President Cyril Ramaphosa: Reply to questions in National Assembly

8 May 2018


7. Mr A J Williams (ANC) to ask the President of the Republic:

In view of his announcement on 16 April 2018 of the appointment of four persons to serve as Special Envoys on Investment who will travel to major financial centres in Asia, the Middle East, Europe and the Americas to meet with potential investors with the intention to attract a total amount of $100 million in new investment over the next five years, particularly in productive sectors of the economy, and the current decline in total fixed investment as a share of the gross domestic product from 27% to 19% since 2008, what

(a) message does the team of Special Envoys on Investment intend to convey to potential investors and

(b) is the Government`s strategic objectives for convening the Investment Conference in September 2018?


Honourable Members,

Last month, I appointed four special envoys on investment to meet with potential investors in South Africa and around the world as part of a new investment drive.

This is in preparation for an Investment Conference to be held later this year.

The message that these special envoys will convey to potential investors is that South Africa is on a path of economic renewal.

They will explain why the country is an attractive investment destination with as yet unrealised potential.

Their message will be that South Africa is bouyed by a new optimism, with improving business confidence, consumer confidence and investor sentiment.

Government is working on a social compact with business, labour and civil society on a transformed and inclusive growth path.

An important part of building the social compact is the work that has started towards a Jobs Summit, in which all social partners will make specific commitments to contribute to faster job creation.

The envoys will indicate that the economy is being well managed.

Government is consolidating fiscal debt, our currency has strengthened and South African bonds are the best performing among emerging markets in 2018.

Government is working to root out corruption and instituting turn around strategies at state owned entities.

New boards are already in place at Eskom and Denel, and an interim board has been put in place at Prasa.

We are investing in the development of the young people who will drive the economy into the future.

Government has begun with the provision of free higher education to students who would otherwise face financial exclusion or hardship.

Together with our other interventions in the education system, this will significantly help boost the capabilities of our workforce.

We have launched an initiative in collaboration with the private sector to provide work experience opportunities for one million young people over the next three years.

As part of the work underway to improve South Africa`s investment climate, government is successfully rolling out the Invest SA `One Stop Shop` programme and has partnered with World Bank to improve the country`s competitiveness.

They will also provide details on the support Government provides in the form of incentives and special economic zones to attract and facilitate investment.

The investment recruitment drive and roadshows will culminate in the Investment Conference, which will be a platform for investors to announce new investments and to be exposed to potential opportunities.

We are aiming to raise $100 billion in new investment over the next five years.

More broadly, our aim through this investment drive is to make South Africa an investment destination of choice for many years to come, so that we can achieve sustained growth and create jobs, reduce poverty and transform our economy.

I thank you.


8. Ms D Carter (Cope) to ask the President of the Republic:

Whether, in the interests of transparency, accountability, responsibility, the rule of law and the best interests of the country, he will establish a commission of inquiry into the alleged serious dysfunction, malfeasance, corruption and gross abuse of resources of the State, including financial resources, for wrongful ends within the Crime Intelligence Division of the SA Police Service and the State Security Agency; if not, why not; if so, what are the relevant details?


Honourable Members,

During the State of the Nation Address in February, I said that a priority of government would be to restore the integrity of public institutions that are charged with very critical mandates in our constitutional democracy.

In line with that commitment, we are working to stabilise key institutions in the security cluster, strengthen law enforcement institutions and shield them from any external interference or manipulation.

We are deeply concerned about allegations of corruption and other acts of wrongdoing in some of our intelligence services.

With respect to the State Security Agency, I will shortly be setting up a Review Panel to assess the structure of the Agency relative to its mandate and inquire into its systems and capacity.

I have also instructed the Minister of State Security to take the necessary steps to attend to all governance and operational challenges confronting the Agency and to work restore the public`s confidence in this critical institution.

The Minister of Police is similarly undertaking measures to address the challenges in the Crime Intelligence Division of the South African Police Service.

These include the appointment in March 2018 of a new Divisional Commissioner for Crime Intelligence, Lt Gen Anthony Jacobs.

At the same time, it is necessary for critical oversight bodies like the Joint Standing Committee on Intelligence and the Office of the Inspector-General of Intelligence to be empowered to undertake their respective mandates.

I am confident that through the work that government is undertaking to address the challenges within the intelligence services, together with the work being undertaken by these oversight bodies, we will succeed in restoring the integrity and operational capability of services that play a vital role in keeping our country and its people safe.

I thank you.


