President Jacob Zuma: Reply to questions in the National Assembly on 13 September

13 Sep 2016

Mr L P Khoarai (ANC) to ask the President of the Republic:

In view of the recent Cabinet Lekgotla where the Government’s programme of action, the Medium Term Strategic Framework, was reflected upon and firm decisions were taken on concrete action plans in order to take the Nine-Point Plan to a higher level, (a) what are the details of some of the decisions that were taken and (b) what do the specified action plans require from all identified sectors to take South Africa on a sustainable socio-economic trajectory?

Reply:

Madam Speaker:

The recent Cabinet Lekgotla assessed the implementation of the National Development Plan, which underpins the Medium Term Strategic Framework 2014-2019 and in particular the Nine Point Plan.

The focus at the Lekgotla was on key programmes and projects to deepen the implementation of the Nine-Point Plan in the next financial year and which will ensure high impact and help reignite growth and stimulate job creation.

The Department of Public Enterprises and National Treasury will consolidate the procurement of locomotives into a single organisation, under Transnet. This will ensure efficiency and compliance with the localisation requirements.

We also looked at introducing legislative amendments to implement the 30% set asides by March 2017. This will unlock the potential of SMME’s, cooperatives and the township and rural enterprises.

Government will continue to focus on labour-intensive sectors, including the need for various mechanisms to support greater impact on jobs, such as the use of our incentive programmes for amongst others: clothing, textiles, leather and footwear value-chain; agro-processing and business process services.

We agreed to accelerate the successful Oceans Economy intervention to expand coastal and marine tourism in order to realise significant job creation.

To resolve the energy challenges in our country, the Department of Energy will complete the Integrated Energy Plan and Integrated Resource Plan for Electricity by the end of this year.

This will help provide certainty on electricity pricing and investment in the generation capacity.

I chair Inter-Ministerial Committee on Investment that will coordinate 40 priority investment projects across government. These 40 projects include the agro-processing and agri-parks, energy and infrastructure, manufacturing and services projects.

The Department of Trade and Industry will finalise the strategy for the deployment of locally developed technologies by the end of this year. Furthermore, the Department of Science and Technology and the National Treasury will secure additional funds to sustain and expand the Sector Innovation Fund through the Economic Competitive Support Package.

Priority continues to be placed on water saving and the minimisation of water losses.

This month will witness agreements being completed with municipalities experiencing high water losses. This will be done to facilitate the placement of water agents and plumbers that government is training.

We launched the programme last year to train fifteen thousand (15 000) young people to perform this task. This is important for youth development and empowerment as well.

The Presidential Infrastructure Coordinating Commission presented its report.

An action plan to ensure greater expenditure on municipal infrastructure maintenance and to enforce proper financial asset management will be developed and implemented to extend the lifespan and quality of our infrastructure assets.

The National Treasury and the Department of Planning, Monitoring and Evaluation presented their recommendations on work done in the past year to align the national budget to the National Development Plan as well as to the Medium-Term Strategic Framework.

Our Government has identified a set of budget priorities for 2017/18 which focuses on maintaining infrastructure spend, strengthening support for skills development and maintaining real levels of spending on the poor.

The Lekgotla also reflected on progress made and the next steps in the reform of state-owned companies (SOCs).

The implementation of the stabilisation programme has progressed with varying degrees. The Inter Ministerial Committee on SOCs, chaired by Deputy President Cyril Ramaphosa, will continue to oversee thirteen specific interventions.

Madam speaker government will not reignite growth alone. We welcome inputs from labour, business and also political parties aimed at the improved implementation of the National Development Plan through all these programmes and interventions.

I thank you.

The Leader of the Opposition (DA) to ask the President of the Republic:

In light of the fact that there is already an Inter-Ministerial Committee on state-owned entities, which has been chaired by the Deputy President, Mr MC Ramaphosa, since December 2014, how will the Presidential State-Owned Companies Coordinating Council interact with this body?      

REPLY:

Honourable Speaker,

I appointed the Inter-Ministerial Committee (IMC), which is chaired by Deputy President Cyril Ramaphosa, to preside over the implementation of the Presidential Review Committee (PRC)’s recommendations.

In the recently held Cabinet Lekgotla, the IMC recommended that the Presidential SOCs Coordinating Council be established to give effect to the Presidential Review Committee’s (PRC) recommendation of a SOE Council of Ministers.

The recommendation to institute a SOE Council of Ministers was made by the Presidential Review Committee (PRC) on State Owned Enterprises which was appointed in 2010.

The PRC’s recommendations were approved by Cabinet in April 2013 and were released to the public.

The Presidential SOCs Coordinating Council is one of the measures that are being introduced as part of a comprehensive refurbishment of the shareholder model of State-Owned Companies in order to improve their functioning.

The President also chairs other coordinating structures such as the Presidential Infrastructure Coordinating Commission (PICC), which oversees the implementation of major infrastructure projects across the three spheres of government, national, provincial and municipal level.

The President also chairs the Inter-Ministerial Committee on Investment, which coordinates government’s efforts at attracting investment. The role of these structures is only to coordinate and supervise and ensure that they all work together and not in isolation. It is not to directly run projects or take over responsibilities of line function departments.

