Ekurhuleni Investment Conference
City of Ekurhuleni's priority programmes BY the City of Ekurhuleni's Executive Mayor Cllr. Mzwandile Masina, At Emperors Palace Conference Centre
Programme Director, Ms. Iman Rappetti
Honourable Minister of Finance, Mr. Malusi Gigaba
Honourable Premier of Gauteng, Mr. David Makhura (In Absentia)
Members of the Gauteng Provincial Executive Committee
Speaker of Council, Cllr. Patricia Kumalo
Chief Whip of Council, Cllr. Jongizizwe Dlabathi
Members of the Ekurhuleni Mayoral Committee and Fellow Councillors
Leaders of Opposition Parties in Council
City Manager, Dr Imogen Mashazi and the Senior Management Team
Leadership of Business, Labour and Civil Society
Members of the Media
Fellow Residents of Ekurhuleni
Ladies and Gentlemen;
I wish to express my utmost gratitude for accepting our invitation for this august and critical occasion, more especially on a Monday morning! I hope it will set the tone for the rest of the week
"A country, a movement, a person that does not value its youth and children does not deserve its future.' Ladies and gentlemen I wish to reverberate these important words echoed by our struggle icon and one of the most profound and celebrated leaders in South Africa and around the world, O.R. Tambo. A man of undisputable distinction, who unequivocally valued the significance and strength of young blood in a nation.June is an important month for South Africa, as we commemorate a defiant generation of young people, that affirmed the role of the youth in all epochs of history.
As we commemorate Youth month, the City of Ekurhuleni has adopted a theme called "Freedom to opportunity", which speaks to the struggle of this current generation and its peregrination towards economic freedom.
Ladies and gentlemen, distinguished guests; As we drove to the Emperors palace today, I believe that all of you had a glimpse of South African realities along the way. You would have seen the men in overalls defying the cold winter mornings sitting on streets, robots and crossing pavements with the hope of an opportunity for a small job to keep poverty at bay.
As you drove to the gym, you saw taxis and buses carrying workers to their respective destination. You would have drove out of your driveways and witnessed men and women pulling cartons of plastic bags, which seems to have become a norm in the urban streets of Gauteng.
Ladies and gentlemen, the state of the economy, the dire inequalities do not require a report or us intellectualising poverty. As leaders in government and business, we have a daily illustration right outside our homes and at the gates of corporates South Africa, of the economy and the state of our people.
Stats SA released its Quarterly Labour Survey during a briefing in Tshwane last week painting a bleak picture on unemployment and more especially the state of the youth. Young people between the ages of 15 and 34 made up 58% of the additional 433 000 people seeking jobs, raising the youth unemployment rate of young people to 38.6%. this is the highest in 14 years.
One had to ask; what lies ahead for the next generation? As our theme for the City of Ekurhuleni states "Freedom to opportunity", it interrogates the subsequent gains post political freedom. Whilst we can never undermine the significance of all political gains in the democratic dispensation, the agitated youth of our country demands answers on, how has that translated to a better life for the majority of our people.
The Ekurhuleni Investment Conference 2017 is being hosted on the heels of our City's State of the City Address (29th March 2017) and the Budget speech (25th May 2017), wherein we outlined our priorities, plans and budget allocations in order to propel our regional economies to greater heights.
More importantly, the Ekurhuleni Investment Conference 2017 takes place during the 41-year Youth Month Commemorations and the 100 Centenary Commemoration of our stalwart and EMM resident, Oliver Reginald Tambo. As we plan to celebrate this giant, and the 100 years milestone, it is only proper that the principles that Comrade OR Tambo stood for, are embedded in our daily practices and activities.
In this regard, the hosting of the Ekurhuleni Investment Conference 2017 is a strategic intervention by the City to redress the triple challenges of Inequalities, Poverty and Unemployment that O.R Tambo dedicated his life to fight against.
