FROM THE DESK OF THE PRESIDENT
Monday 28 March 2022
Last week we held our fourth South Africa Investment Conference as part of our ambitious drive to raise R1.2 trillion in new investment over five years.
The value of the investment commitments made at the conference was R332 billion, bringing the total value of commitments to date to R1.14 trillion. With just one year to go, we have now reached 95% of the target we set in 2018.
The Investment Conference was significant for several reasons.
Firstly, this was an impressive amount of investment commitments in the midst of a pandemic that has dampened the global investment climate for more than two years.
Such is the appetite of global investors for our economy that this year saw pledges from traditional trading partners in the European Union, United States, China and the United Kingdom, but also from Canada, Mauritius, Norway, Turkey and Pakistan. We also had funding pledges from the United Arab Emirates, where we are currently participating in Dubai Expo 2020.
Secondly, firms that already have a footprint in South Africa are increasing their existing investment commitments, signifying a renewed vote of confidence in our economy even at this difficult time.
The expansion plans of existing mining operations include an additional R10 billion investment by Anglo American, R11.8 billion by Impala Platinum, and R2.8 billion from Ivanhoe Mines to expand its Platreef mine in Limpopo. In the automotive sector, the Ford Motor Company has committed R16.4 billion to expand the manufacture of the next generation Ford Ranger, and there are commitments of R800 million by BMW and R350 million by Volkswagen.
Thirdly, the range of projects represented at this year’s conference illustrate the diversity of our economy and that potential investors see far more opportunity across several sectors than they did in previous years.
We have secured investment pledges in mainstay sectors like mining, agriculture and automotive, but also in renewable energy production, pharmaceuticals, clothing and textiles, infrastructure and logistics, telecoms and the digital economy.
Our creative industries have been given a major boost by multimillion rand investments in film and television production by the world’s largest media companies like Warner Media and Netflix. After nearly 15 years in the making, the eThekwini Film Studio in KwaZulu-Natal will soon become a reality following a R7.5 billion investment from Videovision Entertainment.
Finally, and perhaps most importantly, this year’s conference was marked by increased domestic investment, most notably from black industrialists.
Thanks to a concerted campaign by government, we are continuing to increase the participation of black industrialists in the nation’s economy. Over the last five years, some R32 billion has been invested in nearly 800 black industrialists and entrepreneurs through funding initiatives within the Department of Trade, Industry and Competition, with close to 120,000 jobs either saved or created.
At this year’s conference, black industrialists made investment pledges in mining and steel production, automotive, component manufacturing, consumer goods, bulk fuel storage, and ship-building and repair in the Saldanha Industrial Development Zone.
Importantly, these investments are not confined to the traditional economic centres.
As the commitments turn into projects, they will create jobs and improve livelihoods not only in the cities and metros, but also in small towns and rural areas. This will spur the growth of local economies, leading to more opportunities and to the improvement of people’s quality of life.
As one of the CEOs at last week’s conference said, the truest measure of the success of these investments lies in the extent to which they give opportunity to every South African to realise their potential.
Since the first South Africa Investment conference in 2018, these investments have brought jobs, work and training opportunities all over the country, from data centres in the Western Cape to e-hailing services in Gauteng, from food and beverage production and pharmaceutical manufacturing plants in the Eastern Cape to mines in the North West and to factories around the country.
Delegates to the conference said that our reforms around energy, transport, telecommunications and immigration, and the progress of sectoral master plans, have improved investor confidence, as has government’s effort to increase private sector participation in our infrastructure build programme.
I am currently on a visit to the United Arab Emirates, where we are making a case for investors in the Gulf and beyond to come invest in South Africa. Our pavilion at Dubai Expo 2020 is showcasing not just our agricultural and tourism offerings, but also what we have to offer in manufacturing, defence, aerospace, e-mobility and many other areas.
Several investors in these foreign markets often express surprise at just how diverse the South African economy is and the range of opportunities that exist.
