Programme director
Members of the Diplomatic Corp
All business men and women present
Government Ministers and Senior Officials
Ladies and gentlemen
The 2010 World Cup left a legacy that will be held dear by the people of South Africa and the generations to come. We are proud that we have hosted a world class event which demonstrated our organisational abilities and capabilities.
The event unified the people of South Africa and instilled a sense of national pride and unity. We also hope it sent a positive message to the international community that we, as a country, are ready to be effective investment partners.
We are pleased that the financially induced recession that started in 2008 did not become a global depression. We are proud of our role as one of the members of the G20 in taking important decisions quickly and implementing them effectively.
The world outlook is now positive, even though most of the Organisation for Economic Cooperation and Development (OECD) countries are most likely to grow slowly for several years. Fortunately, like other emerging markets, South Africa has the capacity to grow more rapidly.
We expect South Africa to grow more strongly this year than we thought at the time of the budget in February. Growth next year is likely to be even stronger.
Our infrastructure investment programmes helped us get through the crisis with a ready-made counter cyclical investment. We are spending our money on things we really needed to do, not projects we pulled out of a hat.
Of the close to R300 billion that we have been spending annually on infrastructure, relatively little was dedicated to the world cup.
Much more of it is going into electricity production and transmission, improved railway lines, water storage and distribution, larger fuel pipelines, more efficient ports, better airports, better roads, and better public transport.
These investments in public infrastructure have the effect of both improving the quality of the lives of our people, and hugely increasing our capacity to produce and export. These effects will continue over the next five to ten years.
We realise that our economic growth was constrained by delayed investments in infrastructure. Clearing out our infrastructure backlog is undoubtedly going to raise our productivity, our competitiveness, our exports and therefore, our capacity to create jobs.
We understand very clearly that improving our production capacity is our priority as government, alongside improving the quality of health care and education, and reducing crime. This is perhaps the reason that led us into conflict with our public sector unions recently.
As government we were at pains to explain that investing in job creation is a priority and in the best interests of the whole country, including workers and the unemployed.
We think that, in the end, government got its message across effectively.
We realise how important the public sector is, that is why we are improving the quality of government services in areas where they are lacking.
We are heartened by the turnaround in our Home Affairs department, and in several other institutions.
We don't want any weak institutions standing in the way of economic growth and social development.
Our better infrastructure will allow us to grow faster. But, not without similar investments in our people. The very highest priority of this government is to improve the quality of basic education and the quality and quantity of skills development programmes, especially at colleges and universities.
With these investments and reforms, we can ultimately reach a growth rate of six or even seven percent over an extended period. We know we will be able to achieve this as we grew at over six percent in some periods during the last decade.
Such growth would roll back poverty and unemployment decisively.
This accounts for our concern about reports of the manufacturing and mining sectors, among others, being weakened by the strong rand and the consequent stifling of growth and job creation.
In an attempt to maintain a competitive, stable exchange rate, the South African Reserve Bank (SARB) has intensified its efforts to accumulate the foreign currency.
Their efforts were welcomed by government; however the government’s support for the central bank to build foreign exchange reserves can only be provided "to the extent that it is possible and affordable."
The key messages that I would like to leave you with are: firstly, that we understand that faster economic growth is the necessary condition for rolling back poverty and unemployment; and, secondly, that we understand what we need to do to raise the growth rate.
Our partnerships with international companies are central to our drive for greater productivity and economic growth.
In this regard, we value our relationships with international investors, especially in the critical sector of mining which continues to be the backbone of the South African economy.
Our opportunities for mutual partnerships are almost limitless, considering abundant resources we have beneath and above our soil. Let us make the best of it together.
Government is committed to an efficient and transparent environment, including in the processing of licenses, that holds out good prospect for mining investment.
Let me therefore, in conclusion, reiterate the sentiments of Mineral Resources Minister, Susan Shabangu, that ‘government is concerned about the growing negative sentiment. I want to assure all our stakeholders that South Africa is indeed a mining jurisdiction worthy of future investment.’
I thank you ladies and gentlemen.
For more information, please contact:
Vusi Mona
Cell: 082 047 2260
Address by Deputy President Kgalema Motlanthe at the investors' lunch at the old London Boys School