Let me remind this esteemed Conference that the national liberation movement that was championed by this stalwart had recognised its intrinsic value as the basis of good, accountable and people centred governance. In this regard, we also acknowledge that the living standards in South Africa are much higher today than was the case at the dawn of our democracy in 1994.Despite visible and tangible gains, the sad reality is that the community of Ekurhuleni still have to confront socioeconomic challenges.
The challenges are characterized by the legacy of 9 former towns and 17 townships with no single city core, a fragmented and dispersed urban structure of towns and townships, a declining manufacturing base, high levels of poverty and homelessness, Ageing infrastructure and service delivery capacity constraints. The City of Ekurhuleni continues to confront the reality that despite our noble resolve towards nation-building and reconciliation, the majority of our communities are having a difficult time to rid themselves of the shackles of apartheid.
These socioeconomic challenges are further exacerbated by the perception of corporate exploitation, corruption and wastage, which in turn breeds mistrust between the government, business, civil society, labour and communities.
As espoused in our Budget Speech 2017, we have assumed a definition of Radical Economic Transformation as - 'a fundamental change in the economic distribution mechanism, structure, systems, institutions, patterns of ownership, management and control' in order to mainstream and advance the majority of South Africans whilst enabling economic competitiveness. This approach enables us to unlock and open the economy to non-traditional economic players who in turn would trigger economic activity and enable the economy to be more dynamic, competitive and inclusive.
The Neoclassical concept of Institutional Economics is more relevant today in order to enable communities and businesses to transact on the basis of rules that governs their existence.
By implication, laws and rules reflects the application & distribution of economic and political power amongst interest groups in society thus mitigating selfishness, self-interest and opportunistic behaviours.
In this regard, it is imperative that municipalities as the engines for economic development, growth and transformation, should assume their rightful role.
Amongst our primary responsibilities as municipalities is to:
•Demonstrate stronger commitment to invest in infrastructure
that enables service delivery levels that are responsive to business & investor's needs.
•Provide policy certainty, predictability and transparency to
reduce opportunistic behaviours between and amongst economic players.
•Create a favourable business climate that improves business
confidence and stimulates the crowding-in of strategic private and public sector investments.
In line with our resolve to advance a Pro-poor Developmental Agenda as espoused in the National Development Plan, we have resolved that the role of government in the eradication of poverty, in combating unemployment and in eliminating inequality cannot be left to the distribution mechanism of the free market economic system.
MMC's, MEC's, Minister, the Business community;
We are bestowed with the mammoth task of providing answers. I believe that this conference should not pass as another networking session, or talk shop, but more importantly assist government in restoring the faith of South Africans, more importantly the youth, in transforming the economy.
As the Executive Mayor, I gave clear directions to the MMC as well as the team, that the state of the economy no longer dictates for us to come up with profound themes and narratives for our people. We no longer need to repackage old concepts; we need to deliver.
Service delivery protests around the country are a reflection of how many of our people are idling in communities due to the increasing rate of unemployment. Leading from the front in these protests is the youth. This is a reflection of an agitated part of society which seeks answers for the current socio-economic disparities they are confronted with.
There has been much talk in media and the public discourse about Radical Economic Transformation. In the midst of excitement and interrogation of the term; we shouldn't lose sight that the majority of our people need radical economic transformation in their immediate lives.
The position to radically transform our economy, is underpinned by the imperative to push back the Frontiers of Poverty, Underdevelopment, Unemployment and Inequality in partnership with our social partners.
Having appreciated the role of the private sector in catalyzing inclusiveness in the structure and ownership patterns of the economy, the relationship between government, business, labour and civil society requires a renewed Social Compact.
At the center of this Social Compact is to clearly define the role of business in shaping government policy in order to ensure that their profit maximization imperative, does not conflict with the national welfare imperative that government seeks to realize. We are under no illusion that striking this balance would be easier for both parties.
