Minister of Trade, Industry and Competition Budget Speech, responses by FF+ & IFP

Budget Vote 2023, Ebrahim Patel, Minister of Trade, Industry and Competition, National Assembly.

House Chairperson, Honourable members, fellow South Africans, I stand before the House at a time of great uncertainty and crises – for the world and especially for the developing economies, such as South Africa.

Context always matters. And this context matters greatly to how we govern and how we think about our economy and about our place in the world.

As the President of the World Bank described it

Rather than gaining ground, the poor are being left behind in a global tragedy of inequality. This drastic narrowing of economic and social progress is creating a time of upheaval in economics, politics, and geopolitical relationships.

Honourable members, we have to contend with very heavy headwinds. And despite the challenges, South Africa is making strides in its recovery from the impact of COVID19: GDP has recovered from the heavy blow to economic output that the pandemic brought; and UCT research shows that 95% of jobs in the formal sector have now been recovered.

This is good news. But the impact of the war in Ukraine and the energy shortages have had numerous negative consequences for trade, for the cost of living and for the investment environment.

And the impact of climate change is being felt more and more by people around the world, both in developed and developing countries.

This ‘poly-crisis’ – as some commentators describe it – requires a steady hand on the tiller, agility, and calm but determined resolve.

We have to put our heads down and find a way to battle through the storm.

In the past few years, our central mission at the Department of Trade, Industry and Competition has been to build on our country’s innate resilience, so as to nurture a more resilient economy – one that both grows and transforms.

What that means is that we need to grow our economy but to do so in a way that benefits the many and not just the few.

In the past, when the economy has grown, it has tended to favour those with existing wealth and privilege. That is unsustainable; the inequality gap gets wider.

We have to close it.  We have to create economic opportunities for those who have not benefited in the past. They must not be left behind.

In this year’s budget speech, Chairperson, I want to tell the House that despite extraordinary headwinds and challenges, we have made considerable progress with pursuing the goals of growth and transformation, and have laid substantial foundations for economic recovery based on increased investment, industrialisation, localisation and trade.

This represents, Honourable Members, a quiet revolution in the way that we, as government, contribute to and influence the market economy on behalf of the interests of all who live in South Africa.

This is not a technical exercise. The economy has a very human face. When the economy struggles, people suffer. When it grows and transforms, then more people can thrive.

Over the past 12 months, I have told Parliament the stories of South African workers, of entrepreneurs, of industrialists - young people, women, and black and white compatriots whose stories illustrate the impact of our new way of doing things.

These stories set out more than 150 case studies of real, tangible impact; stories of people like:

• Nokwazi Mbele a young vibrant program manager at a factory in Kwadukuza that makes wire harnesses for cars, supported by the auto masterplan
• Sanele Luthuli, a production analyst producing pulp that will go on to be used for making viscose and pharmaceuticals whose factory used a dtic incentive
• Mike Nkuna and Rashid Gutta, who both run their own furniture manufacturing businesses and are examples of black industrialists now covered by a masterplan.
• Neil De Preez of Mellovans and a team of innovators who design and produced a 3-wheel electric vehicle being sold on our roads and exported to other countries, supported by the IDC
• nuclear engineer Dr Ramatsemela Masango who manufactures electrical inverters and who is also supported by the IDC
• Disabled workers Kyle Turner and Thato Mbhele who works at a factory that makes plugs, which we supported to get offtake commitments from two large retailers
• Trainees Nwabisa Bavuma and Garrison Cotzee who work at a company that makes underwater LED lights and cameras that are used for the undersea cables that connect SA with the rest of the world; and
• Janette Hilton-Gericke, the owner and Rozanne Heyns, a sewing machinist who work together in a dtic-support factory, to make the jerseys for Bafana Bafana, the SA netball team; and I want to add, the Stormers supporters for the rugby-match on Saturday against the Irish Munsters at the Cape Town Stadium.

Honourable members, later today, Deputy Minister Gina will today speak to the practical reforms in how the dtic works to enable government to transform people’s lives,  because of people like those I have mentioned that we do what we do. That’s our purpose.

Tomorrow at the NCOP, Deputy Minister Majola will outline the partnerships with provinces and local government and with partner countries on the African continent. Showing how the dtic is seeking to mobilise support within the country and across the African continent for a vision of growth and jobs.

