Keynote address by Deputy President Shipokosa Paulus Mashatile at the Knysna Regional 2024 Investment Conference, Premier Hotel, Knysna, Western Cape Province

Friday, 15 November 2024

Programme Director;
Minister of Water and Sanitation, Ms Pemmy Majodina;
Deputy Ministers of Finance, Mr Ashor Sarupen;
Deputy Minister of Higher Education and Training, Dr Mimmy Gondwe;
Deputy Minister of Forestry, Fisheries and the Environment, Mr. Narend Singh;
Knysna Municipality, Executive Mayor, Cllr Aubrey Ndoda Tsengwa;
Garden Route District Municipality, Ald Andrew Stroebel;
Speaker of Council, Knysna Municipality, Cllr Mncedisi Skosana;
Members of Panel Discussions;
Business Representatives and Investors;
Senior Government Officials;
Ladies and Gentlemen,

Let me take this opportunity to thank the organisers of this Conference, for extending an invitation to us, as the National Government. It is indeed exciting to stand before you today to discuss the most effective ways of growing our economy in this region and beyond, as well as strengthening Small Medium and Micro Enterprises (SMME'S) and attracting much needed investment in productive sectors of our economy.

The conference theme, "Investments through skills and capacity building in the broader region", without doubt, aligns with the South Africa Investment Drive, an initiative aimed at attracting investors from around the world to showcase investment opportunities in the country. The theme also highlights the importance of driving investment initiatives in key economic sectors such tourism, telecoms, logistics, finance, food and beverage sectors.

As part of our investment drive, in October, we undertook a working visit to the Ireland and the United Kingdom to strengthen bilateral relationships by identifying new trade and investment opportunities. Investors expressed interest in understanding how the government plans to ensure political and economic stability following the formation of the Government of National Unity (GNU).

We took them into confidence that the new government took office with three strategic priorities: driving inclusive growth and job creation, reducing poverty and the high cost of living, and establishing a capable, ethical, and developmental state. We told them South Africa has much to offer as an investment destination.

Regarding economic growth and stability, the Minister of Finance during the MTBPS produced a pro-growth mini-budget, aligning with Treasury's fiscal strategy of balanced spending and economic growth, aiming to tackle South Africa's low economic growth challenges pragmatically and realistically. In simple terms, the government's growth strategy is anchored by the following pillars:
● Maintaining macroeconomic stability
● Building state capability
● Supporting growth-enhancing public infrastructure investment and
● Implementing structural reforms

South Africa has shown significant results from measures aimed at reducing economic bottlenecks, including the Economic Recovery and Reconstruction Plan (ERRP) and Operation Vulindlela, which have boosted economic growth and job creation.

The Quarterly Labour Force Survey for Q3 2024 by Statistics South Africa shows a positive trend in the labour force and a decline in unemployment rates. The official unemployment rate decreased to 32.1%, from 33.5% in Q2, and the number of employed people increased by 294,000 to 16.9 million. The Eastern Cape, Northwest, Mpumalanga, and Western Cape provinces saw the largest employment increases.

Operation Vulindlela aimed to boost economic growth and job opportunities by focusing on five key priorities: stabilizing electricity supply, improving freight logistics, enhancing digital communication, ensuring stable water supply, and reforming visa regimes.

The initial stage of Operation Vulindlela resulted in a number of positive changes. For example;
● Reforms in the energy sector have unlocked over R390 billion in investments
● More than R500 billion in new investment was made possible
● There was a pipeline of 22,500MW of private sector renewable energy projects.
● Reduced the time to obtain a water use license from 300 to 90 days.

Through Operation Vulindlela we have also completed a comprehensive review of the work visa system and made recommendations to overhaul it in order to attract skills and investment. The reform includes the introduction of an eVisa system in 34 countries and a revision of immigration regulations to establish a more flexible points-based system for skilled work visas.

Operation Vulindlela has made significant progress in boosting investment and allowing private sector participation in the country's freight-rail network. Interventions at key port terminals have reduced vessels at anchorage by 73% since November 2023. Logistics reforms include opening the freight rail system to competition and introducing private sector participation in container terminals, with Transnet selecting an equity partner for Durban Container Terminal (DCT) Pier 2.

The second phase of Operation Vulindlela will be focusing on reforming the local government system, improving the delivery of basic services, and harnessing digital public infrastructure as a driver of growth and inclusion.

As part of empowering township economies and driving inclusive growth, on November 7, CoGTA introduced a new Standard Draft By-law for Township Economies. The By-law aims to create an enabling environment for small businesses in townships, supporting economic inclusion, job creation, and community empowerment.

The government is committed to transforming townships into vibrant economic hubs, providing standardised norms, easier entry and operation for both formal and informal businesses, and tailored resources for streamlined operations within municipal jurisdictions.

Key features of the By-law include empowering municipalities to establish designated business zones, supporting businesses and capacity building, and simplifying permit and registration processes.

Equally in dealing with the recent challenges of food poisoning in the townships and rural parts of our country, the President will be addressing the nation on how we will be intervening in this regard.

Ladies and gentlemen, it is commendable that the Knysna focus area, which includes - Economic Development for SMMEs, Investment Promotion, Collaboration and Networking, Skills Development and Training, and Focus on Key Economic Sectors, are directly linked to the afore-mentioned By-law.

