Honorable Speaker, we convene here this afternoon to hold debates of substance on the broad policy outlines tabled before this house by the President of the Republic during his State of the Nation Address (SoNA) five days ago.
The ANC has over the past 82 years (1912-1994) conducted a struggle to bring about freedom and democracy in South Africa. A united and democratic South Africa able to take its rightful place as a sovereign state in the family of nations was achieved through the selfless struggle conducted by our movement.
Since 1994, South Africa’s fiscal framework has been grounded in a sustainable, countercyclical approach to managing revenue and expenditure. Fiscal consolidation remains a priority, whilst our Government continue with social and economic programmes as planned.
Madam Speaker, in essence the ANC led Government argues strongly that our Macro Economic Policy is sound and stable providing certainty to international markets, predictability of investment returns and giving us as a country leverage to focus all our energies to Micro Economic Policy affecting our domestic environment.
[T1] Allow me to reflect on the ANC led Government Micro Economic Policy environment since the dawn of democracy:
Madam Speaker, between 1994-2015, a number of key policies in order to rebuild and transform the economy has been pursued by the democratic Government. First the RDP with net effect which was “redress” through social security-net that was extensive.
Second in 1996, Growth, Employment and Redistribution (GEAR) introduced to deal with Inflation and fiscal deficit amongst others; these were slightly achieved bringing about macro-economic stability.
Thirdly in 2005, the Accelerated and Shared Growth Initiative – South Africa (ASGISA) to focus on poverty and unemployment, with not much notable achievements.
Fourthly, NGP announced in 2010 and NDP in 2013 providing a long term planning horizon of up to 2030.
As we celebrate 60 years of the Freedom Charter, the President correctly reminded us that the people of South Africa declared amongst other things, that South Africa belongs to all who live in it, black and white, and that the people shall share in the country’s wealth.
ANC Government’s task in the second phase of the democratic transition is that of radical socio-economic transformation to democratise the economy. This represents a fundamental break with the ownership patterns of the past and the putting in place of a South Africa that belongs to all who live in it.
Madam Speaker, allow me to define what the ANC mean when talking about “radical socio-economic transformation”. In general terms, when we speak of radical socio-economic transformation we refer to a systematic restructuring of our political economy in a manner that breaks with the past ways of economic (mis)management in which the vast majority of South Africa’s citizens were locked in the margins of the economic mainstream.
It is about building economic relations that promote the historically marginalised social classes by drawing them into the field of asset ownership.
It is particularly important to lay down this definition as analysts’ continue to cause confusion in the minds of our people about the meaning of this radical socio-economic transformation concept.
At the centre of radical socio-economic transformation are programmes addressing a range of areas to give impetus to the second phase of democratic transition:
The land and agrarian reform is the apex priority (Draft Expropriation Act is now before Parliament), the mineral sector in particular beneficiation through Phakisa, the creation of a steel company including strengthening state mining company to focus on strategic minerals, massive youth employment programme, resolving the energy challenges, high impact Industrialisation, massive infrastructure rollout and as well as resolving labour market challenges all pronounced by President Zuma represent a sum-total of what will ensure inclusive growth and jobs for the economy.
Madam Speaker, the ANC led Government has undertaken to put together an industrial policy framework that will achieve an integrated industrial growth strategy that is underscored by a deliberate move to build a broad asset-base that crowd in new industrial players, specifically targeting the historically marginalised sections of society.
A great deal of times our economic growth has been largely based on an increasing market-value of a fixed set of assets, particularly in the extractive industries.
This has also been punctuated by periods of growth that was driven by consumption; fueled and associated with unsustainable increases in private credit extension, without viable capital-assets through which such debt can be serviced. The long-term results have proven disastrous!
Government has doubled its infrastructure spending over the past five years to over R1 trillion rand providing market opportunities to advance transformation agenda of the ruling party. There have been troubling instances of collusion by some amongst the monopolies in the private sector that prevent transformation and entry for emerging black firms.
This remains a sore point and our Government will be tougher against monopolies and their opportunistic tendencies in order to achieve its transformation targets on procurement and jobs as set in the ANC manifesto.
Central to our improvement of the rate of employment in our economy is the creation of a broad and robust manufacturing sector. I want to speak of the creative ways through which we have managed to salvage our existing industrial assets in the manufacturing sector from the negative impact of a volatile global economy.
Madam Speaker, the example with the Automotive Sector as the leading subsector of our manufacturing comes to mind. The Automotive Investment Scheme and the Automotive Production Development Programme (APDP) are amongst the key fiscal support mechanisms set out to assist the auto industry by our Government.
Other incentive instruments that perform the same function across the manufacturing sector include the Manufacturing Competitiveness Enhancement Programme. These interventions are among the contributors to the 203 000 jobs increase that the President referred to during SoNA.
