Chamber of Commerce and Industry luncheon, Johannesburg Country Club
25 September 2007
Thank you for the opportunity to speak at this luncheon.
France is one of South Africa's most important trading partners, and it is
important for us to keep engaging on issues of mutual interest, and improve
economic and trade relations between the two countries.
Europe remains the biggest source of trade for South Africa. Seven out of
ten countries trading with South Africa are based in the European Union (EU),
and we have seen a steady increase in bilateral relations between France and
South Africa over the years. France ranks among South Africa's ten most
significant economic partners in terms of trade, investment, development
assistance and research and development, and has over 100 companies operating
in the country, including multinationals such as Total and Lafarge.
French construction companies are also involved in the building of the
stations and railway line for the Gautrain Rapid Rail Link. Bilateral trade has
more than doubled over the past eight years, to R25 billion in 2006. This
comprised of R8,2 billion in South African exports, and R17 billion in imports
from France. We need to work harder to facilitate an increase in South African
exports, and thus help support local manufacturing sectors. It is envisaged
that the South Africa-European Union Trade, Development and Co-operation
Agreement (SA-EU TDCA), which was concluded in 1999, will be one of the
approaches which are instrumental in helping to promote local exports.
The France-South Africa Chamber of Commerce and Industry has been
instrumental in providing support for South African companies wishing to set up
business links in France, and this kind of assistance goes a long way in aiding
local firms to increase their global footprint. Developing the country's
manufacturing sector, which is the economy's second-largest, and making it more
globally competitive, will give local firms a fair chance of competing with
their international peers, and alleviate the pressure that a large trade
deficit has on the economy.
Over the next few years government is embarking on an ambitious
infrastructure investment programme, which will position South Africa as an
investment destination of choice, and aims to step up economic growth, which
will be shared by all South Africans, through increased development and
employment. This is no minor task, and requires of us an unwavering confidence
in this economy, and the courage to take these daring, and sometimes even
unpopular steps, to ensure that South Africa's economy is geared towards higher
and more sustainable levels of growth.
The Department of Public Enterprises is responsible for about R170 billion
in state-owned assets, with two of our biggest State-Owned Enterprises (SOE),
Transnet and Eskom, investing approximately R240 billion in the economy over
the next five years to upgrade rail, ports and pipelines as well as to ensure
security of supply of energy, which is in short supply globally. France has
made great advances in the generation of nuclear energy, with over 70% of its
energy derived from this source, up from 8% in the 1970s, making France one of
the cleanest energy producers in the world. South Africa currently derives only
about six percent of its energy from nuclear, and we would like to increase
this significantly in coming years.
Eskom's reserve margin, at about eight percent, remains low, and the build
programme will, among other things, help us bring this figure closer to the
internationally accepted level of 15%. The Competitive Supplier Development
Programme, the impact of the Build Programme on the South African economy is
expected to be huge, and it is important that we leverage this expenditure to
develop the local supplier industry.
The programme, developed by the Department of Public Enterprises, aims to
reduce the import content of infrastructure investment programmes by creating
an enabling environment for the development of local suppliers who can compete
with global competitors. The programme targets business sectors related to the
infrastructure investment programmes of Transnet and Eskom. This includes rail,
ports, pipelines electricity generation, transmission and distribution.
Transnet, Eskom and PBMR are now all participating in the programme. They
are all in the process of developing their Supplier Development Plans (SDPs).
Transnet and Eskom's plans will be completed by February 2008, and PBMR's by
June 2008. The SDPs will provide a long-term strategic vision for the
development of the local supply base of the SOE. In the meantime, the SOE are
seeking opportunities for securing competitive local supply in their current
procurement processes. This includes requesting Original Equipment
Manufacturers (OEM) to provide information on local content in their tender
submissions, and using local content as a criterion in the tender adjudication
process.
The response from global suppliers has been positive, and we envisage that
these procurement negotiations will result in significant foreign direct
investments in South Africa, and the integration of South African suppliers
into the global supply networks of international companies. The government has
programmes in place to assist marginal South African suppliers to improve their
capacity to participate in the supply networks of the international companies,
and government agencies can assist international companies to identify local
suppliers.
Empowering our youth is also a task that is close to our hearts. Developing
skilled workers, trained in maths and science, is key for South Africa's
advancement globally. Through initiatives such as the Denel Youth Foundation,
learners are offered a second chance to improve their marks in the critical
areas of maths and science. This will open up to them career opportunities in
the fields of science, engineering and technology, where the country is
currently experiencing a shortage of skills.
The only way we can ensure that South Africa has the necessary skills to
take this country forward, is if we are willing to invest in their education
and training. I therefore urge all of you here today to look at the companies
you work for, and see how you can further the skills and training of your
workers, so that they are better able to contribute to economic growth and
development in our beautiful country.
Thank you to the France-South Africa Chamber of Commerce and Industry
(FSACCI) for their hard work in helping to improve relations between France and
South Africa. It is through efforts made by organisations such as yours that we
can get closer to our goals of making the South African economy more
competitive globally, and improving the lives of our people.
Thank you
Issued by: Department of Public Enterprises
25 September 2007
Source: Department of Public Enterprise (http://www.dpe.gov.za)
