Friday, October 26, 2018
Ladies and Gentlemen,
I am pleased to welcome you all to this inaugural investment conference.
We are pleased and humbled that you have responded to the call by the government and the people of South Africa to participate in this conference and thus be part of a new dawn in our country.
As representatives of the domestic and international investment community, as representatives of business organisations and international financial institutions, by your presence here, you have chosen to walk with us along the path of growth, employment and shared prosperity.
Like us, you believe that South Africa is a land of opportunity – a land where the soil is rich and the oceans teem with life, where the beautiful vistas of our country are spectacular and its diverse people are vibrant and resilient.
For you know that its people are its great wealth.
Like us, you believe that there is vast potential in South Africa; and that it has enormous potential that has been constrained for decades by narrow prejudice and debilitating human neglect.
Together with us, you celebrated the miracle of our peaceful transition to democracy.
You were there when we began to rebuild our economy and fundamentally change the fortunes of our people.
You witnessed both our achievements and our missteps.
You supported us and wanted us to succeed as you wished us well.
And when we stumbled, you looked on with concern and disillusionment when it seemed that we may squander the remarkable inheritance of Nelson Rolihlahla Mandela.
Yet, throughout these difficulties, you have retained an abiding interest as both domestic and international business in the fortunes of this country.
We know that, like the people of South Africa, you have harboured a profound hope that we will prevail.
This inaugural South Africa Investment Conference is therefore an expression of a shared hope and a renewed confidence.
It is a bold and unequivocal statement that we are determined to put behind us the period of uncertainty and discord and embrace a future of cooperation and partnership.
We are here to declare that we are determined to build a country that is driven by enterprise and innovation, to develop an economy that is diverse and resilient and prosperous, and to create companies that achieve sustained returns not only for their shareholders, but also for the workers that drive them and the communities that support them.
We are country that is rich in ways that we often do not appreciate.
There are few places in the world that have the abundance of minerals that lie beneath the ground on which we now stand, that have the soil to sustain such a diversity of plants, crops, livestock and game, where the sun shines nearly all year around and where the golden beaches stretch on forever.
We have an incredible natural inheritance, whose economic and social value we have not yet even begun to effectively explore.
Our political and social inheritance, by contrast, is deeply contradictory.
Through decades of deliberate underdevelopment, the majority of South Africans were dispossessed of their land, assets and livelihoods, and denied the education and the skills that make meaningful participation in the economic life of the country possible.
The devastating effects of this manifest injustice still define our society and severely constrain our economic development.
The continued exclusion of millions of South Africans – particularly as it relates to skills and to ownership of assets – is the single greatest impediment to the growth of our economy and the development of our society.
It explains the persistence of poverty, unemployment and inequality nearly 25 years into our democracy.
It is for this reason that we have placed economic growth and job creation at the centre of our national agenda.
It is for this reason too that we have prioritised the education of our children and the skilling of our workforce, and it is for this reason that we are accelerating the provision of land and other assets to the poor and marginalised.
And it is for this reason that in April this year we launched an ambitious and, in the history of our country, unprecedented, drive to raise at least $100 billion in new investment over five years.
We did so understanding that no meaningful growth and no significant job creation would be possible without a massive surge in productive investment in the economy.
Over the last half year, as we have prepared for this Investment Conference, our four Presidential investment envoys – Phumzile Langeni, Jacko Maree, Mcebisi Jonas and Trevor Manuel – have travelled across the country and around the globe to meet potential investors.
Invest SA, our award-winning investment promotion and facilitation agency, has compiled an investment book of projects that represent great potential.
Today, a number of local and international companies will make announcements on investments to expand existing operations in the country or establish new ones.
In addition to the announcements that will be made at this conference we have received investment pledges from a number of countries.
We have appointed task teams to work with these countries to convert these pledges into investments.
We have emphasised the need for more South African companies to lead the investment charge, demonstrating that they have confidence in this economy and in its ability to deliver decent and reliable returns.
