In the state of the nations address last week, President Ramaphosa set out the goal to revitalise the economy with priority sectors and reimagined
industrial strategy. Our debate today takes place in the context of a tough domestic economic environment, an increasingly uncertain and a fragile global growth, which places responsibility on us to do more to change our performance and our outcomes.
Hon members, the official job survey which was released today, shows a modest quarterly rise of 22 000 jobs in the formal sector, yet the pace and scale of job creation must be stepped up significantly. The economic revitalisation of South Africa will take energy, dedication and months of hard work. It will need the efforts of all of us, Members of Parliament, government officials, managers, investors, workers and learners.
If we work together, and we share the outcomes fairly, we can grow the wealth of the nation; reduce inequalities and poverty, above all, provide more and better jobs for our people. Industrial strategy is a centerpiece of our economic recovery. It will be evidence led, with greater prioritisation. Implementation will be more disciplined, but also increasingly responsive and collaborative.
Crucially, industrial policy will no longer be the focus of one department only, but be the common focus across government. Mr President, it has been said that powerful dreams inspire powerful action. In my remarks today, I wish to share with the House and fellow South Africans some specific actions and plans to turn the vision of the state of the nations address into a reality.
Let me start with what we will do differently. First, we will learn from our successes and build on them. A leading example is the auto industry. It is now our major export industry in manufacturing, employing 110 000 South African workers. It is a large and industrially sophisticated sector, producing 3 million cars and bakkies over the past five years alone. It has attracted massive investments from around the world and a local component sector.
The success of the auto industry provides learnings about policy coherence, policy certainty, responsive governance and the value of a strong partnership between business, labour and government. Second, we will focus on implementation. The reorganisation of
government is to ensure that we have a capable state able and willing to do what it says it will do, to focus on practical actions, to break policy paralysis and coordinate across the state to ensure a good fit between incentives and outcomes such as jobs and youth opportunities.
Third, we will speed up decision-making and inject a sense of urgency in the work of government.
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English:
Finally, we will partner closely with key economic actors. The role of industrial policy is to unleash private investment and energise the state to boost economic inclusion. This is an essential part of building investor confidence and the platform for job creation. The President spoke on Thursday night of industry master plans. What is different is that they will be in the form of sector social pacts, rather than simply government decrees.
Hon members, the executive hit the road running in the past 4 weeks to implement the electoral mandate and the National Development Plan, NDP. On Friday, the day after state of the nations address, 93 agreements were signed between South African suppliers and Chinese companies, to buy local products for export to China, with a contract value calculated at R27 billion, which will strengthen growth and jobs here in South Africa. [Applause.]
To promote opportunities for African economic integration, two weeks ago Deputy Minister Majola participated in the conclusion
of trade agreements between SACU, and the East African community. These agreements lay the basis for increased intra- African trade and cement the continent's position as the next growth frontier. At the Africa Big 7 export promotion exhibition, Deputy Minister Gina highlighted the strengths of South African food exporters.
Two weeks ago, Minister Ndabeni-Abrahams and I agreed in Japan with our G20 counterparts on ways to unlock opportunities in the digital economy. We also developed approaches to maintain exports in the face of growing global trade tensions. To ensure South African jobs and trade are protected whatever happens with Brexit, I am engaging with my UK counterpart about accelerating work on a bilateral trade agreement, working closely with SACU partners, and we will prioritise this.
Illegal import of goods through our ports, remain a significant challenge damaging tens of thousands of South African jobs. In the past week, as a start, we engaged with both the new Commissioner of SA Revenue Services, SARS, and the Ministry of Commerce of China to seek urgent and joint action to address
this. What these examples do? They underscore our commitment to practical and decisive actions to address blockages to growth.
On Thursday, President Ramaphosa laid out a vision of an energised economy. To implement it, we are setting clear timeframes and meeting with investors and labour to consider concrete actions to grow industrial output and jobs, building on the Public Private Growth Initiatives, PPGI. Hon Shivambu, it is not Van Zyl Slabbert, but Toyota's Dr Jan van Zyl.
To capitalise on the R71 billion surge in Foreign Direct Investment, FDI, last year into South Africa, we are engaging domestic and foreign investors to strengthen the enabling environment for investment in the productive sectors; and with the finance industry to unlock the R100 billion industrial finance commitment made at last year's Jobs Summit. I should make the point that China use FDI very strategically to build the industrial capability and technology while boosting domestic savings.
Hon members, let me share a few examples of significant new investments: Next month, in July, two new investments will be launched, a R135 million high-voltage cable manufacturing plant expansion in Port Elizabeth and the opening of a new R50 million composites factory in Germiston. In August, the Toyota Hi-Ace Ses'fikile minibus taxi plant expansion in Durban will be launched, with a near half a billion rand worth of investment.
