BUSINESS FOCUS:
‘We have to rework and sharpen our transformation model’
WE HAVE reason to be optimistic, with improved economic conditions, commodity prices and stronger global growth which should encourage both investment and employment, President Jacob Zuma said ahead of his State of the Nation (Sona) address.
Zuma hosted the Pre-Sona Business Investor Luncheon at the Grand West Casino. The session was attended by ministers, leaders of business and organised labour.
The meeting served as a platform to further strengthen co-operation between the government, organised labour and business to promote inclusive economic growth, radical socio-economic transformation and job creation in South Africa.
Zuma was accompanied by members of the Inter Ministerial Committee on Investment, which he established in 2016 to improve support and assistance to investors wishing to take advantage of the vast investment opportunities in South Africa.
“We meet this year under improved conditions economically. Following a period of low economic growth in the last few years, prospects have improved for the years ahead. We expect economic growth of 1.3% in 2017, following an estimated 0.5% in 2016,” Zuma said.
Agriculture is expected to recover following improved weather conditions, while tourism and the manufacturing sector should be supported by the weaker rand and a recovery in economic activity in the region, he said. “Despite the improved outlook, we have to acknowledge that we are not growing fast enough to significantly reduce our triple challenges of poverty, inequality and unemployment.
“Unemployment currently stands at 27.1%. This is the highest rate since June 2004. Our youth unemployment stands at 44%. Low economic growth and pressure on revenue suggest that the public sector can no longer be the main engine of jobs growth,” he said.
A most important challenge to be confronted head-on this year is the scale of inequality and exclusion in this country, Zuma said.
“After two decades since democracy, the black majority still remains largely outside of the mainstream economy. Social justice cannot be achieved if we allow the status quo to persist. We have failed to ensure that the growth is shared. As we begin a new phase of economic recovery, we have to make sure we take everyone along.
“We have to rework and sharpen our transformation model and, more importantly, demonstrate commitment and empathy. A dedicated division in the Department of Trade and Industry, InvestSA, has been established, which will focus on investment promotion, facilitation and aftercare.
The national One Stop Shop service for investors will be launched next month at the department’s campus in Pretoria, and three provincial One Stop Shops will be launched by the middle of the year.
“The One Stop Shops will be the focal point of contact in government for all investors to co-ordinate and facilitate with the relevant government departments involved in regulatory, registration, permits and licensing. InvestSA will provide specialist advisory, intergovernmental co-ordination, fast-track unblocking, and red tape reduction in government,” Zuma said.
He said international conditions had changed, with global protectionism appearing to be on the rise, affecting trade negatively – a veiled reference to the election of US President Donald Trump.
“But there is more that we can do, and opportunities that we can seize: The European Partnership Agreement came into force in October 2016, with increased market access for certain products.
“We must also be cognisant of the opportunities and challenges that Brexit will bring. Regional integration and trade with other countries in Africa is a key component of our trade policy, and offers many opportunities,” Zuma said.
“We are making credible progress with the continental free trade area, with the first phase of negotiations to include goods and services to be completed in 2017.”