Programme director
The Mayor of the City of Umhlathuze, Councillor Mnqayi
The Deputy Minister of Public Enterprise, Mr Enoch Godongwana
The President of the Zululand Chamber of Commerce, Mr Thula Mkhwanazi
The Chairman of the Portfolio Committee on Trade and International relations, Mr Dumisani Gumede
Captains of the industry present
Delegates present
Ladies and gentlemen
All protocol observed
It gives us immense pleasure to be part of this auspicious occasion where we are meeting as citizens of this beautiful city of Mhlathuze and of the province of KwaZulu-Natal to share ideas and to look at ways of ensuring that we accelerate efforts to develop and grow the economy of this region for the benefit of all the people of this province.
Programme director, 2010 is not only a historic year because of the fact that South Africa will be hosting the 2010 FIFA World Cup, but also because we this year we mark the release of our first democratically elected president, one of our torch bearers of freedom, uBaba uNelson Mandela.
For any living mortal twenty years is a significant period of growth, not only because it is a time when an individual has to navigate his vessel in the rough seas of life on his own. For a young nation as South Africa reaching twenty years is a milestone when you consider the journey we have travelled and what we have achieved in the past decade.
For all the gigantic strides we have taken towards the objective of achieving a non-racialism, non-sexism, equality and prosperity, we salute our movement and the movement of Nelson Mandela, the African National Congress.
Programme director, an event such as this is a momentous occasion not only because it is not every day that all social partners from one region come together to discuss issues of economic growth and development, but also because this city plays a critical role in the economy of this province. Not only is the district of Uthungulu the jewel in the crown of our province, but it is an economic hub whose potential is yet to be fully exploited.
The city of Umhlathuze, in particular, is home to one of our country biggest and busiest port, the Port of Richards Bay. Combined, the port of Richards Bay and the port of Durban, which is the busiest port in Africa, handle more than 80 percent of exports and imports of our country. In terms of the overall gross geographic product contribution, uThungulu of which Mhlathuze is part, comes at number three following Umgungundlovu and Ethekwini.
Together, Uthungulu, eThekwini and Umgungundlovu have a combined contribution of close to 80 percent to the KwaZulu-Natal gross domestic product (GDP). These figures show that the city of Mhlathuze and the greater uThungulu region are an important cog in the economic wheel of this province. Programme Director we meet during interesting times in the evolution of our economy.
Just this week the MEC for Finance Ms Ina Cronje delivered her budget, in which she announced a number of measures to stimulate the economy of our province and to ensure that we inculcate the culture of fiscal prudence. The provincial budget came barely weeks after the Minister of Finance Pravin Gordhan unveiled his budget during which he revealed that he had set aside close to R900 billion for infrastructure development over the next three years.
This, programme director, underlines the government’s commitment to ensure that we use the push and pull factors to stimulate the economy by using the investment infrastructure as a catalyst for growth.
Programme director, we also meet after we recently learned that our country is officially out of the recession and that in the last quarter our economy grew by 3,2 percent. What makes this development all the more heart-warming is that some of the countries in the developed world are still struggling to wriggle them out of the grip of the recession.
But what is more heartening is that our province has netted an above national average growth of 3,7 percent in the last quarter.
This clearly indicates that our economy is now on an upward trajectory. However, it should be stated unequivocally that, even though the clouds of the economic storms are slowly dissipating, we are not out of the woods just yet. Many of you will remember that our province became first province in the country to convene a conference to deal with the impact of the recession.
Not only was the KwaZulu-Natal Economic Recovery and Jobs summit a huge success, but it brought all stakeholders from across the spectrum. It is a matter of common cause that the pioneering approach of KwaZulu-Natal in hosting this summit was subsequently adopted by the national government and all the provinces which also held their own summits.
That we are pioneers is in no doubt, but we accept that, as trendsetters, a lot more creative ideas and innovative approaches are expected from us. This regionally focused economic summit is a practical expression of the partners in the KwaZulu-Natal economy, again leading the way for the rest of the country to follow as far as economic development is concerned.
