President of Black Business Council Dr Danisa Baloyi
Executive Committee and members of Black Business Council
Distinguished guests

We are honoured to be invited to engage with yourselves as the progressive Black Business Council on matters of mutual interest.

More interestingly, our engagement on how can the Ministry for the Public Service and Administration together with the Black Business Council work together to move South Africa Forward could not have been more appropriate.

As part of a caring and progressive government, we are here to share our views with you on how can we implement radical economic transformation through the public service.

Ladies and Gentlemen:
On the occasion of his second inauguration President Jacob Zuma vowed that ‘economic transformation will take centre-stage’ during his last term of office.  He promised that “the structure of the economy will be transformed through industrialisation, broad-based black economic empowerment and through strengthening and expanding the role of the state in the economy.”

The fact that the economy would assume centre stage should not come as a surprise. It is part of the normal course of evolution of statehood. All indications point to the fact that the first phase of transition, consolidation of formal democracy is complete. The country has entrenched all the necessary checks and balances such as free press, independent judiciary, independent chapter 9 institutions, and regular free and fair elections.

But this achievement is under threat owing to the unfinished business of economic transformation. In the State of the Nation Address, President Zuma was clear and unambiguous in his description of the challenge. He observed:
“Twenty two years into our freedom and democracy, the majority of black people are still economically disempowered…The gap between the annual average household incomes of African-headed households and their white counterparts remains shockingly huge.

White households earn at least five times more than black households, according to Statistics SA. The situation with regards to the ownership of the economy also mirrors that of household incomes.  Only ten percent of the top one hundred companies on the Johannesburg Stock Exchange are owned by black South Africans.” (close quote).

The situation is not any different in top management in which whites continue to rule the roost with 72% demographic representation and Africans grossly underrepresented with a measly 10%.

Ladies and Gentlemen:
The second challenge facing the country is the persistence of the triple challenge of poverty, unemployment and inequality. Underscoring the centrality of the economy in its resolution, President Zuma is spot-on in his observation that ‘the most effective weapon in the campaign against poverty, is the creation of decent work, and that creating work requires faster economic growth.’

Indeed, since assuming office, economic transformation has become the hallmark of President Zuma’s administration, featuring with some minor refinement in each of his State of the Nation addresses. Its latest incarnation assume the formulation of ‘radical economic transformation.’ The objective of radical economic transformation is two-fold. First is to place ‘the economy on a qualitatively different path that ensures more rapid, sustainable growth, higher investment, increased employment, reduced inequality’ and second is to ‘deracialise the economy.’

We often hear that some people do not understand what radical economic transformation means.  Some people often refer to it as a mere slogan.  But, the ANC and President Zuma have been more bold and direct in defining radical economic transformation – which is, “a fundamental change in the structure, systems, institutions and patterns of ownership, management and control of the economy in favour of all South Africans, especially the poor, the majority of whom are African and female.” (close quote).

Described this way, transformation of the productive structures and relations would be at the core of placing the economy on a qualitative path. This would require moving away from a situation where the country remains largely an exporter of primary products.

Dr Rob Davies, the Minister of Trade and Industry has elaborated on the form and key elements of radical economic transformation.  He argues that first, radical economic transformation must entail radical transformation of production relations, second it must lead to less conflictual, characterised by more equitable benefit-sharing and by less inequality. Lastly, it must place ‘job creation at the heart of work programmes and promoting a more inclusive job-rich pattern of growth.’

Citing KPMG publication, Africa Arisen: The Blue-Sky Continent 2014, Minister Davies points out that Africa produces and exports Six Billion US dollars ($6 billion) worth of coffee. But that coffee is processed, packaged and branded elsewhere and is sold for One Hundred Billion US Dollars ($100 billion). That is, a staggering Ninety Four Billion US dollars ($94 billion) is earned outside of the borders of Africa on the basis of its products. The value chain is outside of our continent with the value-added part located outside of our continent. In other words, money that could have been earned in the continent, had we industrialised, is also part of the export.

This speaks to the heart of President Zuma’s call for South Africa to move up the value chain and to embark on the beneficiation of its products, be it in mining or agriculture. Moving up the value chain will enable South Africa to embark on industrialization. Already, the mineral beneficiation action plan has been developed as part of the Industrial Policy Action Plan.