We also applaud you for establishing the Go Local Campaign and the Small Medium and Micro Enterprises (SMME) incubator project, as well as computer workshops and support for unemployed youth.

We must urgently execute such measures to assist SMMEs in improving their lives and becoming more interdependent to enhance profitability and productivity. We need to make major investments in the local economy, which will assist the younger generation and empower them for economic participation.

Therefore, your primary objective as a municipality should be to motivate young individuals to establish their own enterprises, thereby enabling them to also function as employers. Small businesses are crucial because they generate new employment opportunities, products, revenue, and services for their respective communities.

Our government is committed to supporting small and medium enterprises (SMEs) to boost the country's growth. In this regard, President Cyril Ramaphosa has approved the National Small Enterprise Amendment Bill, which streamlines government support services for SMEs.

The amendment enables the National Small Enterprise Act of 1996 to create the Small Enterprise Development Finance Agency, which will serve as a one-stop shop for aspiring entrepreneurs and promote the development of Cooperative Banking Institutions. The government encourages young people to take advantage of these opportunities and start expanding their businesses to take South Africa's growth to new heights.

Our government will continue to pursue programs that encourage broad-based black economic empowerment, and employment equity, and support small and medium-sized enterprises, with a focus on supporting these enterprises in townships and rural areas, and shifting economic activity to areas where the majority of the population resides.

The government is promoting investment and reducing red tape in municipalities to improve business effectiveness. Small businesses are particularly affected by red tape, as they lack administrative resources and time.

The regulatory burden discourages young entrepreneurs from starting small businesses. By simplifying processes, economic growth can be driven at a grassroot level, allowing the youth and other vulnerable groups to occupy space in the sector. Municipalities should also collaborate on reforming critical sectors like education, renewable energy, agriculture, infrastructure, ocean economies, and boatbuilding.

Ladies and Gentlemen,

We are embarking on a Just Energy Transition (JET) plan, requiring a $100 billion investment from both public and private sectors to reduce emissions, protect vulnerable communities, and diversify the economy. Key investments include renewable energy, electricity transmission, green hydrogen, new energy vehicles, energy transition skills, and economic diversification. Private investment, public-private partnerships, and foreign partnerships are crucial for achieving our energy transition goals.

We encourage business owners and aspiring entrepreneurs to explore investing in green energy or solar to expand business opportunities in these sectors.

Another huge area of investment, especially here at Knysna is in the tourism sector. Knysna is a popular travel destination in the world, making it one of the Garden Route's most popular travel destinations. To maintain its status as a top travel destination, the city must continuously innovate and collaborate with partners from various sectors.

The question lies on how we can convert the tourists who visit this area into another source of income for our community. As young entrepreneurs, you have to understand that tourists who visit this region act as a growth engine, stimulating investment in infrastructure, promoting sustainable development, and fostering the conservation of cultural and natural heritage. These are also business opportunities that can generate income and create sustainable development in the community.

Ladies and Gentlemen,

As we gather here today, it is evident that the advancement of women and youth in small businesses is not just a matter of gender or age equality but a fundamental economic imperative. Women and young entrepreneurs are the backbone of our economy, and it is essential that we create an environment that nurtures and supports their growth and success.

Through targeted economic reform programs, we have a unique opportunity to unlock the potential of our nation's women, youth and people living with disabilities, paving the way for inclusive growth and sustainable development.

The second area of focus for the National Small Enterprise Development Strategic Framework is to address market concentration and enable market access, especially for SMMEs owned by women, youth, and other underserved communities.

We are also addressing market concentration and enabling market access, especially for SMMEs owned by women, youth, and other underserved communities.

We must combine our resources as the government and private sector to invest in entrepreneurship, providing access to finance, fostering skills development, and promoting innovation.

Compatriots,

It is crucial that we collaborate to eradicate corruption within the government. Establishing a culture within municipalities that is intolerant of unscrupulous conduct, fraud, and corruption is important in moving our country forward. Corruption in our economy and tender process, discourages small businesses due to unfair competition and illegal pressures from government officials.

The punishments we impose for corruption play a central role in deterring future corruption. Therefore, those who are caught in corrupt activities must be punished. By working together, we can make a significant impact in combating corruption, as fraudulent activities impede economic growth and cause businesses to suffer.

If we work together, we can create fertile ground for small businesses to thrive and contribute significantly to our economy.

As I conclude, let me briefly reflect on the task that lies ahead in the next year, when South Africa will assume the Presidency of the G20, as of December 1. The theme we have chosen is 'Solidarity, Equality, and Sustainable Development'.
We will use our G20 Presidency to advocate for increased investment on the African continent and across the countries of the Global South.

We will continue to promote a global economic order that is inclusive and fair.

In the spirit of Government Business Partnership, we should remain commit to nurturing and strengthening small businesses.

We must construct a strong monitoring, implementation, and assessment process that assures all players are held accountable for economic growth, job creation, and the establishment of a developing ethical state that provides services to the people.

Our focus should now be on the speed of execution of all decisions reached at this conference and beyond.

Together, we can build a more prosperous and resilient economy for all.

Thank you.