International Convention Centre, Durban, 29 April 2021
Programme Director, Ms Palesa Phili
Premier of the Province of KwaZulu-Natal, Honourable Mr Sihle Zikalala
Convenors of the KZN Economic Council’s Social Partners:
Mr Edwin Mkhize [Labour]
Mr Richard Mkhungo [Civil Society]
Mr Nigel Ward [Business]
Colleague MECs
Traditional Leadership:
Inkosi PT Zulu [Provincial Deputy Chair: House of Traditional Leaders]
Inkosi DV Zondo [Convener: Local Economic Development Committee]
Heads of Departments and Other Officials
Chairpersons and CEO’s of Public Entities
Our various Presenters
Members of the Media
Ladies and Gentlemen
Comrades and Friends
This is not an ordinary Summit. The constituencies we represent demand of us that we construct a social compact that will provide for us to apply our collective talents, strengths and energy into rebuilding and transforming our economy.
President Ramaphosa on Covid-19, 21 April 2020:
“Our economic strategy going forward will require a new social compact among all roleplayers – business, labour, community and government – to restructure the economy and achieve inclusive growth”.
“We will forge a compact for radical economic transformation that advances the economic position of women, youth and persons with disabilities, and that makes our cities, towns, villages and rural areas vibrant centres of economic activity”
Declaration by KwaZulu-Natal Premier Sihle Zikalala on Social Compact, January 2021:
“The outbreak of Covid-19 that affected the whole world called for the reconfiguration of global economies. The province of KwaZulu-Natal developed a provincial reconstruction and transformation plan. This transformation plan identified specific priority sector interventions. Such priority sector interventions now form the backbone to the social compact. Social partners have committed to the implementation of these priority sector interventions.
The expectation therefore is that this social compact should not be taken as a static document, but one that would constantly evolve. To this cause, all social partners have therefore resolved that this social compact will not be shelved to gather dust, but will be result driven in its implementation.”
When Covid-19 struck and our government responded with the declaration of a state of disaster, and the establishment of the National and Provincial Command Councils, we developed our response into four pillars:
1. Our Health response
2. Creating safety net for the vulnerable
3. Ensuring compliance with National Disaster Regulations
4. Economic Recovery which crystallised into a Draft Economic Recovery, Reconstruction and Transformation Plan.
Many months of work have gone into all four of the above tasks. The Economic Pillar was processed initially in government through our Economic Cluster and at the same time intensively consulted on in the KwaZulu-Natal Economic Council representing all four partners here today.
This Summit represents a critical milestone on the path to finalisation of the Plan and its subsequent launch by the Honourable Premier in the very near future. Indeed it is a critical building block towards the final plan. It is thus a very serious responsibility that rests on our shoulders.
We must also take comfort in the fact that we are not alone in this. We are part of a powerful national effort. The presentations later in the programme by Mathew Parks of COSATU, Rudy Dicks (Head of the Project Management Office in the Presidency), Trudy Makhaye (Economic Advisor to the President), and Mr Pepi Silinga of Transnet will talk to the national effort.
We in KwaZulu-Natal have said to our national counterparts that we want to see KwaZulu-Natal represented in a fair and just way in their plans. At the same time, it is very clear that it is our own initiatives and determination that will realise success both locally and nationally.
This means that as partners, we must each pull our own weight as each has committed to do.
We accept that it starts with us as government to give leadership through action on key issues such as fighting corruption, good governance and building the capable ethical state. We understand that water, electricity and sanitation are key economic issues as well, and that local government and local economic development are central to economic recovery. We commit to dedicated work on this and are prepared to be held accountable.
The provincial budget is significant and must be used effectively. There are many programmes in all the economic cluster departments – Economic Development, Tourism, and Environmental Affairs, Transport, COGTA, Public Works and Agriculture – that can have a significant cumulative effect.
We are also determined to raise the profile, productivity and impact of our provincial State Entities. Key amongst them are:
• KZN Tourism (entire tourism chain)
• Trade and Investment KwaZulu-Natal
• Ithala
• Ezemvelo
• Sharks Board
• Growth Fund
• Moses Kotane Institute
• Richards Bay Industrial Development Zone
• Liquor Authority
• Gaming and Betting Board
• Film Commission
• Dube Tradeport
Several are examples of very good work, and yes, a few have to be assisted to overcome significant challenges. This is work in progress and we must be prepared to be held accountable for it. The point is that there are many fronts to these tasks. We believe that in time the cumulative effect of all Entities will be visibly significant.
In the course of our work in the KwaZulu-Natal Economic Council, we have established the beginnings of trust and credibility. It is early days but we really have no choice but to consolidate and build further, with the robust frankness that is required at times.
We have to as partners, continue to build breadth and depth in our work. We must develop a model of working together with tangible results and cascade this model to District and Local government level.
Each partner must commit to do so and I dare say that we should immediately commit to take this model to all our districts and our secondary towns, viz. Msunduzi, uMhlatuze, Newcastle, Ray Nkonyeni, KwaDukuza and Alfred Duma.
The Social Compact must be different. It cannot be a spray and pray approach. It must be scientific and formal, and we have committed to developing a monitoring and evaluation capacity that will hold all of us accountable.
In this vein, we have disaggregated our KwaZulu-Natal provincial economy into the following 14 sectors:
• 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
• Trade and Investment
• Manufacturing (Automotive, Paper and Pulp, etc.)
• Mining and Mineral Beneficiation
• Oceans Economy
• Tourism
All of these are significant but some have a special strategic potential while others contain the proverbial low hanging fruits. The social compact seeks to unpack each of the sectors and sets out a framework agreement.
The ICT sector and connectivity infrastructure have been identified as key deliverables. The expansion of the Durban Port is another, while the job creation potential of the Call Centre Industry has recently been highlighted with the release of a global report ranking South Africa as the top global business services sector location for 2021.
It is estimated that almost 15,000 jobs have already been created in KwaZulu-Natal with the possibility of another 55,000 jobs in the medium term. This is phenomenal.
We understand that our labour partners have concerns about this industry but have committed to work through these challenges.
The Transnet expansion of the Durban Port to treble its capacity in the next 10 years is, at an estimated R 100 billion investment and 180,000 jobs in the construction phase, the biggest single infrastructure investment in the near future. Again we understand that labour has issues. We must put the facts on the table and work through any difficulties. The same approach will prevail in all other sectors.
Tourism remains a major sector in our province and we are very encouraged by the Easter occupancy figures which averaged between 50-60%. We are pushing hard for an even more successful July vacation season but are mindful that this lies in our own collective hands. We must prevent or seriously mitigate any third wave.
We will seek to develop a common understanding of radical economic transformation generally and some of government’s specific programmes such as Operation Vula and RASET. Economic transformation and development of township and rural economies will become cross-cutting objectives of all programmes. We want to be radical in the impact of our programmes, not in the rhetoric. I submit that as we knuckle down to practical, workable and sustainable implementation, we will not only find each other but enrich the programme as well.
The Covid-19 has exposed many fault lines in our society and this necessitates that we act urgently. Economic growth and economic transformation are two sides of the same coin. Growth will only be sustainable if it is inclusive and that inclusivity is only possible when the economy is growing. We must avoid the temptation of thinking of these as mutually exclusive concepts.
For many years we have talked past and against each other but the time for that is over. I strongly believe that the process we are undertaking today will serve to rebuild trust among all social partners.
We look forward to fruitful discussions and engagements over the next two days.
I thank you.