State of the Nation Address by Jacob G Zuma, President of the Republic
of South Africa on the occasion of the Joint Sitting of Parliament on 11 February 2016
Good
evening, sanibonani, molweni, dumelang, goeie naand, lotshani, riperile,
ndimadekwana,
Today marks
the 26th anniversary of the release of President Nelson Mandela from prison,
which was one of the most remarkable episodes in the history of our country.
It is also
the 50th anniversary of the declaration by the National Party regime that
District Six would be a whites only area, leading to the forced removals of
more than 60 000 residents.
The year
2016 also marks the 20th anniversary of the signing into law by Madiba, of the
Constitution of the Republic. The signing took place in Sharpeville on 10
December 1996.
We are proud
of our democracy and what we have achieved in a short space of time. Our
democracy is functional, solid and stable.
Compatriots,
The
Constitution, which has its foundation in the Freedom Charter, proclaims that
South Africa belongs to all who live in it. A lot has been done to promote
inclusion and a non-racial society.
However, the
journey to a non-racial society has not yet been completed.
The nation
was shaken last month when racism reared its ugly head on social and electronic
media, causing untold pain and anger.
There is a
need to confront the demon of racism. Human Rights Day, March 21, will be
commemorated as the national day against racism this year. It will be used to
lay the foundation for a long-term programme of building a non-racial society.
Compatriots,
I would like to remind you of a few other important anniversaries.
The year
2016 marks 60 years since the women’s march to the Union Buildings to demand an
end to the pass laws. We are happy to have in our midst Ms Sophie de Bruyn, who
was among the heroic leaders of that historic march.
We also
acknowledge the former President of the Black Sash, Ms Mary Burton. We
acknowledge the organisation’s track record in fighting for human rights,
justice and equality.
This year
also marks 40 years since the landmark June 16 student uprising in
Soweto.
We welcome
the photographer who shot the famous photograph of Hector Peterson carried by
Mbuyisa Makhubu with his sister Antoinette, Mr Sam Nzima.
We also
salute the class of 1976 for their bravery in standing up against the brutal
apartheid regime. We acknowledge one of the activists of that era, the Deputy
Secretary of Parliament, Ms Baby Tyawa, who is in our midst.
This year we
also mark 30 years since the ambush and brutal killing of the Gugulethu Seven
by the apartheid police in March 1986.
The University
of Fort Hare celebrates its centenary, which is a critical milestone in the
liberation history of not only our country but the continent. The national
celebrations will take place on the 20th of May.
Let me
recognise uMntwana wakwaPhindangene, the leader of the IFP who is a former
student of the university.
The year
2016 also marks the centenary of the battle of Deville Woods in France, which
took place during the First World War.
Scores of
Black soldiers fought in the war but were treated badly due to the colour of
their skin.
A memorial
that will restore their dignity and humanity is scheduled to be unveiled in
July this year in France.
Madam
Speaker and Madam Chairperson,
A resilient
and fast growing economy is at the heart of our radical economic transformation
agenda and our National Development Plan.
When the
economy grows fast it delivers jobs. Workers earn wages and businesses make
profits.
The tax base
expands and allows government to increase the social wage and provide
education, health, social grants, housing and free basic services - faster and
in a more sustainable manner.
Our economy
has been facing difficulties since the financial crisis in 2008. We embarked on
an aggressive infrastructure development programme to stimulate growth.
Our reality
right now is that global growth still remains muted. Financial markets have
become volatile. Currencies of emerging markets have become weak and they
fluctuate widely.
The prices
of gold, platinum, coal and other minerals that we sell to the rest of the
world have dropped significantly and continue to be low.
The
economies of two of our partners in BRICS: Brazil and Russia - are expected to
contract this year. The third, China, will not register the kind of robust
growth that it is known for.
Because our
economy is relatively small and open, it is affected by all of these
developments.
Our economy
is also affected by domestic factors such as the electricity constraints and
industrial relations which are sometimes unstable.
The IMF and
the World Bank predict that the South African economy will grow by less than
one per cent this year. The lower economic growth outcomes and outlook suggest
that revenue collection will be lower than previously expected.
