Programme Director,
Esteemed Members of the media present;
Ladies and Gentlemen;
Dignitaries present;
All protocol observed
On behalf of the government of KwaZulu-Natal (KZN) and the people of this province, we wish to express our delight for being part of this prestigious occasion where we are marking the end of the year and critically, also taking stock of what, working together, we have achieved in our on-going efforts to create an economy that benefits all of us
Firstly, Programme Director, allow us to thank the Gagasi 99.5 management for inviting us to address this august occasion and to share with you what as a department we have been able to achieve this year.
This invitation gives us hope and belief that our media houses are indeed taking notice and keen interest of what government is doing in KwaZulu-Natal. We are also humbled by the fact that you have chosen the Department of Economic Development and Tourism as partners here tonight in your quest to enhance your news content quality and in this regard, Programme Director, we hope we shall not disappoint. As the government, we have always maintained that the media, has a big role to play in our society beyond informing and educating the public about the programmes of government. Our view, Programme Director, is that the media are our partners, with whom we need to work in concert to create a better society.
At the centre of efforts to construct a new society from the debris of apartheid misrule, should be a media that is in concert with the will and the aspirations of our people. We need a media that is able to empower people with knowledge, a media that is pre-occupied with building social cohesion. We need media that itself is the defender of our Constitution and the rights and responsibilities enshrined therein. As stated earlier on, we will use this platform to attempt to paint a picture about some of the achievements of the department in the context of both objective and subjective global and domestic conditions our department is operating under.
Programme Director, one of the mandates of the department is to grow the economy of our province and to ensure that tourism becomes one of the critical sectors around which to anchor our economic fortunes.
It is because of this reason, Ladies and Gentlemen, that the department recently held the second instalment of the International Entrepreneurship and Investment Conference in October this year 2012. This gathering sought, amongst other things, to ensure that our province becomes a centre of economic growth on the back of innovative entrepreneurial drive. The theme for this year’s edition of the conference was: Positioning KwaZulu-Natal at the Epicentre of Africa’s Sustainable Economic Growth and Development. This was chosen because of the latest developments within the global economic space which have shown that Africa is not only the next global frontier of growth but is destined to be the biggest economic story of our times.
Accordingly, we have noted that one of the important indicators underpinning drivers of growth and entrepreneurship is our ability to pick up the winners. According to the International Monetary Fund (IMF), for the first decade of this century, six of the 10 fastest growing economies in the world were in Sub-Saharan Africa and this region is projected to have some of the fastest growing economies in the next few years. In short, Programme Director, we believe that as the province we need to locate our economic prospects within the positive economic sentiment permeating our continent.
Programme Director, the Bureau of Economic Research reported in its October economic outlook flagship publication that, an improved global economic outlook for the period 2015-2017 will be to the benefit of the SA economy. However, South African GDP growth is forecast to remain below the 4% mark with an average of 3.8% expected during 2015-2017. While this would be a notable improvement from growth of 2.9% projected between a period of 2012-2014, the medium-term forecast suggests that (at least for the next six years) the economy is unlikely to grow at the rate required to make a meaningful dent in the very high unemployment rate. South Africa’s economic prospects have deteriorated since mid-2012.
GDP growth in some of our key trading partners worsened in the first half of 2012, and the outlook remains clouded by a number of risks. Domestically, widespread industrial strife during the third Quarter and the early stages of fourth Quarter of 2012 has increased the local constraints on the economy.
Programme Director, as all of us know, KwaZulu-Natal no long command the largest population in South Africa according to Statistics South Africa’s latest census figures. This means that its percentage share of the national budget would be reduced while those of Gauteng and the Western Cape would increase. Provincial governments largely depend on these funds, and this will mean KZN will get a smaller percentage share of the fiscal pie. While Gauteng was the smallest province, it now boasted the largest population, with 23.7 percent or 12.3 million of the country’s 51 million people.
KwaZulu-Natal now has 10.3 million people or 19.8 percent or the population, down from 21.1 percent in 1996. As a Province, we harbour unease about the risk of getting a smaller percentage share of the national budget because size of population accounted for about half of the equitable share formula. Other factors included the size of provinces and social and infrastructure needs.
Programme Director; let me zoom in on our current initiatives to stimulate economic development in the province. Our current projects and programme portfolio spans from training, capacity building, mentorship, research, strategic initiatives and partnerships as well as catalytic projects.
