Address by President Zuma at New Age Business Breakfast CT


01 November 2011

Fellow South Africans,

Good morning to you all!

 Let me thank the New Age and the SABC for creating this opportunity for interaction with the Cape Town business community and fellow South Africans in other parts of the country.

In a few days’ time, on Saturday, the country will mark Children’s Day, as the first Saturday in November each year is South Africa’s National Children’s Day.

We work harder each day to make South Africa a more prosperous country for our children and future generations.

Children, like the majority of people in our country, find themselves in dire situations of poverty in many families.

 Government continues to provide much-needed support to children to fight child poverty.   We currently have more than 10, 5 million children who benefit from the child support grant, while we provide foster care benefits to over 563 000 vulnerable children.

The impact and importance of these grants in our communities is yet to be widely understood.

 During the global recession, the grants sustained the lives of children from poor households and protected them from extreme hunger and poverty.

This was revealed in a report released in March last year by UNICEF and the Financial and Fiscal Commission of South Africa, titled: “The Impact of the International Financial Crisis on Child Poverty in South Africa”.

 While the economy shed many jobs during the recession with a negative impact on families, the report highlights that “it appears the institutionalization of social protection programmes in South Africa, especially the child support grant, have paid off in terms of assisting poor families to stay above water in both ordinary and extraordinary times”.

 Research has also indicated that the spending patterns of the child support grant focuses on basic necessities such as food and electricity. In addition, we have witnessed increased school attendance and nutrition in homes of child support grant beneficiaries.

 Government also subsidises close to 800 000 children at Early Childhood Development Centres, to enable children from poor households to obtain early education. In addition, more than eight million children at primary and secondary schools benefit from school-feeding schemes.

 We are satisfied therefore, that we are on the right track with regards to child protection programmes to cushion them from poverty.

 

Compatriots,

 While our poverty alleviation measures assisting both adults and children are extensive and effective, they cannot substitute the need for a growing economy that should create jobs.

 I have travelled to many parts of the country in recent months monitoring the performance of government. I come face to face with the triple scourge of poverty, inequality and unemployment, which continue to afflict scores of people.

Most of the unemployed people in this country are young women and men under the age of 35 years.

 The global economic recession of over two years ago resulted in almost half a million jobs being lost.  The probability of another global downturn does not bode well for us and our commitment to grow the economy and create jobs and job opportunities.

We however remain steadfast in our commitment to remove all obstacles to achieve our goal of creating 5 million jobs for our fellow citizens that are currently unemployed, by the year 2020.

To place job creation firmly on the agenda of all important sectors in the country, we declared 2011 the year of economic transformation and job creation.

We know that this is a tough call, given the punishing economic climate in which we are losing jobs instead of creating them.

We are convinced however, that our economic transformation programmes will build a stronger and more resilient economy in the long run.

We have adopted a range of measures to turn the tide against unemployment and place the economy on a labour-absorbing path. 

 The New Growth Path adopted over a year ago outlines our vision to transform the economy into an inclusive growth path, break our historical dependency on extraction and exportation of raw minerals as well as take as to respond to the challenge of climate change. 

We have introduced an industrial policy action plan to promote industrialisation, especially in sectors that have the potential to create large scale employment.

 We have an Expanded Public Works Programme and a community works programme to provide short-term employment opportunities while also responding to pressing community challenges. 

 Our hope is that this programme will give the excluded an opportunity to earn some income and acquire some basic skills that can be utilised elsewhere in the economy.

 Following our July Cabinet Lekgotla, we have decided to mainstream infrastructure development.

 Our country needs power stations, railway lines, road upgrades, bridges, dams, refurbished airports and other critical infrastructure development projects.

 To this end, government is investing more than R800 billion in infrastructure over the next few years. Estimates suggest that infrastructure development can sustain between 50 000 and 100 000 jobs in construction through 2015.

It will also contribute to much-needed economic growth and development.

To manage this priority, we have established a high-level Presidential Infrastructure Coordinating Commission, (PICC), chaired by the President, assisted by the Deputy President, Kgalema Motlanthe. The PICC has to monitor every major infrastructure project in the country.

