Programme Director
The Mayor of the eThekwini Metro, Cllr James Nxumalo
The Co-Chair of the KZN Growth Coalition, Moses Tembe
Esteemed captains of industry present
Grant Coppin and representatives of Investec Private Bank
Ladies and gentlemen
All protocol observed.
On behalf of the government of KwaZulu-Natal and the people of this province, it is indeed an honour and pleasure for us to address this esteemed gathering, which is aimed at nurturing mutually beneficial relationships between ourselves and the business community in our province.
Programme Director, as government we have always maintained that the challenges facing our people and indeed the society as a whole in the province can only be addressed if we as government work in tandem with the business community and all others social partners.
It is because of this reason that we believe that this forum is important owing to the fact that it offers all of us the opportunity to ensure that we take stock of the strides we have made together, and together plot the way forward to ensure that the economic trajectory of this province is premised on inclusive and shared growth for the benefit of all the people of this province.
Programme Director, the fact that the government in our province and the business fraternity over the years have forged strong partnerships is in no small part owing to the efforts of the KwaZulu-Natal Growth Coalition. In this regard, as government we want to pledge that we will work tirelessly to ensure that the Growth Coalition grows from strength to strength in the years to come.
Programme Director, we meet today after the Premier of our province, Dr Zweli Mkhize, announced his resignation as Premier and that he will take, on full-time basis, his position of being the Treasurer-General of the ruling African National Congress as of 1 September 2013.
In this regard, we want to salute him for the role he has played as the co-chairperson of this forum during this tenure. It is a tribute to his sterling contribution, working with his co-chairperson that this forum has grown in leaps and bounds over the past few years and has contributed immensely towards achieving an economically prosperous province. Few can forget the tenacity and intelligence with which he led our province during the difficult recession which, unfortunately, coincided with the beginning of his term.
Indeed, Dr Mkhize leaves behind a legacy of financial soundness, that only a few provinces in the country can hope for. In this regard, ladies and gentlemen, we want to stress that KwaZulu-Natal will continue to be a model of financial rectitude and a thriving province which is continuously sharpening its competitive and comparative advantages to be the gateway to the African continent.
An important part of our message to the business community this morning is that the province is stable. There is no ambiguity about the economic policies of our government. Taking their cue from the national policies which, themselves, are a manifestation of the policies of the ruling party, these policies are not going to change. Premier Mkhize was at the head of a collective of MECs who all pursued the same policies, programmes and projects all aimed at growing the economy of our province.
As has already been amply demonstrated, the province remains in capable hands under the stewardship of MEC Senzo Mchunu, who holds the reins as interim Premier up until such time the leadership structures of the African National Congress announce a new Premier.
Here too, we have absolutely no qualms about the future nor do we have any morsel of uncertainty for we know that the African National Congress has a highly competent pool of capable leaders from which to choose our next Premier. We have no doubt that whoever will be taking the reins will continue on where Dr Mkhize has left off to position the province as the frontier of economic growth and prosperity.
Programme Director, we meet today on the back of the good news that our economy has grown at 3 percent in the last quarter. This, in our view is a confidence booster and omen which shows that we are indeed beginning to turn the corner as the country.
Notwithstanding this, our province needs to work doubly hard to ensure that, in the context of the slow global economic recovery, we remain globally competitive and we attract investment to our province. In acknowledging the importance of foreign direct investment to the economy of the province, the KwaZulu-Natal provincial Government is currently implementing an Investment Strategy, which identifies a number of incentives critical to attract both domestic and foreign direct investment (FDI).
The investment strategy targets both foreign and domestic investors. As a result of our continued effort to attract investment the province, our entity, Trade and Investment KwaZulu-Natal brokered about 24 foreign investment projects, valued at 4.2 billion, between 2009 and 2012. As government we are working hard to build on these gains and ensure that our province remains an attractive investment destination.
Despite the commendable input of the Growth Coalition to the economic success of the province, the prolonged effects of the 2008/09 economic recession threaten to take us way back. Therefore, this breakfast meeting comes at a time when the economic fortunes of our country and indeed our province are under threat.
The rand has been under excessive pressure for quite some time now recently depreciating to as low as R10.26 to the US dollar. On the other end, Inflation, as measured by the CPI breached the 6% mark, and even more worryingly the 2013 second quarter labour market statistics point to an even depressed environment.