However, we move from the premise that failure to reach some compromises in this regard, could bear more devastating consequences for our economy. Instead, we should advocate for policies that enhance economic and social gains. This includes business making capital investments. Business should also invest in socioeconomic programmes that reduce inequalities, poverty and unemployment as a practical demonstration of their social citizenry.
Meanwhile, government must recover lost ground by playing an active and meaning role as globally investors do not have much faith in the ability of government to deliver on their promises.
This resolve is based on the understanding that locational advantages that we enjoyed a decade or two ago as a preferred destination for trade, tourism and investment have dramatically shifted due to exogeneous and endogenous factors. Therefore, our approach going forward shall be characterized by a social compact that ensures that we reclaim our comparative and competitive advantages.
We note with concern that overall Business Confidence is at its lowest, hence are encouraged by South Africa' re-entry into the Top-25 most attractive destinations for FDI in the world according to the 2017 AT Kearney Foreign Direct Investment Confidence Index.
This renewed confidence is attributed to a perceived flight to safety thus signalling that global investors are looking to diversify the location of their FDI in line with their risk appetite.
The Gauteng City-Region remains the top destination and recipient of greenfield and brownfield investments in South Africa due to obvious locational advantages.
According to the Foreign Direct Investment Confidence Index, "South Africa has bucked the overall regional trend, hence it should come as no surprise that South Africa has claimed the final spot in the Top-25 countries".
However, it is imperative that municipalities should enhance their capabilities to harness this positive developments and investor confidence to crowd-in most of the investment inflows by ensuring that they are responsive and are investor friendly.
In this regard, I am pleased to reiterate that despite Fitch & Standard & Poors credit downgrade for South Africa on sovereign considerations, the Moody's Ratings Agency has maintained its positive rating of Aaa.za / Prime-1 investment grade for the City of Ekurhuleni. This is a vote of confidence in our Good financial performance, which reflects strong revenue growth; Historically strong liquidity position; Prudent financial management; and having a relatively large local economy, with a strong industrial base.
This prudent management has been a catalyst to mega private sector investment by the Riverfields Development Company in developing the Plumbago Park, the M-T Development Company in developing the mixed used development complex, TERACO for developing a world-class data centre in Isando, Unilever SA for the plant in Boksburg and Chloorkop, South African Breweries for developing the Malt Melting plant, Lords Trust Development Company for developing the Lordsview Industrial Complex, the Badenhorst family' the investment at the Carnival Junction, just to mention but a few.
These large scale mixed use developments are part of our City' Investment Pipeline of over R300 billion project value over the next 15 years.
Our efforts as the City of Ekurhuleni are poised to ensure that we are a destination of choice for investment, trade and tourism, as we leverage our Aerotropolis properties, locational advantages and associated infrastructure and economic clusters to our advantage. The City of Ekurhuleni encompasses what is claimed to be "the largest concentration of industrial activity in South Africa, and in sub-Saharan Africa".
Hence our approach is directed at ensuring that our industrial clusters would emerge to leverage synergies across various related industries such as transport equipment, aerosols, automotive, plastics and health sciences clusters.
We believe that by facilitating the formation of these clusters, the City would have supported and fostered an industrial revolution that is characterized by stronger sectoral linkages and greater competitiveness.
However, inspite of our favourable achievements as mentioned above, we are resolved that our quest to realize and achieve our objectives as espoused in our City' Ten (10) Point Economic Plan, cannot be realized if we do not insist on the following non-negotiable imperatives:
1. Manufacturing Revitalisation
2. Aerotropolis Masterplan Implementation
3. Acceleration of Special Economic Zone Programme
4. Land Availability for Strategic Development
5. Support SMMEs through Public Procurement
6. Implementation of Township Economy Strategy
7. Enabling Public Transport System
8. Massive Public Infrastructure Investment
9. Promote Localisation and Production
10. Skills, Capability Development and Workplace stabilisation
In this regard, we have commenced to assemble land & property packages that are located within the Aerotropolis Catchment and surrounding areas with a particular focus on the CBDs of Boksburg, Kempton Park and Germiston as our priority Urban Development Zones.
