Richard Clarke, DSA Chairman and Executive Chairman of Table Charm,
Ernest du Toit, DSA Vice Chairman and CEO of Annique Health and Beauty,
Direct Selling Association Directors,
Executive Management of DSA member companies,
Distributors from DSA member companies,
Members of the Media, Academia and Learners
Ladies and gentlemen,
Good morning.
Introduction
Mr Richard Clark and Directors thank you for this extraordinary invitation to the Awards Luncheon of 2013. My participation in the forum is due to the hard work of your Co-Convenor Renier Schoeman and a comrade in the ANC’s Progressive Business Forum (PBF). I also want to acknowledge the other PBF Co Convenor, Daryl Swanepoel who is with us.
Our economic realities
In the context of our economy Africa’s economy is expected to grow by 3% and 4.1% in 2013 and 2015 respectively. Factors that will contribute to an improved medium-term performance include expanded public-sector infrastructure investment, new electricity-generation capacity and strong regional growth.
These rates of economic growth are still too low in view of the fact that South Africa should grow at a sustained rate of 6% in order to be able address its triple the challenges, namely, the 25% rate of unemployment, poverty and the shortage of critical skills. What is desirable is to achieve an inclusive growth expansion relative to the social and developmental challenges we face.
Today, South Africa is still one of the most unequal countries in the entire world. Its Gini co-efficient, which measures inequality, is the worst of all the countries reported on the World Bank’s World Development Indicators. Deep inequalities go hand in hand with high levels of joblessness and social instability including deadly conflicts.
Policy responses
Government has formulated policies aimed at tackling the growth of our economy. We have adopted a long term development blueprint called the National Development Plan (NDP) 2030.
This is our bold statement, which sends a message to everyone including investors that, we are shaping, inspiring and unlocking the future. Our former Minister of Finance, who is today the Minister of National Planning, had this to say, during the launch of the country’s overall vision of how South Africa should position itself: “The plan we hand over today is about the actions that all of us must take to secure the future chartered in our Constitution.” As you might be aware, the South African Constitution protects socio-economic rights.
The NDP spells out, the enabling milestones, such as:
- Establish a competitive base of infrastructure, skilled and competent human resource and an enabling regulatory framework
- Broaden ownership of assets to historically disadvantaged groups such as women, and rural communities
- Enhance the quality of education and attainment of critical skills in fields like engineering, finance and ICT
- Produce sufficient energy to support industry at competitive prices, ensuring access for poor households, while reducing carbon emissions per unit of power by about one third.
- Ensure that all South Africans have access to clean running water in their homes.
- Make high speed broadband internet universally available at competitive prices.
- Realise a good trade surplus, with one-third produced by small-scale farmers or households.
- Broaden social cohesion and unity while redressing the inequalities of the past
- Play a leading role in continental development, economic integration and human rights.
The New Growth Path and the Industrial Policy Frameworks
The Government has aggressively introduced interventions that are intended to drive industrial development such as the Industrial policy Action Plan (IPAP), IDZ and now SEZ, as well as the government’s blue print for promoting inclusive growth which is driven from my department, the Economic Development Department, namely, the New Growth Path.
Through the New Growth Path, we aim amongst others to introduce measures that will sustain overall economic growth, eradicate poverty and create decent jobs. The New Growth Path identifies key Jobs drivers and sectors that need to be supported in order to create the 5 million new jobs that South Africa requires by 2020.
Infrastructure development has been identified as a catalyst which would reinforce co-ordination and cooperation in implementing projects of all our priority sectors. The Government’s infrastructure development plan is coordinated through the Presidential Infrastructure Coordinating Commission (PICC), which is chaired by the President himself.
This twenty year project will cost an estimated R4 trillion. Six hundred (600) projects have been identified in partnership with the private sector and classified into seventeen (17) Strategic Integrated projects (SIPs).
Its components can be grouped under the following categories:
- Electricity generation and transmission
- Bulk raw water resources
- Smart ports projects
- Air links
- Advanced manufacturing
The provision of infrastructure by government creates an enabling environment for small businesses. It will ensure that small businesses are able to access markets and distribute their goods both locally and across the border. However, on their own the afore-mentioned government policies alone are not sufficient for arresting unemployment, poverty and inequality. Direct selling provides another avenue in combating unemployment. An advanced infrastructure will certainly improve your sells and enable you to enter the continent.
The impact of direct selling
Direct selling is an integral part of the economy. Direct selling industry in South Africa has reported growth of an average of 10.7% over the last three years, with a sales turnover in 2012 exceeding R8,77 billion.
It can become an avenue for the inclusion of youth and women. South Africa’s direct selling industry and provides entrepreneurial and income opportunities to over one million people of all ages, races and economic backgrounds. It is encouraging to know that direct selling is an industry with an open-door approach, offering low barriers to entry as well as a sheltered and mentored learning environment to newcomers entering the business.
Direct selling has the potential to dramatically impact on unemployment levels in South Africa by creating thousands of jobs for youth and women. The low barrier of entry into the industry has enabled people without education to engage in the economy. It is an industry that particularly suits women. 86% of direct sellers in South Africa are women, and this figure reflects a global trend where over 75% of direct sellers globally are women.
Direct selling can turn entrepreneurial and financial dreams into reality. More than simply creating jobs, direct selling provides an environment for learning, personal development and business building which are critical elements of entrepreneurship. South Africa’s level of entrepreneurship is worrying. Total entrepreneurial activity rate in South Africa is below the global average. Engaging in direct selling and succeeding at it holds the benefit of increasing our entrepreneurial activity rate.
We need to use this sector to establish the culture of winners. This sector calls for personal variable and quality.
The Minister of Economic Development, Ebrahim Patel, in his recent 2013 budget vote speech in parliament, announced that Sefa and the IDC will together make close to R3 billion available for youth employment and youth entrepreneurship over the next five years. Direct selling provides fertile training ground for unemployed youth by placing them at the coalface of economic activity. Our strategy should always be to invest in small businesses in ways which ensure that they enter the whole value chain.
An added benefit of direct selling is that where the sector grows, so does the scale of manufacturing goods and products sold within it. Thus an increase in the size of sector through increased demand for its goods and products can have a ripple effect across the economy through expansion of the manufacturing sector.
Direct selling falls squarely within the small business sector. It allows individuals to start small and grow by leaps and bounds where they begin as sales agent, go on to be distributors, then partners and finally individual business owners in their own right.
Effective small business support is thus an essential ingredient to individual mobility and graduation within this sector. Without it, individuals may easily run out of steam and see no long-term benefit of being involved in direct selling.
Our resolve for economic inclusion when it comes to small businesses is to support them across the whole value chain. In that way, we’ll gradually enable small businesses to take their rightful place as drivers of the economy and generators of sustainable jobs. This calls for a shift in mind-set about the value of small businesses.
Conclusion
These Awards do not only recognise people that have worked hard but also give hope to those that are entering the market to be supported, trained and developed. I would like to assure you of government’s sensitivity to your challenges. You are certainly our gateway to inclusion for our disabled, youth, women and rural people.