In what often appears to be a sea of bad news, we are encouraged by the diversity and extent of the investment commitments made at the 4th South Africa Investment Conference.
These investments – like those made at past conferences – are good for employment, good for transformation and good for the country.
With best regards,
FROM THE DESK OF THE PRESIDENT
Last week, government concluded the auction of high demand spectrum for mobile telecommunications. This is a significant milestone in our reform agenda, which will, as we have said before, drive growth and transformation in our economy.
The licensing of spectrum is one of the major reforms that we are implementing to modernise and transform key network industries such as energy, telecommunications, transport and water provision. Already much progress has been made in creating new opportunities for investment in electricity generation, freight rail and ports, and in improving the management and quality of the country’s water resources.
The licensing of this new spectrum will be accompanied by agreed social obligations to connect public schools, health facilities and police stations over the next three years. Like the mineral wealth that lies beneath our soil, radio spectrum is a valuable national resource that needs to be used for the benefit of all South Africans.
Through its data services market inquiry in December 2019, the Competition Commission found that the cost of data in South Africa was considerably higher than in many other countries. The spectrum release is expected to reduce the cost of mobile data, expand network reach to rural and outlying areas, and improve network quality. Every South African who uses a mobile device will feel the benefits of this reform, especially the poor and those who currently don’t access the internet due to high costs or a lack of coverage.
Expanding digital access is critical for economic growth. Cheaper data means that young people will have greater access to digital platforms to seek job opportunities online. Students will be able to access information and educational materials. Entrepreneurs will be able to start businesses and reach new markets.
Equally, the availability of this spectrum will contribute to economic transformation. It will allow many more people, especially those from remote areas and poor communities, to access digital resources and will improve their ability to participate in economic activity.
The use of this spectrum will also enable the rollout of 5G networks. These 5G networks will accelerate the process towards universal connectivity – where all South Africans are connected – and the deployment of the digital technologies and services that are driving the fourth industrial revolution. This is a crucial step to bring South Africa back to the cutting edge of digital technology and ensure that our economy remains competitive.
Over the last year, the process of switching from analogue to digital broadcasting has gathered pace and will soon be completed. Digital migration will also free up valuable radio frequency spectrum currently used by broadcasters to be used in the provision of mobile broadband services and other applications. The switch to digital improves the TV watching experience, with many more channels and better quality picture and sound.
Digital migration will enable a massive leap forward in South Africa’s technological development. For poor households that are currently using an old analogue television, government is providing subsidised set-top boxes to help them make this switch.
The auction of spectrum is an important achievement. It was delayed for many years due to the policy drift, state incapacity and vested interests that were a feature of the era of state capture. The fact that we have now completed this process reflects the determination of this administration to undertake – and accelerate – the far-reaching reforms that our economy needs to grow and create jobs.
The auction of spectrum is one of the priority reforms included in Operation Vulindlela, which is working with government departments to accelerate the implementation of important reforms to support economic growth. By putting in place dedicated capacity to deliver on reforms, and focusing on the most important priorities, Operation Vulindlela has helped us to make real progress in a short space of time.
We are determined that South Africa must not be left behind by the digital economy, just as we are determined that no community and no person should be left behind in experiencing the vast benefits of being digitally connected to the world.
With best regards,
FROM THE DESK OF THE PRESIDENT
Africa’s management of the COVID-19 pandemic is a story of defied expectations.
It is now two years since the first COVID-19 case in Africa was reported. Even as the burden of infections remains high – to date Africa has recorded over 11 million cases – dire predictions about Africa’s ability to withstand the health impact of the pandemic have not materialised.
Some have called it Africa’s COVID-19 paradox, that despite widespread poverty, poor living conditions, under-resourced national health systems and scant resources, the pandemic is being effectively managed in a number of African countries.
Several reasons have been suggested for this ‘paradox’. These include the continent’s relatively young population, experience in fighting outbreaks of disease, exposure of the population to previous infections, and limited travel connections in many countries.