In order to consolidate the gains we have already made, our province has become the first province in the country to establish the KwaZulu-Natal Economic Advisory Council, modelled along the lines of the National Economic development and Labour Council NEDLAC. The council will be constituted by all the stakeholders who took part in the summit, including government, business, labour and civil society.
The council will serve as a consultative platform and will assist the province in crafting a long term vision of its development and growth. As a result, seven think-thanks linked to various sectors have been established. These will serve as an implementing vehicle for the council. The think-thanks will be made up of experts in various fields whose main task will be to assist in steering our economy into placid waters, taking their cue from the resolutions of the Summit.
The guiding light as we engage in this task is partnerships and collaboration. Without all the partners working together, the pace of economic recovery, in the first instance, and economic growth, in the second instance, would be quite slow. The progress we have recorded over the past few months since the summit, shows that a lot can be achieved when we put our heads together and set aside our differences. This summit is therefore critical for the social partners of the uThungulu region.
This gathering is an important milestone for the uThungulu region and the Umhlathuze city for it marks the opening of a new chapter of shared economic planning. However, we can ill afford to allow this gathering to be a run of the mill affair characterised by a lot of discussions without any tangible outcomes. Critically, this summit should not be a talk shop.
This summit must emerge with a set of concrete resolutions that should talk to the challenges facing the region of Uthungulu and the opportunities that can be exploited.
This conference should craft a vision that begins to address some of the medium to long terms strategies that need to be implemented for this region to be a bustling centre of phenomenal growth.
Programme director, our government has developed the provincial spatial economic development strategy which identified areas of potential growth in KwaZulu-Natal. Critically for this region, the provincial spatial economic development strategy (PSEDS) identified the following as areas of focus for growth in Uthungulu:
Agriculture and land reform
* Nkwalini valley land reform beneficiaries, citrus production and processing
* Expansion of tea production and processing in Nkandla
* Support and expansion of land reform initiatives, for example: Mtonjaneni land reform initiative, timber and cane production
* Development of agricultural potential along P700 route
* Develop sugar cane production opportunities on land with potential on trust land
Tourism
* Zulu heritage trail
Cruise tourism, creation of luxury cruise liner terminal at Richards Bay harbour
* Forestry tourism, improve tourism opportunities related to Nkandla, Qudeni, Entumeni, Ngoye and Dlinza forests industry
Industry
* Richards Bay industrial development zones: provide world class infrastructure, address issues related to land ownership, designation as an industrial development zone, relationship with municipality and South African revenue Service (SARS), roles of province and national
* Empangeni industrial townships: assist municipality to provide world class infrastructure support industrial development
* Provide adequate affordable housing and related services
Services
* Formalise and plan Nkandla and Ntonjaneni to position for investment
* Provide adequate affordable housing and related services in towns
As is stated above, the provincial spatial economic development strategy identifies sectors and opportunities that can be exploited in all the districts of our province. It is important that in crafting the strategic vision of the region, we should locate it within the provincial spatial economic development strategy.
The reality, programme director, is that development cannot be an isolated process that does not take into account the conditions of each and every district. Development should be an integrated process. Critically for this Summit, rather than re-inventing the wheel, the focus should be on finding out how far we have gone in fulfilling some of the requirements for growth outlined in provincial spatial economic development strategy, whether we have since changed our approach and, if that is the case, we are moving at all in pursuing the adopted alternative routes.
In order to ensure integration in our economic planning and to create economic linkages, our government has identified a number of primary corridors. The region of Uthungulu hosts one of the biggest and, potentially, most lucrative corridors in the province, the Durban-Richards Bay corridor. Over the past four years, more than R10 billion has been invested in this corridor. This, we believe, is just a drop in the ocean compared to the potential that exists.
Not only does this corridor boast the two busiest ports in the country, but it also has a new spanking green field airport (King Shaka Airport) which should reduce the logistical cost of doing business. The new airport opens a new economic chapter for the province of KwaZulu-Natal and for this corridor.
