ADDRESS BY KWAZULU-NATAL PREMIER SIHLE ZIKALALA ON THE OCCASION OF THE KZN ECONOMIC COUNCIL SUMMIT HELD AT THE DURBAN ICC ON 29-30 APRIL 2021
EXPANDING THE FRONTIERS FREEDOM AND CREATING A PEOPLE-CENTRED SOCIETY
It is an honour and pleasure to be invited to address this important gathering of the KwaZulu-Natal Economic Council. I have no doubt in my mind that this is a meeting of patriots who are seized with the task of expanding the frontiers of freedom and human fulfillment. In this regard, we are heartened that this gathering is being convened during Freedom Month, a month in which we as South Africans celebrate and reflect on the gains made since the 27th of April 1994, the date of our first ever democratic elections.
On Tuesday, our country commemorated this important milestone: twenty seven years of freedom and democracy.
We recall founding President Nelson Mandela in his first State of the Nation Address on the 24th of May 1994 enjoining all South Africans to roll up their sleeves and urgently get to work to construct a people-centred society. Madiba implored all of us to be seized with the historic task of rebuilding our nation from the ruins of division to restore the human dignity of all South Africans.
A few days earlier in his inauguration address on the 10th of May 1994, President Mandela envisioned a rainbow nation that is united, non-racial, non-sexist, equal, and prosperous. He called on our nation to work together in ensuring that there is “work, bread, water and salt for all”.
All of us are in agreement that a lot has been achieved over the past 27 years but we also acknowledge that there is more that we can still achieve, especially on the economic front.
While there is always a temptation to refer to the 1994 breakthrough as a “miracle”, we recognise that it was a product of sweat, toil, and blood. Many people, black and white, paid the ultimate price to be able to put a legitimate government based on the will of the people to change their lives.
Our Freedom Day also represented a victory of international solidarity in the global struggle to overthrow the apartheid regime. It was also a triumph for civil society, labour, and other sectors to begin a new chapter in a nation that had become synonymous with injustice and conflict for nearly four centuries.
Our collective, heroic struggle against the tyranny of racial oppression inspires to remember that nothing can stand in the way of a people united behind a common enemy.
While we have many examples to point to for our collective success since 1994, we know that there is a number of South Africans who feel we could have done much better.
These are South Africans who go to bed hungry. These are South Africans who have no income, and without a prospect of securing employment. These are South Africans who are facing obstacles in starting enterprises to support themselves and their prospective employees. As we celebrated Freedom Day on Tuesday, many were emphatic that they have not tasted the fruits of freedom and democracy.
Today South Africa is faced with an economic crisis and deep levels of race-based and gender-based deprivation and inequality. Just like we waged a fight against the monster and enemy of apartheid, today South Africa requires immense sacrifices and a coordinated approach to reignite economic growth, create jobs, and banish hunger and want from the face of our beautiful land.
We are therefore pleased as government that we are gathered under one roof with you in what can only be a practical demonstration of the united front we have formed against the economic challenges we face which have been exacerbated by the deadly Covid-19 pandemic.
This venue, the ICC and the Hilton Hotel next door, are some of the casualties of the economic crisis precipitated by the pandemic which has ravaged global economies and caused untold human suffering globally. As we traverse through these adverse times it is therefore imperative that we, as a province, remain united and not take our eyes off the ball.
ECONOMIC OUTLOOK
Compatriots, we all know that global economic prospects deteriorated dramatically in 2020. In 2020, the South African economy is said to have contracted by 7%. It will take united, focused, and disciplined action from all stakeholders to undo this setback.
It was only later in the year that the global economy began to rebound steadily from the substantial contractions following the cautious reopening of economic activities in most economies, particularly in May and June.
However, the recovery path remained uncertain as COVID-19 continued to spread in many parts of the world, forcing other countries to reinstate lockdowns. Thus, global growth is estimated to have contracted by 3.5% in 2020. The global economic growth is expected to bounce back significantly by 5.5% in 2021 before moderating to 4.2% in 2022.
Back home, the country’s overall annual economic performance, real gross domestic product, increased at an annualised rate of 6.3% in the fourth quarter of 2020. This was supported by the further easing of lockdown restrictions in the country and largely driven by the Manufacturing industry.
On a year-on-year basis, the economy contracted by -4.2% in the fourth quarter of 2020 - this was the fifth consecutive decline since fourth quarter of 2019. This indicates that economic activity has been weak prior to the Covid-19 induced slump, thus requiring more than the counter-cyclical measures put in place to reboot the economy amid the pandemic in order to rectify the state of economic activity.
On the 25 of March 2021, the South African Reserve Bank revised South Africa’s GDP forecast for 2021 upward to 3.8% from the earlier prediction of 3.6%.
Let’s briefly turn our attention to KwaZulu-Natal which is South Africa’s second largest economy, contributing an average of 16% to the country’s GDP.
