Honourable Ministers,
Honourable Premier of the Eastern Cape,
MECs and Executive Mayors,
President of the National Association of Automotive Manufacturers (NAAMSA),
President of the National Association of Automotive Component and Allied Manufacturers (NAACAM),
Industry stakeholders,
Ladies and gentlemen,
Good morning to you all.
I am very pleased to join you this morning.
Let me start by thanking the CEO and management of the Coega Industrial Development Zone (IDZ) for hosting us today as we meet with this important sector.
We are happy indeed to visit Coega. Since its inception a decade ago, this IDZ has provided hope and a competitive future for its immediate area and the Eastern Cape Province.
Government made a strategic decision to invest to date, in excess of 10 billion rand into the Coega IDZ and the Ngqurha Port respectively.
We are pleased that the IDZ is now home to more than 20 companies, in sectors such as renewable energy, automotive components, call centres, agro-processing and logistics.
There are a lot of encouraging developments at Coega IDZ indeed, and government will continue to provide support.
Ladies and gentlemen,
You will recall that in the State of the Nation Address at the beginning of this year, I declared 2011 a year of job creation through meaningful economic transformation and inclusive growth.
I alluded to the introduction of a New Growth Path that would guide our work in achieving these goals.
I undertook that government departments would align their programmes with the job creation imperative. The provincial and local spheres were requested to do the same.
In addition, I directed that the programmes of the State Owned Enterprises and development finance institutions should also be more strongly aligned to the job creation agenda.
At the time I emphasised that we would not, and could not be able to create these jobs alone.
Accordingly, we engaged our social partners namely business, labour and community constituencies. While looking to the private sector in particular to help us create most of the jobs, I committed government to play its part in job creation.
In terms of jobs numbers there have been progress and setbacks.
About 152 000 new jobs have been created since the low point in the third quarter of 2010, mostly in the formal sector. At this point there are 64 000 more jobs in the economy than a year ago, but total employment, including both paid jobs and self-employment, is still substantially below 2008 levels.
The pace of quarterly job growth has slowed down and jobs were lost in manufacturing, mining and agriculture in the second quarter compared to the first three months of this year.
Worryingly, most jobs were lost by young people. They make up 30% of employed people but suffered 60% of jobs losses.
Given the sluggish pace of job creation, our decision to focus directly on this priority this year was correct. It really needs renewed national attention.
We will have to work much harder together, to reach the New Growth Path target for 2020, which is five million jobs.
We are taking decisive steps to achieve this aim. These include maintaining high levels of infrastructure expenditure and promoting labour-intensive production in particular.
In the short-term, we continue promoting public employment schemes, especially through government’s Community Work Programme and the Jobs Fund.
However, we must focus more on the long-term, which is why we are here today to demonstrate government commitment to boosting the country’s manufacturing sector in general, and the auto sector in particular.
I decided to come and meet with the transport equipment sector in particular, given its central role in the economy of this province, which does not have other anchor industries such as mining.
Our visit is in line with the fact that Government has identified the automotive sector as a key growth sector in our economy and has focused intensively on it over the last sixteen years.
Our approach has been that we should take advantage of industries where we have a strong competitive edge in the world, such as the automotive sector.
We have exceptional production facilities, good communication facilities and readily available raw materials among many advantages, which we have over the years been utilizing very optimally.
We also have good access to markets in Africa and the Southern hemisphere.
This is why in recent years, South Africa has been one of the best performing motor vehicle markets in the world.
The fact that our vehicle exports have been high enough to enable us to export to more than 70 countries, speaks volumes about our achievement in this sector.
We are here to share ideas with the industry, especially on how together we can further strengthen this sector.
I have no doubt that the Motor Industry Development Programme, which the government has implemented since 1995, has paid dividends.
Our Department of Trade and Industry indicates that through this Programme, vehicle production increased from 388 442 units in 1995 to 534 490 units in 2007. Exports rose from 4% in 1995 to 32% in 2007.
The programme will be replaced by the Automotive Production and Development Programme from January 2013.
The intention with the new programme, among others, as most of us are aware, is to expand the automotive vehicle production to 1,2 million vehicles per annum by 2020.
The programme includes the Automotive Investment Scheme, which we expect should raise the number of jobs created.
We are happy that the new programme was developed in consultation with National Association of Automotive Manufacturers, the National Association of Automotive Component and Allied Manufacturers, the National Union of Metalworkers of South Africa (NUMSA) and other industry interest groups.
As said earlier, job creation is a collective effort.
We will play our part as government and provide whatever incentives we can, to boost the industry. This is more important in light of the recession that followed the global economic crisis, as well as the current growing uncertainty about the pace of global growth, particularly in the European Union (EU) and the United States of America (USA).
Amongst other support measures, the Industrial IDC has announced a massive increase in the level of industrial funding. It will make 102 billion rand available over the next five years. Some companies in your supply-chain have benefitted from IDC support.
However, the industry should also play its part by increasing localization and also contribute to skills development and training, in partnership with local academic and training institutions.
The recently signed National Skills Accord should be a basis for strong partnerships between business and labour on the shop floor.
In this manner, we will be able to build cooperation between our social partners to take on the joint challenge of creating more jobs and expanding our productive capacity.
Ladies and gentlemen,
Government recently announced a Presidential Infrastructure Coordination Commission to speed up the roll-out of much needed infrastructure across the country.
This infrastructure investment will help both local communities and business. As you are aware, logistics – ports, road and rail, as well as energy and communications – are vital for the long-term competitiveness of the sector.
Ladies and gentlemen,
While we deal with the priorities of fighting unemployment and poverty, we must not lose sight of the fact that we have achieved a lot in our less than two decades of freedom and democracy.
We are laying the basis through the New Growth Path, for strong economic performance and more opportunities for all South Africans.
Our continent is growing fast. Our country is renewing its infrastructure and addressing the problems of service-delivery.
We are forging new partnerships with large and influential developing countries, in BRICS. We are hosting the COP17 climate change talks in Durban at the end of the year.
And the world still marvels at the successful manner in which we hosted the 2010 FIFA soccer world cup.
We can mention a lot of other achievements, which we sometimes forget in the heat of looking at challenges and frustrations.
We are optimistic that we will make a lot of headway in working to build a more prosperous South Africa and a better life for all.
To contribute to achieving that better life in this province, tomorrow we will visit Umtata to assess service delivery progress in the King Sabata Dalindyebo Municipality.
I issued a directive early this year for an Inter-Ministerial team made up of Ministers, MECs and Mayors to deliver water, electricity, roads, sanitation, housing and to upgrade the local airport.
Tomorrow the team will report back to the community on how far they have gone with this task.
We are a government that wants to remain in touch with the people, and which responds to the needs of our people.
I look forward to a fruitful meeting with you today, as we work together towards a more prosperous South Africa.
I thank you.