I will set out the progress we have made over recent years and especially the past year, the obstacles that have held back progress and which we need to address, and our plans for the coming year.

We are strengthening the foundations of growth and transformation through investment, industrial development and trade.

In 2019, we announced the reimagined industrial strategy.

In 2020 we used it to focus on Covid-19 industrial products, manufacturing billions of rands of hand-sanitisers, ventilators, vaccines, masks, anaesthetics, and other products for our market and for exports.

In 2021 we published policies on trade, competition and localisation and made significant progress with the masterplans and with sector social pacts.

In 2022 and the first part of 2023, we have focused on:

• Investment
• Localisation
• Trade
• Job creation; and
• the Just Energy Transition and its potential to catalyse what we regard as a whole economy transformation.

First, Chairperson: Investment which is the lifeblood of growth.

We have reported to Parliament a number of investment projects that had a significant positive effect in past year. They include

• The opening of the Hesto Harnesses factory with 4 000 jobs;
• The launch of the new Isuzu D-Max bakkie produced in the Eastern Cape;
• The opening of the new Sappi Saiccor facility with R5,5 billion in expected output and exports;  
• The connection of the new Google undersea cable linking South Africa,  West Africa and Europe, to enable business and personal communication, search functions, financial transactions, and entertainment.

Through successes such as this, South Africa has exceeded its previous five year target for investment, with R1,5 trillion in new investments announced over the past five years.

But if we are going to grow and transform, we need much more investment.

Hence, we are setting a new annual stretch target of R400 billion in new investment pledges to be focused on by the dtic-group for this financial year, some of which has already been secured.  This is in support of the five-year plan, which the President announced, to raise R2 trillion. The 1st Investment Conference to report against the new target will be convened by March 2024.

While South Africa welcomes investment, we are determined to act against misuse of our financial markets to hide the proceeds of corruption and crime. Today I published a set of regulations that require companies to determine the real identity of shareholders who hold more than 5% of a company’s shares. This is also a step in addressing the concerns that has resulted in South Africa being grey-listed by the Financial Action Task Force.

Second, Chairperson: Localisation - increasing local production and innovation  is key to expanding the productive economy.

Both investments and localisation require industrial funding and other support. Last year, the dtic-group enabled R30 billion in various incentives and industrial funding to be made available to firms based in South Africa.

We are making progress with efforts to beneficiate our raw materials: a large new steel mill is under construction in Germiston that will use South African iron ore to produce flat-steel products and bring competition to the upstream market, employing about 300 new workers from townships like Kathelehong.

Ten new factories are in full production in the new Tshwane SEZ employing over 2500 workers; and in March this year, we signed an MoU with the world’s 4th biggest car-maker Stellantis, to explore possible local assembly of their vehicles.

A number of successes were also achieved last year in products such as pharmaceuticals, glassware, food products, clothing, car components and many others. A new cooking-oil refinery will open in Richards Bay later this year.

Building on this, we are setting a target of R40 billion in additional local output and commitments this year.

The foundation for achieving this is the public-private partnerships through which businesses are committing large sums of money to boost local procurement. The companies who have made these commitments include Coca-Cola, Air Liquide, Shoprite-Checkers, Pepsico, Consol Glass, Heineken, Implats, Mercedes Benz, VW, BMW, Ford, Nissan, Toyota and Isuzu.

Each and all of them deserve recognition and respect for showing such confidence in South Africa.

We have built up a significant localisation chest, made up of R4bn in localisation and supplier development funds for our industrial sectors like green energy, equipment, food and medical devices; and R19 bn in commitments to procurement in sectors such as auto components and mining supplies.

These will all be actively used to help achieve the new goal for this year and beyond.

These gains should not be under-estimated. As I say, such investment is essential if our economy is to grow and transform.

The fact that we have attracted such investments, and built up this multi-billion rand localisation resource-chest, is testimony to the fact that our investment appeal and economic potential remains clear and real, despite the challenges and the tough headwinds.

Contrary to the doom and gloom merchants who seem to revel in their despondency and despair, there are sound grounds for hope that are our economy can revive and prosper.