In September we will see Proctor and Gamble launch its
R300 million investment, producing Pampers nappies and women's hygiene products. By October, Best Value Foods, a black-owned fresh fruit and veg operation, will open a R31 million operation in Midrand. In November, we will host the SA Investment Conference and in the same month showcase SA products at the Shanghai Import and Export Expo.
Mr President, in the steel industry, within the next 100 days we will launch a support programme for new plant and equipment in metal fabrication. We will meet investors and stakeholders on the long-term development of foundries and steel mini-mills, including measures to enable the local beneficiation of scrap
metal. To promote local fashion and the South African clothing and footwear industry, within 50 days we will release a draft master plan for the industry, and within 100 days we will have held substantial consultation to build consensus on a sector social pact.
In the chemicals value-chain, we are mobilising South African companies to supply R8 billion worth of goods and services as part of the Golfinho-Atum gas project in Mozambique, partly underwritten by our Export Credit Insurance Corporation, ECIC. In plastics, we will partner with domestic manufacturers to identify opportunities for import replacement. The new Auto Masterplan aims by 2035 to increase local content from 39% to 60%, double its annual car-production, expand employment to 220 000 people and create a R2,5 billion fund to support black industrialists in the sector.
Agriculture and agro-processing provide enormous opportunities for growth. We are now the world's second largest citrus exporter and beef exports are rising. Within the next 50 days, we will convene agro value-chains with Minister Didiza, to
identify impediments to greater output and to enable black farmers and small-scale farming to expand. We are engaging the sugar industry to address its challenges, and we will encourage the trade authorities to finalise their investigation into unfair poultry trade practices within the next 60 days.
We will defend our poultry industry, which is a significant job creator. The digital economy is vital to a rejuvenated economy. To ensure that data prices fall, working with the Minister of Communications, we will consider and implement the recommendations by the Competition Market Inquiry into data services. We anticipate that there will be negotiation with the large cellphone companies in the next five months, to bring data prices down.
Similar interventions will take place to support the mining industry, the creative sectors and tourism. We will roll out the new changes to the Competition Act to build an inclusive economy in which young people can participate. The first set of changes, expected in the next 100 days will enhance the authorities' powers to address harmful monopolies, excessive and predatory
pricing and to increase penalties for contravention of the Act. It will also enable though, more collaboration between firms, where this can lead to economic output and jobs.
For too long, retail malls have shut out young new entrepreneurs and small businesses. We will consider the recommendations from the Competition Market Inquiry to provide space for small retailers and to facilitate buyer groups for spaza shops to source more affordability. Government has to date supported some 400 black industrialists through the Industrial Development Corporation, IDC, and the DTI programmes.
Over the next five years, we will support an additional 400 black industrialists' projects with financial support of some R40 billion. To deepen localisation, we will finalise commitments with state-owned companies to buy from South African producers. Part of what we will do also is to co-operate with retailers to stock and actively promote more goods made by South African workers. Hon members, we need to respond pro- actively to the threat of a global trade war and the slowdown in growth in most of our major trading partners.
Building the African Continental Free Trade Area and making our trade- promotion efforts more effective and strategic are therefore quite critical. We will work with other nations to sustain the rules-based trade order while maintaining the policy space required for industrialisation. A pillar of our industrial policy is the development of new investment clusters through special economic zones, SEZ, revitalisation of industrial parks, business and digital hubs.
In the next three months, we will set up the legal entity for the Bojanala Platinum Valley SEZ in North-West, which has an investment pipeline in place. Within 12 months, we will do the same for the Northern Cape SEZ in Upington and the Automotive SEZ in Tshwane. Ford South Africa has exciting plans to re- energise the Silverton area of Gauteng through the SEZ. In the next 3 months, we will commence support for infrastructure upgrades at 15 local industrial parks, including in Fort Jackson, Butterworth, Mossel Bay, Orlando West, Eldorado, Upington and Thohoyandou.
Our focus now is on immediate actions. However, to build a long- term platform for inclusive growth over the next five years, we will consider measures to promote worker participation in company boards and in ownership schemes, the use of a sovereign wealth fund to underpin investment in strategic and priority sectors and the rollout of the Infrastructure Fund, to enable energy, water, transport and digital platforms to promote inclusive growth, economic inclusion more generally and social cohesion.
Partnership is critical, and therefore we make a strong call on large co- operations, to avoid the resorts because there is a resort sometimes to retrenchments, as we have seen in a number of sector, and most recently, with Multichoice. Therefore, we need that while we have the space to rebuild the economy. Hon members, I can think of no better words to conclude a statement made in June 1965, by that great African patriot, Kwame Nkrumah, who said:
The task ahead is great indeed, and heavy is the responsibility; and yet it is a noble and glorious
challenge which calls for the courage to dream, the courage to believe, the courage to dare, the courage to do, the courage to envision, the courage to fight, the courage to work, the courage to achieve - to achieve the highest excellencies and the fullest greatness of man. Dare we ask for more in life?
I thank you.