Minister Blade Nzimande: Inaugural Ocean Economy Skills Summit 2021

Board Chairperson of the Transport Education and Training Authority, Mr Zamokuhle Zungu;
CEO of the Transport Education and Training Authority, Ms Maphefo Anno-Frempong;
President, South African College Principals Organisation, Mr Sanele Mlotshwa;
CEO Civil Aviation Authority, Mr Ernest Khoza;
Acting CEO, South African Maritime Safety Authority (SAMSA), Ms Tsepiso Taoana-Mashiloane;
Chairperson: Aerospace, Maritime and Defence, Ms Sefale Montsi;
Department of Transport Chief Director, Maritime Transport, Mr Dumisani Ntuli (Mphemba);
Executive Chairperson and Group CEO, Infinity Investments, Mr Patrick Ndlovu;
Chief of Human Resources for the South African National Defence Force, Vice Admiral Asiel Kubu;
South African Chief of Naval Staff, Rear Admiral Mbulaheni;
Chief of Air Staff Governance, Major General Butler;
Staff Officer Maritime Operations and Planning, Lt. Col MB Tau;
Scientific Technology Manager, Institute for Maritime Technology, ARMSCOR, Mr Russell Egypt;
CSIR Senior Researcher, Mrs Simone Smith-Godfrey;
SA Air Force, Brigadier General Kevin Moonsamy;
SA Navy Hydrographic Services, Captain Theo Stokes;
Senior Staff Officer for Naval Education, Training and Development, Captain Tshabalala;
ARMSCOR Senior Manager, Mr Nkosinathi Ncongwane;
Acting Managing Director, eThekwini Maritime Cluster, Ms Zenzile Gwamanda;
My Advisors and Ministry Staff
Invited guests;
Members of the media;
Ladies and gentlemen

Good Morning

It is my great pleasure to be with you today in this inaugural Oceans Economy Skills Summit 2021 at a critical time, when the entire global community is grappling with the global pandemic of COVID-19.

We do not know how long this global pandemic will be with us, but we are clear of what needs to be done to weather the storm and mitigate its socio-economic impact. 

Not only is a pleasure for me to address you today as the Minister of Higher Education, Science and Innovation, but also as a former Minister of Transport, in which issues of marine transportation are managed.

This inaugural Oceans Economy Skills Summit is being held at an opportune time in the history of our country, to look into practical measures, from the perspective of skills development to unblock blockages associated with skills development in our oceans economy.

This Summit is being held against the background of the launch of the Economic Reconstruction and Recovery Plan by the President on 15 October 2020, in response to the unprecedented challenges posed by the global pandemic on the domestic economy. 

The President has also given us marching orders when he delivered his State of the Nation Address (SONA) on 11th  February 2021, when he  identified the following four overriding priorities for 2021, which are critical as well for our oceans economy:

  • Defeating the COVID-19 pandemic;
  • Accelerating our economic recovery;
  • Implementing economic and social reforms to create sustainable jobs and drive inclusive growth and finally; and
  • Fighting corruption and strengthening the state.

Our economy has been stagnant for decades with low levels of investment and growth, leading to reproduction of unemployment, poverty and inequality.

Whilst we are clear that the major causes of our distorted and unequal growth path are deeply structural and tied up with our particular economic and social history, it is also true that the global pandemic has put a significant strain on our collective efforts to tackle these social ills, as identified in the National Development Plan.

The Medium-Term Budget Policy Statement as presented on the 28th  October 2020 made a projection that the real Gross Domestic Product (GDP) is expected to contract by 7.8% in 2020, to rebound by 3.3% in 2021; 1.7% in 2022 and 1.5% in 2023.

Coupled with this, employment decreased by 2.2 million to 14.1 million in the second quarter of 2020 compared to the first quarter of 2020. There has been some level of improvement in the third quarter of 2020 as we have seen an addition of 543 000 employed persons in our workforce.

However, I must emphasise that the challenge remains, that of stubborn high levels of youth unemployment, standing at 61.3% in the third quarter of 2020, for young people between the ages of 15 – 24 years.