Third, Chairperson: on the trade front there are further reasons to be optimistic.

Last year, South Africa crossed the R2 trillion export mark for the first time, selling agriculture and manufactured products and minerals that creates jobs. SA has access to a number of markets on preferential terms. Despite the challenging global environment, we are setting a stretch target for this year of achieving R800 billion in global manufacturing exports, and R8 billion in global business services exports.

Trade with the rest of Africa has great potential to expand the economy. Our target is to export at least R330 billion in manufactured goods to other African countries as the minimum goal and we hope to achieve more.

In this past year:

• SA hosted the first AfCFTA Business Forum in Cape Town;
• Two trade-related protocols were completed;
• Eighty-eight percent of tariff lines have agreed rules of origin; and
• SACU finalised an offer for SA and 4 neighbours of products where we will open our markets under the new AfCFTA preferences.

And, in the course of this financial year, we plan to start trading under the AfCFTA, building on the foundations laid in the past year.  This is the next vital step in the project that will occupy a generation of compatriots to fully implement.

These are important developments because they can boost our efforts to industrialise and beneficiate our minerals, create jobs for young people and diversify our export markets in a turbulent and polarising world. Our prosperity, Madame Speaker, is inextricably linked to that of this Continent.

State Visits are now used to address economic opportunities more actively.  Since last year’s Budget Vote, 12 Business Forums with heads of state and investors were held, covering relations with countries to which we export about R300 billion in goods, sustaining almost 60 000 jobs. More than 1 000 delegates from firms participated in these forums; and this year, a further 10 new Business Forums will be held, with greater focus on follow-up opportunities for firms.

We need more market access for our products and will engage trading partners to open up markets on citrus-fruit, horses and game meat and seek to expand exports to the European Union and the UK.

In August, we will host the BRICS – Business Forum to explore value-added exports and higher levels of investment.

Given the importance of our relationship with the United States, we will step up our engagement with senior US government and business representatives, to retain preferential access to trade under AGOA.

This is an extraordinarily important opportunity, to boost trade and jobs in spite of the challenges in the environment.

South Africa is well-positioned to benefit from these different trading relationships. All of them are important to us, and each of them brings different kinds of value to our economy and our people. Hence, we must ensure that they are all valued and respected, and nurtured appropriately.

In addition, in the past year we have adjusted tariffs to address the concerns of a number of sectors, in product lines such as fridges, rubberized textile fabrics, chemicals and many others.

At times the evidence leads us to decline a tariff increase application, as we did for frozen foods; and when it is needed, we increase the level of protection, as we did in the case of cement, where dumping threatened large numbers of local jobs and firms.

Critics sometimes claim that we intervene too much in the economy. Well, Madam Speaker, if this is what ‘intervention’ means, then I am happy to plead guilty. We intervene to preserve fair trading relationships, to save businesses and protect livelihoods.

Fourth, Chairperson: jobs – which is where the need to grow and transform matters most.

While our efforts have focused on protecting existing jobs, given the size of the unemployment challenge, our industrial policy also seeks to identify new sectors with potential to grow, including:

• In the Medical value-chain, with medical devices, vaccines, cannabis for medical treatment and other products;
• In the Green value-chain: with solar and wind energy components, battery manufacturing and electric vehicles;  
• In the Digital value-chain: with artificial intelligence applications, 3-D printing, higher-end call centres and in attracting digital migrants; and
• In the Food value-chain, covering fruit, meat, nuts, oils and processed products.

For this year, the dtic-group will have a target of mobilising R35 billion in incentives, supplier-development and industrial funding to back firms that seek to modernise, grow and expand their businesses. This is the foundation of sustainable job creation.

We will seek to cover one million current workers with various dtic-measures, ranging from trade support, to masterplans, industrial incentives or competition settlements. And we have set a target of 100 000 new jobs, through the social employment fund and in manufacturing and productive services.

To improve the ease of doing business, we are finalising amendments to the Companies Act and changes to the ITAC processes; making it easier for companies to comply with legislation or access the ITAC services so that we unlock more investment and growth.

We spend a lot of time and energy listening to business representatives across our economy and we have heeded criticism that in some cases there is too much regulation or the wrong type of regulation. 

