By Minister Rob Davies
The New Year might just have started but 2016 already feels a lot like last year. The world continues to grapple with slowing economic growth. The slowdown in China has not dissipated, while growth in Europe which is another major trading partner remains muted.
At home our nation faces similar headwinds in the shape of a prolonged drought and tough local economic conditions. The World Bank says our economy will grow by 0.8 per cent this year.
In such an anaemic environment, prudent fiscal actions are essential and these were clearly communicated by President Jacob Zuma during the State of the Nation Address. However, just as important, is the posture assumed by everyone in the country.
Now is the time for all South Africans to stand united behind our country. The often repeated phrase that we all need to sing from the same hymn sheet has never been more applicable. Government, business, industry, labour and civil society must work as one to build confidence in the country, our institutions and our economy.
What we say about the country is also vitally important; our posture matters. When people talk negatively about the country it hurts us all and contributes to negative perceptions. However, when we accentuate the positive the converse is true.
President Zuma focussed almost exclusively on the economy in his address and rightly so. The economy remains at the heart of our quest to move South Africa forward. Our drive to create jobs and grow the economy so that we can tackle the triple threat of poverty, inequality and unemployment and has never been more pressing.
During his address, President Zuma emphasised that a resilient and fast growing economy is at the heart of our radical economic transformation agenda and our National Development Plan.
“When the economy quickly grows it delivers jobs. Workers earn wages and businesses make profits. The tax base expands and allows the government to increase the social wage and provide education, health, social grants, housing and free basic services - faster and in a more sustainable manner,” he said.
There are, of course, critics who will claim that these are just mere words and that concrete actions are required to turn the situation around.
However, President Zuma addressed these concerns by speaking extensively on progress in the implementation of the Nine Point Plan, which was announced during the State of the Nation Address last year as an intervention to respond to sluggish growth.
One of the major aspects of the plan was to resolve the energy challenge and we have seen a lot of progress so far. President Zuma said there has been no load shedding since August last year and the government has invested R83 billion in Eskom. This has enabled the power utility to continue investing in Medupi and Kusile, while continuing with a diligent maintenance programme.
There has also been progress in incentive schemes, which were introduced by the Department of Trade and Industry to boost investments in the manufacturing, especially textiles, leather and the automotive sectors.
Incentives for the automotive sector have attracted investments of more than R25 billion over the last five years. The presence of many multinational companies has also affirmed South Africa as a regional manufacturing hub.
The golden thread flowing through all these success stories is that incentive programmes are effective and attractive to investors.
Another aspect of the plan is the revitalisation of agriculture. The prolonged drought has once again highlighted the vital importance of agriculture to our economic and social well-being.
The Agri-Parks programme is a potential game changer, which aims at increasing the participation of small holder farmers in agricultural activities. It also dovetails with the important issues of land reform, which remains an emotive issue to many.
Construction has begun in at least five Agri-Parks, which are: Westrand in Gauteng, Springbokpan in North West, Witzenberg in Western Cape, Ncora in the Eastern Cape and Enkangala in Mpumalanga.
All of these programmes point to steady progress albeit not as fast as we would have liked in some cases.
Our country needs high levels of investment to boost economic growth and create jobs. There are many positives to which we can look- for instance our country remains an attractive investment destination. If we all pull together we can ensure that South Africa becomes the preferred destination for investment.
During SoNA, President Zuma highlighted the need for a common narrative from business, labour and government. By working together we will get the country moving in the right direction and set our economic growth on a higher trajectory.
Rob Davies is Minister of Trade and Industry
