the pressing challenges of energy
- building a larger African market for our goods and services
- boosting investment in the economy
- developing sector compacts around local production
- broadening ownership and economic inclusion; and
- promoting local innovation.
While the DA was flip-flopping on its own call for a national state of disaster and the EFF indulged in disruptive tactics on Thursday night, Government was setting out steps to deal with the serious, pressing and urgent challenges of energy supply.
Energy shortages are damaging the economy, requiring a focus on fixing coal power stations, and expand renewable energy.
In a recent visit to Saudi Arabia, the President addressed companies to invest in our energy sector. One such firm, ACWA Power is building a large solar power plant in Postmasburg, a Northern Cape town with evidence of a history of innovation stretching back to the Khoisan people who mined there more than a thousand years ago.
The power plant will generate and also store up to 12 hours of solar power for release when there is no sunlight. With 100MW of energy, it expects to cover up to 200 000 households from this one plant.
Air Liquide will this year start building a 220 MW solar plant in Humansdorp, while as Minister Mantashe says, several other energy plants are currently being built.
To speed up energy supply, a number of government departments like the dtic have lifted red tape and provided more flexibility to the build programme.
To enable companies and competitors to cooperate on energy matters, we will finalise a set of targeted exemptions from the Competition Act within 4 weeks; and the Competition Tribunal will consider new measures to speed up hearings on competition cases relating to energy.
To provide for a just transition, we are mobilizing support for workers to be retrained, for renewable energy components to be made locally and for a special focus on Mpumalanga.
Incidentally, the DA speaks about the crossing of the Rubicon. History records that when Caesar crossed that river, it marked the start of an era where he broke the law, brought his troops into Italy, started a civil war and became dictator for life. Be careful what you wish for.
And the DA itself crossing the Rubicon – oh boy, given your policies, it’s about crossing the river whilst abandoning the poor, discarding the elderly and sacrificing the lowest paid in society. The abandoned communities of ithereleng in DA-run Tshwane (whose mayor has just resigned) and of Masiphumelele in DA-run Cape Town living in misery, will confirm it. Only a small minority will reach the other side of your Rubicon.
So, while the DA wished that the President metaphorically had crossed the Rubicon river in Italy, this Government is working with 53 other African countries across the Limpopo river to bring into operation a vast new African Continental Free Trade Area.
Our exports to the rest of the world is growing after the disruptions of Covid. SARS reports that global exports have now surpassed R2 trillion and grew by a healthy 11% last year.
Already, we are trading more with our neighbours, exporting nearly half a trillion in goods to other African countries, our highest ever level. What’s more, nearly three-quarters of this are exports of manufactured goods – value-added exports which creates jobs. We reached record levels of exports of products to other African countries last year, ranging from cosmetics to trucks. But we can do more.
The AfCFTA is an agreement that will reduce import tariffs and restrictions to make it easier to trade goods and services between African countries.
On Thursday, the President noted that SA and four neighbours will shortly be submitting a joint offer on products where import tariffs will be reduced for the AfCFTA.
Two days later, on Saturday, we tabled that offer at a meeting of AfCFTA Trade Ministers in Gaborone. As soon as the offer has been approved by the African Union this year, we can start trading under these provisions. These are important steps in driving the development of our continent. A stronger Africa, is a stronger South Africa.
While the EFF mobilises on the streets with fake militaristic rhetoric having lost the debate in this house, and the DA complains of five disastrous years, Government secured private sector pledges to invest more than R1 trillion in the economy
Members of Parliament may wonder how the investment pledges are implemented and what they achieve. A few examples can illustrate the impact on production, jobs and opportunities. To date, this investment has led to the opening, expansion and continued operations of a number facilities across South Africa. Example 1: the new Sappi Saiccor plant in KZN opened in September last year, producing pulp that goes into the making of viscose fabrics, tablets and other products. Young fashion designer Tshepo Mohlala uses rayon from the pulp for his new jeans range. Rural communities benefit. Example 2: Google announced a large investment and in October opened the undersea cable between SA, west African countries and Europe, significantly expanding our ability to do business, run zoom meetings and complete cross-border financial transactions. Example 3: the recently opened Hesto Harness plant employs 4 000 workers in KwaDukuza. Nokwazi Mbele, an electrical engineer, is one of a number of women creating jobs through localization of the electric distribution systems that connects a car’s batteries, engine, lights, aircons and more. Jobs for young people, Hon Malema, unlike what you assert.