9. Ms H H Malgas (ANC) to ask the President of the Republic:

With reference to his speech at the official funeral of Mrs Winnie Madikizela-Mandela on Saturday, 14 April 2018,

(a) what did he mean when he said that we must recognise our wounds and damage as a nation that were caused by our past and that it impacts on how we respond both to the current situation and our future and

(b) how should the nation collectively deal with its current and future socio-economic challenges?


Honourable Members,

The colonial conquest of our country, which began over 300 years ago, was achieved through violence and brutality.

The system of apartheid was built and sustained through the violent suppression of the political, social and economic rights of the black majority.

This violence took the form not only of state repression, but also the dispossession of people`s land, the destruction of their livelihoods and the exploitation of their labour.

Through the migrant labour system, the imposition of influx control and the creation of the bantustan system, families were torn apart and communities dislocated.

In its efforts to crush any resistence, the apartheid government resorted to detention, torture, intimidation, murder and the deployment of vigilantes to sow violence and discord in communities.

While these methods of repression were laid bare in the proceedings of the Truth and Reconciliation Commission and though the TRC contributed to the process of national reconciliation, many of the wounds of decades of apartheid and colonialism remain.

In many ways, we remain a violent society, where murder, assault, rape and other `contact` crimes are still widespread.

The alarming levels of violence against women and the abuse of children are a damning indictment on our society.

We are particularly concerned at the apparent increase in instances of femicide, where women have been killed by their partners.

There is a responsibility on all of us, particularly men, to ensure that such crimes do not occur.

Too often, people resort to violence to settle differences or to express discontent.

There are other wounds that have still not healed.

The violence of poverty, homelessness and hunger continues to afflict millions of our people.

Despite the social and economic progress we have made, severe inequality continues to divide our society, by race, gender and geography.

If we are to heal these wounds, we need, firstly, to acknowledge them.

As the governing party said in its January 8th Statement this year:

“We shall redouble our efforts to build a society in which black poverty and white privilege are consigned to the past.”

In this context, we wish to commend the Honourable Maimane for having made exactly the same statement in his Freedom Day message.

We will be the first to defend him against those in his own party who want to deny the reality of racial inequality in South Africa.

We need, secondly, to agree as a nation on the measures we must take to deal with them.

Reducing inequality and ending poverty must be at the centre of our efforts.

This requires a growing, inclusive economy, the creation of jobs for all our people, the provision of quality education and the development of skills.

It requires government support to the poor through a comprehensive social security system, affordable health care and the provision of housing and land.

It is only by ensuring that everyone has the opportunity to acquire useful skills, to find decent employment, to earn a living wage, to have a house and to feel safe, that we will be able to effectively heal the wounds of the past.

At the same time, we need to build families, communities and workplaces that are cohesive, stable and peaceful.

We are on our way to build the kind of society to which Mama Winnie Madikizela-Mandela and many of our great leaders dedicated their lives, but we still have some distance to travel.

We still have many wounds to heal.

I thank you.


10. The Leader of the Opposition (DA) to ask the President of the Republic:

With reference to his reply to question 2 on 14 March 2018, what are the details of the assurances that his newly appointed envoys will give potential foreign investors in order to ensure that the National Development Plan`s growth targets are met, despite the Government`s plan to expropriate land without compensation?


Honourable Members,

For South Africa to grow faster and to build a transformed and inclusive economy, land reform is necessary and urgent.

We will explain to potential investors that land reform is not incompatible with agricultural productivity and economic development, as the historical experience of some East Asian economies, such as South Korea, demonstrates.

Land reform, which will include the mechanism of expropriation without compensation, will be implemented in a way that contributes to a stronger economy, job creation and economic freedom.

We will do so without jeopardising economic development, agricultural production or food security.

In our investment law, we provide significant guarantees to domestic and foreign investors.

In our engagements at the World Economic Forum meeting in Davos, during investor road shows in the US and UK and at a recent roundtable discussion with CEOs in London, we have found that foreign investors appreciate the need for South Africans to find sustainable solutions to the inequitable distribution of land and wealth.

In their investment decisions, investors take a long term view on the market opportunities, sector policy and support and regulatory environment.

They are looking for stability and policy certainty.

Our envoys will indicate that steady progress is being made in consultation with industry, labour and communities on the finalisation of the Mining Charter.

We will soon be finalising our approach on the allocation of spectrum, which will build the requisite capacity for a modern inclusive economy.

Government is levelling the playing field for investors and businesses entering concentrated markets through amendments to competition legislation.

