Address by KwaZulu-Natal MEC for Economic Development, Tourism & Environmental Affairs, Mr Sihle Zikalala during the Diplomatic Corps & International Stakeholders’ Gala Dinner held in Gauteng on 14th September 2017
Your Excellencies, Ambassadors and High Commissioners present
Honourable Mr Massimo De Luca, Head of Trade and Economics â Delegation of the European Union in South Africa
Chairperson of the Board for Trade & Investment KwaZulu-Natal, Ms Ina Cronje;
Board members of Trade and Investment KwaZulu-Natal
Ms Pumla Ncapayi; HOD KwaZulu-Natal Economic Development Tourism and Environmental Affairs
Chief Executive Officer for Trade & Investment KwaZulu-Natal, Mr Zamo Gwala;
Mr Frikkie Brooks; DDG Strategic Management for KwaZulu-Natal
Esteemed Members of the International Diplomatic Corps
We would like to begin by registering our appreciation as the Provincial Government of KwaZulu-Natal for being part of this significant function which also affords us an opportunity, as the province and country at large, to reflect on the value of forging partnerships with different nations of the world.
Indeed human beings, by their very nature, are gregarious and convivial which confirms that we were created to work together in the process of conquering various challenges that could impede on our efforts to improve our lives.
But more importantly, the modern world requires constant communication and liaison between nations to share ideas on how to achieve socio-economic prosperity beyond national and regional borders. The dwindling natural resources and technological advancements essential for our survival demand that we forge effective foreign relations â where nations that are endowed with specific life-enhancing commodities could share with the rest for the benefit of global citizens. This is where diplomatic relations become indispensable in terms of facilitating partnerships to forge regional and global stability.
In KwaZulu-Natal we have long acknowledged that our contribution to national and regional development hinges on the creation of stability and good relations with the rest of the trading world. It is for this reason that we have constant liaison with diplomatic corps representing different nationalities since we believe that there is a lot we could learn from each other in terms of developmental strategies and indeed cultural relations.
Ladies and gentlemen, perhaps before I delve into my address, let me reiterate that South Africa embraces a multi-party democracy as a foundation for governance following the watershed elections in 1994. The African National Congress as the governing party leads the democratic processes in this country; hence it is leading by example as reflected in its Constitution which advocates for the holding of regular leadership elections within its own structures. We therefore wish to stress that the judgment of the Pietermaritzburg High Court on the outcome of the 2015 provincial leadership elections is nothing but a demonstration that democracy is alive in this country.
The ANC in the province has therefore acknowledged the court decision and we are working closely with the national leadership to deal with this matter which, we believe, should not trigger any anxiety and concerns amongst diplomatic and business communities.
Leadership contestations are always a symbol and measurement of democracy and we want to assure you that this matter shouldnât ferment any alarm for a perceived instability. We are a mature organisation and we have been able to resolve some of the most difficult challenges in our 105 years history.
The very democracy that we today enjoy in this country owes its existence to the ability of the African National Congress of resolving its own internal dynamics and, of course, engaging our political rivals through democratic means. We therefore wish to assure you that the court decision will have no negative impact on the reigning stability and peace in the province and the country as a whole.
In this regard, KwaZulu-Natal, as the second largest province with respect to contribution to the countryâs gross domestic product at 15.6%, will continue to occupy this position and, further hereto, work on its ambitions of becoming the worldâs gateway to the rest of the region.
This we do bolstered by our advanced strategic trade facilities in the form of two world class ports in Durban and Richards Bay respectively and as well as modern road, rail and aviation infrastructure essential for competitiveness.
KwaZulu-Natal is also home to the world renowned Zulu Kingdom and is blessed with a unique fusion of raw natural beauty, modern sophistication, cultural diversity and pulsating energy. The province is blessed with exceptionally beautiful topography including the splendiferous iSimangaliso Wetland Park and the Drakensberg-Ukhahlamba Unesco World Heritage Sites respectively thus making us an ideal location for investment and holiday-making.
However, these competitive advantages, including our proximity to the coastline, could pale into insignificance if we lack diplomatic linkages with regional and global trade partners. This function therefore symbolises our ingrained desire to facilitate and strengthen our liaison with offices of all diplomatic missions situated in this province. It further gives us the chance to showcase many of opportunities created by the Provincial Government of KwaZulu-Natal in collaboration with its social partners in the private sector.
We are part of the African region which, in recent years, has recorded significant economic advancements with some of the fastest growing economies located in this continent. KwaZulu-Natal therefore shares exciting ambitions of becoming the regionâs economic miracle which is instigated by our belief that we could be an active agent in fulfilling the long held view of Africa as the new frontier for economic growth.
According to the International Monetary Fundâs World Economic Outlook, the Sub-Saharan Africa (SSA) region alone is expected to grow by 2.7% and 3.5% in 2017 and 2018 respectively.
Furthermore, other Sub-Saharans African countries are receiving increased levels of Foreign Direct Investment (FDI) inflows due to political stability and have embarked on diversifying its economies by moving away from primary sector subsistence and agriculture.
KwaZulu-Natal is therefore positioning itself for industrial growth â taking the cure from the National Development Plan which had influenced the content of our own socio-economic blue-print, the Provincial Growth & Development Strategy. Our sophisticated financial sector and indeed excellent infrastructure are amongst attractions for potential investors.
