Ministers from South Africa and Germany
Professor Gross, Chairperson of the Sub-Saharan African Initiative of Germany Business
Ambassador Stofile (Reverend), SA Ambassador to Germany
Business Leaders and Captains of Industry
Distinguished Guests
Ladies and Gentlemen
It is a pleasure for me to be addressing you this evening at the conclusion of my official visit to the Federal Republic of Germany.
Over the past two days Ministers and officials from the South African Government have been engaging with their German counterparts to further solidify the already strong political, economic and social relationships between South African and Germany.
South Africa enjoys a deep historical relationship with Germany, having a significant population of German descent and heritage.
Germany is South Africa's strategic and long term partner. We have 600 German companies employing close to one hundred thousand people in South Africa.
I am pleased that our business delegations were able to meet and have discussions during the Business Forum, attended by more than one hundred delegates from our two countries.
I am encouraged by the positive feedback I have received regarding this session, and look forward to hear about future German investments in the South African economy.
South Africa recognises the importance of foreign direct investment (FDI). We are - and will remain - open to FDI.
Openness is reflected in the stock of FDI in South Africa that now accounts for around 42% of our Gross domestic product (GDP).
Inward flows also continue to grow and over the last five years South Africa accounted for the bulk of new investment projects in Africa with investment arriving from the USA, Member States of the EU, from China, India and other Asian countries.
Ladies and Gentlemen,
South Africa like the developed world is still lingering from the effects of the financial crisis.
With further headwinds and slowdown in global growth, it makes the task even more difficult to address the challenges of socio-economic development in South Africa.
From a South African Government perspective, the National Development Plan (NDP) is our economic blueprint and provides a coherent, comprehensive and pragmatic plan to transform our economy.
It also provides for faster economic growth that is more inclusive.
In transforming the social project of our nation, we are addressing the triple challenges of poverty, unemployment and inequality.
The strategy outlined in the NDP is threefold.
In addition to boosting the quality of education and skills development, we have to promote industries that are labour intensive such as mining, agriculture, construction, hospitality and small businesses.
Secondly, we also have to grow the more advanced sectors of the economy, such as manufacturing, parts of financial services, telecommunications and business services.
Thirdly, more effective provision of a broader social wage should enable even the poorest of people to have a decent standard of living, to build the capabilities to get better jobs, higher incomes and a broader range of benefits.
In order to address the challenges, constraints in our economy and to kick start our economy, we announced a nine point plan to push the economy forward, ignite growth and create jobs.
This entails the following;
1. Resolving the energy challenge.
2. Revitalising agriculture and the agro-processing value chain.
3. Advancing beneficiation or adding value to our mineral wealth.
4. More effective implementation of a higher impact Industrial Policy Action Plan.
5. Encouraging private sector investment.
6. Moderating workplace conflict.
7. Unlocking the potential of SMMEs, cooperatives, township and rural enterprises.
8. State reform and boosting the role of state owned companies, ICT infrastructure or broadband roll out, water, sanitation and transport infrastructure as well as
9. Operation Phakisa aimed growing the ocean economy and other sectors.
In 2014, we launched Operation Phakisa, which is a strategy to unlock the economic growth potential stemming from South Africa's vast ocean coastline.
Operation Phakisa consists of the following four work streams:
- marine transport and manufacturing
- offshore oil and gas exploration
- aquaculture
- marine protection services and ocean governance.
We have now extended this to include a Mining Phakisa.
South Africa is becoming a frontier for new sectors for investment such as the green economy, oil and gas, shipbuilding and the ocean economy amongst others.
Our Renewable Energy Independent Power Producer Program (REIPP) has become world renowned and a policy blue print for other countries.
These sectors offer German companies opportunities to invest and to partner our companies in South Africa.
I am very keen that we can cooperate with SMEs as the backbone of the German economy is small companies that are technology driven and innovative.
Ladies and gentlemen
We were encouraged by the World Economic Forum's Annual Global Competitiveness Report 2015/16 in which South Africa climbed up 7 places from 56 to 49 countries of 140 countries.
South Africa's biggest improvements come in the areas of: health and primary education (up 6 places), efficiency (up 6 places), technological readiness (up 16 places) and innovation (up 5 places).
South Africa has also improved in the areas of: macro-economic environment (up 4 places), higher education and training (up 3 places), and business sophistication (up 2 places).
However, South Africa cannot be complacent and government is committed to improve our investment climate.
We meet with business in the Presidential Business Working Group to discuss education and skills, infrastructure and the regulatory environment as well as the labour market environment.
We are also establishing a one stop Inter-Departmental Clearing House to attend to investor complaints and problems.
The Minister of Trade and Industry is adding capacity to create a specialised unit that will fast track, unblock and reduce red tape in Government.
Investors are encouraged to contact the dti investment unit for this clearing house service.
Ladies and Gentleman
The African continent is now widely acknowledged as the next growth frontier. This is why our trade policy prioritises regional development through the Southern African Development Community (SADC), the Tripartite Free Trade Area (T-FTA) signed in June 2015 in Sharm el-Sheikh and the Continental Free Trade Area (C-FTA).
The Tripartite Free Trade Area brings together Southern African Development Community (SADC), Common Market for Eastern and Southern Africa (COMESA) and the East African Community of 26 countries with a population of 600 million and a market size of 1 Trillion dollars.
Taking advantage of these developments, we have positioned as a regional manufacturing and services hub and seeks to partner German companies in the industrial and infrastructure development of the African continent.
Since Germany is by far South Africa's most important trading partner in the Euro28, it is important for us to keep engaging on issues of mutual interest, and improve economic and trade relations between the two countries and the African Continent.
We wish to emphasise to you all that there are opportunities for us to cooperate further on and that there are many areas for companies in our respective countries to work together.
I wish you a good evening of networking and finding further areas for cooperation and partnerships.
I thank you.