Importantly,
our country seems to be at risk of losing its investment grade status from
ratings agencies. If that happens, it will become more expensive for us to
borrow money from abroad to finance our programmes of building a better life
for all especially the poor.
The
situation requires an effective turnaround plan from us.
It is about
doing things differently and also acting on what may not have been acted upon
quickly before.
I will share
a few points that we believe would make a difference.
First, our
country remains an attractive investment destination. It may face challenges,
but its positive attributes far outweigh those challenges.
We must
continue to market the country as a preferred destination for investments. This
requires a common narrative from all of us as business, labour and
government.
If there are
any disagreements or problems between us, we should solve them before they
escalate. This is necessary for the common good of our country.
We have had
fruitful meetings with business, including the high level meeting with CEOs on
Tuesday this week.
We have
heard the suggestions from business community on how we can turn the situation
around and put the economy back on a growth path.
We have
heard the points about the need to create the correct investment support
infrastructure.
Government
is developing a One Stop Shop/Invest SA initiative to signal that South Africa
is truly open for business. We will fast-track the implementation of this
service, in partnership with the private sector.
Such an
initiative requires that government removes the red tape and reviews any
legislative and regulatory blockages.
We have
established an Inter-Ministerial Committee on Investment Promotion which will
ensure the success of investment promotion initiatives.
Compatriots,
we have heard the concerns raised about the performance of state owned
enterprises and companies.
Many of our
SOCs are performing well.
Sanral has
built some of the best roads in Gauteng and in many parts of the country. These
make us the envy of many parts around the globe.
The Trans
Caledon Tunnel Authority has constructed dams of varied capacities, thus making
it possible for our people to have access to safe drinking water.
Transnet has
built rail infrastructure which has enabled our country’s mines to move massive
bulk of commodities through our ports to markets around the globe.
Eskom, in
spite of the challenges, still manages to keep the economy going, against all
odds.
Our
development finance institutions such as the Industrial Development Corporation
(IDC) or Development Bank of Southern Africa and others have provided finance
for infrastructure, various industries and agricultural businesses without
fail, even in the aftermath of the global financial crisis.
For the
state owned companies to contribute to the successful implementation of the
National Development Plan, they must be financially sound.
They must be
properly governed and managed. We will ensure the implementation of the
recommendations of the Presidential Review Commission on State Owned
Enterprises, which outlines how the institutions should be managed.
The Deputy
President chairs the Inter-Ministerial Committee which is tasked with ensuring
the implementation of these recommendations.
We have to
streamline and sharpen the mandates of the companies and ensure that where
there are overlaps in the mandates, there is immediate rationalization.
Those
companies that are no longer relevant to our development agenda will be phased
out.
Government
departments to which they report, will set the agenda and identify key projects
for the State owned companies to implement, over a defined period. Proper
monitoring and evaluation will be done.
These
interventions are essential for growth and also for the reduction of national
debt levels.
Compatriots,
We must take advantage of the exchange rate as well as the recent changes of
visa regulations, to boost inbound tourism.
SA Tourism
will invest one hundred million rand a year to promote domestic tourism,
encouraging South Africans to tour their country.
We have
heard concerns from companies about delays in obtaining visas for skilled
personnel from abroad. While we prefer that employers prioritise local workers,
our migration policy must also make it possible to import scarce skills.
The draft
migration policy will be presented to Cabinet during the course of 2016.
We have
heard the appeals for policy certainty in the mining sector, especially with
regards to the Mineral and Petroleum Resources Development Bill.
The Bill was
referred back to Parliament last year. We await Parliament to conclude the
processing, which we trust will be done expeditiously.
Compatriots
We need to
empower SMMEs to accelerate their growth. Access to high-quality, innovative
business support can dramatically improve the success rate of new
ventures.
The
department of small business development was established to provide such
targeted support to small business.
Economic
transformation and black empowerment remain a key part of all economic
programmes of government. One of our new interventions is the Black
Industrialists Scheme which has been launched to promote the participation of
black entrepreneurs in manufacturing.
We urge big
business to partner the new manufacturers including businesses owned by women
and the youth, as part of broadening the ownership and control of the economy.
Compatriots
We are proud
of our Top 10 ranking in the World Economic Forum competitiveness report with
respect to financial services.