Honorable Speaker, in 2014 the President called upon all of us to endeavor to build an inclusive economy anchored on a large and growing industrial base underpinned by broad-based economic empowerment. He reiterated this call last Thursday.
We have already made headways in institutionalising this call. We are leading the charge of transforming the racial patterns of ownership in industrial assets through BEE and SMME Policies.
President Zuma announced ground breaking initiatives on designations and set asides; the National Treasury will soon be issuing Practice Notes to all spheres of Government and this will benefit Cooperatives, BEE, SMME and Black Industrialists. President called for ensure full industry charters compliance starting with Mining Charter amongst others. Indeed we continue with the good story against all odds!!!
Our Black Industrialists development program is a systematic initiative to crowd in new industrial actors into the network of productive industrial assets as well as financing the development of new industrial assets. Mr. President, there is already a huge inflow of applications for participation.
We are now in the process of consolidating a mechanism of supporting these black industrialists. We are exploring a framework that will use the existing capacity of institutions like the NEF, IDC, PIC, and other Incentive Schemes to serve as the base upon which this programme will be rolled out.
Madam Speaker, Government incentives have been quite effective in leveraging investment. As things stand, there is a further R 39.9 Billion pipeline potential investment up to the 3rd quarter of this financial year. This is part of the investment consolidation that will accelerate the realisation of the 6 million job opportunities target of the ANC manifesto
Honorable Speaker, there can be no radical transformation of the productive side of the economy without a matching move to build a robust network of foreign markets for sustainable trade.
Our view has always been that we should pursue trade relations in a manner that systematically improves our trade balance by yielding more export opportunities for South Africa.
For this trade advantage to be realised also imposes on us the obligation to build an industrial base with diverse output that can appeal to various markets, domestically and abroad.
In respect of this, the consolidation of existing trade partnerships and the exploration of other market avenues like African regional integration become crucial.
South Africa is currently engaged in trade negotiations that will upscale its partnerships with other African economies.
Through our location in Southern African Development Community (SADC), we are engaged in a Free Trade Agreement negotiation that enjoins three regional economic blocks that enjoin 26 countries with a combined GDP of US$860 billion and a combined population of approximately 590 million people. This is the SADC-EAC-COMESA Free Trade Agreement negotiation.
The Tripartite initiative comprises three pillars that will be pursued concurrently, in order to ensure an equitable spread of the benefits of regional integration: market integration, infrastructure development and industrial development. The FTA will, as a first phase, cover only trade in goods; services and other trade-related.
Whilst structured to last for 3 years, it has an extension option of two years. This is a strategic advance towards African economic integration and its population size is revealing of the market-potential that Africa has in the bid to develop equitable and fair alternative markets in an unbalanced global terrain.
All of these initiatives can and will ride on the massive infrastructure plans that we have developed over many years. We seek to galvanise emerging industrial players to use the infrastructure network of the trade corridors that we already have.
Madam Speaker, South Africa is re-negotiating the terms of its participation in the Africa Growth and Opportunity Act (AGOA) in order to improve the trade position of particularly South African farmers in accessing the American markets.
There is also renewed effort towards the conclusion of the Doha Development Agenda (DDA) in the WTO. It will be important for Africa to be properly coordinated to ensure that development remains at the centre of the negotiations and that agriculture is central to any developmental round especially for Africa.
Similarly, our membership in the BRICS block is part of the strides we continue to make in accessing a wide range of markets. This allows for South Africa to enter more favourable trade markets for investment capital and exports.
The institutional formation of the BRICS organisational machinery is proceeding well. Already work is under way to fully establish an African Division of the BRICS Bank, to act as a springboard for infrastructure investment in the continent. This will provide huge market opportunities and certainly our economy will receive a major boost from this development.
Madam Speaker …I want to state that the ANC is hard at work in pursuit of socio-economic freedom. This is a struggle we are committed to pursuing with vigour, determination and discipline as we did during the struggle against Apartheid.
Unlike some overzealous people in this house, we appreciate that the struggle for Socio-Economic Freedom is not an event and does not depend on the howling of slogans.
As the ANC, we are committed to implement all the ideals of Freedom Charter…. We remain the only Liberation Movement that will continue to contest for State Power to transform society in order to deal decisively with poverty, unemployment and inequality.
The ANC support SoNA as delivered by President Zuma and further commit to work tirelessly in Government with the Business, Labour and Civil Society to change the structure of our economy using NDP 2030.
Thank you Madam Speaker!!!!
[T1]I suggest that we pitch it within the broader context of the ANC lead government, as the DM won’t be speaking on behalf of the DTI per se but the ANC caucus, further he is expected to also touch broadly on the economy.
