Minister of Trade and Industry Ebrahim Patel has reiterated the government’s plans to rebuild and transform South Africa’s economy and create job opportunities.
The minister rebuffed criticism that president Cyril Ramaphosa’s State of the Nation Address (SONA), delivered a week ago, contained no new economic plans.
In a Parliamentary debate on Tuesday (17 February), Patel insisted that SONA was “jam-packed with the details of implementation”.
“Honourable Members, you may not know Beverly Mhlabane, who lives in Benoni. She’s a poultry farmer, empowered by the Poultry Master Plan. She has 6,500 hens for her eggs business, which is expanding now into chicken meat.
“Her story is one of the many human faces behind the facts and figures presented in SONA.”
Patel said that following the General Election in 2019, president Ramaphosa took to this podium to lay out a plan for the South African economy.
“It was based on a hard and critical look at our progress since the start of the democratic era. While we had created jobs, too few had been for young people entering the job market, so youth unemployment had risen.
“While we had transformed parts of our economy, wealth remains concentrated in the hands of a few.”
He said that the president set out a Re-imagined Industrial Strategy in 2019; which recognised the areas in which the South African economy had lost pace, and laying out the plan for achieving greater, greener and more inclusive growth, with more jobs.
Patel said that while last year’s SONA provided the detailed commitments underpinning the new vision – the what, how and when of the strategy – the arrival of the Covid-19 virus changed the context dramatically.
The virus, he said, caused a sharp decline in consumer and business confidence, disruptions in supply-chains, which in turn compelled an urgent imperative to protect livelihoods in the face of the deepest global downturn in more than 50 years.
“This is the new context. A cruel and painful one for many citizens and businesses. And yet, in spite of these most challenging of circumstances, SONA demonstrated that we have continued to make progress,” Patel said.
Opportunity for transformation
Covid changed something important, Patel said. “The basic structure of South Africa’s economy needs to be transformed from a 19th century exploitative, low wage, high carbon, extractive economy, to a new economy that aligns local comparative strengths with the need to build inclusivity and resilience.”
“We can’t just hope to bounce back from the pandemic to the old normal – a bygone era that some of the members of the opposition appear to yearn for. Because Covid-19 has caused so much economic destruction it requires us to build back differently.”
This includes the expanding of factories to excel in advanced and flexible manufacturing, while adding more locally-manufactured components.
“That is why the detailed report-back to the nation on the Master Plan progress in the auto and clothing sectors is so important – plans developed and implemented with the full involvement of industrialists and workers. It builds local capabilities, South African jobs and lays the platform for local suppliers.
“We are strengthening the socio-economic impact of mining and beneficiate our minerals, to take advantage of our natural mineral wealth in a very different way – a truly strategic shift, breaking the patterns of the past.
“Building new value chains from mines to market,” he said.
“That is why the Steel Master Plan approved last week by the industry that uses local iron-ore, the scrap metal price preference system and the export tax proposals; and the big increase in export last year of catalytic converters using South African platinum, are so important.”
Patel said that the government is growing agricultural lands, and upskilling people, so that as land reform is addressed, farmers are able to feed themselves, other South Africans, and the world.
“That is why the progress with the poultry and sugar master plans were highlighted in SONA and why the 20% rise in agricultural exports last year, led by citrus sales, is so important,” he said.
“We want to build a greener economy, with new products and industries.
“That’s why the President’s reference to the South African-built hybrid vehicle, using green and diesel technologies together, to be launched by Toyota in October, is so important, like the new solar fridge and freezer built in KZN by Defy, like the opening of a new plant that beneficiates platinum and palladium to produce fuel-cells in Dube Trade Port.
“Using green energy platforms to build more component manufacturing plants.”
Patel also pointed to president Ramaphosa’s references towards a more integrated and connected Africa.
Africa, he said, imports R7 trillion of goods from elsewhere, bigger than the entire local economy – and this presents an opportunity for industry, for new industrial entrepreneurs to build sustainable businesses. He cited the following businesses:
- Thami Gxowa who exports cooler boxes to Mozambique;
- Zanele Ntsibande selling hollow core internal doors to Botswana;
- Sibu Maphatiane who exports train brake shoes to Zimbabwe;
- Doron Barnes who sells steel to the DRC;
- Ntsiki Biyela who sells wine to Ghana;
- the Montsi family which exports machine cutting tools to Mauritania.
“These are the new South African entrepreneurs. Lives improved; futures secured. Wealth shared more widely, as new opportunities are created. This is the vision of the Freedom Charter and the over-arching mandate of this government,” said minister Patel.
That is why the agreement with Coca Cola 10 days ago is significant, as it sets aside 15% of the company’s shares to its 8,000 workers, he explained.
“Add the worker ownership agreement in the Simba Chips/Pioneer Foods merger, and in less than a year, more than 20,000 workers will now have a stake in their firms, letting the people share in the country’s wealth.”
“We already have a plan,” said Patel. “We are putting it into action. SONA was a report back to the nation. It’s all about implementation. Implementation that changes lives and transforms society.”