Government believes that the oceans economy presents us with a potentially significant opportunity to unlock latent potential in our vast ocean and coastal heritage and assets – what we refer to as the ocean economy - and bringing its benefits to bear to the majority of our citizens, particularly the poor and working class.

Recent estimates, done in 2015, have projected growth potential in the ocean economy in the region of R177 billion to our GDP, with creation of just over one million jobs by 2033.

Clearly, in the light of the recent recession and contraction in the global economy as a result of the COVID-19 pandemic, these estimates and baseline assumptions will have to be revised. Nonetheless, it is an undisputed fact that South Africa’s ocean and coastal economic heritage offers new and untapped potential for inclusive and sustainable economic growth.

This Inaugural Oceans Economy Skills Summit is a golden opportunity for the oceans economy stakeholders and the entire post school system to ensure that our oceans economy plays a critical role in our path towards an inclusive and sustainable growth trajectory, as indicated in the Economic Reconstruction and Recovery Plan (ERRP), prioritising especially young people, women and people with disabilities.

Inclusivity demands that we firmly redress the deep structural inequalities reproduced across racial, gender and spatial lines, and ‘sustainability’ requires us to ensure durable and decent jobs, as well as preserving our biodiversity and climate stability.

I have noted that broadly, the sector has 3 708 companies registered in terms of the South African Revenue Services data as of April 2020, categorised as follows:

  • Forwarding and Clearing = 1 072,
  • Freight Handling = 1 458, and
  • Maritime = 1 178.

My immediate challenge to you, is to note that 71.5% of all those employed in the sector are males and that 54% of them are between the ages of 35 to 55 years old.  Equally, the racial patterns of ownership and control, especially for large and medium-scale enterprises active in the ocean economy space, does not enjoy black majority participation.

Similarly, there is also a strong imperative to address spatial inequalities by diversifying South ocean and coastal economic activities, including infrastructure and skills, beyond the large cities, to bring it within reach of many rural communities.

The ERRP has identified gender equality and economic inclusion of women and youth as one of our priority interventions. In fact these transformational and developmental imperatives are transversal, as you deliberate in the Summit, please prioritize transforming the sector for an inclusive and sustainable growth path trajectory.

The National Development Plan (NDP) has also identified the potential of the Oceans Economy as one of the key industry sectors that can contribute to unlocking the country’s economic recovery. It can thus serve as one of the drivers to fight against poverty, unemployment and inequality.

Achieving inclusive growth in this sector is possible because we know that our country boasts of more than 3 000 km of coastline making it the third longest on the African continent.

We know for example that the eastern half of the Eastern Cape Province has never developed coastal and maritime assets such as small harbours for trading and recreation, typically to be found in the western hemisphere of the country. We also know that the region’s spectacular coastal plain with its unspoilt beauty and amazing cultural assets remain to be one South Africa’s most promising tourist destinations of the future.

We also know that Saldanha Bay is recognised as the deepest and largest natural harbour in the Southern hemisphere. It has a land and sea surface of over 19 300 ha and water depth up to 23.7m.

This means it can handle the largest container vessels. Indeed, it has been argued that our territorial waters are South Africa’s tenth province. This ideal geostrategic position of South Africa means that we must develop effective strategies to maximise the economic contribution of the ocean economy.

It is reported by Operation Phakisa that South Africa has 127 vessel berths that can collectively handle a total of 160 million tonnes of cargo per year. 42 berths are for break-bulk, 30 are for dry bulk, 18 are for containers and 16 for liquid bulk. In addition, our port system has around 6 000ha of landside area and over 30km of quay wall.

The plan is to expand these to 9 000ha and 80km respectively within a 30-year period. This expansion of the oceans economy infrastructure will attract investment and increase our capacity to reach the projected contribution to GDP. 

Given that we have eight major seaports that are responsible for about 80% of trade in South Africa, with an estimated traffic activity of 30 000 vessels sailing through our waters annually, means that we are ideally positioned to provide maintenance and all sorts of support to these vessels that come into our shores.

