Address by Mr Andries Nel, MP, Deputy Minister for Co-operative Governance and Traditional Affairs at the Black Business Quarterly Awards Dinner held at Emperors' Place, Ekurhuleni
Programme Director,
Acting President, Susan Shabangu,
MEC for Economic Development, Mr Lebogang Maile, Excellencies Ambassadors and High Commissioners Mr Faizal Motlekar
President Black Management Forum, Mr Mncane Mthunzi, Distinguished Guests,
Ladies and Gentlemen,
Sanibonani,
Dumelang,
Goeienaand,
Ndi madekwana,
Good evening,
Riperile,
As-Salamu-Alaykum.
It feels good to be a South African.
Thank you very much for honouring us with an invitation to address the 14th annual Motlekar Black Business Quarterly Awards. Thank you being able to be part of recognising champions of transformation.
These Awards encourage and promote sustainable black business and transformation through the recognition of good corporate governance leadership and achievement. This is an important contribution to our national development.
South Africa has made remarkable progress in the transition from apartheid to democracy.
In nearly every facet of life, advances are being made in building an inclusive society, rolling back the shadow of history and broadening opportunities for all. South Africa has been able to build the institutions necessary for a democratic and transformative state.
The Constitution enshrines a rights-based approach and envisions a prosperous, non- racial, non-sexist democracy that belongs to all its people. Healing the wounds of the past and redressing the inequities caused by centuries of racial exclusion are constitutional imperatives.
Access to services has been broadened, the economy has been stabilised and a non- racial society has begun to emerge. Millions who were previously excluded have access to education, water, electricity, health care, housing and social security.
However, twenty-one years into democracy, South Africa remains a highly unequal society where too many people live in poverty and too few work. The apartheid spatial divide continues to dominate the landscape.
The quality of school education for many black learners is poor. A large proportion of young people feel that the odds are stacked against them. The legacy of apartheid continues to determine the life opportunities for the vast majority.
To accelerate progress, deepen democracy and build a more inclusive society, South Africa must translate political emancipation into economic wellbeing for all.
National Development Plan
The National Development Plan (NDP) envisions a South Africa where everyone feels free yet bounded to others; where everyone embraces their full potential, a country where opportunity is determined not by birth, but by ability, education and hard work.
Realising such a society will require transformation of the economy and focused efforts to build the country's capabilities. To eliminate poverty and reduce inequality, the economy must grow faster and in ways that benefit all South Africans. This has been a difficult year.
In particular, young people deserve better educational and economic opportunities, and focused efforts are required to eliminate gender inequality. Rising levels of frustration and impatience suggest that time is of the essence: failure to act will threaten our democratic gains.
Progress over the next two decades means doing things differently. The NDP sets out six interlinked priorities: First, uniting all South Africans around a common programme to achieve prosperity and equity. Second, promoting active citizenry to strengthen development, democracy and accountability.
Third, bringing about faster economic growth, higher investment and greater labour absorption.
Fourth, focusing on key capabilities of people and the state. Fifth, building a capable and developmental state.
Sixth, encouraging strong leadership throughout society to work together to solve problems.
Social cohesion is central to the NDP. If South Africa registers progress in deracialising ownership and control of the economy without reducing poverty and inequality, transformation will be superficial. Similarly, if poverty and inequality are reduced without demonstrably changed ownership patterns, the country’s progress will be turbulent and tenous.
Back To Basics
Essential for the successful implementation of the NDP is strong, well-functioning local government. Local government is the sphere of government that is closest to the people.
Local government has been at the forefront of tremendous achievements in ensuring access to basic services. Despite this, the governance, functionality and viability of many of our municipalities is cause for serious concern.
For his reason President Zuma convened a Presidential Local Government Summit a year ago in September 2014.
The summit agreed with the assessment presented by Minister Pravin Gordhan that one third of our 278 municipalities were doing well, one third were getting many things right but faced challenges and one third were dysfunctional.
The Back to Basics approach is based on a comprehensive assessment of South Africa’s 278 municipalities based on criteria ranging from political stability through governance to service delivery.