Ladies and Gentlemen:
As we reflect on the 23rd year of our democratic freedom, it is important for us to reflect on the journey traversed towards reaching reconciliation and democracy in our country. The South Africa of today is the South Africa we dreamed of in many respects.  Millions of marginalised South Africans gained access to social services and welfare they had never experienced before.

The reality, though, is that we have not been able to fulfill the ideals of all of our citizens. The National Development Plan (NDP)[i] notes that the South Africa of today looks very different to the one we left behind in 1994; yet the many poor South Africans highlight the serious shortcomings in our development path. The legacies of colonialism, apartheid and dispossession in South Africa have not been eradicated. We are still plagued by the macrocosmic issues of unemployment, poverty and underdevelopment.

Our Government’s Medium Term Strategic Framework (MTSF) is a strategic plan for the 2014 - 2019 electoral term, which reflects the commitments made in the election manifesto of the governing party, the African National Congress (ANC). The MTSF highlights Government’s support for a competitive economy, creation of decent work opportunities and encouragement of investment.

As the MTSF document puts it, “the NDP provides the framework for achieving the radical socio-economic agenda set out in the governing party’s election manifesto. It recognises the need for a capable and developmental state, a thriving business sector and strong civil society institutions with shared and complementary responsibilities. It identifies decent work, education and the capacity of the state as particularly important priorities. It also highlights the need to improve the quality of administration of many government activities.”

As government, our focus during this electoral mandate period is on the following:

• Radical economic transformation, rapid economic growth and job creation;
• Rural development, land and agrarian reform and food security;
• Ensuring access to adequate human settlements and quality basic services;
• Improving the quality of and expanding access to education and training;
• Ensuring quality health care and social security for all citizens;
• Fighting corruption and crime;
• Contributing to a better Africa and a better world; and
• Social cohesion and nation building.

Ladies and Gentlemen:
In order to professionalise the public service, we have amended the Public Service Regulations on the 1st of August last year, so that we put in place policies and regulations to curb corruption in the public service.

The new Regulations stipulate clearly that Public Servants must not conduct business with any organ of state or be a director of a public or private company conducting business with an organ of state.  In this way, we want to make a clear distinction between Public Servants and yourselves as business people.  We could not and cannot have Public Servants who, at same time, moonlight as business people.  To this extent, Public Servants were informed accordingly that they should cease doing business with organs of state or resign from the public service.

The Regulations introduced transitional arrangements for the implementation of Regulation 13(c), which provided public service employees with a period of six months - which ended on 31 January 2017 - to relinquish their interests in businesses involved in conducting business with an organ of state, or to resign from the Public Service. Employees who opted to resign from such businesses were required, in terms of the transitional arrangements, to provide proof of resignation to their Heads of Department by the end of February 2017.

In this regard, the National Treasury manages the Central Supplier Database (CSD) empowered centrally to register suppliers who want to conduct business with the State. As such, it provides a list of names of individuals and businesses conducting business with the State to the Department. By comparing data from PERSAL with that on the Central Supplier Database, public service employees intending to conduct business with the State, as well as those conducting business with the State, are identified. In January 2017, we forwarded letters to Executive Authorities, identifying those officials that are registered on the Central Supplier Database and those who are conducting business with an organ of state, to create awareness on the transitional arrangements.

Ladies and Gentlemen:

In March this year, we matched the Central Supplier Database information with PERSAL data. A total number of Eleven Thousand Five Hundred and Sixteen (11 516) Public Officials were found to be registered on the Central Supplier Database and were therefore in a position to perform business with an organ of state.

As at the end of February 2017 and for the period 1 October 2016 to 28 February 2017, a total of Two Thousand Five Hundred and Thirty Six (2 536) employees, who were registered on the Central Supplier Database, have resigned from the Public Service. We are currently following up with departments to assess if there are any remaining public servants who have not resigned from the companies they were associated with.

To assist with the implementation of Regulation 13 (c), we approved two Directives:

• On 13 September 2016, a Directive on Other Remunerative Work Outside the Employee’s Employment in the Relevant Department as contemplated in Section 30 of the Public Service Act, 1994, was approved. This Directive came into effect on 1 November 2016. The Directive clarifies that although employees may obtain permission for remunerative work outside their employment, such permission shall not be used as a basis for conducting business with an organ of state.
• In January 2016, a Directive on Conducting Business with an Organ of State was approved to clarify the definition of an “organ of state,” and excluding certain activities that are not considered to be conducting business with an organ of state; for example, teaching activities at universities.