Had time permitted, I would provide details of many other projects, like the opening of the new Corobrick facility in Carltonville, or the Polarium plant that is manufacturing lithium battery modules, or food factory Kerry Ingredients, or call centres opened in Cape Town due to dtic incentives. All of these, the product of this Government, working together with businesses to bring jobs to communities across this country.
While the DA’s coalition of small parties is unravelling, and the EFF tries to divide the nation, this Government is building greater cohesion between South Africans in the economy through sector social compacts or masterplans in steel and car production, in clothing and furniture manufacturing, in poultry, sugar and agro-processing and in Global Business Services.
These masterplans require that government, business and labour each make commitments – some cover stable industrial relations, new investment, greater local output and smarter regulation.
The sugar masterplan is stabilizing a still-troubled industry and saved jobs. The clothing masterplan is shifting the sourcing decisions of major retailers. The global business services masterplan created new jobs. The auto master plan is re-industrialising the economy.
In Gauteng, 10 newly-built factories opened in the new Tshwane Auto Special Economic Zone last year, producing parts for the new Ford Ranger bakkie. A total of 3 200 additional manufacturing jobs were created in Ford and its suppliers. The new vehicles will be exported to more than 100 countries across the world. Hon Steenhuizen knows about it as he posed for a picture at the SEZ.
In the E Cape, the new Isuzu G-Max began rolling off the production line in Gqeberha in April.
In KwaZulu Natal, Government supported Toyota to get its plant back to production after the devastating April floods and I pay tribute to the workers and management for an extraordinary effort to clear tons of water and mud from the factory, equipment and machines, enabling the plant to recommence production to world-class standards.
We will build on the successes of our auto programme with a shift to hybrid and electric vehicles, including pursuing our interest in deepening the value-chain in EV components, including battery-production. The next step, following consultations, will be for Cabinet this year to finalise the measures and roadmap.
While the DA is engulfed in a kindergarden leadership crisis, unable to hold onto even its black leaders, this Government is working to widen the base for economic activity, promoting worker ownership and black industrialists.
Today, the Commission gazetted the new market inquiry on fresh food produce* markets. It will consider whether the structure of this market limits entry of small businesses and imposes undue costs on consumers.
In the next 3 months, the Competition Commission will conclude its market inquiry into online or digital services such as property, food ordering, accommodation, and general e-Commerce services. It will finalise measures to address practices that inhibit or exclude smaller players and support transformation.
The President spoke of the inaugural Black Industrialist Conference held last July. They include black industrialists like:
- Dalisu who began commercial production in Mkhondo of anhydrous sodium sulphate to replace imports, and
- Brimis Engineering that manufactures industrial valves and pumps, and
- CapeBio that makes enzymes used in molecular biology research and diagnostics, and
- Microfinish that manufactures safety components for internal combustion engines and exports 98% of its production to the EU, USA and UK, and The past year saw progress with greater levels of worker ownership in the economy. More than 400 000 workers own shares in the firms they work for including at Coca-Cola, Pepsico, Shoprite, Imperial, Consol Glass, Burger King, mining and other companies. Not politically connected people Hon Steenhuizen but workers like Mmakoma Senosha, Nqobile Yende and Cornelius Grewar.
They earn dividends from these shares.. Real benefits to more South Africans.
In some cases, worker-nominated representatives sit on the boards of their companies, bringing the voice of workers to corporate thinking and at the same time giving workers insight into the strategic thinking and challenges faced by companies.
And while the DA and the EFF have shown in the SONA debate an absence of ideas and the ability only to puff – wind is not ideas, verbal heat is not energy – we in turn published a draft green hydrogen commercialization strategy seeks to use South African sunlight, wind and minerals to position us as a leader in the production of this exciting clean energy.
Honourable Members, the year ahead is still tough, with strong headwinds and energy shortages that will still limit our growth. The country faces many challenges.
But in these most difficult times we will need to work together more, implement better and focus on community needs.
Join us, let’s roll up our sleeves and be part of the national effort to build the economy and build our nation’s hope and resilience.