During the year under review the department has made significant in-roads in the following projects:
- Students Sponsorship (co-operatives training) UNIZULU, Cooperatives Train The Trainer At Coastal College, KZN Short Skills Training Programme, Technical Skills Training For Cooperatives (FET), Sewing Machine Technician Training, KZN Unemployed graduate assistance programme;
- Mentorship of Cooperatives in Bakery, School Nutrition Cooperatives, Fresh Produce, Goats and Tourism, small, medium and micro enterprise (SMME) Incubation Chemical Industry Park;
- Czech Republic MSC: Textile Technology, LED Training and Capacity Building Programme 2012-2015 in Partnership with UKZN (Masters and Post Graduate Diploma), University Research Network (Green Economy Research);
- Specialised Investment Team, Operation Vuselela, BEE implementation teams, Women in Tourism, UMzinyathi Technical Assistance, Umlalazi Trading Centre, Mandeni Trading Centre, Women in construction, KZN Tooling Initiative, Czech Republic MSC Project Impact Study,) Ingodini Border Caves, Goat Commercialisation, KZN Honey, Cut-Flower, Digital Community Hubs, Upgrading of South Port Beach, Upgrading of Alkanstrand Beach, Upgrading of King Shaka Memorial Site, KZN Furniture Initiative
- Our province has also, working with the KZN Sharks Board, become the first province to launch the first of its kind maritime centre of excellence on the continent. The centre is already operational and is housed at the KZN Sharks Board.
Other projects that are coming on stream include the following:
- Trading Centres (UKhahlamba & Nyoni), Luwamba Wellness Centre, Gijima Local Competitiveness Fund 2, Trade Point, Shipbuilding, Ship Repair & Boatbuilding Initiative, Durban Automotive Supplier Park, Leather Processing, Charcoal Production Enterprises, Drakensberg Cable Car, Snathing Community Forest Project, Makhathini Cotton, Hides & Skins Hub, Agro Processing Technology Park, One Village One Product (OVOP);
- SMME Training And Capacity Building (Business Management), BEE Training and Awareness, Small Enterprise Pre-Finance Training And Business Support, SMME Forest Enterprise Skills Development Programme;
- Women in Maritime, Pro-Poor Development, Amendment of KZN BEE Strategy, District Municipality Investment and Promotion Facilitation Strategies (Amajuba, UThungulu, UThukela, Ugu), B-BBEE Implementation systems (BEE Manual and Enterprise Development),Implementation of revised KZN Youth Strategy, Youth Ambassadors, Youth designers;
- Construction Jewellery and business incubation centres (conceptualisation) Incubator Research, State of Small Enterprises Research in KZN, Profiling of KZN Exporters, Ugu ICT Enabled Incubator, Business Processing & Outsourcing (BPO) Park feasibility, Food Processing Feasibility, Feasibility Studies - Central Business licensing Portal and KZN Regulatory Impact Assessment & Business Environment Improvement Unit, Tracking the implementation of Provincial Economic Strategies (PSEDS, Export, Investment, PGDS and IDS) and Provincial Job Verification, Emerging Researchers Capacity Enhancement Programme, Amajuba Fashion Hub, UMgungundlovu Leather Manufacturing Hub;
- Women in hospitality and business management, Tourist Buddies & Service Excellence, Exporter Training Programme, Tourism Safety & Awareness Workshops/Campaign, Nsikeni May Lodge;
Ladies and Gentlemen, linkages with the African continent are at the forefront of the vision for the province as expressed in our Provincial Growth and Development Strategy. “By 2030, the Province of KwaZulu-Natal should have maximised its position as a gateway to South and Southern Africa as well as its human and natural resources, so creating a safe, healthy and sustainable living environment”
KwaZulu-Natal’s major comparative advantage in the region is its global and regional connectivity. The province borders three countries; has two international sea ports; one international airport; a world class air freight facility; and possesses the greater part of the busiest road freight route in the country. These factors make KwaZulu-Natal the perfect springboard for international investment into the country and indeed into the greater Southern African Development Community (SADC) region.
Despite this, there are relatively few multi-national head offices, which have footprints into the wider SADC region, located in KwaZulu-Natal. As such, a key strategic objective of the province is to attract major multi-nationals by offering them competitive locational advantages, which, interalia, include excellent global connectivity through King Shaka International Airport; efficient facilities for the export and import of goods; and access to the vast SADC consumer market which stands at approximately 260 million people.
