Opening remarks by Deputy President Paul Mashatile at the Global Investment Summit held virtually on 14 June 2023
Programme Director,
Mr Hendrik Du Toit, Ninety-One CEO,
Mr Thabo Khojane Managing Director, Ninety One SA,
Ms Natalie Phillips Deputy Managing Director,
Leaders of Business and Investors on the platform,
Distinguished Delegates,
Ladies and Gentlemen,
Good morning! Dumelang! Avuxeni!
Let me begin by thanking you Mr Du Toit and your team for inviting us to participate in this important Global Investment Summit, under the theme "Adapting to a new reality" and a platform that seeks to propel the economy forward.
We are joining you virtually because today we are responding to questions in the National Council of Provinces, in Cape Town.
We decided to join you because we regard you as a critical player and a critical partner in growing our economy.
We are confident that many of you have joined this summit because like us you believe in South Africa and support our development agenda as outlined in the National Development Plan, NDP 2030 aimed at eliminating poverty and reducing inequality, including growing an inclusive economy among others.
Most recently in response to the impact of COVID-19, we have adopted the Economic Reconstruction and Recovery Plan to put South Africa back to the pedestal of economic growth and prosperity.
We are beginning to see the results in this regard, for example, According to the StatsSA, is that the economy after contracting by a revised 1, 1% in the fourth quarter of 2022, real gross domestic product (GDP) edged higher in the first quarter of 2023, expanding by an estimated 0, 4%.
As you are aware the manufacturing and finance industries were the major drivers of growth on the supply side of the economy. The demand side was lifted by exports, with smaller positive contributions for household, government, and investment spending.
The African Development Bank (AfDB) projected the RSA economy to grow marginally, by 0.2% in 2023 and 1.5% in 2024, supported by growth in trade, tourism, mining, and manufacturing.
The AfDB projects that inflation will ease to 5.9% in 2023 and decline further to 4.5% in 2024 on account of reduced fuel and food prices, subject to evolving global dynamics.
Furthermore, the AfDB reports that the fiscal deficit is projected to increase marginally, to 6.2% of GDP in 2023 and 6.7% in 2024 due to fiscal consolidation, including higher tax revenue. The current account deficit is projected to widen to 2.2% of GDP in 2023 and 2.4% in 2024 due to an anticipated drop in commodity prices.
Whereas the IMF looking ahead on real GDP growth indicated it is projected at 0.1 percent in 2023 with, annual growth expected at about 1½ percent over the medium term.
While the economy is gradually returning to pre-COVID period we are aware that there is more that we can do to change the fortunes of the economy. Also because the current growth levels will not create enough jobs to absorb new labour market entrants.
Hence we appreciate your efforts to keep the critical matter of socio-economic transformation on the national agenda by investing in global change, a crucial aspect of socio-economic transformation.
More than ever before, the Government and the business sector must work together to fund and invest in projects that can generate both income and profit and unearth investment opportunities in the country.
In this regard we urge you to work with us through Infrastructure South Africa to partner on our infrastructure portfolio. Including partner with the Department of Water to invest in water infrastructure so as to avoid another crisis in that sector. This is because through Operation Vulindlela, the Department of Water and Sanitation is working towards resolving 80% of water-use licences as requested by mining companies within 90 days.
Ladies and Gentlemen
We must work together to build and strengthen our economy. We must find real-world solutions to the burning issues of poverty, unemployment and inequality that confront us as a people.
We are coming to this summit with an open mind to hear what you have to say, hear you out and also with the aim to go back to the drawing board on some of the issues so that our country is investor friendly.
We assure you that there are many investment prospects in South Africa. Investors may consider investing in industries such as manufacturing, agribusiness, transport and logistics, the ocean economy, the digital economy, and renewable energy.
Distinguished Ladies and Gentlemen
As a matter of urgency, solving the energy crisis remains at the top of our agenda as Government.
Together with business and the Government, we want to work with you to stabilise the energy supply by amongst other:
- fixing Eskom and improving the availability of existing supply;
- enabling and accelerating private investment in generation capacity;
- accelerating the procurement of new capacity from renewables, gas, and battery storage;
- unleashing businesses and households to invest in rooftop solar, and
- to fundamentally transform the electricity sector to achieve long-term energy security.
Equally, Government continues to rapidly implement the Integrated Resource Plan 2019 by procuring additional energy capacity through renewable energy procurement programmes.
