Remarks by President Cyril Ramaphosa at the Young Presidents’ Organisation Dinner, International Convention Centre, Cape Town
President of the Republic of Rwanda, Your Excellency President Paul Kagame,
Chairperson of YPO, Mr Pascal Gerken,
Executive Members of YPO, Mr Scott Mordell and Mr Paul Berman,
Ministers and Deputy Ministers,
Western Cape MEC for Economic Opportunities, Ms Beverley Schäfer,
Members of the Young Presidents’ Organization,
Members of the Diplomatic Corps,
Ladies and Gentlemen,
It is a great honour to address this important gathering of accomplished business leaders from across the globe, who together represent a substantial portion of the world economy.
I am told there are 95 countries represented here. Welcome to our beautiful country and most especially, the Mother City, Cape Town.
We are pleased that we chose South Africa as the host of the 2019 YPO Global Leadership Conference.
It is my pleasure to welcome all CEOs and other business leaders from abroad. I am most pleased to welcome the CEO of Rwanda Incorporated and that is none other than His Excellency Paul Kagame.
It is my hope that you will use this opportunity to learn more about our country from direct observation and engagement.
The Young Presidents’ Organization represents a significant body of opinion in business all over the world.
You are holding your conference at a time when the investment environment remains challenging and uncertain.
On the global scale it is said that, the key risk is that global GDP growth has peaked, with G7/Eurozone/Chinese growth expected to dip into 2020.
As global growth appears to be weakening; trade tensions continue between the US and China; political risk is increasing in both developed and emerging markets; debt levels remain elevated across government, corporate and household sectors; and monetary conditions are tightening in the short term as central banks shift to more hawkish policies.
What about Africa?
The African development Bank says that in the medium term, growth is projected to accelerate to 4 percent in 2019 and 4.1 percent in 2020.
And though lower than China’s and India’s growth, Africa’s growth is projected to be higher than that of other emerging and developing countries.
The World Bank’s report on the prospects of growth in Africa says that these numbers belie the enormous diversity that is to be found in the African continent and that a number of countries are showing impressive growth prospects.
Ethiopia is on track to have nearly the highest GDP growth rate in the world, and several smaller economies like Tanzania, Kenya, Rwanda, and Ghana are growing at rates over 6 percent, a number on par or higher than China’s expected growth.
These countries are Africa’s torchbearers for economic growth as they are also successfully attracting global capital through progressive policies aimed at diversifying their economies and growing the middle class.
This conference is taking place at an opportune moment in our country.
South Africa is emerging from a difficult period not only of poor economic performance but also of diminishing public trust in state institutions and low investor confidence.
We have been forthright in acknowledging the effects of corruption and what we describe as ‘state capture’ on our economy, our institutions and our people.
We have taken decisive steps to end state capture, to rebuild our law enforcement agencies, to end corruption and mismanagement at state owned enterprises, and to ensure greater policy coherence.
As we work to correct the mistakes and missteps of the past period, we are focused on lifting economic growth and creating jobs.
We have embarked on an ambitious investment drive, with a target of $100 billion of new investment over 5 years.
As a result of these efforts, South Africa is firmly on a path of growth and renewal.
We draw strength and encouragement from our partners within the global business community who are keen to see South Africa succeed.
We are heartened by the many companies – both local and international – who see South Africa as a country alive with opportunity.
We are well aware of the deep social and economic challenges our country faces – including widespread poverty, unemployment and severe inequality.
Yet we are not daunted by these challenges, nor complacent about the difficult work that needs to be done to overcome them.
As we build a new future for the people of our country, we look to our past for both perspective and inspiration.
South Africa is a diverse and beautiful country, with a resilient people and a proud history of struggle against injustice.
Even in the darkest days of apartheid, our people never gave up.
In part, they never gave up because they knew they had the support of many people from our continent and the world who abhorred the racist policies of apartheid.
They merely fought harder, with greater determination, to achieve a durable constitutional democracy.
Just as they defeated an iniquitous system of racial oppression 25 years ago, the people of South Africa are today acting in concert to address the social and economy legacy of that system.
They are working together to build an inclusive economy that benefits all South Africans, regardless of the circumstances of their birth.
We are here this evening to invite you to become our partners on this journey of inclusive growth, which will create employment, reduce inequality and offer business a meaningful opportunity to make a positive impact in society.
We are inviting you to invest in a South Africa that has world class infrastructure, hosting the largest cluster of air and maritime transportation companies on the African continent.
We have the most advanced ICT infrastructure in Africa, with internet and personal computer penetration being the highest in the region.
Many companies are attracted by the relative cost of doing business in South Africa, underpinned by the availability of skilled labour, a supportive operating environment and a highly sophisticated banking system.
We are determined to further improve the ease of doing business in South Africa and have set ourselves the target of being within the top 50 countries ranked in the World Bank’s Doing Business Report within 3 years.
South Africa is currently rated 82 out of 190 countries.
Within 6 years, President Kagame, we are determined to have caught up with Rwanda.
It is wonderful to have a top performing country, like Rwanda, in our continent as it affords us an opportunity to emulate them but also inspires us to catch up.
We realise that this will take an extraordinary effort by all social partners, from government departments and agencies through to business and trade unions.
Yet, extraordinary efforts will be required if we are to create jobs at a rate that our people need to lift themselves out of poverty.
One of the most important requirements for economic activity is the reliability and affordability of energy.
South Africa has been experiencing electricity shortages in recent years as our energy utility, Eskom, has faced severe financial and operational difficulties.
We have therefore embarked on a series of immediate measures to stabilise the electricity grid, ensure that Eskom can meet its financial obligations and restructure the utility to make it more efficient, transparent and accountable.
