Programme director
The President of National African Federated Chamber of Commerce (NAFCOC)
Esteemed executive members of National African Federated Chamber of Commerce
Honoured guests present
Members of the Media
Ladies and gentlemen
All protocol observed
We wish to start by expressing our sincere appreciation to the President of Nafcoc and his executive on behalf of the provincial government of KwaZulu-Natal for choosing our province as the venue for your deliberations of the 46th Nafcoc Conference.
As the provincial government, we appreciate the fact that the organisation has identified KwaZulu-Natal as an ideal province to host what is arguably the most important gathering in the history of this great organisation.
NAFCOC couldn’t have chosen the right theme for this 46th conference: “Economic Transformation is our priority.”
This is a catchy theme that points us in the right direction as a developmental state. It emphasises two things.
Firstly, that we must ensure that in everything that we do, economic development becomes our priority. Secondly, this theme is clearly saying to all of us, we must work together to speed up the transformation of our society. But it also emphasises what as government we have always been saying that the drive to transform our society in all its facets is not only the preserve of government but is something that should be done by all of us as a collective.
Programme director, the presence this evening of leaders in government and representatives of private companies is encouraging. It is a good indication that there is continuing cooperation between business and government. No longer is economic development a space occupied by government alone. Economic development is the business of every business, every government and every citizen. The actions of all these role-players impact on and change the economic environment within which they all operate.
Similarly, the actions of each of these stakeholders can enable or hinder the operations and functioning of the other role-players. For example, excessive government bureaucracy can hinder the establishment and management of businesses, anti-competitive behaviour from existing businesses can keep new entrants out of the market, the lack of credit can strangle the growth of existing businesses and prevent the birth of new ones.
Therefore, unless we collectively identify and remove the key constraints to growth and development, we stand little chance of achieving progress. Nor can we as a people hope to join the ranks of the most advanced economies if we – business and government don’t work in partnership.
The economic meltdown of recent times is another example that has amply illustrated the interrelatedness between various economic role-players. The actions of bankers and banks in the first world led to a global economic downturn that resulted in the job losses. We were all affected government and the private sector.
And it is only through conscious reflection on these connections and by putting in place mechanisms that improve our relationships with one another that we can improve the functioning of the economy as a whole, for the benefit of all.
The 46th Conference of Nafcoc comes at the time when there is an urgent need to stimulate all sectors of the economy to ensure that we move out of recession. Just last week, Statistics South Africa released gross domestic product (GDP) figures for the third quarter which showed that South Africa's economic growth slowed unexpectedly and grew by a measly 2,6 percent.
Critically, we also meet barely a week after the government, under the Department of Economic Development, presents its new growth economic path, which will guide our country’s economic trajectory. It is a known fact that there are a number of constraints that have been identified as hindering growth in the economy.
These include among others:
- a low saving culture,
- an uncompetitive currency;
- a low skills base
- anti-competitive behavior in many sectors of the economy
Critically, the new document calls for a broad pact between business, labour and government aimed at fostering employment creation whilst enhancing competitiveness and social equity and development goals.
The reality Programme Director is that the economic slowdown has shown that in practice the interests of government, labour and business are not diametrically opposed.
As we speak one of the Europe’s biggest economy, Ireland, is in doldrums following hard on the heels of other economies which have failed to weather the harsh economic conditions brought about by the economic meltdown. Not too far from Ireland, Portugal is also experiencing its own fare share of economic blues and it is, according to analysts a matter of time before it also needs a bail out. As many of you are aware, a lot has been said about the New Growth Path. But the fact of the matter is that it is starting block for us as a country to attempt to fashion a future and to try to accommodate the divergent interests of all the players in the economy, including the civil society. We therefore believe that instead of throwing the baby with the bath water, it is incumbent on all of us including business to come to the table and say this is what we are offering in order to create a future in which all of us can have a stake.
One of the important issues that the document touches on is the issue of the BBBEE. The New Growth Path calls for a major rethink of the BEE framework and policy and points to a number of weaknesses in the current operation of BEE, including the excessive focus on transactions that involve existing assets and benefit a relatively small number of individuals.
The New Growth Path seeks to place BBBEE in a growth and employment framework. It calls for a substantial revision of BBBEE Codes to increase employment, skills development and new investment. As the province of KwaZulu-Natal we are one of the first provinces which have come out to state without any a hint of equivocation that BBBEE has produced unintended consequences.
These include alleged reports of fronting and manipulation of figures attributed to black economic empowerment. Among other unintended consequences has been an emergence ofplayers in the economy who abuse their status to get rich quick without contributing meaningfully tothe economy. There has also been a dearth of innovation and creativity as people chase easy riches.In other words, the rate of economic transformation is, practically, out of kilter with the numbers ofblack players in the economy simply because of the peripheral role that they play. Having said this, however, we still believe that BBEE remains a critical economic tool with which to effect redress in the economic landscape.
This is evidenced by the fact that we have established the Black-Economic Empowerment Advisory Council. The Council will deal with among other things: ensuring how B-BBEE should benefit people living in the rural areas of our province. The Council will also advise on how issues of fronting and other abuses of B-BBEE legislation should be dealt with. Importantly, the Council will also have to devise strategies on how to move B-BBEE implementation beyond compliance as currently being seen and implemented by most enterprises.
Programme director, as government we reiterate our belief that the future of our country lies in business, labour and government working together for a common goal of boosting the economy of our country. We look forward to the resolutions of this congress and the role that business is set to play in this post economic recovery phase.
The challenges that have been brought about by the economic recession mean that the time for business that is solely concerned with maximising its own bottom line is over. The future of business and that of other players in the economy are inextricably linked. We wish you fruitful deliberations and once again we wish to thank you for choosing our province as the site of your important discussions. May you find time to experience not only the warmth of our people but also the hospitality and the inimitable beauty of our province.
I thank you.