We know from Operation Phakisa that when we are talking about the oceans economy, we are referring to a wide range of economic activity. These include three primary sub-sectors, namely:

Shipping and transport: which includes maritime logistics infrastructure, shipping transport and ports, marine services, and Coastal administration;

Marine resources: which includes, fishing, pharmaceuticals, aquaculture and offshore energy and mining;

Marine tourism: which is broken down into boating and cruising, sports and recreation and leisure.

We also know that this includes four secondary industry sub-sectors as follows:

Operational support services: which includes shipping logistics and marine technologies;

Manufacturing and construction: which includes civil engineering; marine manufacturing (ship/boat building, component manufacturing); ship repair and maintenance (ship modifications, oil, and gas structures, etc.);

Business services: which incorporate maritime specialised professionals within the banking, legal, insurance, ICT, and the consulting domain;

The public interest cluster: which looks at public maritime functions and services (maritime regulatory and naval defence), enforcement, emergency, and disaster management

We must, therefore, identify economic growth points and address challenges to unlock this potential, especially focusing on skills and innovation.

This is exactly what this Inaugural Oceans Economy Skills Summit, with all its direct and indirect stakeholders, is about – putting our heads together to determine how we, as a country can skin this cat. This is where the post school system has a huge role to play and hence the motivation to hold the Inaugural Oceans Economy Skills Summit.

The South African International Maritime Institute (SAIMI) research report shows that - the South African labour market is contradictory with a structural mismatch between labour demand and supply: the labour market shows a demand for high skilled workers, but there is a surplus of low skilled potential workers, especially among young people. This report categorises this mismatch into three groups:

Demand mismatch: which is referring to the fact that the economy is creating jobs that need highly skilled workers and yet the skills market does not seem to have the right mix, volume and diversity of skills required to respond to this dynamic and fluid labour market context. This is what we mean by a structural mismatch between labour demand and supply;

Educational supply mismatch: which is referring to the types of skilled graduates needed by the labour market against what is produced by the institutions of learning. There is a mismatch in that there is a need for larger numbers of Science, Technology, Engineering and Mathematics (STEM) graduates and artisans in new and more diverse fields, especially in respect of the Fourth Industrial Revolution (4IR) challenges. The NDP has calculated that as a country we need to produce 30 000 artisans per year by 2030. In our own Economic Reconstruction and Recovery Skills Strategy we have realised the need of these skills, urgently;

Qualification-job mismatch: This refers to graduates who are working out of field. This means that some people are qualified in one field of study but work in a different field and thus not using their educational specialisations.  To add on this, our own Skills Supply and Demand Report (LMIP) (2020) indicates field of study mismatch at 32.5% which is similar to the average for the OECD countries. It is however, lower than for example, in the case of Romania and Peru, at 39.2% and 51.5% respectively.

This is our challenge at this Inaugural Oceans Economy Skills Summit., Further and beyond the above facts, our Skills Supply and Demand Report (2020) shows that in South Africa, 28% of the employed in 2016 were determined to be underqualified, while 24% were determined to be overqualified. 

We must address this challenge in our oceans economy sector working with our post school institutions, especially led by the Transport SETA and SAIMI.

Although we already have some post-school educational institutions offering learning programmes in marine and maritime fields of study, we can do more, not only to attract the groups of learners we are targeting but also enhance our innovation, research capacity, and develop new learning programmes. We can also integrate technology in the classrooms, improve infrastructure to deliver these programmes, conduct professional development of staff, create greater collaboration amongst role players in the sector and support innovation.

Some of our universities offer a variety of maritime and marine-related degree programmes and courses that support the oceans economy.

These include civil and mechanical engineering, law, medicine, economics, and business studies. The Quality Council for Trades and Occupations (QCTO) has programmes in boat building and repairs that are accredited at National Qualifications Framework (NQF) levels 2, 3 and 4.

This means our programme offerings must accommodate a wide range of knowledge fields such that we can even absorb some of our unemployed youth and those young people not in employment, education and training (NEETs).

