S Ndebele: KwaZulu-Natal Growth Coalition breakfast meeting

7 August 2007

Protocol

Programme Director, Mac Mia,
Zweli Mkhize, MEC Finance and Economic Development,
Councillor Zanele Hlatshwayo,
Mayor of Msunduzi Municipality,
Councillor Logie Naidoo,
Deputy Mayor of eThekwini Municipality, John Barton,
Co-Chair of the KwaZulu-Natal Growth Coalition, Colin Franks,
MD of Investec Private Bank and sponsor of this function, Hamish Erskine
Dube TradePort Presidents of Chambers of Business,
Present Captains of Business,
Present Members of the Diplomatic Corps

Public/Private Partnership

I listened with interest to the presentations by John Barton and Zweli
Mkhize and marvel at the depth and sincerity of both public and private sector
leaders for working together for the betterment of the province. We must really
commend the continuing public/private partnership that is exemplified by this
engagement under the Growth Coalition. We have certainly made strides since the
inception of this Coalition in 1999. I lend my full support to more frequent
sector-driven interactions with our government and the private sector, as well
as with the leadership of local municipalities and the business community.

People who are here today are very special, and are regarded as the top 150
executives in KwaZulu-Natal for being at the helm of major national or
international corporations, leading their respective Chambers, or heading
prominent associations, government or quasi-government institutions. For these
reasons, we are grateful that you accepted our invitation here today. You are
no doubt all achievers, but I would like to highlight what I believe to be
exceptional achievements this year.

To Captain Sarno (not present today as he had to leave on urgent business to
Italy) for the Shosholoza project, which has captured the imagination of people
worldwide. The spirit of Team Shosholoza should inspire all of us here present
to row this economic transformation boat in unison and in harmony.

Achievements becoming norm

Who would have thought that Africa as a continent, or for that matter a
Durbanite, could dare to challenge for the glory amongst the best and the
richest that the America's Cup epitomises?

I was watching initially with disbelief and later with great admiration as
to how our amateur sailors representing all races teamed up together to
challenge successfully the biggest names in the industry. It is this spirit of
'can do' that the world is starting to appreciate about South Africa and her
people. The hosting of the World Cup in 2010, the A1 Formula Racing, the
hosting of some of the biggest conventions the world has seen and many other
achievements are becoming not the exception, but the norm, ever since our
miraculous 1994 elections.

Political stability

Political stability in KwaZulu-Natal has always been close to my heart and I
hope that you agree with me in recognising that the turbulent years of
the
80's and early 90's are well and truly behind us. Today, our Provincial
Parliament comprises representatives from the greatest number of political
parties and it operates in a truly democratic manner. The debates are robust
but cordial and the outcomes of our decisions are truly driven by the desire to
improve the socio-economic wellbeing of our citizens.

Challenges

I say this obviously with respect as we all have our own priorities in the
various fields of the business, political and social lives in which we find
ourselves. I would however appeal to all concerned to always put the well-being
of our country, and indeed our province first, in whatever we do or say. We
must strive to emulate such great examples as that shown by Patrick Sokhela, to
name but one individual, who is the province, has made some difference by
supporting one of the only two soccer clubs the province has in the Premier
Soccer League (PSL). This is just a single individual but we have big companies
who surely can also prove they are also there for the province.

Investment

Programme Director we face many and varied challenges. Some of the
challenges we face in this province include two specific ones:

* the finalisation of Environmental Impact Assessments (EIAs)
* rezoning.

I want to say upfront that these two issues continue to threaten our drive
to attract investment into the province. No serious investor can afford to wait
for eighteen months or even more to start doing business only because of the
lengthy turnaround period in approving EIAs or completing re-zoning.

As Premier of the Province I have directed that EIAs and rezoning
bottlenecks will have to be finalised within a maximum period of three months.
Failing which, an appeal will have to be lodged with the Provincial
Director-General who will be able to make a ruling to end the impasse relating
to EIAs or rezoning in this province.

Of course we have many other challenges as have already been outlined by my
Co-Chair, John Barton, and MEC Mkhize. But I can assure you that we will
soldier on together and united to tackle all the challenges that face us.

Crime

One such challenge is that of fighting crime. There is a greater need to
involve churches, learning institutions, social clubs, community policing
forums, and any other organisations in this fight.

For example in communities: How can parents accept that their 23 or 25 year
old drives a brand new 7-series BMW without questioning where he got the means
to afford it? How can members of church congregations witness the flaunting of
luxury goods by its members knowing full well that the economic circumstances
of some of those members do not permit them to possess such items? Networking
and reporting of such cases would enable the police to confront and investigate
and where relevant make arrests. It is proven worldwide when communities become
involved the crime rate decreases.