In furtherance of this, I call upon South African companies to engage with our investment envoys on their investment plans, including capital expenditure programmes, so that we can have a better idea as a nation what the future portends for our country on the economic growth landscape.
This conference takes place in the wake of a number of decisive measures we have embarked upon in the last few months to improve the investment environment.
Following thoroughgoing consultations with various role players in our economy, we have been addressing issues of policy uncertainty and regulatory obstacles that have impeded investments in a number of industries.
We have been working with the World Bank to improve the ease of doing business in South Africa and crafting a new FDI strategy for the country.
Invest SA is intensifying its facilitation and aftercare service in terms of international best practice.
Together we are working to fast track investment projects and reduce red tape.
As part of the decisive measures that we have had to take, we have had to confront challenges in some of our largest and most strategic state owned enterprises, which have experienced years of poor governance, a decline in financial and operational performance and corruption.
Given the crucial role of these state owned enterprises in the economy, as providers of critical infrastructure and bulk services, it is essential that they be restored as engines of growth and development.
We have replaced the leadership in several state owned enterprises, ensuring that we have people with experience, integrity and the relevant skills who are now leading the development and implementation of sustainable business models.
As a country, we have also had to confront the bitter reality that several public entities have been severely affected by corruption and the phenomenon of state capture.
One of the urgent measures we have had to take is to end such corruption and hold those responsible to account.
We have established a commission of inquiry into state capture that has begun a thorough and far reaching investigation into these practices.
We have also established commission of inquiry into the South African Revenue Service and the Public Investment Corporation, institutions that are both vital to the effective functioning of our economy.
We are certain that these commissions will not only unearth all instances of malfeasance and governance failures, but will help to restore the integrity, credibility and effectiveness of these entities.
As we put in place the pillars of sustained growth into the future, we are working to address immediate concerns, specifically the effects of two quarters of negative economic growth.
Last month, government announced an economic stimulus and recovery plan that aims to restore growth, save existing jobs and create new ones.
As part of this plan, we are taking immediate steps to finalise reforms in key sectors like mining, oil and gas, tourism and telecommunications – all of which are sectors that have great potential for growth, but which have been constrained by policy uncertainty.
The revised Mining Charter has been finalised.
This is the outcome of extensive and meaningful consultation between government, community, labour and business and represents evidence of our commitment to solving the challenges in the sector collaboratively.
Government has decided to draft separate legislation for the oil and gas industry, settling a long-standing dispute that will provide direction and certainty to an industry with great potential.
Through the publication of a new Integrated Resource Plan for public comment, we have provided detail on the country’s future energy requirements.
Government also signed off a number of outstanding renewal energy supply agreements, bringing significant further investment into a growing sector of our economy.
We have finalised consultations with the telecommunications industry and other stakeholders to ensure allocation of spectrum reduces barriers to entry, promotes competition and reduces costs to consumers.
Our independent communications regulator is now preparing to licence available high demand spectrum.
We have initiated a review of our visa regime to facilitate greater arrivals of tourists, highly skilled individuals, business people and investors.
We are reprioritising our budget – within the existing fiscal framework – to invest more in those activities that will boost growth, including agriculture, township and rural businesses, and infrastructure.
We do so in a severely restricted fiscal environment.
As the Minister of Finance indicated when presenting his medium-term budget policy statement earlier in the week, we are determined to ensure public spending remains within sustainable levels – and that we generate greater revenue by pursuing growth with a single-minded determination.
We see infrastructure investment as a critical enabler of growth and job creation, and are therefore consolidating government infrastructure spending into a single Infrastructure Fund.
We intend to use that Fund to leverage investments from development finance institutions, multilateral development banks, asset managers and commercial banks.
A dedicated team will oversee the implementation of an extensive infrastructure programme covering areas like water, transport, energy, telecommunications and social infrastructure.
Despite the challenges of the present, our economy has several fundamental strengths that makes it a suitable destination for investment.
South Africa has established a diversified manufacturing base that has shown its resilience and potential to compete in the global economy.
