Statement on the Cabinet meeting of 11 May 2016

12 May 2016

1. Implementation of Key Government Programmes

1.1. Cabinet took note of the report-back by the Minister of Finance to the President, on the progress of Government’s consultations with the private sector and labour on the economy. The President mandated the Minister to lead engagements with these social partners to map out a strategy and come up with measures for growing the economy and preserving the country’s credit rating.

Cabinet is pleased that this work has culminated in concrete initiatives that will improve the country’s economic prospects. The President announced several priority initiatives on Monday, which include: (1) a joint private and public sector fund for Small Business Support, (2) addressing constraints to increasing investment in order to accelerate inclusive growth, (3) government and private sector co-investment in infrastructure drawing on experience of the successful Independent Power Producer Programme and (4) strengthening State Owned Enterprises to ensure their financial sustainability and reinforcing their role in driving development.

These announcements are testament to what this country can achieve when all social partners come together to work towards the same goal.

1.2. Cabinet remains confident that government’s aggressive fiscal consolidation, the historic R1 trillion collection by the South African Revenue Service and the recently announced five short-term interventions, all complement the Nine Point plan so as to ensure a turn-around in our economic fortunes. The increased revenue collection by SARS will further enable Government to deliver services that will improve the quality of lives of all its citizens.

1.3. Cabinet welcomes the announcement by ratings agency, Moody’s Investor Services, which over the past week reaffirmed the country’s credit rating at two notches above sub-investment grade. In affirming the rating, Moody’s noted that South Africa was approaching a turning point after years of weak growth and the aggressive consolidation measures in the 2016 budget will stabilise government debt to GDP in the current year. All parties are agreed that collaborative efforts need to be strengthened to give impetus to the economic recovery. We also note that the Minister of Finance’ work with social partners includes a credit ratings workstream that will identify potential reforms and interventions to preserve South Africa’s strong capital markets and investment grade credit rating.

1.4 The President appreciates the Budget Votes by respective Ministers which address the needs of all South Africans. The progress reports and plans emanating from the Departmental Budget Votes demonstrates that South Africa is a nation at work, with government leading the way, in building a better life for all.

Concrete measures have been put in place to reduce the negative impact of the global economic downturn on our economy, and to prepare for robust growth when the economic cycle turns positive. We are also working hard to remove domestic impediments to growth.

The budget votes also demonstrate that government, labour and business are working together, more than any other time, to find ways of re-igniting growth and building a better life for all. This includes vigorous implementation of the Nine Point Plan, announced by President Jacob Zuma in his 2015 State of the Nation Address as well as Operation Phakisa, designed to fast track implementation of solutions to critical development areas. These programmes address critical issues from the National Development Plan, such as reducing poverty and unemployment.

1.5. Cabinet reassures South Africans that the country’s unemployment situation is being addressed through the implementation of the country’s National Development Plan (NDP) through the Nine Point Plan economic intervention which seeks to ignite growth and boost jobs in key sectors of our economy. The collaboration of the private sector is pivotal for a successful outcome.

Government is using all available initiatives including its Industrial Policy Action Plan (IPAP) to create more labour absorbing production and services sectors to address unemployment which has been further impacted by the difficult global and local economic conditions. Minister of Trade and Industry, Rob Davies launched the eighth annual iteration of the IPAP 2016/17 to 2018-19 on 9 May 2016 at a 100% black-owned casting and machining foundry in Gauteng. Government emphasizes the importance of developing close cooperation with cutting-edge local industrial companies involved not just in infrastructure development, transport and logistics, but across a wide range of technologically sophisticated, export ready and labour intensive sectors of the South African economy as a totality.

While the Quarterly Labour Force Survey for the first quarter of 2016 recorded an increase in unemployment to 26.7 per cent on a quarter on quarter basis, 2016 employment levels are higher by 204 000 employed people when compared with the first quarter of 2015.

1.6. Cabinet welcomes the handover of the Beaufort West Youth Hub, in Western Cape by President Jacob Zuma, which provides a facility to the youth, where they can empower themselves. The Hub has a mix of facilities that provide for holistic development of young people and for the community at large. The facilities available in this youth hub will provide young people from poor communities with opportunities to better participate and contribute positively to their communities and to the country.