The top group comprises of municipalities, which, in most cases, have the basics right and performing their functions well to extremely well.
The middle group comprises municipalities that are doing fairly well. While many of the basics are in place, and the municipalities deliver on the functions of local government, they face challenges which if left unattended to can lead to degeneration and decline.
The bottom third group is made up of municipalities that are dysfunctional, and face serious challenges in meeting their constitutional obligations. These municipalities require urgent intervention and support to enable them to get the basics right.
In these dysfunctional municipalities the review found, amongst others:
- Endemic corruption,
- Dysfunctional councils,
- No structured community engagement and participation systems,
- Poor financial management leading to continuous negative audit outcomes.
These municipalities also have a poor record of service delivery and service management functions such as fixing potholes, collecting refuse, cutting grass, maintaining public places, fixing streetlights, etc.
Most of the problems are as a result of:
- A lack of capacity in administration,
- Poor leadership and oversight by councils and
- Political infighting and conflicts, often fueled by contestation over resources. It is in these municipalities that the people of South Africa are being failed.
The objective of the Back to Basics approach is to get the bottom third of municipalities into the second category, the second category into the first category and keep those in the first category there.
The Back to Basics approach is based on five pillars:
- Putting people first
- Delivery of a basket of quality basic services
- Ensuring good governance
- Ensuring sound financial management
- Building capable and resilient institutions.
Cutting across these pillars is a targeted and vigorous response to corruption and fraud, and a zero tolerance approach to ensure that these practices are rooted out.Supply chain management practices in municipalities are being scrutinized.
Where corruption and mismanagement have been identified, we are not hesitating to make sure these are decisively dealt with through provisions such as asset forfeiture and civil claims.
We must also work to change practices in the private sector and civil society to change the national morality. I happened to be sitting on a plane next to a black woman who had no idea who I was. She was wading through a raft of papers so I asked her what she did. She explained that she was an entrepreneur who had just bid for a tender. She explained that this was usually followed by requests for a weekend away or for further meetings to ‘discuss’ the tender. We certainly need to change this attitude and mind-set that exists among some. We need to strengthen our anti-corruption measures.
Ladies and Gentlemen,
Clear Back to Basics benchmarks have been set for municipalities to perform their basic responsibilities. Joint national-provincial Back to Basics Task Teams have been established in all provinces.
Municipalities are submitting monthly reports to a CoGTA National Monitoring Centre on the implementation of Back to Basics performance indicators. The most recent report on local government audit outcomes by the Auditor General shows a steady trend towards good governance and sound financial management.
Of our 278 municipalities, 148 (53%) now have unqualified audits - up from 120 (43%) last year. 198 (58%) of all 335 municipalities and municipal entities received unqualified audit opinions for their financial statements. This is up from 165 (49%) last year.
What is particularly significant is that 76% of the total local government expenditure of R315 billion is being spent by municipalities and municipal entities with unqualified audit opinions. This means that almost eight out of every ten rands spent by local government is properly accounted for.
All provinces showed improvement in their audit outcomes. The biggest contributors to the number of clean audits are Gauteng (13, or 39% of their auditees), KwaZulu-Natal (20, or 28% of their auditees) and the Western Cape (18, or 55% of their auditees).
Limpopo deserves a special mention. For 2012/13 only one of its 32 auditees received an unqualified audit. The others received qualified (19), adverse (3) and disclaimed (9) audits. This has improved dramatically to 15 unqualified audits for 2013/4.
Notwithstanding this tremendous progress we must all be disappointed that 68 municipalities received qualified audit opinions. We must be even more disappointed that 50 municipalities received disclaimed audit opinions. It is completely unacceptable that 25 auditees have had disclaimed opinions for the past five years.
These results were achieved through hard work, dedication, leadership and consistent hands-on engagement by, with and in municipalities.
Spatial Transformation
Back to Basics also means ensuring that our municipalites have the capacity to manage South Africa’s rapid urbanisation and to transform apartheid spatial patterns.