Maintaining
and indeed improving our ranking is important to our competitiveness as a
country.
It is also
fundamental to our ambition to become a financial centre for Africa.
The banks,
through the Banking Association of South Africa, are to launch a project aimed
at establishing a centre of excellence for financial services and leadership
training.
This will
ensure that as a country we can attract, nurture, develop and retain the best
talent in financial services in our country and across our continent.
They will
work with the Minister of Finance and the National Treasury to get this done.
We believe that this will over time ensure that we can expand the pool of
financial skills and broaden the job opportunities for many young people.
This
strategic project from the banking sector is a positive and encouraging outcome
of our engagement with business this week.
Together we
move South Africa Forward!
Compatriots,
We have made
an undertaking to spend public funds wisely and to cut wasteful expenditure,
but without compromising on the core business of government and the provision
of services to our people.
In 2013, the
Minister of Finance announced a number of cost containment measures.
Excessive
and wasteful expenditure has been reduced, but there is still more to be done
to cut wastage.
I would like
to announce some measures this evening.
Overseas trips
will be curtailed and those requesting permission will have to motivate
strongly and prove the benefit to the country.
The sizes of
delegations will be greatly reduced and standardised.
Further
restrictions on conferences, catering, entertainment and social functions will
be instituted.
The budget
vote dinners for stakeholders hosted by government departments in Parliament,
after the delivery of budget speeches will no longer take place.
The Minister
of Finance will announce more measures and further details in the budget vote
speech on the 24th of February.
The
executive management and boards of public agencies and state owned companies
must undertake similar measures.
I also
invite Premiers of all nine provinces as well as mayors to join us as we begin
eliminating wasteful expenditure within government.
I trust that
Parliament and the Judiciary will also be persuaded to consider the
implementation of similar measures.
Compatriots
A big
expenditure item, that we would like to persuade Parliament to consider, is the
maintenance of two capitals, Pretoria as the administrative one and Cape Town
as the legislative capital.
We believe
that the matter requires the attention of Parliament soon.
Compatriots
We all have
a lot to do to turn the economy around and to cut wastage. We will go through a
difficult period for a while, but when the economy recovers, we will be proud
of ourselves for having done the right thing.
Compatriots,
I would now
like to report back on the undertakings made last year. During the State of the
Nation Address in February 2015. I announced the Nine Point Plan to respond to
sluggish growth.
The nine
point plan consists of:
a. Revitalisation
of the agriculture and agro-processing value-chain;
b. Advancing
beneficiation adding value to our mineral wealth;
c. More
effective implementation of a higher impact Industrial Policy Action Plan;
d. Unlocking
the potential of SMME, co-operativess, township and rural enterprises;
e. Resolving
the energy challenge;
f. Stabilising
the labour market;
g. Scaling-up
private-sector investment;
h. Growing
the Ocean Economy;
i. Cross-cutting
Areas to Reform, Boost and Diversify the Economy;
i. Science,
technology and innovation
ii. Water
and sanitation
iii. Transport
infrastructure
iv. Broadband
rollout
v. State
owned companies.
We have made
significant progress in the implementation of the plan.
Progress has
been made to stabilise the electricity supply. There has been no load shedding
since August last year which has brought relief for both households and
industry alike.
Government
has invested eighty three billion rand (R83 billion) in Eskom which has enabled
the utility to continue investing in Medupi and Kusile, while continuing with a
diligent maintenance programme.
Additional
units from Ingula power station will be connected in 2017, even though some of
them will begin synchronisation this year.
The multiple
bid windows of the Renewable Independent Power Producer Programme have
attracted an investment of one hundred and ninety four billion rand.
This
initiative is a concrete example of how government can partner with the private
sector to provide practical solutions to an immediate challenge that faces our
country.
In 2016,
government will select the preferred bidders for the coal independent power
producer.
Request for
Proposals will also be issued for the first windows of gas to power bids.
The nuclear
energy expansion programme remains part of the future energy mix.
Our plan is
to introduce nine thousand six hundred megawatts of nuclear energy in the next
decade, in addition to running Koeberg Nuclear Power Plant.
We will test
the market to ascertain the true cost of building modern nuclear plants.
Let me
emphasise that we will only procure nuclear on a scale and pace that our
country can afford.