Other than infrastructure planning and execution, government is also implementing other undertakings made in the State of the Nation Address to boost economic activity and jobs prospects.

 The merger of small business funding institutions is underway. The R9-billion Jobs Fund to encourage employment creation initiatives is now operational.

 The programme to provide R20 billion in tax incentives for large businesses has also been implemented.  New regulations under the Preferential Procurement Act will come into effect in December this year.

 This will increase government’s commitment to buying local in order to stimulate employment and production.

 A social accord supporting this move was announced yesterday.

 

We also realize that we need to make our people, especially the youth, employable through training. We are encouraged by the support we get from labour and business in this regard.

An innovative Skills Accord was signed recently.

In addition, substantial work has been done to forge a common approach on the green economy with business, organised labour and community organisations. 

 But most importantly, we would like to emphasise the importance of SMMEs in boosting economic activity and job creation.

During this negative economic climate, many retrenched workers will try to start small businesses to survive. Many of these startup businesses will be of the survivalist type and need the support of both big business and government.

 Adequate training in business skills and mentoring are critical factors for success in small enterprises.

 We urge big business to provide that mentoring support, as it will be helpful to the economy in the long run.

 Government has a number of programmes on SMME development, skills training and enterprise support services. 

 We have established a support network through the Small Enterprise Development Agency (SEDA).

The Agency has established a network of forty two branches, seventeen mobile units and fifty eight Enterprise Information Centres countrywide. There are close to 63 916 new clients accessing the SEDA branch network. 

 SEDA has established three branches and enterprise information centres in the Western Cape.

 We are aware also that there are discussions between SEDA and the Real Enterprise Development Initiative (RED DOOR) of the Western Cape province, for SEDA to acquire the Red Door branches to expand this network.

 Government has also introduced policies that will assist small businesses that are in financial distress, provided for in the new Companies Act.

 The provision will help to ensure that SMMEs in distress are saved before they reach a stage of insolvency and ultimate liquidation.

 From government’s side we are also tackling the failure to pay suppliers on time, which affects SMMEs’ negatively.

We have sent out an unambiguous message to Directors-General of government departments to take personal responsibility for this anomaly as accounting officers. We expect regular reports from them on progress made to pay suppliers, which should be done within one month of services or goods being delivered.

Government cannot be the one that stifles the growth of SMMEs.

 

Compatriots,

 We are also building an economy that is connected to the world, and which will benefit from vibrant and balanced trade with the rest of the world. Creating decent jobs remains a priority because our domestic policy and the national interest inform our foreign policy.

 Africa remains our primary focus area, while not neglecting the developed North and the developing South, with regards to bilateral relations.

 A major development on the continent is the integration of SADC, the East African Community and the Common Market for Eastern and Southern Africa.

 This will create a market of 26 countries with a combined population of nearly 600 million people and a total GDP of approximately 624 billion US dollars. This is a massive market that will no doubt help to boost growth and development.

 Our participation in forums such as BRICS, India-Brazil-South Africa Forum and the G20 provide platforms of promoting the African agenda and a more just and equal world economic order.

 I leave for France this evening to attend the G20 meeting. The forum has emerged in recent years as a premier forum for global economic policy discussion and coordination.

 Issues to be discussed at the G20 include the global economic situation, reforming the International Monetary System, improving global governance and promoting a development agenda.

 

Compatriots,

 While government is doing its best to boost job creation, Governments can never be the principal providers of jobs.

Instead, jobs are created by successful and well-managed private sector enterprises. Our role is to create an enabling environment through progressive policies and programmes.

 We therefore urge business to do more to increase levels of investment, training and above all employment creation.

 I urge business to find ways to also support localisation which aims to support and rebuild our manufacturing sectors. 

We welcome the ongoing discussions and partnerships between business, labour and government on job creation and other matters within the ambit of NEDLAC.

The accords that have been signed by business, labour and government on local procurement, basic education and skills development indicate unity in dealing with matters affecting the country.

This unity will give our people hope and great optimism.

 Let us continue to work together, to build a more prosperous and successful South Africa for our children, whose special day we will celebrate on Saturday, National Children’s Day.

 I thank you.

www.thepresidency.gov.za

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