Our job is to balance the needs of particular businesses and sectors, with the wider public interest, and to strike the right balance, so that the rules of the game serve both the need to grow the economy and to transform it.

Fifth, Chairperson: energy is the foundation of modern industrialisation and sustainable economic development

Energy shortages are extracting a high price in the short term. We recognise the hardship to businesses and to livelihoods. We have to put the electricity crisis behind us as quickly as possible.

But if taken on with focus and vigour, the energy sector provides historic opportunities for a green transition and for an injection of capital and innovation in the economy.

This is what we call a ‘whole economy’ approach.

The Just Energy Transition focuses on three main areas: electricity, green hydrogen and electric vehicles. These represent three major areas of our economy – they are three big levers.

But the potential for a whole economy transformation goes far beyond them. If we get the just transition right, we will create new industrial value chains across our economy, benefiting people in parts of the country that have hitherto not had access to such economic development.
This is the grand prize. We must align our strategy and our plans; we must remain loyal to the underlying principle of a ‘just’ transition, we must rally many different sources of finance, local and international, public and private; and, we must safeguard the investments with sound governance, as well as robust and credible transparency mechanisms. 

To address the challenge, we are supporting the national action plan and also bringing DTIC capacity, skills and networks to support this.

Today, I published two block exemptions for energy users and energy suppliers, to enable collaboration to address energy shortages and share facilities, to coordinate maintenance and to work together to increase supply of energy. I also published new energy standards that will require energy-efficient light-bulbs to be used in homes and offices.

By the end May, we will launch both an energy resilience fund of R1.3 billion in support available to enterprises including SMMEs to mitigate the impact of load-shedding; and the new Energy One-stop Shop in the dtic to assist with speeding up regulatory processes to accelerate private-sector investment in electricity generation.

To support the transition to electric vehicle manufacturing, considerable technical work is being done and engagements held with National Treasury to expeditiously finalise an affordable and effective strategy; and we are confident we are close to completing that road-map.

This will be complemented by a new project we are launching next month, to identify opportunities for battery production in SA. In support of this, we will be working with partners – Finland, the US, China, Belgium, Germany, Zimbabwe, Zambia and the DRC - on battery production value-chains

We are playing our part in achieving the ambitious vision of the just energy transition, and we will continue to serve its reform agenda so that it can realise its full – ‘whole economy’ – transformational potential.

Chairperson, Honourable Members,this year’s APP sets out the key elements of the South African reimagined industrial policy that seeks to:

• Deepen the domestic market by growing employment, increasing productivity and undertaking other measures to improve equity and income distribution; 
• Widen the market for South African goods and services through a stronger focus on exports to the region and other rapidly growing economies.
• With Supply-side measures seek to improve competitiveness, build resilience and strengthen the agility and innovation at firm-level.

The APP is a significant step-change that has been introduced, with an industrial policy framework, clear targets on jobs, on investment, on exports, on localisation and on exports. To galvanise the Department on these important drivers of growth, I have announced stretch targets today, higher than that set out in the APP. The masterplans, already yielding good results in areas such as autos, clothing and poultry, will be expanded with stepped-up implementation of the furniture masterplan.

And to complement these, we will focus on greater economic inclusion.

We will achieve this with the following five focused steps:

• Addressing inequality and extend worker ownership
• Confronting spatial inequity
• Promoting Black Industrialists
• Advancing to a more open and competitive economy, and
• Protecting consumers.

1. We will address inequality through by promoting greater worker shareholding in the firms they work at and finalising the Companies Amendment Bill in Cabinet within 3 months, which deals with disclosure of wage differentials.

Mandy Mtilwa, Kim Williams and Mbatha Maphela are workers at Pepsico who are now shareholders in the company, with thousands of other workers in the same company, following the agreement reached with the dtic in merger proceedings.

This past year alone, more than 100 000 workers became shareholders in the companies they work for, receiving dividends from the company; and with shareholding worth more than R20 billion at no cost to them.

For this year we set a target of 20 000 more workers to be covered by worker ownership schemes, together with:

• Targeting R7,5 billion in incentive support for programmes in labour-absorbing sectors; and
• Hosting a Worker Ownership Conference and promoting worker directors on the Boards of companies.