Another reason that has been suggested is the rapid response of the African Union to the pandemic, driving a coordinated response and unified strategy. This strategy mobilised resources to fortify national health systems, set up an online platform to secure medical supplies, undertook a continent-wide drive to acquire vaccines, and drove effective public health communications.
At a time when decisive leadership was called for, the leaders of Africa stepped up.
In the course of the past two years, African countries have built remarkable resilience that will be invaluable for future health emergencies of this nature.
Faced with massive global shortages of medical equipment and diagnostics in the early days of the pandemic, African countries turned to local manufacturing of sanitisers, personal protective equipment, COVID-19 test kits and ventilators.
There is another aspect to Africa’s story of defied expectations, namely the realisation that as the global crisis unfolded, our continent could not rely on the generosity of wealthy countries. We had to do things for ourselves.
African countries have had to contend with wealthy nations pledging partnership, solidarity and cooperation, but at the same time acting in a way that holds back the continent’s recovery from the pandemic. An example was the travel ban imposed late last year on South Africa and a number of other countries in the region in response to our scientists’ detection of the Omicron variant.
But nowhere has this been more apparent than in the unacceptable practice of developed countries buying up and hoarding all available COVID-19 vaccine stocks in quantities far exceeding the needs of their populations. This as vast swathes of the so-called developing world struggled to access them for their people.
Our experience of managing COVID-19 has emboldened the nations of Africa. It has shown us that resources and capabilities exist across our own continent to deal with emergencies of this magnitude.
It has reminded us that we have world-class institutions like the Africa Centres for Disease Control and Prevention that must be supported and capacitated to fulfill their mandates.
It has shown us how fragile our global partnerships can be, particularly in a global emergency.
Most importantly, it has strengthened our collective resolve to step up pressure on developed economy nations to give us not charity, but our just dues.
Countries of the global north have a responsibility to support Africa’s development in large part due to the role that many of these countries played in plundering, polluting and impoverishing our continent.
Last week, I attended the 6th Summit between the African Union and European Union in Brussels. There, African nations outlined their expectations from the partnership with the bloc as we work to recover from COVID-19 and manage the effects of climate change.
We welcome the help that EU countries continue to provide towards Africa’s sustainable development in a way that develops our capabilities and brings the continent closer to self-reliance.
Last year, South Africa was selected by the World Health Organisation (WHO) as the first site for a vaccine technology transfer hub. On the sidelines of last week’s Summit, the WHO announced that six African countries including South Africa will receive the technology needed to produce mRNA vaccines at scale for the continent.
We will continue to make the case for building Africa’s capacity to produce its own vaccines, including through a temporary waiver of the Agreement on Trade Related Aspects of Intellectual Property Rights at the World Trade Organisation (WTO).
We welcome the commitment of the AU-EU Summit “to engage constructively towards an agreement on a comprehensive WTO response to the pandemic, which includes trade related, as well as intellectual property related aspects.”
Without being able to manufacture our own vaccines, an equitable recovery will not be possible.
Building a better Africa and a better world is the cornerstone of South Africa’s foreign policy. For Africa to play a full and equal role in global affairs, we must first attend to the developmental challenges of the people of Africa.
We must uplift ourselves by making our own medicines to treat our people and save lives. We must develop our own economies through the African Continental Free Trade Area (AfCFTA), promoting investment and tourism within Africa, accelerating industrialisation, and driving green growth and low-carbon development. We must end all conflict and entrench democracy and good governance.
Thanks to our experience of the COVID-19 pandemic, the cause of African unity has been given a new lease on life. It has given renewed momentum to the project of political and economic integration, which has been strengthened by the advent of the AfCFTA.
Africa has found a new voice. It is bold and unapologetic in its expectations of our partners. At the same time, we are determined that Africa’s challenges must be, are being, and will be, solved by Africans themselves.
