Programme Director
The KwaZulu-Natal Premier, Dr Zweli Mkhize
The Deputy Minister of Trade and Industry, Ms Thandi Tobias-Pokolo
Esteemed delegates to the conference
Dignitaries present
Ladies and gentlemen
All protocol observed
It gives us great pleasure today to welcome you as guests of the Annual Conference of the Federation of Southern African Development Community (SADC) Sugar Producers. Not only have we been afforded the opportunity to welcome you to South Africa but in particular to KwaZulu-Natal, the Kingdom of the Zulu and one of the pivotal sugar producing regions in South Africa. But more importantly, our province is also a tourist paradise second to none.
As the MEC who has been entrusted with leading a department that promotes our province as a tourist destination of choice, it would be remiss of us not to urge you ladies and gentlemen to ensure that before you leave our province you must visit some of the tourist treasures that make our province such a much-see destination.
But back to the subject at hand, programme director, our province has had a long association with the sugar industry. The sugar industry was established in KwaZulu-Natal in the mid 1800’s and has since then been an industry that has grown from strength to strength, with approximately 35,000 cane growers in South Africa, most of them finding their home in the KwaZulu-Natal province.
As delegates to this conference we have been given an all important task of examining ways in which we can expand and grow the production of Sugar in the Southern African Development Community (SADC) region by especially focusing on the areas of trade and diversification into renewable energy.
This theme has been chosen wisely considering the times that we find ourselves in. Climate change and “going green” have become the new buzz words over the last few years, as the reality of climate change sets in for human beings. When the issue of global warming was first tabled on the world agenda there were many sceptics who questioned if the scientists were in fact correct with their predictions. However, the issues of global warming, climate change and an over reliance on fossil fuels are now clear cut and definitive. This has led to a definite paradigm shift taking place as more civilians, businesses and politicians become aware of the significant impact that climate change is going to have on the environment, society and the economy.
It is because of this reason that in October this year the leaders of the world, business people, people from all walks of life and the civil society, will meet here in Durban to discuss the every same topic of climate change and its ravaging impact in what has been dubbed as the COP 17. The time has passed for all of us to engage in polemics; there is consensus that the time to act is now if we want to halt the negative impacts of climate change and free our economies from being over dependent on a fossil fuel growth path.
Programme director, it is encouraging to see that the SADC sugar community is seeking ways in which sugar production can be used as an effective tool to create renewable energy in the region. If one examines the Southern African region one finds that it has the suitable characteristics to take up the challenge of bio fuel and cogeneration projects in that we have the two greatest assets to offer that of land and labour.
Not only will a move into bio-energy potentially rejuvenate the sugar industry but it will at the same time provide a mechanism to achieve greater fuel security for countries and hence result in less reliance on fossil fuel producing countries. The recent economic history has shown us what spikes in fuel prices can do to our local economies as well as the international economic climate. Over and above this, our over dependence on fossil fuels leaves our economies susceptible to the exogenous geo-political and socio- economic vagaries, such as the much talked about Arab Spring, which resulted in the sharp increase in oil prices.
A move away from dependence on fossil fuels is therefore a welcome initiative and we challenge this conference to take the dialogue that will take place here regarding co- generation and put it into action when we leave this place.
Programme director, it is often quoted that it is quicker and faster to imitate than to innovate so at this conference let us adopt a spirit of imitation and of learning by doing.
In the co-generation and ethanol production arena, we have a great case study to learn from in the example of Brazil. One of the important lessons to learn from the Brazilian model is that the state played a pivotal role in nurturing and promoting ethanol production. This was done by the state putting in place subsidies and incentive schemes to promote investment in the bio fuel industry. As a policy maker, we would therefore, encourage this conference to deliberate on what is needed from the state, markets and private investors to allow for successful large co-generation initiatives to be undertaken in the SADC region.
Programme director, it is at conferences such as these that we are reminded of the desire and vigour that exists in the Southern African region to promote economic growth in the region and establish a market force that is internationally competitive. What makes conferences such as these successful is the attitude and enthusiasm with which the delegates approach the conference. Therefore, like many of you, we stand here today eager to be a listener and a contributor to discussions as it is these two factors that allow for successful dialogue to take place. We are sure that as delegates at this conference we are all eager to see Sugar Production in the SADC region prosper, with greater synergies being created through trade and diversification of product.
In preparation for today, we were briefly reviewing the main objectives of the SADC Sugar Cooperation Agreement and thought that it would be pertinent to highlight three of the key objectives of this agreement as they are a good summation of what this conference is seeking to achieve.