Compatriots,
Our
government through the Department of Trade and Industry introduced a number of
incentives in the past few years to boost investments in the manufacturing
sectors especially textiles, leather and the automotive sectors.
Progress has
been made in these sectors.
The
incentives for the automotive sector have attracted investments of over twenty
five billion rand over the last five years. We welcome key investments from
Mercedes, General Motors, Ford, Beijing Auto Works, the Metair group, BMW,
Goodyear and VW.
The clothing
and textile sector has also been successfully stabilised after a difficult few
years.
Multinational
companies such as Nestle, Unilever Samsung and Hisense have also affirmed South
Africa as a regional manufacturing hub.
They have
retained and expanded their investments in new plants.
Indeed the
progress made in manufacturing has certainly demonstrated that the incentive
programmes are effective and attractive to investors.
Compatriots,
I announced
programmes for the revitalisation of agriculture last year. We introduced the
Agri-Parks programme, aimed at increasing the participation of small holder
farmers in agricultural activities.
Construction
has begun in at least five agriparks, which are: Westrand in Gauteng, Springbokpan
in North West, Witzenberg in Western Cape, Ncora in the Eastern Cape and
Enkangala in Mpumalanga.
The
agricultural programmes must empower women farmers as well. Allow me to
introduce the winner of the Female Entrepreneur of the Year 2015, Ms Julia
Shungube, from Nkomazi municipality in Mpumalanga.
Honourable
Speaker and Chairperson,
Land reform
remains an important factor as we pursue transformation.
I spoke
about the fifty/fifty policy framework last year, which proposes relative
rights for people who live and work on farms.
Twenty seven
proposals have been received from commercial farmers and four are being
implemented in the Eastern Cape and the Free State.
I also
announced the Regulation of Land Holdings Bill which would place a ceiling on
land ownership at a maximum of 12 000 hectares and would prohibit foreign
nationals from owning land. They would be eligible for long term leases. The
draft Bill will be presented to Cabinet in the first semester of the year.
We also
announced the re-opening of land claims for people who had missed the 1998
deadline. The number of new land claims that have been lodged stood at close to
one hundred and twenty thousand as of December last year.
Compatriots,
As we are
aware, five provinces have been seriously affected by drought, namely
North-West, KwaZulu-Natal, Free State, Limpopo and Mpumalanga.
Government
provides relief to affected communities. Isomiso sixakile impela ezifundazweni
eziningi. Imfuyo iyafa kanti nezolimo zisele emuva. Isikhathi esinzima
lesi.
Uhulumeni
uzoqhubeka nokuxhasa abalimi kanye nokusiza imiphakathi ngezimoto ezithwala
zamanzi.
Let me take
this opportunity to commend the civil society initiative, Operation Hydrate
and others for the provision of water relief to many communities in
distress.
The building
of water infrastructure remains critical so that we can expand access to our
people and industry.
The first
phase of the Mokolo and Crocodile Water Augmentation project in Lephalale area
in Limpopo is fully operational. It will provide 30 million cubic meters of
water per annum.
The raising
of the Clan William Dam wall in the Western Cape entails raising the existing
dam level by 13 metres to provide additional water supply.
To curb
water wastage, the Department of Water and Sanitation has begun its programme
of training fifteen thousand young people as artisans.
Madam
Speaker, Madam Chairperson,
On improving
labour relations, we welcome the agreement reached by social partners at NEDLAC
on the principle of a national minimum wage.
Deliberations
continue on the level at which the minimum wage must be placed.
It is
important to emphasise that the national minimum wage should be implemented in
a manner that does not undermine employment creation, the thriving of small
businesses or sustained economic growth.
We are also
encouraged by reports from NEDLAC that a framework to stabilize the labour
market by reducing the length of strikes and eliminating violence during strike
action is being finalized.
We have
heard the concerns of labour about the Tax Amendment Act that I signed into law
in December, following its passing by Parliament.
Government
is in discussion with COSATU about the matter and a solution is being sought.
Discussions
are also on-going within government, led by the Department of Social
Development and National Treasury, with regards to finalising the comprehensive
social security policy.
Compatriots,
Only a few
years ago, our mining sector was in turmoil especially on the platinum
belt.