The draft Special Economic Zones (SEZ) Bill was released by the Department of Trade and Industry (DTI) at the end of 2011 and the final Bill is set to be adopted in the next few months. This Bill essentially seeks to regulate the designation, development, promotion, operation and management of Special Economic Zones. The draft SEZ bill defines the SEZ as “a geographically designated area/s of a country, set aside for specifically targeted economic activities which are supported through special arrangements which may include laws and often support systems that are different to those applied in the rest of the country”. Increasingly, SEZs have become the primary vehicle through which developing countries successfully attract Foreign Direct Investment (FDI). We must not be left behind and there is need to partner together to ensure that these SEZs become internationally competitive.
In identifying an appropriate SEZ for the province, it is essential to build on the comparative advantages of the province. One such comparative advantage, as alluded to earlier, is the King Shaka International Airport and Dube Trade Port. Accordingly, the Department of Economic Development and Tourism in conjunction with the DTI has proposed the development of an SEZ around the Dube Trade Port. Utilising the air cargo export capacity of the Trade Port, one of the focus industries of the SEZ will be the processing of agricultural products for export.
The SEZ will also focus on ‘green economy’ manufacturing, and the research and development of green technology. It is befitting that KwaZulu-Natal, as the host of the landmark, COP17 Climate Change Conference, should develop the country’s first dedicated green research and manufacturing zone. It is envisioned that this ‘green manufacturing’ would also spill over into the agro-processing industry, whereby ‘green’ production and processing techniques will be extensively used.
Ladies and gentlemen, the SEZ programme will also incorporate the existing IDZ at Richards Bay, which will be upgraded to SEZ status. The focus of this SEZ will predominantly be toward heavier manufacturing, looking particularly at metals and mineral beneficiation. In particular, the SEZ would look to attract investors who can add value to our mineral resources which currently leave our shores in a largely untransformed state.
Ladies and Gentlemen, in recognising the spatial inequalities prevalent in our province and the need to see development occur in not just the major economic nodes but wherever significant concentrations of people reside, we have embarked on a process of establishing district industrial hubs. These hubs are themselves a form of SEZs, and while they will not be a part of the SEZ programme, will nevertheless aim to create an attractive environment for investors. The Department of Economic Development and Tourism is currently in the process of appointing teams to drive the establishment of these hubs in each district. Some of these hubs will enhance support for existing industries in which the region possesses a comparative advantage (i.e. Clothing and Textiles), while others will be in emerging sectors with significant potential (Furniture Manufacturing; Green energy).
Ladies and gentlemen this brings me to talking about some of the new or at least less explored sectors of the economy which could be developed in KwaZulu-Natal and which we think would provide good future investment opportunities. The following industries/sub-sectors show exceptional potential and should be a focus of government investment into the future of the province:
Green economy and renewable energy: The COP17 conference in Durban provided significant momentum in the area of ‘green economy’ research. As a result the Department of Economic Development and Tourism has recently finalised a provincial ‘Green Strategy’ and many district and local municipalities have followed suit. This certainly lays the policy and institutional foundation for green economy developments, while a growing research capacity in this field at the province’s universities and in private consultancies provides for a human capital skills advantage in this sector.
In terms of renewable energy development, the province is aided by the fact that there are vast spaces of untransformed land, which could be sustainably used for Wind Power or Hydro Power energy generation in particular. In summary, Ladies and Gentlemen, the province has the right mix of institutional support; skills and expertise; and natural conditions to be the country’s forerunner in the field of green economy developments. International Tourism: We are all aware that KwaZulu-Natal has traditionally been the province’s top domestic tourism destination.
The province’s foreign tourism performance, however, is way below its potential. If the province can more robustly market its unique cultural and eco-tourism attractions, there is no reason that the province should not perform better than Gauteng or the Western Cape in attracting foreign visitors. Critical in this regard, is the attraction of more direct international flights to King Shaka Airport. SA Express’s recent launching of Southern African flights from and to King Shaka is a promising development in attaining this objective. Increasing the ability of the tourist market to access KZN’s tourism products, however, is not a substitute for effective product development. Constant innovation and development is always necessary in the tourism sector and in this respect the following projects are being explored:
- A large scale, all inclusive beach resort for the province
- Coastal hiking routes
- A consolidated and state of the art museum of Zulu history
- A Drakensberg arterial route linking the isolated Drakensberg regions and resorts
Rail manufacture: Ladies and Gentlemen, you are perhaps aware of Prasa’s rolling stock replacement programme. With a substantial steel industry, the province sits in an ideal position to contribute significantly to the manufacture of new coaches, and other rail equipment.