For 2020, the province contracted by -6.9% with the construction sector hit the hardest and shrinking by 18%. One of the province’s most important sectors in terms of jobs creation and contribution to GDP, is the manufacturing sector, and it contracted by -11.9% in 2020.
During this time unemployment also rose. As reflected in the The Quarterly Labour Force Survey, during the fourth quarter of 2020 South Africa recorded a 32.5% unemployment rate with KwaZulu-Natal at 29.6%. Compared to 2019, total employment decreased by 1.4 million and the number of unemployed persons increased by 7.5% (507,000) during 2020.
As the economy enters into a state of recovery, it is vital for our policies to focus on inclusive economic growth that promotes both public and private sector investment in productive infrastructure, fruitful expenditures and social relief.
The KwaZulu-Natal Provincial Government will continue engaging economic development partners and stakeholders to promote key trade and investment opportunities in a more targeted way.
PRIORITIES FROM THE STATE OF THE NATION AND STATE OF THE PROVINCE ADDRESSES
Ladies and Gentlemen, since the news of the first confirmed case of Coronavirus on the 5th of March 2020 here in Durban, the lives of South Africans have never been the same. In a period of a year, we have lost loved ones, colleagues, and neighbours because of the pandemic. People lost jobs and businesses were forced to close down. Since the arrival of this global pandemic, we have had to change our priorities in order to manage the crisis and to find ways of thriving in it. It has been taxing and challenging on all of us and we thank all
South Africans, including business and labour for the cooperation and spirit of solidarity they have demonstrated in these extraordinary times.
When His Excellency, President Cyril Ramaphosa, delivered the State of the Nation Address on 11 February 2021, he encouraged all citizens to work together and rise from the pain and economic devastation that Covid-19 had inflicted on our nation. President Ramaphosa stated four urgent priorities for our nation:
1. Defeat the Coronavirus pandemic;
2. Accelerate Economic Recovery;
3. Implement economic reforms to create sustainable jobs and drive inclusive growth;
4. Fight corruption and strengthen the State.
On 26 February 2021, I delivered the State of the Province Address (SOPA) under the theme, “Quickening the Tempo to Economic Recovery and Job Creation”. The SOPA presented a detailed programme of action which focusses on:
1. Intensifying the fight against the Coronavirus;
2. Re-igniting economic recovery and job creation;
3. Building Social Cohesion, Fighting Crime and Corruption;
4. Delivering Basic Services in particular Water;
5. Building a Capable and Ethical Development State.
As the province, we are working hard to improve the capacity of our developmental state so that it can effectively deliver on its role of tackling the root causes of poverty, inequality, and unemployment. KwaZulu-Natal remains intolerant to corruption in the public sector and we will continue to lead by example in exposing any wrongdoing and ensuring that those who steal resources meant for the development of the poor are brought to book.
We are working closely with law enforcement agencies and communities to fight crime, including economic sabotage crimes. Working with national government, we are determined to fight those who hijack construction sites and extort bribes. Such actions are not anyway close to the ANC’s interpretation of Radical Economic Transformation.
As government, we support calls that South Africans must be prioritized in employment creation initiatives including the logistics sector. Equally, we are unambiguously opposed to acts of arson and burning of logistics infrastructure. We will continue working with all stakeholders, including faith based organisations to advance moral regeneration and good ethical behavior in the province. We call on the business community itself to partner with us in rooting out crime and creating stability in our province. We also call on business to be good role models when it comes to adhering to the rule of law by ensuring that they prioritise South Africans in job creation in the logistics sector, hospitality sector, and many more that are not designated as scarce skills.
As KwaZulu-Natal, we have said that creating new jobs, supporting manufacturing, boosting agricultural production, localisation in goods and services and igniting township economies must consume our energies in 2021. In this regard, we undertook in the SOPA to establish a War Room on job creation chaired by myself as Premier to monitor the implementation of employment creation projects.
A SOCIAL COMPACT FOR ECONOMIC RECOVERY AND JOB CREATION
When we delivered the State of the Province Address for 2021, we declared that we are “quickening the tempo to economic recovery and job creation”. We also acknowledged that such will only be possible if all social partners work together towards that particular goal.
As Government, we have no illusion that our primary responsibility is to create employment. We understand that through our pro-poor developmental state, we have to create the necessary conditions that attract investments and allow enterprises to thrive. Research across the world clearly shows that many of the new jobs continue to be created by small enterprises. In this regard, we will continue to support SMME development, and in line with our development objectives, support SMMEs which are owned by black people, in particular black women and the youth.
We remain serious about the need to deracialize the economy and to alter the patterns of ownership to reflect the demographics of our land. Through the Radical Economic
Transformation agenda and Operation Vula, we have a direct interest in seeing previously marginalized groups entering the mainstream of the economy. We are not interested in inclusive growth which at the same time is not redistributive.
