Programme Director,
The Premier of KwaZulu-Natal: Dr. Zweli Mkhize,
KZN MEC for Economic Development and Tourism: Mr Michael Mabuyakhulu,
Honourable Members of the Provincial Executive Council and Legislature,
Host Durban City Mayor: Cllr. James Nxumalo,
Host Durban City Municipal Manager: Mr Sithole,
Members of the eThekwini Maritime Cluster,
Chairpersons, Board Members and Executives,
Captains of industry,
Members of the media,
Distinguished guests.
Introduction
I am humbled by the invitation to this august occasion, which marks the 10th Anniversary of the Umyezane Broad-Based Black Economic Empowerment (B-BBEE) Conference and Business Awards; the awards that have not been conferred to the best in business, but have inspired multitudes to take up the challenge of building communities through enterprise, in particular the SMME sector as the engine of economic growth.
Standing here and reflecting on the journey traversed since the inaugural Umyezane Awards 10 years ago, makes today, this moment, a true homecoming for me, and I trust it is the same for many who have been associated with this truly remarkable and transformational event.
I am honoured to be asked to address this Conference, which for its 10th Anniversary has chosen such a topical and relevant subject about the “maritime industry as a pillar for economic transformation”. The fact that it is taking place in this Global Port City of Durban, located within what is for all intents and purposes South Africa’s premier Maritime province – KwaZulu-Natal (KZN), made me reflect more about the significance of this event and how to position my address within the bigger agenda of addressing what President Jacob Zuma has so aptly distilled as the triple challenges of our new struggle terrain, poverty, inequality and unemployment.
My address today will focus on this triple challenge framework:“(t)he course charted by South Africa in the Maritime Industry: An in-depth look into the State Investment into the Industry and its Role in the Future Growth and Development of the Continent’s Economy”.
Reflecting on this topic over the past few days in preparation for this conference, I got to think about the century-long freedom trail of our liberation movement, the African National Congress (ANC), I was convinced that with a good scan through that history, I should be able to pick on the traces of wisdom of our forebears as well as guidance and directives from our leadership in order to respond adequately to the topic and the ground-breaking Conference theme.
For starters, the struggle led by the ANC was, and has been, about the complete emancipation of our people, the political, social and economic emancipation and transformation of our country and continent.
Along that road to emancipation, our forebears have articulated on many things, but relevant to this Conference and on the 100th Anniversary of our movement, I want to recall only two: the call by Honourable Comrade Kwame Nkumah to seize political power and use it as a tool for economic emancipation, and the resolution taken in 1923 at the ANC Conference on Shipping, loosely re-stated here as: to invest in the acquisition of a ship(s) to be owned by Africans.
In addressing this conference, we need to deal with these issues and ask the questions: Can we report back on the centenary of our movement, that having ascended to political power and being in government, that we have been able to use that to achieve our economic emancipation or to ensure indigenous ownership of the ships that move our economy? Is it a question that our leaders were ahead of their time or ahead of ours? Let us engage on the matter, and use this conference to find answers and solutions.
The Maritime Industry: Its role in the future growth and development of South Africa and Africa
Shipping, Ports and Maritime Logistics
It must have been either an obvious fact, or the genius of our forebears, to have realised that shipping, and the maritime sector, are a key pillar if not the foundation of our economy; and that control of shipping is a key instrument in seeking economic emancipation. Sadly today, our country cannot claim to have prioritised this sector; as a result there is no single ship owned in South Africa. Not one! All of the 200 million tonnes of our trade are carried by foreign flagged ships, costing the South African economy in excess of R37 billion per year (South African Revenue Service: 2009).
The economic policies of South Africa are in essence aimed at creating an open, export oriented economy able to trade freely with all nations. Trade constitutes about 58% of the country’s wealth measured as Gross Domestic Product (GDP), of which 98% of that trade by volume, or above 80% by value, is carried by ships, and that includes African trade.
Considering that South Africa is amongst the world’s top 15 shipping nations by tonne per mile measurement, these factors would normally lead to a country prioritising a sector so critical to the success of its entire economic and socio-political programme and future.
In the State of the Nation Address, President Zuma announced a R300 billion spend on the expansion of, primarily, the country’s maritime freight corridors, split between rail and ports. It still begs the question, who is to move those freight volumes to markets and facilitate trading?
It, therefore, means that as the State invests these billions of rands into maritime freight corridors, we have to prioritise the development of two key pillars or freight markets: South African Flagged tonnage (ships) and the Commodity Trading (Exchange) facilities. These two pillars in freight market influence will assist in justifying the billions to be spent. I am glad that Mr Bheki Sibiya, Chairperson of the Chamber of Mines, will be here to address the issues related to this.
Over and above the international freight movements, the key maritime investments are going to be in developing competitive maritime freight hubs. The White Paper is out on the Special Economic Zones; in the maritime space, the Department of Transport’s National Freight and Logistics Strategy, with the 2050 Transport Master Planning, will be key in designating industrial and service hubs for key shipping services. These policies and strategies are expected to provide clear investment priority programmes by the State and hopefully industry as well.
The Cruise Shipping industry has emerged strongly in South Africa and KZN in particular. Combined with the Provincial and Municipal Plans, this industry, together with Coastal tourism, will become key drivers of the tourism market. This past cruise season saw more than 45,000 cruisers and over 60 calls in our ports, with Durban accounting for the most numbers.
The decision by the Province and Port Cities of this area to establish Maritime Clusters as key drivers of the maritime industry is key to the realisation of the goals of transforming the Province into a premier Maritime Province, including Cruise as a key component of the Marine Tourism Industry.