Ship building: With two large international sea ports located on a major marine trade route, KwaZulu-Natal should increase its ship-building capacity. As with rail manufacture, the development of this industry could have backward linkages to the Steel and Wood Industries. We are in the process of developing a Maritime strategy for the province which aims at identifying niche areas for the province in this regard.
Information and communications technology (ICT): While the province struggles to compete with Gauteng in the ICT industry, it has one critical advantage in this sector, namely, the Seacom cable which enters the country at Mtunzini. This infrastructural advantage provides the opportunity to widely distribute broadband capacity across the province, including to relatively marginalised areas. In so doing, the province is looking forward
to start developing ICT incubators which take advantage of broadband access.
Currently the Department of Economic Development and Tourism is working on an ICT and Broadband Roll-Out Strategy which will look to create a comparative advantage for the province in this growing sector.
Programme Director, as all of us know the 2010 FIFA World Cup provided the biggest window of opportunity for us to put the province on the international investment and tourism map. In this regard, we have worked hard to attract other major events in order to ensure that our province, indeed, remains on the radar screen of the international tourism and investment community. It is because of this reason that our province is fast becoming the home of major events. This year alone we hosted the celebrated motorising show, the Top Gear Festival which attracted more than 65 000 people. We also recently hosted the World Amateur Golf Championship which was also a runway success.
Others major events that are coming on stream this year and next year are:
Volvo European Golf Championship
This golfing tournament is expected to attract some of the biggest names in golf from Europe and will be held on 10 to 13 January 2013.
African Nations Cup
As all of us know, the African Nations Cup takes place between 19 January to 10 February 2013.
Brazil, Russia, India, China and South Africa (BRICS) Summit
As all of us know, this summit is aimed at enhancing business synergies between South Africa and the business sector from the BRICS member states. The 2013 BRICS summit will be the fifth annual BRICS summit which is an international relations conference attended by heads of state or heads of government of the five member states of Brazil, South Africa, Russia, India and China. The Summit takes place between 25 to 27 March 2013.
Nelson Mandela Golf Tournament
This tournament takes place between 4 to 9, December 2012.
North Sea Jazz Festival
This festival provides a strategic vision for KZN to promote tourism and economic growth in the province. The North Sea Jazz Festival is expected to attract a growing local and international audience of Jazz lovers of more than 25 000 in the first year. This festival takes place in December 2013, next year.
TAFI congress
One of our strategies as the province of KwaZulu-Natal is to penetrate major tourism markets such as India. It is against this backdrop that the province will in February host the TAFI congress. TAFI is an association of tour operators who are responsible for more than 70% of India’s outbound tourism market. This is a huge coup for us because India is key to our efforts to grow the tourism market in our province.
Indeed, Programme Director, this proves that KwaZulu-Natal is fast emerging as the home of mega events in the country.
Ladies and gentlemen, that was a non-exhaustive list of opportunity sectors for the province, there are many opportunities in our diversified economy. These sectors/industries, however, cannot flourish or be sustainable without the buy-in of the private sector. It is the role of government, through strategic infrastructure spending and other support measures to ‘crowd-in’ private investment, but it is then the role of the private sector to fully realise these opportunities and in so doing create much needed jobs for our economy. As a catalyst for private investment, government is embarking on a number of high-profile developments in the province.
These, among others include:
- The development of a new Dig-out Port at the old Durban international Site
- Durban Port upgrades
- Regional airport upgrades
- The unlocking of the potential of the Durban-Gauteng-Free State N3 corridor as captured in the SIP programme
- The construction of new hydro-electricity station in uThukela
- The development of an aero tropolis around Dube Trade Port
- Establishment of SEZs and District industrial hubs
In closing Programme Director, government’s role is not just limited to strategic infrastructure spending, but rather, must of necessity include, capacity building, mobilising stakeholders and creating an enabling environment for economic activities to flourish. It is essential, that we capacitate individuals and mobilise investors to take advantage of the opportunities created. It is essential for us to engender entrepreneurial and business leadership skills among our populations.
This ladies and gentlemen is how we as province of KwaZulu-Natal make our input in the quest to stimulate and champion economic development and growth. However Programme Director we are all aware by now that “together we can do more”.