We are not interested in growth which simultaneously fails to reduce the unacceptably high levels of unemployment in South Africa or KwaZulu-Natal. It is in the interest of all patriotic South Africans to ensure that black people are not left at the periphery of the economy as if we are still living in the dark days of our bitter and divisive past.
Ladies and Gentlemen, we view the coming together of all social partners to sign a social compact as a positive development. This should be a moment that inspires hope and invokes a huge sense of pride for the people of this province. We have come here under one roof not because we do not have our differences and different ideological postures.
Rather, we have come together because we recognize that the task that lies ahead needs our collective wisdom and collective action. We all carry the hopes of this province and in all that we do, let us remember that our province requires action now. It is for this reason that in delivering the State of the Province Address, we committed to establish a War Room on Job Creation to be chaired by myself as Premier of KwaZulu-Natal where I will oversee the implementation of employment creation projects.
Ladies and Gentlemen, as part of the KZN economic recovery and transformation plan, we have disaggregated our economy into 15 critical sectors. These are the sectors which we have identified as having a potential for growth and ones which are key drivers for exports and investments. The sectors are:
• Agriculture and Agro-Processing
• Clothing and Textiles
• Creative Industries
• Finance and Services
• Fourth Industrial Revolution (4IR), ICT and Innovation
• Health Innovation and Manufacturing
• Industrial Development
• Informal Sector
• Infrastructure Development (Water, Energy and Sanitation)
• Investment and Trade
• Manufacturing (Automotive, paper and pulp)
• Mining and Mineral Beneficiation
• Oceans Economy
• Tourism
• Transport and Logistics (Rail, Road and Air)
Ladies and Gentlemen, the social compact we will be signing tomorrow should clearly set out firm commitments and action plans for each of these sectors. The compact should tell us exactly how we will work together to grow these sectors in line with our recovery plan.
As government, we should be able to indicate areas of investment, what we will do to ensure enabling policy framework and how we will remove red tape.
We come together with the understanding that our inputs as social partners will enrich our economic recovery endeavours.
Programme Director, this social compact is more than just a document outlining a programme of action towards reigniting economic growth. It will be accompanied by a clear monitoring and evaluation framework which will be developed within a month from now. As part of that process we will map out clear timelines for the implementation of the commitments made by all the partners.
And so this social compact is not an event or a once-off. It should stimulate continuous engagements between all social partners. This is why we also want to see these compacts being replicated at district and local levels.
The monitoring should tell us if we are meeting our targets and where we are not meeting them we should regroup and re-evaluate our strategies and if needed change tact. This will be a difficult task given that we are not out of danger in terms of Covid-19 infections.
The process we are undertaking today is a critical part of our recovery. The inputs we are getting here will form part of the overall economic recovery plan which will be launched soon.
We thank all the partners who are here and wish you fruitful engagements over the next two days. We are hoping for frank yet constructive engagements on these very important matters.
CONCLUSION: A CALL TO PATRIOTS
Compatriots, I have no doubt that we are equal to the task of the moment.
Working together, we will fight deadly myths about COVID-19 and vaccines. Working as one, we will continue to demonstrate to others the importance of adhering to safety protocols, including maintaining social distance, wearing face masks, and washing our hands regularly.
We look to you to support the province’s massive vaccination campaign and by encouraging people to register for vaccination.
Compatriots, there is no province that is as beautiful, warm, and hospitable as KwaZulu-Natal.
We are the most diverse province with a rich, proud history. Some of our natural endowments, including the warm Indian ocean, the two World Heritage Sites set us apart from other provinces. We have as yet to tap into these natural resources and the spirit of the people of KwaZulu-Natal.
It is in our hands to turn our present economic misfortune into fortunes and opportunities for development. There is nothing that can stop us to increase by 10 percent in the next decade our current 16% contribution to the GDP of the country. But we can only do that if we unite and agree that this is the moment for patriots to implement a plan that will transform the economy, deliver jobs, and restore hopes for the millions who feel left out in our hard earn democracy.
As Tata Madiba said, “Let there be work, bread, water and salt for all”.
Two years later, our icon, Madiba, delivered his 1996 State of the Nation Address, there was a positive, patriotic mood in the country. The Springboks had made history and won the 1995 World Rugby Cup. Bafana Bafana had just been crowned soccer Champions in the Africa Cup of Nation. Speaking about the new patriotism on board to create a new society, Madiba said:
“When all is said and done, we return again to the challenge of a New South African patriotism: that at the end of each day everyone of us should afford a smile in his or her face, when we pose to ourselves the question: what have I done today to create jobs and improve my skills and those of others!”
Ladies and Gentlemen, I invite you again to unite behind this patriotism for the sake of the future of our country.
It is in our hands.
So, lend a hand and create the KwaZulu-Natal that we will be proud to leave for future generations.
Together Growing KwaZulu-Natal!
I thank you.
