COMMENT BY THE CHIEF EXECUTIVE OFFICER OF THE DURBAN CHAMBER OF COMMERCE AND INDUSTRY, MS PALESA PHILI, ON THE PRESIDENT’S
STATE OF THE NATION ADDRESS ON 20 JUNE 2019
The Durban Chamber of Commerce and Industry welcomes the opportunity to comment on His Excellency, Matamela Cyril Ramaphosa, President of the Republic of South Africa’s 2019 State of the Nation Address. The Durban Chamber wholeheartedly supports the seven key priorities listed by the President as well as the five tenets that the President highlighted as driving those priorities.
However, the Durban Chamber urges the government to also clearly outline in the near future how South Africa will achieve these priorities in a manner that is specific, measurable, achievable, relevant and timely. This will create policy certainty, allow for organised business as a whole, to understand our role in achieving the inclusive and sustainable economic growth and developmental goals, assist business to plan accordingly, and allow for more significant public-private partnership and cooperation.
President Ramaphosa highlighted that the country’s current economic outlook is “extremely weak” with the country’s low growth evidenced by overall gross domestic product (GDP) contracted by 3.2% in the first three months of 2019 and unemployment remaining near record highs. The expectation from business is that there should be clear policy direction from the government regarding the sustainable and inclusive economic growth and development goals of our country. The Durban Chamber believes that the President is correct in placing focus on expanding critical industry sectors such as agriculture, tourism and technology as they represent the greatest opportunity for our country to reverse our economic fortunes and decrease our socio-economic challenges. The Durban Chamber is looking forward to the next planned Investment Summit, as well as other national, provincial and local initiatives, that will encourage investment and stimulate economic activity. The Durban Chamber remains committed to lobbying government on important strategies that promote economic growth and development as well as creating a conducive environment that encourages entrepreneurship and small businesses as it is these that will catalyse economic growth and job creation. Additionally, as a representative of organised business, the Durban Chamber plans to lobby more robustly for better utilisation and support for special economic zones such as Dube TradePort.
What resonates with the Durban Chamber is the mobilisation of efforts towards expanding the agricultural sector, which remains a crucial sector for Durban and KwaZulu-Natal as a whole. As the Durban Chamber, we believe this sector is critical in terms of its potential socio-economic spin-offs as greater investment and development in this sector can lead to job creation and wealth creation across the value chain of the sector and the economy as a whole as well as creating a more inclusive economy. The Durban Chamber has also created a dedicated forum to address the needs, issues and opportunities that may exist within this sector in a practical manner.
The tourism and hospitality sectors play a critical role in eThekwini’s and KwaZulu-Natal’s economy and are responsible for employing many South Africans across its value chain. The Durban Chamber is excited about government’s commitment to attracting 21 million international tourists by 2030 but would like to understand how this will be achieved so that organised business can play a key role in achieving this objective.
Small, Medium and Micro-sized Enterprises (SMMEs)
The Durban Chamber applauds the President on prioritising SMMEs and remains committed to promoting the success of SMMEs. SMMEs accounted for 56% of economy-wide employment and represents our country’s greatest opportunity for addressing socio-economic challenges such as unemployment and inclusiveness. The Durban Chamber believes that it is imperative that we lobby for policies and strategies that enable the growth of the small business sector and encourage more significant support for SMMEs from both the government and large corporates.
Investment in infrastructure projects through public-private partnerships will unlock economic benefits for the entire country. This is one such opportunity that the Durban Chamber believes organised business can play a crucial role in partnering with government to stimulate inclusive and sustainable economic growth. The Durban Chamber welcomes these projects and believes that our members and business can contribute meaningfully by being actual drivers in realising these objectives. As organised business we will advocate more strongly for better and more transparent plans for infrastructure development (improve logistics and service delivery) and maintenance (given the growing number of natural disasters resulting from climate change).