The objectives read as follows: Firstly, to promote within the region, production and and consumption of sugar and sugar-containing products according to fair trading conditions and an orderly regional market in sugar for the survival of the sugar industries in all sugar producing member states, in anticipation of freer global trade.
Secondly, to create a stable climate for investment, leading to growth and development of sugar industries in the member states;
And thirdly, to create stable market conditions in the member states so as to encourage the rehabilitation and development of all sugar industries with a view of facilitating direct foreign investment and the creation of employment opportunities.
These are indeed lofty objectives of which we will do well to take note and expend our energies in making sure that as individual sugar producers and collective bodies that we are doing our bit to ensure that these objectives are being met in the SADC region, especially as we seek ways in which to promote employment and business opportunities in our individual economies.
It is hoped that at this conference as we discuss issues relating to co-generation opportunities and increasing trade linkages that we always keep in mind what this means for people on the ground. Both in SADC and South Africa the sugar industry provides necessary livelihoods to millions of people, most of whom find themselves in rural areas where the production of sugar is the only viable activity in that particular area. So in our deliberations let us not forget those who are on the ground so to speak and are likely to be affected the most by new and different directions taken in the Sugar industry.
Programme director, we all know that the world is now moving towards regional integration, which in short means that the fortunes of this industry need to be located within the context of the SADC region. Already, we know that all the countries within the SADC region have agreed that by 2015 we will have a single market and that by 2018 we will, barring any challenges, have a single currency. This means that we must begin to ask questions such as what impact will the regional integration have on this industry. This is one of the questions that this conference must deal with.
Programme director, once again the theme of seeking out renewable energy initiatives ties in well with recent policy documents released in the South African context. The New Growth Path document that was released last year in South Africa by the national ministry of Economic Development has placed a lot of emphasis on growing the green economy in South Africa with it forecasting that renewable energy initiatives in South Africa have the potential of creating 150 000 to 300 000 jobs. We, therefore, hope that discussions around co-generation in the Sugar industry that will take place at this conference will be a bold step by the Sugar industry towards initiating some of these predicted jobs in the renewable energy sector.
Programme director, the second theme of the conference being trade is also a key theme for consideration. If one again turns to economic history one finds that those nations that have achieved economic growth have used trade as the springboard for this growth. Therefore, just as it is time to act on more sustainable ways of energy production so it is time for Africa and in particular Southern Africa to be more assertive and proactive in taking advantage of trade relationships.
If Africa and Southern Africa do not move away from their image of being only a natural resource haven then achieving accelerated economic growth through trade is going to prove to be difficult. We know that 40% of the sugar produced in the SADC region is exported to preferential markets in the European Union and the United states and that the SADC region finds itself placed at number five in the global top ten sugar exporters.
However, this is largely comprised of raw sugar exports. This trend cannot continue because as long as our exports continue to be largely raw materials orientated we are exporting along with them job opportunities and opportunities for local development.
The time for seeking value added and beneficiation opportunities is now.
Programme director, as government we are prioritising value addition initiatives in most of our sectors. Over-reliance on unprocessed commodity exports exposes our economy to external vagaries such as currency appreciation, price oil shocks and socio-political factors.
Programme director, the US sub-prime crisis and the latest European/Greece debt crisis has once again shown us how fragile the financial world and global economy is. It has also highlighted for us how interconnected countries, economies and markets have become and therefore the truism of “if the United State sneezes the rest of the world catches a cold” succinctly summaries global economic conditions over the last five years.
It appears that in today’s world there is no respite for global anxiety and therefore as SADC nations we need to again learn from other developing nations such as China and India who have ensured that they have broad based export baskets which have cushioned the blows on their economies caused by global economic recessionary conditions.
Programme director, the Department of Trade and Industry (DTI) in South Africa has recently released an Industrial Policy Action Plan entitled IPAP2 which places emphasis on agro-processing as an area in which business opportunities and jobs can be created.
In the same vein, the KwaZulu-Natal province is in the process of developing a revised Industrial Development Strategy where again the area of agro-processing as been identified as an area of opportunity for job creation and small business development. It is therefore hoped that at this conference when discussing trade related issues that we seek to explore opportunities not only relating to raw goods exportation but to processed and beneficiated goods as well.
We are sure that our colleague from the DTI will have more insight to give on the IPAP2 documents and the possible trade and beneficiation synergies that are to be explored within the Sugar Industry.
In preparing for this conference, we came across an academic paper entitled “Future prospects for African sugar: Sweet or Sour?” and thought it aptly summed up what this conference is seeking to achieve. Let us hope that over the course of the day we have sweet discussions where ideas will not only be left as ideas but will be turned into action plans as we return to our respected institutions and countries.
I thank you.
Source: KwaZulu-Natal Department of Economic Development and Tourism