We are further seeking to bench mark it with other utilities across the world which have confronted and defeated similar challenges.
Through these efforts we are certain that we can ensure security of energy supply both in the short term and well into the future.
South Africa is working to drive growth both by expanding our export capacity and increasing local demand.
We have established 10 special economic zones, located in strategic sites around the country, where companies can access preferential tax rates, allowances and incentives.
Importantly, companies can benefit from the proximity of related value chains, and industrial and logistical infrastructure.
As a support mechanism to potential investors across the country, government has put in place an attractive package of incentives administered by Invest SA, our one-stop investment shop.
Located in key economic centres, Invest SA offices assist investors to seamlessly enter the South African market.
They support an investment team that includes four Presidential Investment Envoys, who engage with potential investors both locally and abroad.
We have compiled an investment book, which details investment opportunities in South Africa.
There are wide variety of opportunities in sectors ranging from green energy, recycling and biofuels to water infrastructure, energy, mining and minerals beneficiation.
There are also great opportunities for growth in agriculture and agro-processing, tourism, shipbuilding, business process outsourcing, advanced manufacturing, fuel cell production, aerospace, defence and many others.
South Africa has extensive capabilities in science and technology, with research institutions doing pioneering work in a broad range of disciplines, and has constructed the world’s largest and most sensitive radio telescope.
We are working to develop the skills that our people need to harness the benefits of the Fourth Industrial Revolution to build a competitive economy.
Investment is crucial to enable us to access new technologies and approaches that merge the physical, digital and biological worlds.
One of the most exciting developments in recent years – which happened during President Kagame’s chairship of the African Union – was the adoption by African leaders of the agreement to establish an African Continental Free Trade Area.
This will revolutionise economic development in Africa.
In the past decade, Africa has grown at a rate of 2 to 3 percentage points faster than the global GDP.
The growth of African economies has been supported by increasing foreign direct investment flows, public investment in infrastructure, higher agricultural production and a concerted programme of skills development.
The establishment of the Continental Free Trade Area will create a massive market for goods and services, enabling African countries to expand trade and industrialise.
AfDB experts say that regional integration is now more pertinent than ever in continuing the continent’s economic growth.
This is in the context of the expectation that Africa’s working age population is likely to double to 1 billion in the next 24 years, surpassing both China and India.
This is no doubt a matter of great interest to the YPO, which has expanded its presence in Africa in recent years, with over 700 members in 21 chapters across the continent.
Africa is the next frontier of global growth.
It has vast untapped potential and a huge appetite for investment.
We encourage you to explore the opportunities that exist not only in South Africa, but across the continent.
I want to conclude by voicing my appreciation for the emerging perspectives of the members of your organisation which were expressed in the YPO Global Leadership Survey released in January that an overwhelming 93% of YPO affiliate CEOs believe that business must play a far greater role in making a positive impact on society for the benefit of all people.
This perspective has led me to think of five tasks that I believe the YPO family needs to be preoccupied with seeing that the majority of your members believe that business should make an impact on society for the benefit of all people.
I believe that business should adopt a contrarian posture to Milton Friedman's maxim - that the business of business is business.
The business of business should not just be business.
Focus on profits alone should not be the yardstick.
Instead, we should make stakeholder value the benchmark of a company’s performance.
This talks to focusing on recognising the challenges that the people of the world face and crafting a shared future in which their challenges are addressed.
The World Economic Forum theme of the 2018 meeting was quite relevant when it said “Creating A Shared Future in the Fractured World”.
Today, stakeholders – customers, shareholders, suppliers, employees, community leaders, religious leaders, political leaders, traditional leaders (especially in traditional societies in places like Africa), in fact society as a whole – rightfully expect companies to assume greater responsibility, for example, by protecting the climate, fighting for social justice, aiding refugees, and training and educating workers.
This is the way the world is going as the majority of your own members have said in your survey.
The business of business should be to create value for society.
This is a task that business leaders cannot ignore.
Second, because the Fourth Industrial Revolution runs on knowledge, we need a concurrent revolution in training and education.
Here, both government and business must join forces to provide workers with the skills and qualifications they need to participate in the digital economy, for instance, by being able to tap the opportunities created by artificial intelligence.
I say this advisedly as I recently chaired together with the Prime Minister of Sweden the International Labour Organisation’s commission on the future of work where a clear task was issued to employers that they should assist working people on their journey of lifelong learning so that they are able to cope with the challenges that the fourth Industrial Revolution is going to impose on the world.
Third, we must encourage innovation to fuel economic growth on a continuous basis with new products and services.
Business needs to lead in this regard.
Fourth, as leaders we must summon the courage to address the tough issues and the tough questions.
And there are plenty of them.
How can we secure the future of those whose jobs will be eliminated by machines? How do we create new sectors of the economy? How do we address the challenge of widespread unemployment?
Fifth, business must remain engaged with all the key stakeholders and especially government.
Relationships between business and government is often fraught with conflict.
A business must always have the courage to engage government and collaborate with government even as it might seem difficult.
Business should however not seek to capture government because that always leads to disastrous ends.
Part of this task means that business must never be found wanting when it comes to adherence to integrity and ethical behaviour.
In other words business must rid itself of corrupt practices and be seen to be dealing with corruption effectively.
What is significant is that this perspective that encapsulates these five tasks is embraced by important players in global business.
I am pleased that gathered within this hall tonight are men and women members of the YPO who are astute and very much aware that we all have a responsibility to work for sustainable and inclusive growth.
Let us all work together to make the world a better place for all the people who live in it.
I thank you.