The Durban Chamber acknowledges the President’s remarks on Eskom and agrees that Eskom is critical state infrastructure which cannot be allowed to fail or left to operate in disarray and fall into mismanagement. However, The Durban Chamber is concerned that besides the allocation of the R230 billion, the President has not outlined tangible initiatives to reform Eskom. Early this year, the President mentioned the unbundling of Eskom, but in this address, there was no mention of how this will be executed. This introduces uncertainty, which can affect the economy. The Durban Chamber urges government to clearly outline how Eskom will be unbundled and what steps are being taken to ensure that it operates within international standards of best practice and demonstrates good corporate governance. This will create policy certainty which organised business can plan around. Failure to communicate this will negatively impact the Durban Chamber’s members and the business community at large, in particular, those in energy-dependent sectors such as manufacturing, construction and tourism as well as small businesses and entrepreneurs. The same is true for other National Key points and State-Owned Enterprises such as Durban Port, DSW, Water and Sanitation.
The Durban Chamber is pleased by the President’s announcement about the Special Tribunal, made up of eight judges, which will fast-track civil claims brought to it by the Special Investigating Unit (SIU). President Ramaphosa said the new SIU Special Tribunal would start its work within the next few months to fast-track civil claims arising from SIU investigations, which are currently estimated to be around R14.7 billion. The president said the government would work towards an ethical state, and would not tolerate corruption, patronage, rent-seeking and plundering of public money. To do this, Ramaphosa vowed to strengthen the NPA, SIU, Sars and State Security Agency. The President also said government only wanted corps of skilled and professional public servants of the highest moral standards, dedicated to the public’s interest.
The Durban Chamber is encouraged by this news as the numerous scandals which have exposed high levels of corruption within South Africa and have negatively impacted on our country’s image and profile both internationally and nationally. In the World Corruption Perception Index, South Africa’s rank has declined from 43rd a decade ago to being 73rd on the international stage. This has had a negative impact in terms of foreign investor confidence and has the potential to severely impact the business community’s trust in the Government and their dealings. The Durban Chamber acknowledges the President’s efforts to tackle the issue of corruption, and we note that the Special Tribunal will be actioning the reports and results produced by the current commissions of inquiry.
The Durban Chamber was expecting the President to provide further clarity on the land expropriation and land reform as this will allay fears and uncertainty among local and international investors and potential investors. The Durban Chamber acknowledges that the President advised that over a 5-year period, the government will accelerate the provision of well-located housing and land to poor South Africans but, again, further clarity is required around the specifics of this plan.
Education is a critical topic in South Africa, and the Durban Chamber would like clarity from the government on what steps are being taken to future-proof our society and economy.
Technology and Innovation
The Durban Chamber acknowledges the Presidents emphasis on “data costs”, and as a future-focused organisation, the Durban Chamber believes that government needs to quickly address the spectrum which is crucial if we want to fully embrace the Fourth Industrial Revolution and have sustainable and inclusive economic growth. Opening up the spectrum will reduce data costs and increase speeds as well as accessibility, which will, in turn, reduce business costs and allow for greater access to digital and technology opportunities. Again, a clear outline as to when and how this will implemented and achieved will provide clarity for business on how to prepare and plan for it.
Safety and Security
The Durban Chamber acknowledges that 5 000 students have been registered for basic training in South Africa’s police training colleges and that 7 000 students will be registered per cycle over the next two intakes. However, this does not provide policy clarity on what law enforcement measures and strategies will be employed by the government to reduce crime, particularly as it relates to organised business.
As much as there is uncertainty around the National Health Insurance (NHI) Bill amongst stakeholders, the Durban Chamber is optimistic that the NHI will offer opportunities for the private sector to do business with the government. However, for these opportunities to materialise, the Durban Chamber feels that co-operation between the public and private sectors is non-negotiable, and both parties will have to do more to achieve meaningful discussion. The Durban Chamber would like to request for government to unpack these opportunities in greater detail to business.