The fully equipped Skills Centre that is being operated by South Cape College will provide training in business administration, end user computing and early childhood development to 200 National Rural Youth Service Corps (NARYSEC) participants per year. NARYSEC is a long-term programme where only rural youth are targeted, recruited and contracted for a period of two years.

Youth between the ages of 18 and 25 years old are recruited and then enrolled for training in various skills that will equip them, both with theoretical and practical knowledge, to create employment for themselves and other people in their communities. This Youth Hub is a Pilot project and the first of its kind, and will be rolled out in other provinces.

1.7. Cabinet welcomes the recently held 2016 Open Government Partnership (OGP) Africa Regional Meeting which was hosted by South Africa under the theme "Open Government for Sustainable Development in Africa" from 5 to 6 May 2016.

This gathering comes seven months after South Africa became the Lead Chairperson of the Open Government Partnership. Open government principles are crucial for achieving a much broader range of sustainable development goals, linking openness to governance for the improvement of the vulnerable and poor around the world.

The Open Government Partnership and Open Government is also a key enabler that will assist the global community to achieve the 2030 Agenda for Sustainable Development.

This Regional Summit was the biggest Open Government Partnership (OGP) Regional summit ever organised by the OGP with very substantive outcomes coming out of each session throughout the conference.

In keeping with governments commitment to partnership and good governance, this summit attracted participants from various Civil Society Organisations (CSO) from around the world that are rooted in communities across different sectors outside the traditional CSO’s that have always been part of the partnership.

1.8 Cabinet notes the approval of the merger of three bottling plants to form the continent's largest bottling plant, Coca-Cola Beverages Africa. Cabinet welcomes the agreement on public interest conditions for the merger between government and the Coca-Cola Beverages Africa merger parties that can support our efforts for greater industrialisation in the South African economy.

The agreement safeguards aggregate employment levels in the company for a period of three years, protects workers in the bargaining unit from merger-related retrenchments, supports localisation of the supply chain and commits to develop historically disadvantaged farmers and suppliers to the company. Furthermore, R400 million has been committed to fund enterprise development in the agricultural value chain and another R400 million incremental investment to develop downstream distribution and retail capabilities with associated skills development and training. The iconic Appletiser brand will continue to be produced in South Africa.

The agreement opens fridge space in coolers owned or supplied by Coca-Cola to smaller retailers: ten percent of fridge space will be available to rival products from smaller producers in retail establishments where only Coca-Cola supplied coolers are available. This opens the market to new entrants and small bottlers, helping to avoid restrictive business practices that keep small and medium-sized businesses out of markets.

In addition, the company's long term investment in the country's economic and socialdevelopment will be enhanced through the establishment of the merged entity's headquarters in South Africa. The agreement follows a recent similar agreement entered into with Annhauser Beush InBev relating to the purchase of SAB Miller. In particular, in their emphasis on employment, localisation and small business development, these agreements point to the importance of balancing corporate mergers with public interest issues and set a standard for companies contemplating similar mergers or acquisitions.

1.9. Cabinet noted the launch of the Mpact Polymers R350 million bottle-to-bottle plant in partnership with Coca-Cola. This initiative is in response to the Government's legal framework working through the Environmental Affairs' National Waste Management Strategy goal to promote recycling enterprises. The plant is a first of its kind on the African continent diverting 29 000 tonnes (polyethylene terephthalate) PET waste bottles with an estimated saving of 186 000 cubic metres of landfill space and will contribute to reduction of Carbon dioxide (CO2) emissions of approximately 53 000 tonnes per annum. The Industrial Development Corporation (IDC) provided a R210 million loan facility as well as R30m for its 21% equity stake and the Department of Trade and Industry granted a section 12(I) tax incentive. The recycling plant provides jobs to 80 employees and 1 000 jobs to waste collectors.

Partnerships like this are an important engine for economic growth, creating thousands of jobs in the recycling economy that is worth about R50 billion. Currently, plastic recycling alone provides income opportunities for more than 60 000 waste pickers. Mpact Polymers, state of the art recycling plant complies with EU food safety specifications and is the first such factory in Africa which also meets Coca-Cola’s full certification protocol for PET bottles.

1.10 Cabinet welcomes the report-back on the Integrated Strategic Management of Rhinoceros which has shown that South Africa has turned the tide on rhino poaching. Since the beginning of this year alone 206 alleged poachers have been arrested.