Apartheid forced the majority of our people to live far away from economic and social opportunities and services. This legacy of separation, division and exclusion must be defeated.
While about 3.2 million households have benefited from new housing, and services and infrastructure have been provided to many communities, limited progress has been made in reversing entrenched spatial inequities.
In some instances, post-1994 policies have reinforced the spatial divides by placing low- income housing on the periphery of cities.
We need a new deal for our cities and towns. The legacy of apartheid spatial patterns and the challenges of rapid urbanisation must be confronted through integrated urban development that is linked to the development of our rural areas. There is an inextricable link between rural and urban development.
We must de-racialise communities so that a new and more cohesive society can be built. All residents, black and white, rich and poor, must equally enjoy the benefits of development.
The Integrated Urban Development Framework and the National Spatial Development Framework will be implemented to ensure effective alignment of national economic, environment and social programmes with those of the municipalities.
By 2030, a larger proportion of the population should live closer to places of work, and the transport they use to commute should be safe, reliable and energy efficient. This requires:
(1) Strong measures to prevent further development of housing in marginal places,
(2) Increased urban densities to support public transport and reduce sprawl,
(3) More reliable and affordable public transport and better coordination between various modes of transport,
(4) Incentives and programmes to shift jobs and investments towards the dense townships on the urban edge,
(5) Focused partnerships with the private sector to bridge the housing gap market.
Our success or failure in this endevour will influence whether we become a nation united in our diversity or remain a country where we live together separately. Cosmo City is an excellent example of what can be done to bridge the apartheid spatial divide and I congratulate Mr Faizal Motlekar and Motlekar Holdings on their work in this area.
Leadership
The successful implementation of the National Development Plan requires strong leadership from government, business, labour and civil society. South Africa needs leaders throughout society to work together.
Given our country’s divided past, leaders sometimes advocate positions that serve narrow, short-term interests at the expense of a broader, long-term agenda. It is essential to break out of this cycle.
The country needs partnerships across society working together towards a common purpose. We need to build trust between major social partners.
The government must be responsible for a large share of implementing the NDP. It will need to strengthen its accountability chain, improve its capacity, be prepared to make difficult decisions and work with others in society to solve challenges. This means communicating honestly and sincerely with the public.
The state sets the ethical bar for society as a whole. This makes it even more important that government acts to address the high levels of corruption in its ranks. We are here to serve the people; the people are not here to serve us.
South Africa needs a thriving private sector that is investing in productive capacity. While the profit motive drives business, companies cannot grow unless they operate in an environment where employment and income levels are rising. It is in the long-term interests of all businesses for the country to grow faster and for more people to be employed.
It is also in the interests of business that the level of inequality be reduced. Inequality raises the cost of doing business, skews market structure and ultimately limits growth opportunities. It also breeds mistrust and tension.
Excessive executive remuneration does little to build a more inclusive society where everyone feels that they share in the fruits of development. While legislating salaries is impractical, leadership is required to ensure that businesses act more responsibly.
South Africa has a well-developed and vibrant trade-union movement. Historically, trade unions have played a role in politics, understanding that the issues pertinent to its members do not stop at the factory gate.
Unions advance the interests of their members and give voice to vulnerable workers, such as farm workers, domestic workers or casual workers. Union leadership is critical to ensuring that gains by members are sustainable in the long term. To achieve this, productivity and employment have to rise continuously.
In a developmental state, unions share responsibility for the quality of services delivered, for improving the performance of government, and for fighting corruption and inefficiency.
Civil society leaders represent citizens on issues closest to their hearts and must be taken seriously. These leaders are responsible for ensuring that that criticism and protest are conducted with dignity and maturity.
We are confident that the quality of leadership present in this room tonight and in particular the leadership that is being recognised with Motlekar BBQ Awards are equal the difficult but exciting tasks that lie ahead as we take South Africa forward together.
Programme director, let me stop here before someone says: "Wande ngomlomo njengesiqabetho" or "Wafa emlonyeni njengendebe."
Ngiyabonga Ke a leboga Baie dankie Ndi a livhuwa
Thank you, Inkomu, Shukran.