With effect from 1 February 2017, National Treasury amended the registration process for prospective suppliers to be registered on the Central Supplier Database, to prohibit public service employees from being registered. During the registration process all suppliers are matched against the PERSAL system, to establish if they are Public Service Employees or not. If a match is obtained, the person is flagged and is then required to provide proof that he/she is not a public service employee.

We view misconduct in a serious light and will continue to strengthen measures for effective consequence management in the Public Service.

Ladies and Gentlemen:
We are now familiar with the notion that South Africa has declared itself a developmental state. Successful developmental states (such as Korea, Japan and Singapore) are distinguished by the fact that they established capable institutions which give them the capacity for interventions to positively alter their countries’ development trajectories.  A key feature of developmental states is the strong organisational capacity to ensure the developmental priorities are achieved.

Our Constitution (s195) declares public administration to be development-oriented, wherein, inter alia, a high standard of professional ethics must be promoted and maintained; public administration must be accountable; and people’s needs must be responded to, and the public must be encouraged to participate in policy-making. In order to build a state that is capable of playing a developmental and transformative role, it requires a skilled professional public service. As espoused in the NDP, we require a public service to be a career of choice that should attract highly skilled people, create a sense of professional common purpose and a commitment to developmental agenda.

The establishment of the National School of Government (NSG), one of the entities of the Ministry for the Public Service and Administration, in October 2013, points to such an institution that should be uniquely positioned to develop the skills and competencies in the public service, and be able to offer mandatory training and compulsory programmes supporting the developmental agenda.

The NSG is legislatively mandated in terms of the Public Service Act, 1994 (as amended) to provide training or facilitate the provision of training in the public service. It provides training through a suite of accredited and non-accredited courses and programmes, ensuring applied workplace learning to public servants in areas such as:

• Managing public finance;
• Human resource management and development;
• Good governance;
• Public service leadership, including mentoring; and
• Development monitoring and evaluation.

The NSG recently entered into an Memorandum of Understanding with South Africa Local Government Association (SALGA) to collaborate on areas of capacity building in local government.  The MOU also provides for collaboration in, inter alia, public lectures and/or leadership platforms for reflection, utilising local and international experts, targeting mayors councillors and top leaders in local government; and induction programmes for councillors and senior managers to promote the narrative of back-to-basics in municipalities.

Ladies and Gentlemen:
The NSG also provides compulsory induction to all newly appointed public servants.  Importantly, is the piloting and roll-out of the Executive Induction Programme (EIP) for new entrants at the levels of Deputy Director-General and Director-General. The EIP consists of six components and includes coaching by qualified and professional NSG coaches and mentoring by former heads of department.

The NSG has already contracted 10 executive coaches (retired public servants and private individuals) and assigned them to newly appointed Deputy Directors-General.  This training intervention is in line with the Ministry for the Public Service and Administration Directive on Compulsory Capacity Development, Mandatory Training Days and Minimum Entry Requirements for Senior Management Service (SMS), which provides for compulsory training for Heads of Departments in the form of an Executive Induction Programme and structured exchange/ coaching programme.

The Minister for the Public Service and Administration issued the aforementioned Directive to all national and provincial departments in relation to compulsory capacity development, mandatory training days and minimum entry requirements for Senior Management Service.   In terms of the Directive, all SMS members must undergo relevant training to close identified development gaps as determined by a competency assessment and/or a performance assessment at a specific performer level. They must spend a minimum of 18 days on a combination of generic and technical/ professional training over a three year performance cycle.

In terms of the Directive, a requirement for entry into the SMS is a successful completion of the Senior Management Leadership Programme with either the NSG or a higher education institution accredited with the NSG.  The introduction of the pre-entry certificate is from 1 April 2020, which means that an individual may only qualify to enter (the SMS), if they have successfully completed the programme at a required performer level.