Yesterday I had occasion to open the R1 billion Gibela passenger train manufacturing factory in this province.
The investment is a collaboration between Alstom from France and a local consortium made up of black businesses and the community.
The factory employs 800 workers, of which half are women.
We applaud this investment as it confirms South Africa’s manufacturing capability.
Multinationals with a presence in South Africa cite numerous advantages, from excellent financial systems to world-class infrastructure.
South Africa is a regional manufacturing and services hub on the African continent, and, for many companies, serves as a base to export products globally.
We have done much work in recent years to improve investment incentives, establishing, for example, several special economic zones across the country, each having unique offerings for investors.
These include ready infrastructure for business development, reduced costs for key inputs such as land, water and electricity, and reduced corporate tax rates.
We are determined that our economic policy must facilitate inclusive growth.
Given our country’s history of dispossession, and the continued economic exclusion of millions of our people, we have a responsibility to bring all our people into the economic mainstream.
Earlier this month, we convened a Presidential Jobs Summit, which brought together government, business, labour and the community sector to determine a set of practical, achievable interventions that would increase the pace of job creation.
The Jobs Summit agreed on more than 70 focused interventions that will, among other things, boost domestic demand, increase and broaden exports, create pathways for young people into work and develop sectors such as agriculture, manufacturing, mining and the waste economy.
In addition, we are intensifying work to build a robust and effective education and skills development system that equips our youth for the workplace of tomorrow.
It is important to note that seven of South Africa’s universities are in top 500 in the world.
There are nearly a million students in higher education, and there has been a marked increase in science, technology, engineering and mathematics graduates.
We have implemented policies to promote black economic empowerment, to provide black people, women and people with disability with the assets and opportunities they need to participate more meaningfully in economic activity.
Another area that is critical to economic transformation is land reform, which is currently a focus of intense debate across South African society.
There is general agreement among most South Africans that we need to accelerate land reform not only to redress a historical injustice, but also to effectively unlock the economic potential of the country’s land.
We have appointed an Advisory Panel on Land Reform, which comprises people with extensive experience in farming, policy development, academia and law.
The panel will advise government on the implementation of a fair and equitable land reform process that redresses the injustices of the past, increases agricultural output, promotes economic growth and protects food security.
We are committed, as government to pursue a comprehensive approach to land and agrarian reform that ensures transformation, development and stability, while providing certainty to those who own land, to those who need land and to those who are considering investing in the economy.
Our approach reaffirms the constitutional protection of property rights, which, among other things, prohibits the arbitrary deprivation of property.
Together with robust legislation to protect foreign investments, an independent judiciary and the firm rule of law, our Constitution should allay any fears that investors may have of factories being expropriated.
South Africa’s strategic position at the tip of Africa, makes it a key investment location, both for opportunities that lie within its borders and as a gateway to the rest of the region.
Earlier this year, African heads of state agreed to the establishment of an African Continental Free Trade Area that will provide access to a market of more than 1.2 billion people and a combined GDP of more than $3.4 trillion.
This will fundamentally transform the economies of many African countries and will further enhance the attractiveness of South Africa – with its diverse manufacturing base, advanced infrastructure and sophisticated financial sector – as a compelling investment destination.
Ladies and Gentlemen,
As South Africa emerges from a period of great difficulty and uncertainty, as it confronts challenges that are immense – but not insurmountable – we can declare with confidence that South Africa is a land of untold opportunity.
It is a land that has known the pain of division and conflict and deprivation.
But, equally, it has experienced the exhilaration of liberation and knows very well the value of partnership and collaboration.
It is therefore our great pleasure to invite you to become our partners in realising the great possibilities that this country has to offer.
We invite you to invest in our mines and factories, farms and game parks, call centres and technology hubs, refineries and solar farms.
We invite you to invest in our people, to harness their energy and unleash their latent capabilities.
We invite you to become valued partners in realising the vision – and sharing the benefits – of a new era of renewal, an era of discovery, an era of prosperity and progress and promise.
I thank you.