The Integrated Strategic Management Approach was adopted by Cabinet in August 2014 which saw the Security Cluster implementing a multi-disciplinary, multi-sectoral intervention to protect rhino in South Africa.

1.11 Cabinet congratulates the country for hosting a successful 2016 Tourism Indaba in Durban Kwazulu-Natal, which concluded on Monday, 9 May 2016 with numerous successful interactions between 1 047 exhibitors from 18 African countries and 1 856 buyers from across the globe.  This year, INDABA hosted 3000 more meetings than last year. In total 14 000 business meetings took place over the three days of INDABA, presenting a significant economic benefit potential. The event was also attended by 575 national and international journalists.

The INDABA focussed on the industry's small, medium and micro enterprises (SMMEs) showcasing products and services from promising small travel businesses. 70 enterprises gave workshops on how to access the market - and grow. SMMES have the potential to become big business. The INDABA has bolstered the role SMMEs play in the economic development of both developed and developing countries, in growing the tourism sector. Unlocking the potential of SMMEs is one of the critical job drivers in the Nine-Point Plan that will grow and transform the economy and create jobs.

2. Key Cabinet decisions

2.1. Cabinet discussed the implementation on the Truth and Reconciliation Commission’s (TRC) recommendations and proposed options for the implementation of the Community Rehabilitation Projects.

Realisation of Community Rehabilitation Projects redress the injustices of the past through the rehabilitation of 128 communities that were subjected to acts of violence and destruction during the conflict period (1 March 1960-10 May 1994).

The Department of Justice and Constitutional Development will solicit contributions from relevant stakeholders (public and private) in order to secure adequate resources to bring about holistic interventions in these 128 communities, identified by the TRC on a case by case basis that might differ in value but to a maximum value of R30 million. This will ensure that Projects are feasible and sustainable in order to realise community aspirations.

This contributes to the realisation of the National Development Plan through broadening social cohesion and unity, redressing the inequalities of the past and the realisation of a developmental, capable and ethical state that treats citizens with dignity.

2.2 Cabinet was briefed on the outcomes of the World Radiocommunications Conference (WRC-15) which was held from 2 to 27 November 2015 in Geneva, Switzerland. South Africa led the Africa Group negotiations that led to the region securing additional spectrum for mobile broadband and Africa managed to protect the lower UHF spectrum for digital terrestrial television. More spectrum allocations were made for maritime, aeronautical and space services.

The National Radio Frequency Plan (NRFP) will be updated to reflect the decisions of the WRC-15, which come into force 01 January 2017. The allocation of spectrum within the NRFP will facilitate assignment plans for the different services which are critical to achieving economic, cultural and social benefits through the use of spectrum as a natural resource. In supporting the National Development Plan goals, the spectrum will be used for national broadband rollout, digital terrestrial television, satellite communication and public protection and disaster relief, as well as other services.

2.3 Cabinet was briefed on the Decisions taken by the Assembly of the African Union (AU) Heads of State and Government in Johannesburg in June 2015 to revise the assessed annual contributions by Member States from 2016, in order to enhance its ability to carry out its programmes.

Cabinet approved implementation of South Africa’s new assessed contribution to the AU in line with the Assembly Decision of a new Scale of Assessment. This is based on the principle of solidarity, equitable payment as well as capacity to pay, in a manner that ensures that no single country bears a disproportionate share of the budget.

3. Upcoming events

3.1. President Jacob Zuma will conduct a State Visit to Doha, Qatar on 19 May 2016 to strengthen political and economic relations between the two countries.

3.2. Deputy President Cyril Ramaphosa, as the Special Envoy of President Jacob Zuma to South Sudan, will visit Juba on 16 May 2016. This day is significant to the South Sudanese as they mark the Sudan People's Liberation Army Day.

During his visit the Deputy President will monitor implementation of the peace agreement. South Sudan reached a milestone at the end of April 2016 with the swearing in of the transitional government of national unity.

3.3. President Jacob Zuma will lead the national and Southern African Development Community (SADC) celebration of the University of Fort Hare Centenary on 20 May 2016. The university’s contribution to producing illustrious alumni in the country and Southern Africa bolsters Africa Month celebrations.