Broad-Based Black Economic Empowerment

Another challenge is economic empowerment. Genuine Broad-Based Black
Economic Empowerment (BBBEE) is not merely an option but a necessity, and not
because S'bu Ndebele or anyone else for that matter says so, but because it
simply makes good business sense for all concerned. History is full of examples
of disastrous consequences that follow a situation where a relatively small
group of people enjoy all the privileges whilst the majority remains
impoverished. We have made tremendous progress in South Africa in growing the
economic cake and indeed, sharing amongst more and more citizens, but evidently
we have not yet done enough, particularly in this province. I am on record as
having asked: Why do KwaZulu-Natalians have to go outside the province in order
to make it in life? Indeed we must ask why? We have said this in other fora and
Programme Director, allow me to say this once more.

The Gross Domestic Product per region (GDP-R) of the province of
KwaZulu-Natal is now the second largest in the country after Gauteng, and the
GDP-R growth rate rose over fivefold from 1,0% in 1999 to 5,3% in 2005. This
trend suggests that the provincial economy has the potential to reach a 10%
growth rate by the year 2014, which is far above the Accelerated and Shared
Growth Initiative for South Africa's (AsgiSA's) target of 6,0%.

However we must also continue to pose the question: Within this positive
growth are efforts of business impacting positively on the economic
transformation of our province? Are we as business putting sufficient emphasis
on empowering the previously marginalised communities of our province? Our
Government has correctly identified Black Economic Empowerment as a means to
redress historical economic imbalances. When it comes to uplifting the
social-economic profile of society, no government can be neutral. But what is
business doing?

Programme Director, meaningful participation of black people means in the
context of the developmental province, the empowerment of particularly women,
rural communities, youth, workers and the disabled. This participation can
range from the creation of economic opportunity to ownership of businesses. The
essence of BEE is that it must benefit the majority of black South Africans,
and do this by addressing all seven pillars of the generic BEE score card.
These are ownership, control, skills development, employment equity,
preferential procurement, enterprise development.

The targets set include:

* 40 to 50% black representation at board and management level
* 40 to 80% black representation in terms of employment equity
* 3% of annual payroll towards skills development.

A study conducted by the Provincial Department of Economic Development
provides interesting information and here are some of its findings:

* In terms of equity ownership the survey indicates that 27% of respondents
did not feature black shareholding at all
* 59% of respondents indicated no black ownership
* 42% of respondents have not achieved the target set by government to have 40%
blacks in management
* 57% did not fully disclose corporate social responsibility.

Albeit, a small sample survey, the researchers have concluded that there is
no indication of progressive BEE in this province. It is against this
background that I had last year in the State of the Province Address, asked the
question: "Where are Africans located in the economy in KwaZulu-Natal?"

Generally, the Business community responded very positively and in an
encouraging manner. In his reaction, Durban Chamber of Commerce President
Themba Ngcobo said: "Transformation is a complex and serious matter, but in
KwaZulu-Natal business circles it is frustratingly slow compared to the speed
to which it is happening in Gauteng."

Let us honestly and sincerely ask ourselves the question: why is that so and
whether we can afford to allow such a situation to persist. Interestingly, many
people being elevated to boards in Gauteng are from our part of the world.

We are finalising the establishment of a provincial BEE Advisory Council as
an objective mechanism to monitor progress in BEE in the province. This Council
will consist of government representatives and senior leaders in the private
sector. The primary aim of the Council will be to come up with concrete
strategies and targets to transform the ownership structure of businesses
located in the province.

Our partners in business in the province will be defining themselves against
the basic criteria of transformation, and the extent to which their boardrooms
are non-racial and non-sexist. In this way our partnership with business will
be actively contributing to a developmental province. This is a do-able. Let us
therefore together put more pressure on the accelerator of transformation.

Poverty alleviation

Despite the continual economic growth, we still have too many South Africans
living below the poverty line, too many unemployed and too few black Africans
occupying top leadership positions in corporations, some of which are
represented here today. To those who have made significant and genuine
progress, I say "Thank You and Congratulations."

To those who have not, please understand that you are doing yourselves an
injustice as in due course, it will impact on your bottom line.

Conclusion

We are all in this together and there is no point in saying that the hole is
on your side of the boat when we know that we will all sink together if we do
not plug in the holes together. Let us reflect the spirit of the Shosholoza
project and the work of Captain Sarno that has so inspired us over the last
year. I wish the Shosholoza team great success as well as all of you present
today.

Thank you again for being here today.

Issued by: Office of the Premier, KwaZulu-Natal Provincial Government
7 August 2007