        2. We will address spatial inequity through approving R15bn in industrial incentives outside the 5 main metros and:

• publishing our intention to establish an SEZ in Namaqua in the N Cape, which will open beneficiation opportunities in an area with large deposits of zinc and which is in the proximity of the new green hydrogen hub of Boegoebaai; and
• undertaking outreach visits to each district and metro in SA, taking the dtic and partner departments’ facilities to communities, including funding facilities, registering a company, tax registration and small business support.
• Every senior dtic-official will be allocated a district to champion, so that the work of the Department more strongly reflects the needs of communities and businesses.  

        3. We will promote black industrialists through enabling R40 billion in annual industrial output and 23 000 total jobs to be sustained by black industrialists.

We will also

• Host the next Black Industrialist Conference by February 2024; and
• target R8 billion in support-programmes for SMMEs, and firms owned by black South Africans, women and youth and
• mobilise support through new agreements with the private sector that secures funding for economic inclusion.

I am happy to announce that an hour ago, the CEO of Citi Bank confirmed that they will make a grant of R200 million available for black industrialists in the Vaal area as part of their equity equivalent investment programme.

We are repositioning the BEE strategy to focus on enabling higher contribution by black industrialists to growth and job creation: black industrialist firms are already involved in space technology, food, engineering, car components, poultry and sugar production, clothing, skincare, pharmaceuticals and other sectors.

           4. We will promote a more open economy, by addressing the challenges of  competition, high concentration levels and the effects of market dominance and we will do so by:

• Releasing the results of market inquiry on online services shortly;
• Conducting new market inquiries into fresh food produce, media and the steel industry; and
• Gazetting of block exemptions for small businesses from certain terms of the Competition Act from 1 August 2023.

Today, we published new Competition Tribunal Rules for Market inquiries

          5. We will promote and protect consumers and address excessive pricing through actions by the competition, trade and consumer regulators, combining their resources where it is necessary to do so. Conditions will be put to trade measures to address pricing challenges. Competition and consumer regulators will pursue cases against firms who charge excessive prices. 

I have spoken of the actions in the economy, of cars and food and pharmaceuticals. But the dtic work is also about building the South African narrative, of telling our wider story, contemporary and historical. One film-series supported by the dtic, Shaka Ilembe, is due to be released shortly, it sets out the story of an extraordinary man and an early nation-builder.

That spirit is what should inspire us now – with heads down, we can settle through the storm and emerge stronger, yet more resilient, and with a sustainable and sturdy economy.

In conclusion, Chairperson, despite all the obstacles in our path, and the global headwinds that we face, we are making solid, steady progress.

We are building a stable platform for our national revival in which the economy will both grow and transform.

Given the tough context, I am especially proud of the efforts of our officials in partnership with businesses and workers, and the deputy ministers and I commend this budget vote to the House.

I thank you.

 

__________________________________________________________________________________________________________________________

 

 

DEPUTY MINISTER

TRADE, INDUSTRY AND COMPETITION

REPUBLIC OF SOUTH AFRICA

24 May 2023

House Chairperson.

Portfolio Committee Chairperson.

Honourable Members and,

Fellow South Africans.

House Chairperson, we are presenting this budget vote during the hardest of times for our country.

As highlighted in Minister Patel’s opening address, the current economic environment has taken a huge strain – and our overall economic outlook is subdued because of factors such as the energy challenges and the European geopolitical conflict.

All of these factors account significantly into the backfoot with which we find ourselves, especially with regards to the low growth and the high unemployment figures. 

Honourable members, Despite all these headwinds that are foundational to our current shocks, we are not in despair. We are confident that we will pass this phase and return to a higher growth path and accelerated rate of re-industrialization, the result of which would be the rising employment rate, upliftment of our people and the improvement of the social standards for our society.

I know that as we are making a call, not to despair, majority of our people have easily lost hope. Jodi Ann Bickley, the British writer, once advised us, that “When you are in the middle of a storm cloud, it’s hard to think outside of it, but the only way out of the storm is to ride through it and things will be a lot clearer on the other side”  We have chosen to ride through and address these challenges, and things are going to be clearer on the other side soon.

The Economic Reconstruction and Recovery Plan (ERRP) is instructive to us as this thedtic group, working with the private sector that we rebuild the economy, above the levels we had pre-COVID and reverse the unemployment rate.