3.4. Cabinet encourages people to participate in the Africa Month multi-disciplinary programme that involves different generations and genres under the theme “Building a Better Africa and a Better World”. All activities emphasise the centrality of local communities and comprise various disciplines including: music, poetry, dance, film, cuisine, fashion, craft and design, intellectual engagements and some collaborative work from South African artists and their counterparts in the continent and the Diaspora.

3.5. The International Day for Families will be celebrated on 15 May 2016 under the international theme “Families, healthy lives and Sustainable Future” which relates to the 2030 Agenda for Sustainable Development (adopted in 2015). The International Day for Families was proclaimed by the United Nations General Assembly and focuses on Families: children’s and youth’s health and well-being; work-family balance and health outcomes; and better quality of life for older persons.

3.6. From 16 to 20 May 2016 the Department of Water and Sanitation will lead Sanitation and Hygiene Week under the theme: “It’s not about flushing”. The campaign will raise awareness on the importance of sanitation and promote sanitation best practices.

A key programme is the Bucket Eradication Programme; progress includes total eradication of bucket toilets in formal settlements in KwaZulu-Natal, North West, Mpumalanga and Gauteng. The Western Cape reached 99.8 per cent completion. Progress in other provinces includes the eradication of 20 560 bucket toilets: Free State (4 056), Eastern Cape (2 672); Northern Cape (2 421) and North West (398).

Water and Sanitation Minister, Nomvula Mokonyane will participate in the 84th International Committee on Large Dams (ICOLD) at the Sandton Convention Centre from 15 to 20 May 2016. The platform will share knowledge of the design, construction, maintenance and impact of large dams. It will also include tours of large dams in Southern Africa and will contribute to our water conservation efforts.

3.7. As part of the Integrated National Literacy and Numeracy Strategy, the Department of Basic Education is hosting the 2016 Spelling Bee to improve learners’ performance in languages.

Cabinet calls on all schools, teachers and parents to encourage primary school learners to enter the 2016 Spelling Bee before entries close on 31 May 2016. For more information visit www.education.gov.za.

4. Cabinet’s position on key issues in the environment

4.1. Cabinet strongly condemns the blatant racism that was displayed by some individuals in our country, particularly on social network platforms. Such behaviour goes against the ethos of our Constitution, enshrined responsibilities and values, and violates the rights of our people. This has no place in our democratic society. In particular Cabinet lamented the racist comments attributed to a senior member of the Judiciary, the High Court Judge Mabel Jansen.

The pronouncements especially by an esteemed member of the judiciary are not in keeping with what our society expects from members of the judiciary. The Judiciary should always act impartially and in a manner that is beyond reproach.

Tolerance and respect has been a cornerstone of our struggle for freedom and remains an essential part of South Africa’s democratic foundation. Let us unite again to jointly defeat the divisiveness of racism in our society.

The Department of Justice and Constitutional Development plans to deal with such matters through the introduction of legislation to address racism and in particular hate speech.

Cabinet further calls for all South Africans to respect each other as envisaged in our Bill of Rights.

4.2. Cabinet reiterates President Jacob Zuma’s condemnation of the destruction of 24 schools by people purported to be residents of the Vhembe district in Limpopo. This destruction of educational infrastructure disadvantages our children and undermines the country’s effort to provide quality education.

Cabinet welcomes the meeting by President Jacob Zuma with King of the Vhavenda, Khosikhulu Thovhele Toni Mphephu Ramabulana which was at the request of his majesty on the 8 May 2016 to resolve issues in Vuwani.

President Jacob Zuma has put in place a task team led by the Department of Co-operative Governance and Traditional Affairs to lead the process of developing a package of social infrastructure projects for the Makhado Local Municipality. Cabinet thanks the ministerial Task Team led by Minister Desmond van Rooyen for the inroads made to resolve this matter and appreciates the role played by the Office of Premier Stanley Mathabatha, and the Executive Mayor of Vhembe, Tshitereke Matibe; the Executive Mayor of Thulamela, Grace Mahosi and the Executive Mayor of Makhado, David Mutavhatsindi.

During Task Team meetings, the attending traditional leaders made commitments to work with government to resolve the crisis and condemned the destruction of property and violence and called for the urgent resolution of the situation. At these meetings traditional leaders and the Task Team reaffirmed the outcomes of the meeting with the President and resolved to report progress to the President. As we speak the ministerial Task Team is engaging with all stakeholders as a continuing effort by government to normalise the situation in Vuwani and its surrounding villages.