The
situation has improved and we commend business and labour for the progress
made.
Another positive
development in the mining sector was the Leaders’ Declaration to Save Jobs
which was signed by mining industry stakeholders in August 2015.
We urge the
parties to implement the agreement and to continue seeking ways of saving
jobs.
We appeal to
business again that retrenchments should not be the first resort when they face
difficulties.
Compatriots,
In 2014 we
launched the popular operation Phakisa Big Fast results methodology and
implemented it in the ocean economy, health, education and mining sectors.
Seven
billion rand has been committed in new port facilities, following the adoption
of a Public- Private-Partnership model for port infrastructure development by
Transnet National Ports Authority.
Compatriots,
we were concerned that South Africa did not own vessels while we are surrounded
by about three thousand kilometres of a coastline.
Through the
oceans economy segment of Operation Phakisa, we are trying to solve this
challenge.
I am pleased
that two bulk carrier vessels have been registered in Port Elizabeth, and a
third tanker in Cape Town under the South African flag.
Another
positive Operation Phakisa development has been the launch of a fuel storage
facility here in Cape Town, bringing an investment of six hundred and sixty
million rand.
Aquaculture
appears to be an important growth area within the oceans economy segment of
Operation Phakisa.
Close to
three hundred and fifty thousand rand private sector investment has thus far been
committed in the Aquaculture sector. Nine aquaculture farms are already in
production. These farms are located within the Eastern Cape,
KwaZulu-Natal, Western Cape and Northern Cape.
We continue
to promote innovation within the Nine Point Plan programme.
The
Department of Science and Technology will finalise the Sovereign Innovation
fund, a Public private funding partnership aimed at commercialising innovations
that are from ideas from the public and the private sectors.
Government
will fast track the implementation of the first phase of broadband roll-out to
connect more than five thousand government facilities in eight district
municipalities over a three year period.
Funding to
the tune of 740 million rand over a three year period has been allocated in
this regard.
Compatriots
A lot of
work was done in the social sector as well in the past year.
Government
has responded to the financial shortfall arising from the zero per cent
university fee increase, as agreed in meeting with students and
vice-chancellors last year.
The Minister
of Finance will provide the details of education shortfall funding in the
Budget speech.
I have
appointed a Judicial Commission of Inquiry into higher education. We urge all
stakeholders to cooperate with the Commission and help ensure its success.
On the
health front, the life expectancy of South Africans for both males and females
has significantly improved and is currently 62 years across genders, which is
an increase of eight and a half years since 2005.
The HIV
policy turnaround in 2009 led to a massive rollout of HIV testing and treatment
for 3.2 million people living with the virus.
This has
contributed immensely to healthier and longer lives for those infected.
We
acknowledge the contribution of partners in the South African National Aids
Council which is chaired by the Deputy President.
Our next
step is to revive prevention campaigns especially amongst the youth. The
Minister of Health will soon announce a major campaign in this regard.
I am also
happy to announce that the state-owned pharmaceutical company, Ketlaphela, has
been established. The company will participate in the supply of anti-retroviral
drug to the Department of Health from the 2016/17 financial year.
Meanwhile,
the White Paper on National Health Insurance was released in December aimed at
improving health care for everyone in South Africa.
Compatriots,
Local
government elections will be held within three months after the 18th of May,
the date of the last elections.
We urge all
citizens who are over the age of 18 to register to vote during the first
registration weekend, 5 and 6 March 2016.
We urge the
youth in particular who are turning 18 years of age this year, to register in
their numbers for this first ever opportunity to cast their votes.
Our Back to
Basics local government revitalisation plan was launched in September 2014 and
2015 has been the year of intensive implementation.
In this
second phase of implementation, national government will engage in more active
monitoring and accountability measures.
This
includes unannounced municipal visits, spot checks of supply chain management processes,
the implementation of recommendations of forensic reports, site visits of
Municipal Infrastructure Grant funded projects, and increased interventions to
assist struggling municipalities.
A 10 point
plan of Back to Basics priority actions has been developed to guide this next
phase.
The plan
includes the promotion of community engagement, which is absolutely critical to
enable communities to provide feedback on their experience of local government.