One of the biggest challenge we are confronting is the import/export balance impacting on our economy. South Africa’s import to GDP ratio is too high for an economy which needs to speed up its growth and a country desperately in need for job creation.

The World Bank figures cites that in 2021 our imports were 25% to GDP which is inconsistent with other peer countries. Some of these products imported can justifiably be produced locally.

To illustrate this point, on the 5th of April 2023, I opened a black owned footwear factory in Stanger, Light House Footwear Factory, the Department supported them through CTFL Growth Programme to buy machineries for an amount of R6 million.

 In that launch, I was informed that South Africa consumes almost 300 million pairs of shoes, annually. The 75% of those are imported and only 25% are locally made. Just imagine the impact that we can make in job creation and growth if we can be intentional about driving import substitution, and build as many small and middle sized shoe factories across various districts. This factory, I am referring to, already has an offtake with Jam stores supplying 118 stores nationally.

Minister Patel has spoken extensively about boosting local production and exports.

In our vision as the dtic, we do not think only about large-sized manufacturing and factories, but also the small emerging ones.

I have a proud story of the young Jacobs couple in Ceres, western Cape, which I visited in 2021 as part of inspecting the post-Covid economic recovery in various factories. The Jacobs manufactures jam and were under strain after hard lockdown; we coordinated government assistance. We sent them to our trade mission in Dubai, in Durban for Inter-African Trade Fair. The department of Agriculture and Land Reform gave them a grant of R3.3 million. In Durban Trade fair they have secured an offtake to Zambia, in Dubai they secured an offtake to UAE and today they supply Shoprite in Western Cape and are negotiating with Spar. The eNCA featured their story last Sunday (21 May 2023).

New Departmental Approach.

As the department, we have been hard at work in putting a mirror against ourselves, to interrogate our inner workings, capacity and approaches in achieving all the systemic trade and industrial advances.

We have accepted that a new approach in how we implement, can give us much better results; and this new approach is underpinned by a clear theory of change.

Our point of departure is now an industrial policy and its supportive strategy.

At the centre of the re-imagined industrial policy are three Apex Outcomes agreed to in 2022/2023 financial year for thedtic group and its entities to contribute on. These three apex outcomes are:

• Industrialization to promote jobs and rising incomes.
• Transformation to build an inclusive economy, and
• A capable state to ensure improved impact of public policies.

These three outcomes have six underlying pillars:

• Combine growth with transformation.
• Boost local production.
• Grow exports and expand African trade.
• Increase levels of investment
• Establish a more reliable and low-cost energy system while greening the economy overall, and
• Grow employment.

These six pillars shape the core objectives of the 2023/2024 APP.

The dtic group in previous APPs targeted inputs and activities that would have a beneficial outcome and impact on jobs, industrial outputs, exports, and investment. This was done because many external factors driving the outcomes were outside the control of the Department.

These factors include global economic and geo-political developments, shock events including climate change, and domestic factors such as energy, transport and logistics and crime, which all impacts on growth. The output was often in the form of reports on successes.

This year, however, a significant step-change has been introduced. The new approach focuses on meaningful outputs, referred as targets.

Honourable members, ten core targets have been set that represent the real impact we aim to achieve in the economy, and measure crucial indicators like local output, job creation, and performance of black industrialists.

To demonstrate this with regards to the black industrialist, we have moved away from a broad-based black empowerment, which was more about securing shares from existing white companies, our policy levers have shifted towards expanding the number of firms and companies which are started and owned by black south Africans.

Of course there are still challenges in the policy and funding regime for black industrialists but we are determined to address those areas.  The growth and transformation (pillar) can also be seen in our determination in the promotion of worker-ownership regime in the companies, with board representations.

While our targets are important, these core targets are the apex priorities of the Department, and all programmes of the dtic are expected to contribute to the achievement of these essential outputs. In total 45 outputs targets have been set and shared with parliament last month.

Chairperson, in this approach, Minister Patel has announced the stretch targets today, higher than that set out in the APP. The purpose is to galvanize the Department on these important drivers of growth.

We are introducing clear targets with weekly reports by staff managers. We want a problem-solving approach to work, instead of a bureaucratic mindset.