Cabinet thanks those members of the community and traditional leadership that have intervened to protect the remaining schools and creating an environment for ongoing dialogue.

There can be no valid reason to justify the senseless destruction of critical public infrastructure such as schools. Those residents who are found guilty of burning our public facilities will face the full might of the law.

Cabinet reminds South Africans that our democracy affords all citizens a number of platforms to express their concerns and embark on constructive engagement towards an amicable solution. Residents of this district are encouraged to isolate any elements who are leading and destroying the future of our children and report them to the law enforcement agencies.

In a separate but related incident Cabinet noted with great concern the continuing violence, disruption of schooling and the burning of the traffic department facilities in the Grabouw area of the Western Cape. Cabinet reiterates that the full might of the law will be applied to those found guilty of criminal activity.

4.3. Cabinet conveys its condolences to the family and friends of those who lost their lives due to the flooding in areas of KwaZulu-Natal. Government is providing disaster management services and relief to victims.

4.4. Cabinet reminds South Africans to continue using water sparingly to secure sufficient supply for future use, as there are still areas in the country which are experiencing drought conditions.

Government support continues to lessen the devastating effects of the drought through short, medium and long term budget allocations to fund interdepartmental programmes that respond to the special needs of drought-affected areas and the need to address water losses in critical supply networks.

Government has established an Inter-Ministerial Task Team on Service Delivery, with representation from different sectors. As part of the mitigation measures taken to offset the effects of the drought, dam operating rules have been applied to 35 dams and 4 systems where restrictions are currently applied with regard to the water resource (mandatory restrictions on domestic and agricultural use).

To mitigate the effects of the drought on water users, the Department of Water and Sanitation has spent over R500 million on emergency and short-term interventions in KwaZulu-Natal, Free State, North West, Eastern Cape, Mpumalanga, Limpopo, Western Cape and Northern Cape. The medium to long term interventions are intended to ensure that we are more climate change resilient, which reduces the risks for future drought mitigation.

The approach employed by government in addressing the drought and land degradation problem, facilitates coherent and integrated intergovernmental responses, namely, the Landcare programme, Working for Water, Working on Fire and Working for Wetlands, that contribute to job creation, food security, skills development, conservation, land rehabilitation and restoration as well as rural development. The advent of the current drought necessitates use of technologies that advance resilience. As such in 2015 South Africa approved the use of drought tolerant genetically modified maize to address the issue of food security. We are also enhancing innovative designs and technologies required in the restoration of affected areas to arrest soil degradation and sustain land productivity.

As part of this integrated approach South Africa has committed to partner and become a beneficiary of the United Nations Convention to Combat Desertification (UNCCD) Global target setting support programme. Through these interventions, we join in the global implementation of national voluntary targets as part of achieving the SGDs. The key principle of Land Degradation Neutrality affirms the role of local people in the designing and implementing measures to halt and reverse land degradation. The recently concluded Climate Change Adaptation Strategy identifies priority interventions and harmonises key Water, Agriculture, Biodiversity, Health, Human Settlement, and Disaster Risk Reduction sectoral adaptation plans into a comprehensive National Adaptation Plan. The removal of Alien Species through the Working for Water programme from infested catchment and water courses contributes to improved water quality and quantity

4.5. Cabinet noted with concern the strike action at the South African Post Office, the consequences of which have an impact on its repositioning to better service South Africans.

Government through the Department of Telecommunications and Postal Services is working to address the issues at the Post Office to bring stability and turn the situation around. Last August, the Department appointed a new board, a new CEO and strengthened management to guide the operations and bring stability to SAPO. SAPO’s financial stability continues to be top priority.

The South African Post Office remains a strategic entity for extending government, e-commerce and financial services to South Africans through it’s approximately 2 448 outlets. We are encouraged that management and leaders of organized workers are committed to negotiations as a route to resolve their differences.

4.6. Cabinet congratulates the South African team of learners (Liam Baker, Dylan Nelson, SangEun Lee, Ralph McDougall, Timothy Schlesinger, Hannah Clayton, Rauseenah Upadhey, and Mpho Nkwana) for winning the 24th Pan African Mathematics Olympiad in Senegal. Lee, 17, was also crowned African Queen of Mathematics in the competition for girls for the second successive year.

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