Address by the KwaZulu-Natal MEC for Economic Development and Tourism the Honourable Michael Mabuyakhulu on the occasion of Ithala’s stakeholders’ dinner
18 Nov 2011
The Chairperson of Ithala Board, Mr Mandla Gantsho;
Esteemed Board members present;
The Acting CEO of Ithala Mr Siphiwe Madondo;
Captains of Industry Present;
Our esteemed social partners;
Ladies and gentlemen;
All protocol observed
It gives us immense pleasure to be part of this auspicious occasion where we, as the Ministry of Economic Development and Tourism and Ithala family, are gathered tonight with our stakeholders to break and bread and primarily discuss ways and means of how we can continue to work together in a concerted fashion to grow the economy of our country.
Director of Proceedings, we think it is proper that we should start by thanking all our stakeholders who have heeded our call to be with us tonight to discuss issues of mutual benefit for our province and our country, and more importantly, the role that can be played by all our social partners to crank up our economy.
As government we have always maintained that the nature of the challenges facing our country could not be resolved by government alone, but require all of us as government, business and civil society to work together as a united force.
We meet tonight to mark the end of what, by all accounts, has been an eventful week. Programme director, this week saw the release of the Planning Commission’s 2030 vision report, a document that many commentators have hailed as a frank and honest assessment of where we are as a nation. But, more importantly, the document is a comprehensive diagnosis of all the challenges that impede our potential to be a great nation that we want to be.
Critically, the document also offers concrete suggestions about what we need to do in order to be a winning nation. At the global level, Programme Director, we meet tonight as the after-shocks of the Euro Zone economic tremors are continuing to wreak havoc across the globe.
As we speak, Spain is the latest country within the Eurozone which is facing the spectre of defaulting on its debt. As all of us know, the financial crisis, has already claimed its huge political casualty in former Italian President, Silvio Berlusconi. Closer to home, the country is still mulling over the news that the rating agency Moody’s Investors Services has changed its outlook on South Africa to negative from stable. Of course, this has triggered fears that a downgrading is in the offing. But, more importantly, this has a potential of increasing our cost of borrowing and could also affect investor appetite for local assets.
But what does this has to do with the Ithala’s stakeholders’ dinner? Programme Director, our view is that given the interconnectedness of the world it has become even more critical for us to ensure that in whatever we do we understand that the results of our actions are influenced by both internal and external factors.
From the perspective of Ithala Development Finance Institution this is even more critical. As many of you are aware, as a developmental finance institution, Ithala has been given the task by our government of being a springboard for economic development in our province. Apart from being a lender of last resort, our government has positioned Ithala as a catalyst for economic development.
Programme director, we all know that the financial situation, which is prevalent across the globe, has dealt a cruel blow to many banks across the world. The fact that our banking institutions, including Ithala remain resilient in the face of this devastating global economic storm is a tribute to our strong regulatory environment and the adequate capitalisation of our banks.
But, as we watch the economic crisis unfold across the Euro zone, as a province and as a country, we need to ask ourselves pertinent questions about what kind of a country do we want to live in the next couple of years.
Much has been said about the fact that the tectonic shift in the global economic landscape presents a window of opportunity for the emerging markets to seize the moment. We all know that as a country we are also moving towards regional integration which also offers huge opportunities for us and also mean that we will be operating in a new economic environment.
Programme director, as we meet tonight South Africa will in three years mark 20 years as a free and democratically elected country. The question therefore is, giving the subjective and objection conditions that we have highlighted what kind of a country do we want to bequeath to our children and what is the role of each and every social partner in achieving that country of our dreams? It is because of this reason that we believe the Planning Commission’s 2030 vision report is critical for all of us.
For starters, the report does not only chart a new course, but proposes practical steps of ensuring that by 2030 our country would have eliminated poverty and reduced inequality. But more importantly, for the plan to succeed it depends on the collective contribution of all South Africans in all fields of human endeavour. The plan proposes to create 11 million jobs in the next 20 years in order to ensure that we harness the capability of all South Africans. It also estimates that for this to happen the economy would have to grow by about 5.4% on average every year over this period.
Other objectives for employment and growth by 2030 include:
- The strict unemployment targets will fall from 25% to 14% in 2020 to 6% by 2030
- About 41% of the working population between 15 and 64 would be employed. The aim is to increase this to 52% by 2020 and to 61% by 2030
- The proportion of the population with income below the poverty measure of R418 per day will fall from 39% to zero in 2030
- Overall the dependency ratio will fall from 4 to 2.5.
This plan notes that a fall in dependency ratio will be a central contributor to reducing poverty and inequality. Critically, the plan acknowledges the fact that stimulating domestically oriented activities is a sure bet for increasing employment in our country. The plan notes that the majority of new employment opportunities will arise in home grown economic activities where global competition is less intense.
This includes housing construction, retail, personal services etc. From an economic point of view, we believe that this is one of the most critical observations from the national planning commission, primarily because this relates to the work of Ithala and the environment in which we also operate.
But if this is to happen we all need to make sacrifices. As stakeholders, all of us have an interest in seeing this country succeeding. Therefore, as social partners, we should all learn to rise above our own narrow interests and put our province and our country first. This is a contribution that all of us have to make in order to ensure that our country holds her own in the family of nations.
As we move towards conclusion, Programme director, we want to take this opportunity to thank all our partners who have shown faith in Ithala in spite of the turbulent economic conditions we have been operating under. The fact that Ithala has remained relatively unscathed from the economic recession is because of your continued support. We would also like to thank the new board, led by Mr Gantsho, for the providing strategic direction to the bank and support.
As we stated, Programme director, the challenges facing our country mean that all of us have to work in a concerted manner to create a country that all of us can be proud of. For the sake of posterity, we dare not fail.
I thank you.
Issued by: KwaZulu-Natal Economic Development and Tourism
18 Nov 2011
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