Any such assumption is incorrect.

The Cabinet will apply its mind further to the proposal of the IMC. At this stage no finality has been reached and there are no terms of reference or any other governance structure for the Council that has been finalised.

Let me reiterate that the Inter-Ministerial Committee chaired by Deputy President Ramaphosa remains responsible for overseeing the stabilisation and reform of state-owned entities.

The proposal to establish the Presidential SOCs Coordinating Council is aimed at assisting to ensure improved oversight and coordination of state owned companies.

We welcome inputs from stakeholders on how to tackle this important task of ensuring that State Owned Companies become effective instruments of ensuring radical economic transformation and to improve the lives of our people.

I thank you.

Mr H M Z Mmemezi (ANC) to ask the President of the Republic:

With reference to the Inter-Ministerial Committee on Investment that has identified 40 projects across the clusters of government that will have a high-scale economic impact, (a) which of the projects will be implemented in the next two years and (b) how will communities benefit from the specified projects in the next two years?                                            NO2025E

Reply:

Honourable Speaker,

Government, through the Inter-Ministerial Committee on Investment Promotion, has identified 40 priority investment projects across government.

These 40 projects include the agro-processing and agri-parks, energy and infrastructure, manufacturing and services projects.

They were selected based on having a high-scale economic impact linked to the Nine-Point Plan; being able to take-off within the next two years; and the ability to attract further investment and community benefits.

The IMC on Investment will further discuss these projects and approve them for implementation.

The Top 10 Projects that are under consideration for implementation in the next two years are the following:

  1. The construction of Mzimvubu Dam and Water Project in the Eastern Cape.
  2. BAIC Automotive, a new automotive plant at COEGA in Port Elizabeth
  3. CIPLA, New Biologics Plant for Medicines at Dube Trade Port, KZN.
  4. AB Inbev, a new agricultural project for barley and hops and building the Agro-Supply Chain in North West, Limpopo, Northern Cape and Western Cape provinces.
  5. Clover, the establishment of a multi-disciplinary industrial park to grow the dairy industry and value chain in KZN and Eastern Cape provinces.
  6. Free State and Eastern Cape Apple Production, which is part of Distell’s Apple Juice Concentrate Project for Apple Production in Harrismith in the Free State and Elliot in the Eastern Cape.
  7. Qolora Aquaculture Development Zone, Development of a Marine Aqua Development Zone for Abalone Farming in Qolora, Eastern Cape.
  8. Ngaka Modiri Molema Agri-Park, the development of an agri-hub in Springbokpan, North West.
  9. Transnet Offshore Supply Base, the Development of an Offshore Supply Base in the Port of Saldanha, Western Cape by Transnet.
  10. Metallurgical Cluster Musina, the development of a Metalurgical Cluster for Mineral Benefication and a Special Economic Zone in the Musina and Makhado Corridor, Limpopo.

Communities will benefit from economic development of the areas, attracting further investment, job creation, better infrastructure and opportunities for SMME and cooperative development and food security, particularly in the agro-processing and agri-parks projects.

I thank you.

Mr M L D Ntombela (ANC) to ask the President of the Republic:

Whilst understanding that the spheres of government are separate, yet interrelated and interdependent in their roles and that these spheres are expected to work together in the spirit of cooperative governance, and that through the oversight work of Parliament the experience of committees on a number of occasions is that this conceptual and constitutional understanding is often not adhered to and the spirit of cooperative governance often lacking, (a) what additional reforms are being considered to improve effective governance of the State and (b) will these reforms include a greater role for the masses of our people who are often the recipients of poor service delivery because of the aforementioned?           

Reply:

Madam Speaker

The Constitution provides for the establishment of three spheres of government, ranging from national, provincial and municipal level.

These spheres are distinctive, interdependent and interrelated.

The three spheres have to exercise their powers and functions in such a manner that their policies and executive actions can be effectively synchronised to help facilitate efficient and effective delivery of basic services rather than competing against one another.

It’s a matter of fact that some services remain fragmented and poor communities continue to suffer.

The separate spheres of government should help work best to consolidate service delivery to our people rather than working against one another.

There are some executive functions which are best suited at the national sphere, while others are better handled at the provincial administration, whereas the local municipalities are good at their own functions such as provision of water to our communities.

Government has introduced a comprehensive legislative and institutional framework to give into effect the letter and spirit of the constitutional provision for cooperative governance.

Some of the reforms include the Intergovernmental Relations Framework Act, which seeks to promote and facilitate intergovernmental relations and provides procedures and mechanisms for settling disputes between the spheres of government.

Various structures that bring together different spheres of government and promote cooperate governance have also been established.

These include the President’s Coordinating Council (PCC) at the national level, the Premier’s Intergovernmental Forums at provincial level, and the District Intergovernmental Forums at district levels.

There are also forums that coordinate the work of government at sectoral level.

Departments with concurrent functions have Ministerial Committees (MinMecs), where relevant Ministers meet with relevant MECs to coordinate implementation of government services in the sectors.