We are committed to integration of work between the dtic entities.

We have resolved to do more community outreach programmes, going to our people showcasing what the Department is doing, but also bring closer the agencies to the people where they are, for assistance.

We have started to target Districts in the form of izimbizo with all our agencies needed by the public. We have resolved that all our senior officials will be the ambassadors/champions for districts to ensure that we work with them to materially change the people’s lives.

In the same vein, we are strengthening partnership with business and labour and social compacting.

Internally, we have commenced with the project on the “Fit for Purpose” structure. The roles and responsibilities identified through “Fit for Purpose” structure will assist in addressing the working in silos, streamline business processes, reprioritize resources and reduce administrative burden.

All of the above measures are geared towards improving internal Departmental capacity to deliver in driving re-imagined industrialization policy, in the quickest possible way, with good attitude and without red tapes.

Honourable members, I want to remind you what the English Cleric and writer, Charles Caleb Colton, once said: “Times of great calamity and confusion have been productive for the greatest minds. The purest ore is produced from the hottest furnace. The brightest thunder-bolt is elicited from the darkest storm”

I want to take this opportunity to thank Minister Patel for his sterling leadership and collegiality. I extend my gratitude to Deputy Minister Majola for the cooperation and support. I want to also thank the Portfolio Committee for their oversight role towards us and the Department as a whole.

To the Acting DG Malebo-Thompson and the officials of the Department, we appreciate your work. May this financial year be a success for all of us!

Thank you.

 

__________________________________________________________________________________________________________________________

 

 

Address by Fikile Majola, Deputy Minister of Trade, Industry and Competition, on the occasion of the Budget Vote Debate, National Council of Provinces (NCOP)

25/05/2023

Honourable House Chairperson

Minister Patel and Deputy Minister Gina

Ministers and Deputy Ministers

MECs

Honourable Members

Fellow South Africans

Let me begin by wishing all Africans in the continent and in the diaspora a happy Africa Day.

This year’s celebrations marks the 60th anniversary which is being celebrated under the slogan: “Our Africa, Our Future”.

As we observe Africa Day, we must continue to show our ongoing commitment towards the all-inclusive integration of the African continent.

We are emboldened by the words of Haile Selassie, the former Emperor of Ethiopia, in the first meeting of the Organisation of African Unity (OAU) when he said;

“Today, we look to the future calmly, confidently and courageously. We look to the vision of an Africa not merely free but united”.

Today we are pursuing that dream of our forebears to achieve a free and united Africa.

Our focus on the African Continental Free Trade Area (AfCFTA) has been primarily on negotiating the legal frameworks for preferential trade to commence.

While we continue to prioritise the conclusion of outstanding negotiation issues, we are now shifting our focus and efforts towards facilitating and maximising the opportunities presented by the AfCFTA.

I would like to inform you that after substantial delays in achieving a common position, in February this year, the Southern African Customs Union (SACU) achieved a common offer covering 90% of its tariff book.

In the coming week, Minister Patel and I will travel to Nairobi, Kenya to attend the Council of Ministers which is expected to consider and approve the SACU offer.

In collaboration with provincial governments, the dtic is undertaking a targeted awareness strategy in all provinces to identify opportunities for businesses.

We want to identify and match key export priorities (products and sectors) of each province with the new market access opportunities in countries and regions that have finalised their tariff offers.

The first of these provincial sessions took place in Kwa-Zulu/Natal today and will be followed by Limpopo, Mpumalanga and Western Cape later in June and we hope to complete the process by the end of July 2023.

House Chairperson, last year we made a commitment to revise our spatial strategy in order to build and support a new model of special economic zones.

This was informed by the need to involve all spheres of government as the only way in which we can speedily drive the special economic zones programme.

The success of the new approach as evident in the Tshwane Automotive SEZ has prompted us to further expand the scope to other districts across the country.

As Minister Patel stated yesterday, we are proud to share with you that 10 new factories are in full production in the Tshwane SEZ, employing over 2500 workers.

The new approach recognises the capacity of special economic zones to advance regional economic development in support of the district development model (DDM). 

Yesterday, Minister Patel announced the imminent publishing of our intention to establish a special economic zone in Namaqua, Northern Cape.