Programme Director, the economic challenges facing our province demand that we come up with innovative ways to address them. With unprecedentedly high numbers of young people entering the labour market, the ensuing challenge is to ensure that growth is inclusive of the major part of the province’s labour force and units of production. That is why KwaZulu-Natal province is actively participating in the initiatives to set up the Special Economic Zones (SEZs) and Industrial Economic Hubs.
Special Economic Zone (SEZ) will act as an economic development tool for promoting economic growth and export within an environment that is almost free of the usually burdensome government regulatory processes that often discourage investment. The two Special Economic Zone (SEZs) proposed for the province of KZN are the Dube Trade Port and the Richards Bay SEZs.
The Dube Trade Port will focus on agro-processing and green technology whereas the Richards Bay SEZ will focus on mineral and metal beneficiation. SEZs have had a number of economic benefits and other positive spin-offs in many countries where they have been implemented. These include rapid employment growth, increased economic growth rates, growth of the manufacturing sector, broadening of the export markets, generation of new skills and technological transfer.
We believe these two SEZs have potential to unlock economic opportunities in all our district regional economies. The department is also actively looking at establishing industrial hubs in all the districts within the province. The Industrial Hubs are envisaged to compliment the Special Economic Zones as feeder industries. We believe that the industrial hubs will be intricately linked to these SEZs and will go a long way in addressing spatial disparities in levels of economic development across the province.
Programme Director, we believe that the economic prospects of the KwaZulu-Natal province have not been fully exploited. Our firm belief is underpinned by the following reasons:
- The ports of Durban (the largest in Africa in terms of cargo handling and volumes of vessel and Richards Bay), together handle over 60% of South Africa’s cargo tonnage.
- KwaZulu-Natal boasts a highly advanced manufacturing sector which contributes close to 20% of the province’s GDP.
- KwaZulu-Natal boasts a highly diversified agricultural sector. The province is the country’s leading producer of timber, processing over half of all timber used in the country and accounting for a significant percent of the country’s wood exports. Against this backdrop the province of KwaZulu-Natal is also implementing, among others, the following catalytic projects.
- Cornubia housing project which will cost about R25 billion.
- The roll out of the integrated public transport network which will cost R10 billion.
- The Freight Route and N3 upgrade which will cost R32 billion with the city of eThekwini contributing R13.5 billion.
- Port improvements which will cost R127 billion.
- Ilembe Techno Park Project which will cost R2 billion.
- Ngagane Steel Smelter which is valued at R10 billion
- The KwaZulu-Natal Red Hub Development valued at R5 billion.
Programme Director, our use of the term “catalytic” when describing these projects is deliberate. This means that the projects we have just tabulated are not an end on their own, but should be seen as a means to kickstart our economy to get to the level where it is truly globally-competitive and is able to address our country’s social transformation imperatives. Viewed differently, these catalytic projects are a direct challenge to other social partners, including business, to come on board and join hands with us as we build an inclusive economy. The question is:” Are we up to the challenge?”
Programme Director, following the unveiling of the provincial growth and development strategy, our province has taken concrete steps to implement the plan. We have embarked on the process of ensuring the alignment between the budget and the interventions as contained in the plan.
All departments have been requested to cost the interventions they need to make in terms of the plan and indicate the budget they have allocated and the gap that exists. In case of the funding shortfall the cabinet has undertaken to request the provincial treasury to source funding for such.
In this regard, the implementation of the plan is being monitored closely by the cabinet cluster on a bi monthly basis. This shows that our government is serious about adopting the plan as our loadstar for growth and development. As government we are also exceedingly thrilled that the provincial economic council which comprise of labour, government, business and community representatives has been established in the province.
The KZN Economic Council has already endorsed the provincial growth and development plan and is supporting and monitoring its implementation. Furthermore, the Council has signed a ground-breaking social accord which highlights key priority interventions that will be pursued by the structure.
Programme Director, the reason why we are harping on this is because we want to underscore the point that from the side of government there is policy certainty and that our ducks remain firmly in a row, for us, working as a collective, to place the province on a growth trajectory.
Critically, we want to stress the point that we will continue to be a government that plays a role of being an enabler, a catalyst, a facilitator and an interventionist state.
Programme Director, the Growth Coalition is driven by the goal of building prosperity for the people of KwaZulu-Natal through inclusive economic growth. This is a goal that remains relevant as when this forum was formed in 2005. However, given the subjective and objective conditions on the ground we believe that the task to crank up the economy of the province has taken on an urgent significance and requires both innovation and agility. We have no doubt that if we continue to work together we can achieve this goal.
I thank you.