I already
undertook a walkabout at Marabastad taxi and bus rank in Pretoria on Monday to
speak to informal traders and commuters.
The majority
of complaints and issues raised related to municipal services.
They would
like the Tshwane municipality to clean the area and also to fix some broken
sewerage pipes. Traders said they needed and were prepared to pay.
They alerted
me that many people in Elandspoort receive RDP houses but instead of occupying
them, they either sell them or rent them out other people.
Mrs Baloyi
who runs a stall complained about nyaope drug addicts who steal goods from
traders.
Other
commuters said I must visit Kwaggafontein in the former KwaNdebele and see the
lack of service delivery. I will visit the area soon.
I was also
able to speak to foreign nationals who said they queue daily to apply for
documentation from the Department of Home Affairs. We will continue to visit
communities to hear their concerns and suggestions. Issues raised during the
visit will be followed up by the respective departments.
Compatriots
The South
African Police Service is undergoing a turnaround and has adopted the Back to
Basics approach to management to rebuild the organisation and to improve
performance at all under-performing police stations.
We note
sadly, as well that fifty seven police officers have been murdered to date
during the 2015/16 financial year. We condemn this criminality strongly.
We urge the
police to defend themselves when attacked, within the confines of the law.
Compatriots
The African
continent remains central to our foreign policy engagements.
South Africa
continued to support peace and security and regional economic integration
through participation in the African Union and the Southern African Development
Community initiatives.
We continued
to assist sister countries in resolving their issues for example in Lesotho and
South Sudan.
The South
African National Defence Force represented the country bravely and remarkably
well in peacekeeping missions on the continent. We are truly proud of our
soldiers. They will be showcasing their capability in Port Elizabeth from the
13th to the 21st of February, the celebration of Armed Forces Day.
The
Agreement by BRICS nations on the New Development Bank or BRICS Bank came into
force and the bank is envisaged to approve its inaugural projects in April this
year.
We
participated in the India-Africa Summit as well as the Forum on Cooperation
between Africa and China as we strengthened these important partnerships.
China
announced investments of fifty billion US dollars of which South Africa will
receive ten billion US dollars for infrastructure, industrialisation and skills
development.
On
North-South cooperation, we continued our engagements with the European Union
as a bloc which is our largest trading partner and foreign investor.
Over 2000 EU
companies operate within South Africa creating over three hundred and fifty
thousand jobs.
South
Africa’s relations with the USA and Canada continue to strengthen, especially
in the areas of economy, health, education, energy, water, safety and security,
capacity building and the empowerment of women.
The renewal
and expansion of the African Growth and Opportunity Act (AGOA) provides a
platform for the enhancement of industrialisation and regional integration. All
outstanding issues around AGOA are being attended to.
Compatriots
We extend
good wishes to all athletes who have qualified for the Olympic Games to be held
in Rio de Janeiro.
We encourage
participation in several programmes aimed at promoting healthy lifestyles and
nation building.
These
include the National Recreation Day, the Nelson Mandela Sports and Culture Day;
the World Move for Health Day, the Golden Games and the Andrew Mlangeni Golf
Development Day.
Compatriots,
A committee
has been established to coordinate the participation of our performing arts
legends in nation building activities in the country.
The Living
Legends committee is chaired by playwright Mr Welcome Msomi working with music
icon, Ms Letta Mbulu, as deputy chairperson.
We are also
happy that musicians and actors amongst others heeded our call to unite and
have formed the Creative Industries Federation of South Africa. The Presidency
has established the Presidential Creative Industries Task Team to support our
artists.
Compatriots,
To achieve
our objectives of creating jobs, reducing inequality and pushing back the
frontiers of poverty we need faster growth.
In the
National Development Plan, we set our aspirational target growth of five per
cent per year, which we had hoped to achieve by 2019.
Given the
economic conditions I have painted earlier on, it is clear that we will not
achieve that growth target at the time we had hoped to achieve it.
The tough
global and domestic conditions should propel us to redouble our efforts,
working together as all sectors. In this regard, it is important to act
decisively to remove domestic constraints to growth.
We cannot
change the global economic conditions, but we can do a lot to change the local
conditions.
Let us work
together to turn the situation around. It can be done.
I thank you.