With best regards,
FROM THE DESK OF THE PRESIDENT
SPECIAL TRIBUNAL IS SHOWING THAT CRIME DOES NOT PAY
Monday, 14 March 2022
Dear Fellow South African,
During the Presidential Imbizo in Mahikeng over the past weekend, several citizens raised concerns about the pace of the fight against corruption. They told me what I have heard in many other communities across the country: that the perpetrators of such acts are known, not least because they flaunt the proceeds of their crimes.
But the arm of the law is long. Those who have stolen from the state may believe they have gotten away with it. But their deeds will eventually catch up with them, whoever they are, and whatever position they may hold.
They will learn that crime does not pay.
In this regard, one of our most effective weapons in the fight against corruption and state capture is the Special Tribunal of the Special Investigating Unit (SIU), which I established in 2019.
It adjudicates on matters that the SIU institutes for civil litigation after it has concluded its investigations. The Special Tribunal was set up to speed up litigation. This approach has made it possible for public funds and state assets lost to corrupt acts to be recovered faster, avoiding delays in the high courts, where the SIU has to wait its turn together with other litigants.
The SIU can request preservation orders and the freezing of assets to prevent further losses to the State. This is important when considering that perpetrators who are under suspicion often go to great lengths to move around, hide or dispose of proceeds of corruption.
There can be no doubt the Special Tribunal has been a game changer. Since its establishment, the Tribunal has recovered around R8.6 billion from unlawful contracts.
For any fight against corruption to be deemed effective, it is not sufficient that perpetrators are prosecuted. The proceeds of their crimes must be recovered. This money belongs to citizens and should be used to meet their needs.
Last week, the Special Tribunal ordered two construction companies to return the profits they earned from R40 million in contracts to erect the Beit Bridge border fence. This followed an investigation by the SIU that uncovered a number of irregularities, including a pre-payment to the companies by the Department of Public Works and Infrastructure.
Over the past few weeks alone, the Tribunal has reviewed and set aside more than R100 million worth of irregular and unlawful contracts arising from COVID-related procurement.
The Special Tribunal has also been successful in getting back money from senior executives in state-owned enterprises who conducted irregular business activities. For example, last year a former Transnet executive was ordered to pay R26 million he received as a shareholder of a firm of consulting engineers contracted to Transnet while he was a full-time employee.
The SIU has in a number of cases approached the Tribunal to delay the payment of pension benefits, pending the outcome of its investigations, to public servants implicated in financial irregularities or fruitless and wasteful expenditure.
The cases before the Special Tribunal show that much work still needs to be done to strengthen governance and management across all arms of the state. They point to serious lapses on the part of accounting officers and failures to adhere to laws and regulations governing procurement
I have said before that winning the war on corruption will be difficult, and that it will take time to unravel the vast webs of patronage that had become entrenched.
I have also maintained that we must fight private sector corruption with equal vigour, because for every public sector employee willing to be bribed, there is a business person willing to pay a bribe.
These corrupt relationships have eroded the capacity of the state to deliver on its mandate. They have set back the state’s efforts to provide decent healthcare, to deliver clean water, and to ensure a consistent supply of power to communities and businesses.
But, as the Special Tribunal has demonstrated, we are steadily turning the tide. Not only are perpetrators being arrested and taken to court; they are also having to forfeit the proceeds of their crimes.
There is still a long way to go, and there is a huge amount of stolen public funds that still need to be recovered. But the SIU and the Special Tribunal have made a good start, and I am confident of many more successes in the months and years ahead.
With best regards,
President Cyril Ramaphosa
FROM THE DESK OF THE PRESIDENT
JOB CREATION NEEDS BOTH A DEVELOPMENTAL STATE AND A VIBRANT PRIVATE SECTOR
Monday, 14 February 2022
Dear Fellow South African,
As we work to grow our economy and create employment, there is much debate about the relative roles of the state and business in pursuing these goals.
Some people have suggested that we must make a choice between, on the one hand, a developmental state that plays a vital role in economic and social transformation, and, on the other, a vibrant, expanding private sector that drives growth and employment.