It is significant that Moody`s ratings agency recently decided to keep South Africa at an investment grade and changed its outlook from negative to stable, affirming the country`s recent political and economic developments.

Foreign investors that we have interacted with over the last few months are increasingly optimistic about the prospects for the South African economy and looking with great interest at possible investment opportunities.

I thank you.


11. Ms N R Bhengu (ANC) to ask the President of the Republic:

What is his position with regard to the findings and proposals contained in the South Africa Economic Update Jobs and Inequality report of the World Bank of April 2018, which include many findings that the Government itself has made?


Honourable Members,

The World Bank report on poverty and inequality places strong emphasis on the importance of jobs and skills in achieving faster growth that improves the lives of the poor.

The report notes that it is critical to raise overall productivity and competitiveness in the South African economy to increase the number of jobs created.

These finding are in line with the National Development Plan and the Medium Term Strategic Framework.

The report concurs with current policy emphasis: in order to ensure that growth measures have a meaningful impact on reducing inequality, we must accelerate efforts to improve the quality of basic education and access to tertiary education.

We must improve delivery of these and other key government services.

This is critical given that we still need to devote resources to ensuring that South Africa`s fiscal position is suitably robust to withstand shocks from either global or domestic sources.

As outlined in the Budget Review 2018, some of the measures we need to take to increase investment and raise productivity include efforts to improve investor confidence, institute telecommunications reforms, lower barriers to entry, reform transport infrastructure, and support tourism and agriculture.

The World Bank report confirms our view that it is not sufficient to accelerate economic growth alone.

We need to ensure that such growth is accompanied by the creation of jobs and the provision of support to the poor.

It is for this reason that we have begun preparations with our social partners for a Jobs Summit later in the year, so that we can focus our collective efforts on tackling unemployment.

Our expectation is that these efforts will help to further increase the impact of recent labour market support policies, including the employment tax incentive, the national minimum wage and the Youth Employment Service.

While the World Bank report presents a sobering view of the challenges in the South African economy, it provides useful recommendations that are supportive of, and consistent with, the programmes we are currently implementing.

I thank you.


12. Mr M P Galo (AIC) to ask the President of the Republic:

Despite the Government`s commitment to reduce the regulatory barriers for small businesses as expressed in his State of the Nation Address on 16 February 2018, the Competition Commission, notwithstanding, approved a number of acquisitions and mergers without conditions, how does he intend to reduce barriers for small businesses when the Competition Commission, which should be the instrument to break down these barriers, continues to approve mergers amongst large corporations which hinders an efficient and competitive environment for small and medium enterprises?


Honourable Members,

Small and medium businesses are an important part of the South African economy.

They support more than 60% of employment in South Africa, and are engines for growth and transformation.

It is therefore critical that we continue to pursue measures that will open up the economy for small businesses and black South Africans.

The Competition Act and the Competition authorities, including the Competition Commission, are important instruments to address not only matters relating to competition, but also economic concentration and public interest.

When investigating whether a merger can or cannot be justified, the Competition Commission must consider the impact on employment, and on the ability of small businesses and especially firms controlled or owned by historically disadvantaged South Africans to compete in their chosen market.

The Competition Authorities are required to apply a case-by-case test on the appropriateness of imposing conditions on mergers.

With respect to the specific decisions of the Competition Commission referred to by the Honourable Member, in 11 of the 12 approved mergers, the Commission found the proposed transaction was unlikely to substantially prevent or lessen competition in any market, and did not raise any public interest concerns.

In one case, namely the acquisition of the Cast Products Division of Scaw Metals, the transaction was approved on condition that, among other things, the proposed merger would not result in any retrenchment of employees for 18 months after the implementation of the merger.

South Africa has lead the way globally on matters of public interest.

Many authorities around the world are now beginning to recognise the importance of these responsibilities to support the public interest through their competition law.

There are a number of instances where the efforts of Government and our competition authorities have led to the opening up of markets and the protection of important industries and jobs.

Some 58,000 jobs were saved and 6,500 jobs created through conditions stipulated by the Competition Authorities through merger proceedings, between April 2014 and the 2016/17 financial year.

In its Budget Vote later this week, the Economic Development Department will provide details up to the latest financial year.

As a country, we have begun to more effectively use our competition laws and institutions as instruments of economic development and transformation, and, as indicated in the State of the Nation Address, are working to amend the Competition Act to make public interest more prominent in the decisions of the competition authorities.

I thank you.