In 2009 we also established the Department of Planning, Monitoring and Evaluation to monitor the performance of government across the three spheres and to ensure that government departments work together to deliver services to the people.

Another reform we introduced is the signing of performance agreements between the President and Ministers, which are then translated into Delivery Agreements between Ministers and their counterparts in provinces and municipalities. The Delivery Agreements outline what each sphere of government has to contribute in order to ensure that services are delivered to the people.

Finally, we introduced the Back to Basics approach to local government. This is an important intervention since most service delivery happens in municipalities. One of the aims of the Back to Basics programme is to strengthen mechanisms for public participation.

I thank you

The Leader of the Opposition (DA) to ask the President of the Republic:

In light of the fact that a sovereign ratings downgrade is likely to occur in the coming months, what plan of action does the Government have in place to avoid such an occurrence to ensure that the poor are not adversely affected, that jobs are created and that investors still see South Africa as a safe, desirable investment destination? NO2028E

REPLY:

Madam Speaker

South Africa, like many other countries in the world, has witnessed a decline in economic growth in the last few years as the global economy lost momentum.

Increasing interest rates in developed economies, constrained fiscal positions, lower commodity prices and increased political tensions in parts of the world have supressed both business and consumer sentiment.

At the G20 meeting I attended in Hangzhou, China,  leaders discussed how we can act collectively and in a coordinated manner to support and ensure that growth is sustainable balanced and inclusive.  The Summit reiterated its commitment towards using all policy tools to ignite growth. 

In particular, the Chinese Presidency of the G20 prioritised the implementation of structural reforms, as well as their individual comprehensive growth strategies which outline policy commitments to increase their domestic growth performance and in turn contribute to global growth.

There is general consensus that countries have to prioritise structural reform as an effort to support domestic economies and contribute to better performance of the global economy.

Our efforts to support the South African economy are anchored by the National Development Plan and supported by the Nine-Point Plan.

  • As government we have made advances on our structural reforms in many areas, namely:
  • Improving electricity availability
  • Improving labour relations
  • Improving the ease of doing business, such as the Invest SA initiative and the establishment of One Stop Shops which is taking place
    • Fiscal reforms
    • Supporting SMEs Reforms in State Owned Companies, information technology, transport, competition and water provision.
    • Opening up sectors for private sector participation.

Government’s efforts are further supported by improved collaboration with the private sector and labour.

For instance business has been working on various initiatives to support the economy.

This includes recommendations for sector interventions in;

  • Tourism
  • Agriculture
  • Health
  • Manufacturing
  • Setting up of a small business fund and already 1.5b billion rand has been raised. The Black Business Council has requested the participation of black asset fund managers.
  • Initiatives to support youth employment.

Finally, in our recently held Cabinet Lekgotla we resolved to take all actions necessary to reinforce policy certainty and improve business confidence.

We will do this while simultaneously communicating a clear message that growth-friendly fiscal consolidation will continue.

The Cabinet Lekgotla also reiterated that it remains committed to the February 2016 fiscal targets which are aimed at stabilising debt and containing the rate of increase in debt service costs.

The Cabinet Lekgotla resolved to take the steps necessary to change the composition of expenditure towards investment so that government can make a contribution towards growing the economy and creating more work opportunities.

Madam Speaker

We therefore have every reason to believe that our collective actions as South African can deliver a better economic performance in the next few months and years.

Data last week showing that the South African economy grew at 3.3% quarter on quarter in the second quarter of 2016 is a good sign that our collective efforts are begin to yield fruit.

We are sending a good signal to investors and rating agencies.

I thank you.

Mr X Mabasa (ANC) to ask the President of the Republic:

With reference to the 6th Summit of the Tokyo International Conference on African Development that took place in Kenya over the weekend of 27 to 28 August 2016, what (a) is the nature of increased Japanese investment in South Africa and (b) undertakings would these sectors and the Government need to make for increased investment to be realised?               

Reply:

Honourable Speaker

This year’s Tokyo International Conference on African Development (TICAD) VI Summit focused on advancing Africa’s development agenda.

It brought together Heads of State and/or Government as well as leading industrialists, top business executives and heads of business associations from Africa and Japan to promote high-level policy dialogue between these leaders and to mobilise support for African-owned development initiatives such as the African Union’s Agenda 2063.

Japan has been a major Asian project sponsor in Africa over the past ten years.

The amount of Japanese project finance commitments over the ten years since 2005, have totalled 33.5 billion US dollars.

At the TICAD Summit in Kenya, the Japanese Prime Minister pledged 30 billion US dollars in public and private sector investment for infrastructure development, education and healthcare for the African Continent.

This will be done in cooperation with the African Development Bank over a period of three years.

We held talks with Japanese Prime Minister Mr Shinzo Abe prior to the Summit to further strengthen relations between South Africa and Japan.

South Africa is Japan’s largest trade partner on the African continent. About one hundred and forty thousand people are employed by Japanese firms operating in South Africa.

The Minister of Trade and Industry also held meetings with Japanese investors who expressed an interest in investing in our infrastructure, particularly energy, oil and gas, advanced manufacturing, technology, agro and aquaculture sectors.

I thank you.

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