In addition, the following measures have been taken and will continue to be taken:
- Release further bid windows on an accelerated basis. Bid Window 7 should be released this month for 5000 MW of solar PV and wind, further RFPs for 1200 MW of battery storage, and 3000 MW of gas, and preparatory work should be undertaken to explore a "mega bid window" or rolling bid window.
- Procured emergency power solutions. A Ministerial Determination has been issued and a procurement and funding strategy has been developed.
- Cross-border power purchases from neighbouring countries. A Ministerial Determination has also been issued to secure 1000 MW of additional power from Mozambique, which could be made available within 6 months of the PPA signature. Minister Ramokgopa has already concluded an agreement with his counterpart in Mozambique in this regard.
Ladies and Gentlemen
Furthermore, we have developed the Just Energy Transition Plan to guide the nation's transition from fossil fuels to a sustainable and equitable energy system, without occasioning a bloodbath of job losses.
Our Just Energy Transition Investment Plan for the five years from 2022–2027 outlines the scale of need and the investments required to meet the decarbonisation commitments in our Nationally Determined Contribution, which outlines the rate at which South Africa intends to reduce greenhouse gas emissions and represents South Africa's fair contribution to the Paris Agreement goals.
Through the Just Energy Transition Partnership, we are demonstrating our collective dedication to easing the negative effects of the energy transition on South Africa's economy, workforce, and communities.
However, as work towards the just transition, we will not transition in darkness!
It would be irresponsible of us, given our current energy supply challenges, to simply abandon the existing base-load energy sources with haste and no guarantees for our economy’s long-term energy security!
Ladies and Gentlemen
We are also intensifying our investment drive and eliminating the red tape across the government. We must improve the time it takes to make decisions, this include the issuing of business licences and general approvals. In this regard, The Presidency has established a 'red tape team' to facilitate business operations led by Mr Sipho Nkosi.
The government is also reducing bureaucracy through the simplification of administrative procedures. That when the private sector interacts with government agencies, businesses must navigate intricate and time-consuming administrative procedures. We must reduce unnecessary red tape.
Distinguished Delegates
It is important to remember that for South Africa to advance, we must adapt to a new reality.
As a Government, we are well on track in responding to the demands of the Fourth Industrial Revolution (4IR).
In the context of the evolving 4IR, our National Digital and Future Skills Strategy provides a vital framework for inclusive collaborations between industry, labour, higher education institutions, and society to develop a new set of skills and capabilities for our nation.
Our Government is focused on implementing measures that will lead to increased productivity. This necessitates equipping Public Servants with the skills and abilities necessary to manage the new challenges competently. We want a more agile, results-oriented, efficient, and ethical public sector.
We are also instilling the discipline of execution in the public service. This has been our biggest challenge.
In this regard through the National School of Government, we have partnered with leading institutes such as the University College London to deliver executive education programmes for senior public officials.
This morning together with senior public servants I joined the master class by Mariana Mazzucato, Professor of Economics, from UCL, on the entrepreneurial state and mission economy as strategies for increasing state capacity and driving inclusive growth.
This is part of the continued commitment to ensuring that we improve the discipline of execution across the state as we seek to build a developmental and entrepreneurial state that drives development.
Ladies and Gentlemen
We therefore urge you as investors, to continue investing in our country.
We commend many of you for your continued investments in our country, in youth development initiatives as demonstrated through the Youth Employment Stimulus (YES) initiative as well as investment in improving access to clean, reliable water in the country.
Ladies and Gentlemen
I would like to assure you that we remain committed to a peaceful world. In this regard, we are working together with the African Union led by President Ramaphosa to engage both President Putin and President Zelenskyy to return to the negotiating table in the interest of peace.
We will continue to urge the rest of the world to work with us in finding a lasting solution to the Russia-Ukraine conflict.
We are also making efforts to support peace initiatives in South Sudan and other parts of the African continent.
In conclusion, programme director, South Africa remains open for business. We want to strengthen collaboration with businesses so that we change the fortunes of our economy and more importantly ensure that the economy grows and that more people are involved in the economy.
Regardless of the obstacles, we are committed to staying the course.
Our ultimate goal is shared growth and shared prosperity for all our people and all committed partners like yourselves.
We wish you all the best as you find ways to adapt to a new reality.
Thank you
