Speech by KZN MEC for Economic Development, Tourism and Environmental Affairs, Sihle Zikalala during the SONA debate, Parliament, 13 February 2019
Honourable Speaker,
His Excellency, President of the Republic of South Africa, Mr. Cyril Ramaphosa,
His Excellency and Leader of Government Business, Deputy President David Mabuza,
Honourable Members,
Let us value our achievements - today, SA is a better country
South Africa is indisputably far better than it was before 1994.
Working together, we remain on course to restore the dignity of all citizens and to reverse the centuries of underdevelopment, poverty, unemployment, and inequality.
Honourable House Chairperson, on the 10th of May 2004 former President Mandela made his last address to this very august house as part of celebrating the first decade of freedom. Madiba said: “There is (always) enough reason for cynicism and despair.
But then we should take heart from our own experience and performance. Let us refrain from chauvinistic breast-beating; but let also not underrate what we have achieved in establishing a stable and progressive democracy where we take freedoms seriously; in building national unity in spite of decades and centuries of apartheid and colonial rule; in creating a culture in which we increasingly respect the dignity of all.”
Madiba would have again reminded us that let us not underestimate what we have achieved in 25 the years of freedom. He would have pointed out that:
(a) In 1994, democratic South Africa inherited an eschewed and economy in crisis. It was the economy that was designed and legislated to serve only the few white males today our economy serves the whole of our people irrespective of colour or gender.
(b) Since 1994, the size of our economy has more than doubled. In 1994 our GDP was USD136 billion and in 2017 about US350 billion.
(c) Total public-sector debt stood at 69 percent of GDP in 1994. For 2017, government debt stood at 53.10 percent of the GDP and we are determined to reduce it further.
(d) The number of employed people rose from 9.5 million in 1994 to 15.2 million in 2013, despite the loss of almost a million jobs from 2008 to 2010 as a result of the global downturn. Today, 7 million more people are working compared to 1994.
Today, South Africa is the No1 diversified economy in Africa, and is considered the regional manufacturing hub and the most industrialised country in the continent.
The end of apartheid has seen the phenomenal growth in the tourism industry which is now recognised as one of the main drivers of South Africa’s economy and job creation. Tourism contributes more than R400 billion to the economy and employs more than 1.6 million people across the value chain.
South Africa’s participation in the Oceans Economy has already contributed about 4.4% to South Africa's Gross Domestic Product (GDP) and is creating more than 6 500 jobs.
Without breast-beating, we can confidently report to Madiba and our nation that the ANC-led government remains on course to bring a better life for all.
Why Radical Economic Transformation?
Given the slow pace of transformation in our country and the continuing social and economic exclusion of millions of people, as the ANC, we adopted Radical Economic Transformation as the policy to fast-track economic transformation.
Through radical economic transformation, we seek to deracialise the economy and bring about, “fundamental change in the structure, systems, institutions and patterns of ownership, management and control of the economy in favour of all South Africans, especially the poor, the majority of whom are African and women”.
As the province of KwaZulu-Natal we have not only theoretically defined radical economic transformation but we have adopted programmes with clear targets to help us achieve radical economic transformation.
Public Procurement
In August 2015, the province successfully organized a ground breaking procurement indaba which adopted far-reaching resolutions that will transform the economy using public procurement and these including set-asides for SMMEs, vulnerable groups and clear black economic empowerment targets.
We have developed a detailed implementation plan and we are already hard at work implementing the procurement indaba resolutions within the umbrella flagship programme of Operation Vula. Through this flagship programme we have set-asides 58 commodities that government departments should procure strictly from cooperatives and SMMEs, as a pilot we have started with Clothing and Textile, construction material, Agricultural products, bakeries, chemicals and detergents, furniture and pulp and paper.
Radical Agrarian Socio-Economic Transformation (RASET)
For a long time, only a few large scale farmers have been dominating the whole agriculture value chain and in response to this, the KZN provincial government initiated the Radical Agrarian Socio-Economic Transformation (RASET) program in 2017.
Through RASET, we seek to create an alternative value chain for SMMEs and Cooperatives in order to bypass existing structural barriers and we do so by creating a guaranteed market through demand departments like Department of Health, Education and Social Development. The provincial government has been able to draw private sector organisations such as chain store supermarkets as partners in driving economic transformation.
President, through the provincial Department of Agriculture and Rural Development (DARD):
- We have supported 29 842 number farmers over the past five years on food security related interventions.
- We have also invested no less than R2.6 billion on agricultural development in the province supporting, in the main, emerging farmers.
- DARD is engaged on the implementation of On-farm mentorship and support to 200 young agricultural graduates towards entrepreneurship and better employability within the agricultural sector.
Enterprise development and bulk buying.
The SMME and Co-operatives development programmes remain the bedrock of our initiatives to foster entrepreneurship and to change the economic landscape in line with the agenda of radical economic transformation.
We are pioneering a ground-breaking initiative, known as KwaZulu-Natal Bulk Buying and Warehousing Programme which is aimed at lowering the cost of sales for our small and emerging retailers in order for them to be competitive and be able to expand their market share and participate in the retail value chain. This is part of our efforts to transform and revitalize township and rural economies in order to foster inclusive growth.