I am glad to learn that maritime subjects such as Maritime Economics and Nautical Science have been introduced at some high schools.

Our Sector Education and Training Authorities (SETAs) have also made a great contribution to skills development in our oceans economy.            

For example, the Transport Sector Education and Training Authority (TETA) Chief Executive Officer (CEO) reports that: “With Operation Phakisa aiming to unlock the economic potential engraved in the oceans that surround South Africa, the TETA has prioritised the skilling and training of strategic personnel to ensure prime readiness when opportunities emanate. Strategic partnerships and close relations with international partners have been central to the strategies of the TETA to better position the maritime sector for the opportunities ahead.”

The TETA has developed an internal capacity and expertise on the oceans economy and conducted various type of research to ensure thought leadership.

It has trained 208 artisans in marine and sub-sea apprenticeships in disciplines include boiler-making, millwright, pipe fitting, and welding. It has also trained 850 learners in fishing skills.

Annually TETA  supports five Masters and Doctoral students to obtain a formal qualification from the World Maritime University in Malmo, Sweden.

To date twenty-five (25) such students have completed their studies specialising in Shipping Management and Logistics, Port Management, Maritime Safety and Environmental Administration, Marine Environmental and Ocean Management or Maritime Law and Policy.

While this is commendable, it also suggests that as a country we must develop our own curricula in our own institutions in such studies.

In partnership with the Royal Yacht Club in Table Bay, the TETA commenced the implementation of a sailing training programme. This was a transformation-based sailing training programme that provides 30 youth from disadvantaged communities with the opportunity to develop pre-sea skills and experience actual sea-time before launching a maritime career.

These are just a few examples of what has been accomplished by one SETA. But we are saying, as a country we can and must do more to fast-track growth in this critical sector of the economy. 

SAIMI, with these partnerships in the oceans economy has reported that between 2014 and 2019 about 1 199  and 3 521 learners were trained in apprenticeships and skills programmes in Marine Manufacturing respectively;  650 and 4 825 learners were trained in cadets and skills programmes in Maritime Transport respectively; 308 and 180 learners were trained Aquaculture and Fisheries short courses, respectively; 625 learners were trained in Maritime Protection and Ocean Governance and 207 learners were trained in International Training.

This progress needs to be appreciated as reported by both the TETA and SAIMI. Let us use this important occasion to develop a clear plan for the next five years taking into account the Economic Reconstruction and Recovery Plan and the skills and innovation strategies that my two departments have developed.

As, I close, you will also be aware that on the 26th  November 2020, I launched the National List of Occupations in High Demand (OIHD) in South Africa.     

The list identified 345 occupations that are in high demand out of a total of 1 500 registered in our Organizing Framework for Occupations. These occupations are at both high as well as intermediate skills levels which are critical for our oceans economy.

My colleague, the Minister of Home Affairs, Dr Aaron Motsoaledi has also published and gazettes the Critical Skills List on 18 February 2021, which was announced by the President in his SONA on 11 February 2021. The  list identifies those occupations that may require skilled personnel to be recruited from outside of South Africa.

Please look into the list, the due date for public comments is 31 March 2021, and be part of identifying skills that we need urgently to drive our ERRP.

Lastly, I am particularly impressed by the involvement of the South African National Defence Force (SANDF), South African Air Force, the South African Navy, Transnet, ARMSCOR, the Civil Aviation Authority, the Department of Transport and other government entities that have been mobilised through this summit.

When I presented my strategies on innovation and skills to the Cabinet Lekgotla on 29 January 2021, my Cabinet colleagues, impressed upon utilising government and State-Owned Entities as the training space to engage young people in various workplace based learning opportunities, especially those associated with the ERRP and growing an inclusive economy. Let’s intensify these collaborations with government and its entities.

I am looking forward to your robust debate and fruitful collaborations in our oceans economy beyond this summit, I will need to have a report, with clear practical and implementable actions arising out of this Summit as soon as this is possible.

I thank you.

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