Our reality remains that during the apartheid era, urban local government was organized along racial lines, hence the post-apartheid government inherited totally segregated patterns of residential settlements and infrastructural backlogs.
Since the 17th Century, the development of strategic infrastructure has catalyzed and influenced business, industrial and residential agglomeration location choices as centres of economic activity in order to advance their trade, investment and tourism aspirations.We are resolved to focus our resources on the revitalisation of Core Economic Areas such as CBDs and industrial areas into economic centres of excellence for strategic industrial clusters and human settlements.
This close proximity to economic centres is the primary catalyst that would enable the community-oriented development approach that would catapult our regional economies to a higher growth trajectory especially in
It is our daily reality that Local Government is the first point of contact between citizens and the Government as this sphere of government has the most direct impact on the day-to-day lives of South Africans.
In order to realize the overall objective of municipalities which is to grow local economies, to provide infrastructure and to render services to those living in the municipal jurisdiction.
It remains an achievement to mention that over the years, we have increased our Capex budget from R2 billion in 2011 to R7 billion in 2017, as demonstration of our commitment in the regional economy.
Furthermore, in order to augment of City' capacity to implement Capital intensive projects and thus ensure that 100% of our Capex in spent annually, the following interventions have been made:
In this regard, seeks to pass the litmus test by ensuring that its economic & industrial development, empowerment, emancipation and community development strategies, programmes and plans are symbiotic in order to systematically uproot inequalities, unemployment, underdevelopment and poverty. In this regard, the more people are lifted from the trappings of absolute poverty, unemployment and hopelessness, the faster the regional economy will grow.
As we implement the Ekurhuleni Ten Point Economic Plan, it has become imperative that a suitably resourced vehicle should be put in place to ensure proper planning, coordination, financing and implementation of all the identified catalytic investment projects. In this regard, as per the Council approval that was granted to establish that vehicle, it is envisaged that the Ekurhuleni Economic Development Agency shall be established during the second quarter of 2017/18 financial year.
In conclusion, the Municipal Systems Act envisages that local governments are the engines of economic growth hence they must play a developmental role in their communities.
It is for these reasons that coordination, cooperation and collaboration should be the nucleus of relationships between the three spheres of government, business, labour and civil society in order to leverage and advance the country's national interests and global competiveness imperatives. It remains our collective responsibility to ensure that aspirations of through a concerted and systematic programme to mobilize and channel public and private sector investments into strategic areas of the regional economy.
I wish to express my gratitude to the Minister of Finance, Hon. Malusi Gigaba for honouring this invitation. Treasury remains instrumental in fiscal and monetary prudence in the country and at all times we are bestowed with the duty of ensuring we attract investments into the economy. We hope that this engagement and your presence will afford the business community of Ekurhuleni further deliberations with your team.
Our efforts to build a capable City with the capacity to transform and improve the lives of the people of Ekurhuleni, happens in a national and international environment that is constantly changing and requires simultaneous evolution from us. Our existence in this small corner of the world, as a region, is intimately tied to the fate of the people of this country, the continent and the global village broadly. It is for this reason that we must always relate, empathise with and draw lessons from the experiences of other places and people of the global environment. We continue to strive towards strengthening relations with chambers in the City of Ekurhuleni to realise this objective. May we use these two critical days to architect much needed solutions.
In closing I wish to make use of another quote to stress the significance of ensuring that we include young people in our plans for the future; "A country that neglects its young, destroys its own potential", these were the words of the former United Nation's Secretary General, Boutros Boutros Gali, addressing in Zambia in 2012.
The young remain agitated and restless. Let's internalise this message, let's afford many generations to come, a fighting chance towards economic emancipation.
I thank you