The reality is that we need both. We need a capable developmental state and a dynamic and agile private sector. We need them to work together and complement each other.
This idea is not new. Thirty years ago, in 1992, the African National Congress adopted a document titled ‘Ready to Govern’. The document set out policy guidelines for a democratic South Africa and has, over nearly three decades, influenced the policy direction of successive democratic administrations.
The ‘Ready to Govern’ document envisaged a democratic state with ultimate responsibility for ‘coordinating, planning and guiding the development of the economy towards a sustainable growth pattern’ in cooperation with the trade union movement, business and other organs of society.
It spoke of the need for economic policy that democratises the economy and creates productive employment opportunities at a living wage for all South Africans.
The document further envisages ‘a dynamic private sector, employing the skills and acumen of all South Africans…and of business activities which contribute significantly to job creation, being actively encouraged.’
In the State of the Nation Address last week, I outlined how government, business and labour should work together, each using their unique capabilities, to create jobs.
One of the most important drivers of growth and employment are state-owned enterprises (SOEs). They generate electricity, manage the ports, build the roads and supply the water that the economy needs to function. Since the advent of democracy, these SOEs have significantly expanded access to basic services for the poor. That is why a critical part of our programme is to strengthen state-owned enterprises, restoring them to financial health, improving their operational performance and enabling them to play a more prominent and beneficial role in the economy.
True to the role envisaged in ‘Ready to Govern’, the state directs both growth and transformation through levers like competition policy, broad-based black economic empowerment provisions and employment equity laws, and by linking the award of various licences to universal service and empowerment obligations.
Government is also directly involved in employment creation beyond those people employed in the public service. The Expanded Public Works Programme, which has been in existence since 2003, has provided work opportunities to millions of people.
More recently, in response to the devastating economic impact of the COVID-19 pandemic, this government has overseen the most significant expansion of public employment in our country’s history.
The Presidential Employment Stimulus has supported more than 850,000 opportunities in just 16 months. In addition to expanding public employment, we are providing support to unemployed young people to prepare them for work, make them more employable and connect them to opportunities.
There are many other ways in which government is contributing directly to job creation, including through large-scale investments in infrastructure, the establishment of special economic zones and through support to labour-intensive growth industries.
A special focus this year is on small, medium and micro businesses, on cooperatives and the informal sector. Through the redesign of the loan guarantee scheme that we introduced in the early months of the COVID-19 pandemic, we are making ‘bounce back’ finance more accessible for small businesses. We are expanding the employment tax incentive and looking at various other regulatory changes to make it easier for small businesses to employ more people.
As I indicated in the State of the Nation Address, these are among the measures we are taking as government “to create the conditions that will enable the private sector – both big and small – to emerge, to grow, to access new markets, to create new products, and to hire more employees.”
The private sector employs some three quarters of South Africa’s workers and accounts for over two-thirds of investment and research and development expenditure. Alongside a capable and developmental state, our country therefore needs a thriving private sector that is investing in productive capacity.
As private sector employment expands, more livelihoods are supported and sustained. Goods and services are delivered at a greater scale and the democratic state is able to collect more revenue for social development.
The ‘Ready to Govern’ document says that the role of the state “should be adjusted to the needs of the national economy in a flexible way”, whether it is increasing the public sector in strategic areas or reducing it in others.
Such a mixed economy, it said, would foster a new and constructive relationship between the people, the state, the trade union movement, the private sector and the markets.
It is this relationship that we are now working to deepen and improve, to forge a new consensus for growth and employment. After a decade of low growth and rising unemployment, this is the way to revive our economy – creating a dynamic, competitive, fast-growing economy that is able to compete with the best in the world.
We will not achieve such an economy without both a strong and capable developmental state and an inclusive, fast-growing private sector. We should not be asked to choose one or the other. We need both.
With best regards,
President Cyril Ramaphosa