Remarks by Minister of Trade & Industry: MR Ebrahim Patel, during SONA debate, 19 February 2020, National Assembly.

Mr President, Honourable Members, fellow South Africans.

There is a saying attributed to our continent:

?If you want to go fast, go alone. If you want to go far, go together.?

The central idea in SONA last week is of going together, building broad consensus and developing social compacts – it is how we made our constitution and how we are now rebuilding our economy.

SONA recognised the real challenges and difficulties faced by the economy and by millions of South Africans. Challenges of young people looking for work. An economic structure that does not work for many. Traditional engines of growth that no longer provide the GDP-expansion and employment growth we need.

And the SONA showed what we are doing to change that reality, the hard work to plant the seeds of growth in the soil of consensus to yield the fruits of jobs and opportunity.

We plant the seeds of investment

Last year the Investment Conference brought together hundreds of domestic and foreign investors, with pledges to invest R364 billion in the economy.

The question asked about investments and pledges is whether they will be implemented.

Premier Saul gave concrete examples of the impact of projects in the N Cape. The United Nations estimated that R75 billion of foreign direct investment flowed into South Africa last year.

I can point to many other examples in the past 8 months, including the opening in October of a half-a-billion rand new Toyota facility, with young engineers like Hlengiwe Ngcobo and Jashmeen Singh who assemble taxis using an increasing level of local components. Our policy framework gave the company confidence to commit to bring production of new-generation cleaner, greener vehicles to SA, through assembly of hybrid electric and petrol driven vehicles.

In the year ahead, we will seek further investments and facilitate the start to construction of plants and upgrade of operations. For example:

  • Next month, Exarro will officially open its new Belfast coal mine
  • In May, a new LPG terminal will open in KwaZulu-Natal
  • In June, Amazon Web Services will launch three new data centres here in Cape Town
  • In July, Dalisu, a black industrialist, will finish construction of their speciality chemical plant in Mpumalanga
  • In August, a new R6 billion Automotive Transformation Fund will come into operation
  • In September, B-braun will open a new medical and pharmaceutical devices plant in Gauteng; and
  • In October, Corobrik will launch the expansion of its brick making facility.

We also plant the seeds of improved industrial dynamism of companies

Last year we developed social compacts in the clothing and textiles and the poultry sectors, sectors previously written off as sunset industries but ones that show growth potential, retaining existing jobs and in fact, even in this digital age, creating new jobs.

These Master Plan compacts require practical commitments from everyone. To illustrate with the example of clothing.

Leading retailers like Foschini, Woolworths, Pick n Pay, Pep, Edgars, Truworths and Mr Price committed to buy more South African-made fashion products, shifting from the current 44% local-content to 65%.

Government committed to crack down on illegally-imported goods, and seized hundreds of containers at ports where importers often claim a suit costs R15 and a dress costs R2, so that they do not pay full taxes; actions that damage local industry.

Businesses committed to R6bn in fresh investment in the sector, and unions committed to  new-generation collective bargaining agreements.

This is meaningful. It is creating new jobs, for newly-graduated Sibusiso Makhaye in a factory in Ethekwini; and for Leslie Frans working in Maitland.

We completed the poultry Master Plan with Minister Didiza to support chicken farmers and processors and to save 54 000 jobs while creating new ones, with commitments by all the stakeholders to shift the industry to a new growth-focus and boost investment. It builds on the more than 200 000 new jobs created in agriculture in the past 10 years.

This year we will be finalising more Master Plans, yes in traditional sectors like the steel industry, and the sugar industry which is a key livelihood for rural communities; but also in new economy sectors such as the digital economy, with its opportunities for young people; and the green economy, to industrialise through a greener growth path.

We plant the seeds of improving the ease of doing business

Last October, we launched the BizPortal that enables a young entrepreneur to go to one website, register her company, register for tax, get her BEE certificate, register for UIF, get her domain name, and even open a bank account. All in a few hours, no queuing.

As Twitter user @Noliiie said, ?I am really happy with the @theCIPC  online service. I thought the process of registering a business would be tedious. However, I went to the website and had my business registered within 24hrs. All in the comfort of my home.?

We plant the seeds of growth by opening new markets and protecting access to established markets

Last year, the implementation work on the African Continental Free Trade Area began to take off, with 28 countries having now ratified the Treaty.

17-3-3-2-1 – no not a Lotto number but a stark set of statistics about our continent?s place in the world.

  • Africa has 17% of the world?s population
  • 3% of the world?s GDP.
  • 3% of the world?s trade.
  • 2% of the world?s manufacturing output.
  • And only 1% of the world?s steel production.

The Free Trade Agreement can help to reverse this, if we industrialise as we begin tariff reductions between ourselves, from 1 July this year.

We exported R350bn of goods to other African countries last year, up by 5% and we want this figure to rise significantly.

Last year we concluded an agreement with the UK to ensure we protect South African jobs and exports after Brexit, which means we can continue to sell cars and fruits and juices to the UK on preferential terms.

Last year we also recorded our first significant trade surplus in a decade, of about R23 billion, in our trade with the European Union, selling more than we buy; largely driven by export of cars and car parts, and in the year ahead we want to strengthen manufactured exports further to narrow the manufactured-product trade balance.

We plant for a better future through competition measures

Last week, new regulations took effect to open up opportunities for more South Africans. Dominant firms that impose unfair prices and other terms on SMEs in the grocery retail, agro-processing and online retail sectors can now be penalised up to 25% of revenues.

The powers of the competition authorities have been strengthened on Market Inquiries and in future they will be able to make binding decisions to address structural features, including market concentration, that keep small players out of the economy.

SONA noted the far-reaching recommendations made by the competition authorities on a number of Market Inquiries. In the next few months, we will focus on the measures to open up the grocery-retail sector and act against exclusive leases in shopping malls. The competition authorities are finalising an agreement with major mobile phone companies to bring data prices down, because we see the opportunity to build a new economy, to use the power of digitisation to strengthen traditional sectors and build new ones.

We plant the seeds of inclusivity through deepening transformation in the economy

Growth of GDP is meaningful when that growth creates decent jobs, provides opportunities for young people, empowers women, builds the number of black industrialists and entrepreneurs.

In the year ahead, we will be expanding the number of such enterprises that are supported, because transformation itself can be a source of deep and sustainable growth. And we will refine BEE implementation to enhance its effectiveness, promoting true broad-based empowerment of workers and communities.

Honourable Members, our economy?s annual output is currently R5 trillion and 16,4 million people have jobs. Yet many millions of our people remain jobless and excluded.

More must be done so that we change our destiny and we need to scale up our successes.

These examples show what is being done so that we create hope for millions of young people leaving school and university, eager to find jobs.

And we know that old saying that ?the day you plant the seed is not the day you eat the fruit?.

But the fruit requires hard work now, to ensure that there shall be work and security and that the people shall share in the country?s wealth.

I conclude with the saying that
?He who thinks he is leading and has no one following him is only taking a walk?.

Through building consensus on our growth path, Mr President, you are leading, and unlike the Opposition, not simply taking a walk.

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