The King Shaka Airport is, as we all know, located within the Dube Trade port. Critically, the Dube Trade port boasts a trade port, a cyber port and cargo handling facility which, combined, will go a long way towards helping businesses from Richards Bay to access other markets. At a practical level, the opening of the new airport will reduce the cost of flying to other countries for the people of uThungulu, as they will no longer have to travel to Johannesburg to catch international flights.
It will also significantly reduce the cost of flying air-cargo. All in all, government has made an investment of about R7 billion in this development. This clearly indicates our confidence in the ability of our economy to grow and sustain itself but, critically, this is an open challenge to our current crop of entrepreneurs, big businesses and other social partners, particularly who have their operations in KwaZulu-Natal, to conduct a comparative analysis of the cost of doing business from elsewhere in the country rather than in KwaZulu-Natal.
In crafting a long term vision for Richards Bay, we should seek to, gradually, integrate the economies of uMhlathuze and eThekwini municipalities by ensuring that we maximise the economic opportunities that exist along the corridor.
This does not mean a physical location of both cities, however we believe that creating economic linkages and ensuring that there is economic integration along the corridor will go a long way towards achieving this dream. The south-bound growth from Uthungulu and north-bound growth from Ethekwini, already attest to the fact that this vision is achievable.
We, therefore, challenge this conference to come up with strategies of how we can boost trade with other countries and provinces by fully utilising the Dube Trade port. Critically, we need to look at how to strengthen the linkages based on the corridor strategy.
As many of you know, in order to further to unlock the potential of the city of Mhlathuze, our Department of Economic Development and Tourism has established the Richards Bay industrial development zone which is a public entity. After a number of challenges, the industrial development zone is now fully operational and has secured an operator’s permit.
While we would not go into the details of what the industrial development zone seeks to achieve, however we want to stress the fact that the overall goal behind the industrial development zone is to attract businesses particularly those which are involved in downstream beneficiation.
As you will recall, some of the objectives of the industrial development zone are to:
* create of employment opportunities, improving people’s lives
* beneficiation or adding value to the country’s raw materials, thus
* expanding the country’s enterprise base and employment
* upward migration of the manufacturing sector on the value chain
As part of ensuring that we realise these objectives, we have come up with a basket of measures to incentivise businesses to ensure they invest in this business district of Richards Bay.
Programme director, as all of us are aware the global economic condition has resulted in reduced foreign direct investment from all over the world. In order to mitigate the economic turbulence, many countries have resorting to protectionism and have reviewed other investments in other countries.
This means that countries, like ours which is a developing country, are now fishing from an increasingly shrinking economic pond, as they compete for the scarce foreign direct investments. It is because of this reason that the Richards Bay industrial development zone has developed programme to lure businesses to invest in this business hub by offering them incentives.
The Richards Bay industrial development zone is specifically able to offer a customs controlled area that is conducive to export orientated industries inclusive of the following advantages:
* non-applicability of value added tax (VAT) and duties
* expedited customs procedures
* first world, cost effective secure operative environment
* linkages to the deep water port of Richards Bay
* national incentives programme
Pointedly, we want to ensure that we also attract businesses which are involved in high technology industries. It is our belief that the industrial development zones can play an important role to attract businesses to Richards Bay which will add value to our quest to place this city on new a new economic pedestal.
We meet at an exciting time in the economic life of our province. The past year and the immediate forthcoming period will be characterized by difficulties. However, we take heart from the fact that business normally thrives in conditions of great challenges because that is when real entrepreneurs emerge. Our task as government is to render adequate support for economic growth and to, critically, assume our constitutionally mandated leadership role, within the context of a developmental state, with regard to economic growth.
In conclusion, we want to salute all the stakeholders who have taken time to be part of this gathering. As the Ministry of Economic Development and Tourism, we believe that many other areas of this province can take a leaf out of your book. We have no doubt that this summit will be a phenomenal success and that it will contribute to our vision of fashioning an economy that creates opportunities for all and that will make tourism to work for us all.
I thank you.
Issued by: Department of Economic Development and Tourism, KwaZulu-Natal Provincial Government
6 March 2010
Source: Department of Economic Development and Tourism, KwaZulu-Natal Provincial Government (http://www.kznded.gov.za/)