While we concede that our trade with the rest of the world is still skewed in favour of imports â at $74.7 billion in 2016 â we are nonetheless delighted that our export sector is steadily rising up the graph as South Africa shipped around $74.1 billion worth of goods during the same period. We are optimistic that despite the current ponderous growth, the country and the province would experience improvements especially in the manufacturing industry which would have a bearing on the levels of employment and poverty.
Ladies and gentlemen, we are mindful that despite our optimism about the future of our province, country and indeed the African continent, the rest of the global community still finds itself seized with lower growth coupled with higher than normal levels of unemployment. A number of uncertainties are also flooding world news and, in some degree, threatening the prospect of emerging markets. But as we would all agree, it is in times like these that solid relationships and partnerships must be forged to strengthen and build resilient economies.
As reflected in the immortal words of American author and academic, Helen Keller, âCharacter cannot be developed in ease and quiet. Only through experience of trial and suffering can the soul be strengthened, ambition inspired, and success achieved.â
Thus, a country and indeed the province, we are seeking to embrace innovations of significance to drive economic growth that would give us that competitive edge. This will of course require our highest level of tenacity and commitment to work our way up to the socio-economic summit. Our provincial government, through its strategic agencies such as Trade & Investment KwaZulu-Natal, is therefore actively participating, facilitating and developing interventions to ensure that we use our competitive advantages to achieve our stated goals of creating a symbiosis between our growth prospects and the rest of the global community.
Some promising signs of this strategic approach are already starting to show as it would be recalled that amid the country experiencing tamed growth including due to the recent technical recession which we have just weathered, KwaZulu-Natal exhibited resilience by side stepping its own technical recession. While the country contracted in the fourth quarter of 2016 by -0.3%; KwaZulu-Natalâs economy expanded by 0.5%.
We attribute this to our diversified industry compared to other regions that rely on single or fewer sectors to attain and maintain growth. The latest figures show that South Africa grew by 2.5% while our province expanded above the national rate at 3.3% for the second quarter of 2017. This should make good reading to investors!
We are indeed cognisant that economic growth depends on investment that often resonates with positive expectations of the countryâs future to build and sustain business confidence. As government, therefore, we have continuously invested time and energy to the development of policies directed at creating amenable conditions industrial prosperity. The fundamentals have been in place since 1994 and we are hopeful that amid the aftermath of the 2008 global recession, investors would acknowledge that South Africa is still the most suitable destination for business.
But it must be stressed that the success in achieving any meaningful development would rely on cost-effective implementation of our transformational legislations and policies. We cannot afford the risk of instability emerging out of the majority of our people feeling secluded from the countryâs economy almost two and a half decades down the line following the achievement of political freedom in 1994. It is for this reason that we are using all sectors of the provinceâs economy as vehicles to fast-track and re-engineer socio-economic change.
While government is expected to lead by example in terms of effecting economic transformation by prioritising historically marginalised population groups, the business community is equally expected to be part of this transformation crusade. In KwaZulu-Natal for instance, together with organised business, labour and civil organisations we formed collective liaison structures to drive growth and transformation.
The KwaZulu-Natal Economic Council and Growth Coalition serve as practical confluences of strategic ideas on how we could position the province as a model for growth and socio-economic equality which is the hallmark for stability and the entrenchment of the democratic dispensation.
Through this multi-stakeholder collaboration we have introduced a programme called Operation Vula which seeks to localise the economy by, initially, exploiting the government buying power to buy mainly from small scale enterprises such as SMMEs and co-operatives which are regarded as entry points to real economy and practical interventions to scale down the levels of poverty and unemployment. This programme would guarantee market for small scale emerging enterprises as stated that would supply products to different government departments.
This however, this is coupled with strategies to industrialise the province using its spatial and geographical competitiveness. Some of the programmes we are implementing as a province include among others, the Regional Industrial Economic Hubs, two Special Economic Zones (SEZs) which include one at Dube Trade Port, around Durbanâs King Shaka International Airport and the another one within Richards Bay Industrial Development Zone.
Moreover, we are stepping up our efforts to take advantage of our strategic location as the gateway to the rest of the region and the world market. In response to the economics of speed to swiftly reach out to the highly competitive global market, we are developing an aviation inspired urban development, the Aerotropolis around the state of the art King Shaka International Airport which is then interlinked with infrastructure upgrades at various regional airports across the province.
The Aerotropolis is expected to drive economy growth in the province through global connectivity, speed and agility.
This programme presents KwaZulu-Natal manufacturers and entrepreneurs with the opportunity to develop products that are geared for the export market. This industrial zone, which is the first greenfield-city purposely built to take advantage of the global supply links, is destined to become a trade centre for KwaZulu-Natal that helps attract aviation-linked businesses of all types, including tourism related enterprises such as hotels and as well property development.
Finally, ladies and gentlemen, we all recognise that we continue to live through challenging economic conditions and our endeavours to create the right conditions for growth, we believe, should appeal to potential investors who would be assured of countless opportunities to grow their businesses while simultaneously giving KwaZulu-Natal a competitive edge in the global market.
Once again, we wish to thank the organisers of this session for giving us the platform to share with the worldâs most influential personalities some of our governmentâs plans directed at developing a formidable and resilient regional economy.
I thank you,
Mr Sihle Zikalala, MPL
MEC for Economic Development, Tourism & Environmental Affairs