This special economic zone will catalyse growth and development in the district and neighbouring economies and will also bring more jobs and further investments to the entire province.

In the Vaal, unemployment and poverty levels remain acute and the district development model presents an opportunity to harmoniously deploy State resources to uplift the quality of life of our people. 

Addressing the Sedibeng Presidential Imbizo held on the 12th of August 2022, President Ramaphosa said:

“By far unemployment is the biggest challenge. The Gauteng government has ambitious plans to revitalise Sedibeng by developing agriculture, by developing logistics, tourism and industries as well. These plans are pivoted around the Vaal SEZ”

Working together with the Gauteng provincial government, the district and local municipalities, we are on a path of regeneration and rejuvenation in this region.

The initial phase of the implementation of the proposed Vaal SEZ is anchored by two investment projects that are valued at R5,6 billion. 

Mitochondria Energy will establish a Solid Oxide Fuel Cell manufacturing facility in the Emfuleni local municipality for a total project cost of R4,3 billion. 

Bluedrop Energy will establish a facility in the Lesedi local municipality for the manufacturing and distribution of composite LPG cylinders for a total investment of R1,1 billion. 

These two projects, which are scheduled to break ground within the 2023/24 financial year, will create a combined 2 300 jobs during construction and 1 000 direct jobs at the operational phase. 

Honourable members, Minister Patel is leading a process that will unlock an investment that will catalyse the development of the Vaal Aerotropolis and the Vaal River City projects. 

These two megaprojects, along with the proposed Vaal SEZ, are the cornerstone of the interventions that will revitalise the Vaal economy and stimulate massive direct investment flows into the region. 

I am also proud to announce that our department in partnership with the Limpopo provincial government, district and local municipalities has advanced plans to create the Fetakgomo Industrial Park in Sekhukhune as a base for the creation of the proposed Fetakgomo-Tubatse SEZ.

The proposed Fetakgomo-Tubatse SEZ has developed a positive investment pipeline of 35 domestic and global companies to the tune of just over R40 billion.

Eight (8) of these investors have shown keen commitment and confirmed to be ready to locate in the next 6 to 12 months and projected to invest just over R5,5 billion. 

This proposed SEZ has also presented an opportunity for government to collaborate with private investors to establish a new smart city in the Sekhukhune District.

These investments will benefit communities of Fetakgomo-Tubatse, Sekhukhune District and the entire Limpopo Province.

Honourable Chairperson,

As we continue with the task of connecting with our people, two weeks ago I joined other government leaders as we accompanied the Deputy President to Jagersfontein, a community ravaged by the tailings dam disaster.

Working with Deputy Minister Tau, the Free State provincial government and other departments we are embarking on a programme to help bring normality to the community of Jagersfontein within the next 3 months.

We will canvass resources to enable adequate and efficient service delivery to the people of this town, drive infrastructure investment and advance local economic development.

The project to refurbish the rail corridor linking the Tshwane automotive hub with the Port of Port Elizabeth is gathering momentum.  

The project is driven by National Government working together with Gauteng and Eastern Cape governments and will help attract more investors and create more opportunities and jobs.

Ladies and gentlemen, I would like to take this moment to share with you some of the projects funded by the department and its entities.

ALPLA, a world leader in the development and production of innovative plastic packaging solutions has an investment of R1 billion in the City of Cape Town.

The new plant will produce various plastic products including bottle closures and special packaging for the food and pharmaceutical industries.

Creslow Energy Solutions is a 100% black-owned business founded in December 2021, based in Emalahleni, Mpumalanga, which operates in the Energy Storage industry.

The company manufactures solar batteries and other storage solutions for commercial and residential use and their scalable business model will allow expansion into the African continent.

ArtSolar is based in Durban and is capable of designing and implementing renewable energy solutions for medium to large size projects. Its manufacturing facility opened in November 2022.

This, honourable members is very important for our objective to establish South Africa as a critical role player in the supply of solar products.

As I conclude, I would like to thank Minister Patel and Deputy Minister Gina for their support, the dtic family led by the ADG, Ms Malebo Mabitje-Thompson and lastly the leadership of our entities. 

Once again, Happy Africa Day

Our Africa, Our Future!

Thank you