We are happy to inform South Africans and this august House that on the 31st of January 2019, our province launched the KZN Youth Fund, a first of its kind in the history of KZN. We have allocated R50 million to assist eligible young people to kick-start their enterprises or grow their existing ones. This fund will help the youth of KZN avoid red tape in accessing finance for their business projects.
Black Industrialists Programme
KwaZulu-Natal became the first Province to conclude the Memorandum of Understanding (MOU) with the DTI on the implementation of the Black Industrialists Programme in KZN. Since the programme was launched, 9 Black Industrialist Project from KZN have been approved by DTI to the amount of R300 Million.
On the 22 of January 2019, in partnership with the KZN Growth fund and the DTI, we launched a black industrialist textile firm called Africa Bespoke Apparel, in Verulam. This factory, at full capacity, will create over 750 permanent jobs, drawing most of the employees from surrounding areas. Yet in 2017 we launched the Mthembu Tissue, a black owned manufacturing enterprise.
Our provincial DFI such as Growth Fund and iThala have been directed to prioritize projects that meet the Black Industrialists criteria as set out in the DTI policy.
Special Economic Zones (SEZs)
Government’s support and roll out of Special Economic Zones (SEZ) aimed at fast tracking South Africa’s industrialisation has played a huge role in attracting investment and enhancing industrialisation. We have seen growth in investment in all 8 SEZs that are in the country.
Richards Bay Industrial Development Zone
In Richards Bay SEZ, a R300 million PVC pipe manufacturing plant has been established and is in operation and the investment projects that are in pipelines attest to the effectiveness of the SEZ initiatives.
Dube Trade Port
The Dube Trade Port is well on its way to become a fully-fledged airotropolis and pride for our country.
With Zone one fully occupied, Dube Trade Port zone two earthworks are well underway. Phase two brings additional 45 hectares of prime lights industrial land within the Dube Trade Special Economic Zone.
The second phase of Dube Trade Zone is set to house electronics, as well as a medical and pharmaceutical’s cluster. The top-level structures are expected to go up by next year, in 2020.
The site is serving as the foundation of Dube Trade Port’s next phase of investment attraction, which is projected at R18 billion over the next five years.
Expansion of big companies in KZN
Honourable members, we continue to work productively with major companies to ensure re-investment of the existing companies to expand their operations and thereby creating more jobs for our people.
- Richards Bay Minerals (RBM) is currently seeking an approval from their shareholder Rio Tinto for a R5.5 billion expansion to start mining at Zulti South. The expansion is going to assist in creating thousands of jobs during construction and also retain approximately 2000 permanent jobs.
- Whirlpool, one of the anchor tenants at iSithebe Industrial Park, and the largest manufacturer of refrigerators in Southern Africa decided to expand their operations to produce washing machines and introduced the new assembly line from Poland for the purposes of enhancing its operational efficiencies, improving quality and capacity for export purposes. The R100 million expansion demonstrates confidence in the Isithebe industrial estate and the provincial economy at large.
- SUMITOMO, Sumitomo Rubber South Africa has invested R2.1 billion towards the expansion of their plant in Ladysmith. The expansion saw an additional injection of R970 million to introduce and manufacture truck and bus tyres locally resulting in 193 additional jobs created in uThukela District.
- The KZN Durban Cruise terminal funded by an amount of R225 Million through Transnet is proceeding and will improve tourism performance of the province.
- SAPPI is already engaged on expanding its operation in the south of Durban with an investment of R7 Billion.
KZN investment booklet
Honourable Members,
As the President indicated during SONA, the province of KwaZulu-Natal came to the Presidential Investment Summit last year with its investment booklet for potential investors. The booklet contains a total of 25 bankable projects covering a wide range of sectors including agro-processing, film & media, manufacturing, logistics, medical, property development and tourism (including cruise tourism). Investment value is estimated at US$19.1 billion, with 800 000 temporary jobs during construction and 410 000 permanent jobs will be created.
During the Presidential Investment Summit, the Mara Group which manufactures smartphones pledged to invest R1.5 billion in the country.
Hon. President I am heartened to report that Dube Trade Port signed a lease agreement with the Mara Group and are proceeding with the implementation of this investment and this project alone will create 500 jobs.
Urgent support required from National Government
To continue with speed with the project of transformation, we call on you, Honourable President and Cabinet to embark on decisive steps to:
- Expedite the amendment of the Banks Act to allow ownership of Banks by the State. For us in KZN, the amendment will enable Ithala Soc to become a full commercial bank and be at the forefront of our pro-poor developmental genda.
- Expedite the Bill on production of Biofuel and blending with petrol. This Bill is key to the sustenance of the Sugarcane industry, a key sector in KZN and other parts of the country. This will respond to the plight of the Sugarcane Farmers
- Enforce localization by ensuring, among other measures, that a particular quota is set for SA exports to be carried by South African ships. This will incentivize local ship manufacturing and create much needed local jobs.
Surely, none will dare challenge me when I affirm that South Africa is far better than before the 1994 democratic breakthrough. But it is equally correct that the journey ahead is still long and demanding that we remain focused on the task of transforming South Africa. But we should never underrate the achievements of the past two and half decades.
Let’s all unite in action and grow South Africa together
I thank you/Ngiyabonga.