Ladies and gentleman, I am sure that we are waiting with bated breath for presentations at this conference, from leaders of State-Owned Enterprises (SOEs) such as Transnet, Ports Regulator, Industrial Development Corporation (IDC) and so on to give us the details on these investments.
Marine Resources Industries: Energy and Fishing
The Marine Resources industries are the new investment priority areas by the State, in seeking both food and energy security for South Africa and definitely the continent. There are no significant investment pursuits and activities by Black investors in Fishing and Aqua-Culture. The Department of Transport, through South African Maritime Safety Authority (SAMSA), is currently completing an audit of the fishing boats which will lead to some level of recapitalising the fishing fleet. This will promote the marine manufacturing industries.
Above 60% of about 1700 of those boats may have to be rebuilt in South Africa, favouring big and small ship yards. Off-shore Oil and Gas is emerging as a strategic sector. With the insecurities associated with our current supplies coming out of the Middle East, we need to relook our options in ensuring the security of supplies of crude and refined products.
Again, lack of national tonnage denies the country the strategic options. The State may have to give a strong lead on the transportation of strategic commodities such as oil, maybe iron ore as well, so as to ensure security and add value to the supply chain.
Ladies and gentlemen, the marine bunkering business is drawing the attention of the state as many would be entrants are raising anti-competitive behaviour by the established players, who may include the refiners. The Department of Transport has increased the financial allocation of the Ports Regulator, to be able to guide government on issues affecting the ports including the implementation of BEE imperatives.
Maritime Regulatory Frameworks and Global Agenda
The State is completing the development and revamping of the maritime industry and its shipping regulatory frameworks, including the Maritime Transport Policy and its Shipping Policy instrument, the Tonnage Tax and related legislation. The Ship Registry Turnaround Programme, and Plan and Cruise Shipping Code, are soon to be tabled with the Minister of Transport. We can anticipate that it will include the creation of Public Private Partnership (PPP) schemes for investment in South African ships to ply their trade internationally, regionally (within Africa) and in domestic waters.
I am happy to report that in December 2011 in Angola, South Africa became a signatory of the African Maritime Transport Charter which is a policy for African Investments in the maritime sector, in particular shipping between African ports will be the business of the continent’s tonnage. In South Africa, we are reviewing the issue of the movement of freight and passengers between the country’s ports by foreign ships, a practice not allowable in any of the world’s maritime nations including all the IBSA and BRICS partners.
South Africa has now assumed its leadership position at key Maritime governance such as the International Maritime Organisation, where we are holding the Deputy Chairperson position of its Executive Council. We are consulted and our views are solicited on key discussion points, recently the Climate Change agenda.
I am proud to announce that in line with our leadership global maritime agenda, South Africa won the right to host the IMO Diplomatic Conference on the Fishing Safety in October 2012. It will be hosted in Cape Town.
In December this year (2012), the establishment of a dedicated ocean route for shipping the Electronic Marine Highway in the Indian Ocean along the Eastern coast of Africa, will be completed under South Africa’s project leadership. The member states recently voted South Africa to host the Regional Coordination Centre, on behalf of the countries of that region which include Mozambique, Tanzania, Kenya, Comoros, Seychelles, Mauritius and Madagascar.
Safety, Security Industry
I also wish to point out that through the Department of Transport and its agencies, the State is investing in the shipping safety and security infrastructure, including maritime information and communications, ocean salvage capability, early warning and response systems, amongst others. This will strengthen the state to monitor and manage maritime traffic along our 3 000 km long coast and maritime regions.
The planned investments by the Department of Defence on maritime transport infrastructure and systems are significant as well, given the deteriorating security situation along the Indian and Atlantic Oceans. They include radar and satellite based surveillance, airborne and ocean surface patrol capabilities.
I know that the discussions are ongoing about the South African (SA) Navy returning to this province, which will bring back the core player in developing the Military Industrial Complex to KwaZulu-Natal. The SA Shipyard and other service providers may want to study that market closely.
Conclusion
Premier and Fellow Guests, I wish to conclude by indicating the obvious (maybe it is in the genius of our forebears) that if transport is the heartbeat of the South African economy, then the Maritime and Shipping Sector is the lifeline of that economy. The vision of those foresighted earlier leaders of our people remains unrealised. On the centenary of the ANC, we need to commit to transforming our maritime country into a maritime economy and a maritime nation. We need to embrace our oceanic and inland waterways heritage, and convert them into wealth creation centres.
We need to fight for our share of jobs, wealth and opportunity in this global industry if we are going to reverse poverty to prosperity, unemployment to decent jobs and inequality into abundant opportunities for development and self-actualisation. This must, of necessity, be our maritime clarion call.
The Maritime Sector Development Framework and investments planned or envisaged make this industry the country’s new growth curve in our New Growth Path, are ripe for investment and full of opportunities for whole community participation.
The imperatives that we need to get right in positioning our country and this province as a maritime centre are only three:
- We need to be organised as communities, business particularly Black people and women.
- We need to establish strategic and operational or service specific clusters, as key drivers of inclusive participation, competitiveness and coordination.
- We need to invest in skills development as a strategic endeavour to create both awareness and expertise. Research and innovation must, of necessity, be at the centre of the skills portfolio.
Create effective regulatory frameworks which remove red tape, expedite transactions and bring in incentives for enterprise development. Let it be a gift to our forebears, whose call of 1923 cannot be left to die.
I also wish to announce that there are key forthcoming Maritime events:
- Maritime Careers Expo and Maritime Jobs Summit side by side in Durban in September 2012.
- South Africa Maritime Industry Conference in Cape Town, June 2012.
- The hand over and launch of the SA Agulhas as a Seafarers Training Vessel is in June 2012.
May Umyezane be the turning point in the province’s aspiration to transform itself into a Maritime centre.
Ngiyanibonga kakhulu!