Over and above competencies, which are all necessary for a competent public service leadership, we need to also focus on competencies of political competency and acumen, as well as people mobilisation – which are necessary for a developmental state. We cannot separate the political-administrative interface within the developmental state and these competencies for senior public servants are therefore an important aspect of the political-administrative relations. The NDP calls for a public service that is immersed in the development agenda but insulated from undue political interference.

Ladies and Gentlemen:
The planning capacity for any developmental state is paramount to its success, in particular national economic planning, spatial economic development and planning, and local economic development. In addition to the compulsory courses, the NSG is also engaging with stakeholders towards developing a training programme for economic development. This training should support public servants in ensuring economic benefits and improved quality of life for all residents, and towards maximizing the economic potential of our country, increased local economic growth, employment creation and development initiatives within the context of sustainable development.

We recognise that our country has produced many great leaders, one of those leaders being the late ANC President Comrade Oliver Reginald Tambo, whose life we are celebrating this year. During the State of the Nation Address this year, President Jacob Zuma declared 2017 to be the Year of Oliver Reginald Tambo, in honour of a selfless patriot who would have turned 100 years old this year. His life from a humble beginnings and legacy of a true leader, certainly carries a message for all of us to emulate - demonstrate and practice selflessness, patriotism and humility.

We recognise that our country has produced and continues to produce great leaders in all sectors of our society. And for this reason, we directed that the National School of Government must create thought leadership between public and private sectors.  The NSG must engage with leaders with high level expertise within their respective fields, be it public or private sectors, who can inspire our public service leaders, enthuse them to be innovative and find creative solutions to service delivery challenges.

In order to empower the youth of our country, the NSG has introduced the Breaking Barriers to Entry (BB2E) Programme in 2010, which seeks to reduce the barriers that youth experience as they attempt to enter the public service. Over the last three financial years, a total of Six Thousand Five Hundred and Fourty Eighty (6 548) unemployed graduates underwent public service orientation through the NSG. The key challenge is that access to employment opportunities is limited, and competition for these posts is high, however, the training has put the learners in good stead to compete adequately if they are invited to interviews.

Ladies and Gentlemen:
The Centre for Public Service Innovation (CPSI) is an entity in the MPSA Portfolio that is mandated to entrench and drive the culture and practice of innovation in the public sector through use of various programmes for improved service delivery.

The CPSI is part of the National System of Innovation, which comprises amongst others research councils, academic institutions and science parks such as The Innovation Hub (TIH). Through its partnership with TIH, the CPSI continues to tap into innovations by young entrepreneurs and SMMEs to solve service delivery challenges in the public sector.

In many parts of our country there has been a rise of informal settlements, which unfortunately do not adhere to town planning guidelines and local municipalities by-laws. SAPS approached the CPSI to attempt to find a solution to the challenge of delayed response time resulting in contaminated crime scenes.

In partnership with the Innovation Hub, the CPSI, through the OPENIX platform, called for innovative solutions to this challenge.  An Innovative solution was developed by a women headed SMME, Memeza-Shout. Through the support of the CPSI and The Innovation Hub, a community household alarm was successfully piloted in Diepsloot in 2015/16. The success of this pilot has led to being recently replicated and installed in 23 identified no-fee schools and vulnerable households in Gauteng, in partnership with the Departments of Community Safety and Education.

This game-changing solution redefines the communication between SAPS and communities by connecting households and schools to sector policing vehicles, police stations and community police forums for quicker response time to incidents of crime.
In the pilot, this innovation reduced the average response time of SAPS to incidents of crime from 48 hours to less than ten minutes.  To date 25 police stations have been connected to households and schools in Gauteng and North West. In addition, Three Thousand Five Hundred (3 500) personal alarms have also been distributed to learners in these schools to help protect them from personal attacks between home and the schools.

The replication of this solution, developed by an entrepreneur, is gaining momentum and requires support from the safety and security sector and business.  Social innovations such as this one also stimulate the economy in that the small business grows and contributes to employment creation while solving a serious service delivery challenge.

Ladies and Gentlemen:
Over the years, the CPSI has uncovered a number of innovations that contribute to economic transformation of the previously disadvantaged communities. One such example is a project by two young entrepreneurs based in Rustenburg, North West province, aptly named Repurpose Bags. These school bags are made from recycled plastic shopping bags and feature a solar panel that can be placed inside the top flap of the school bag. These solar panels are later used as lamps in unelectrified communities.

In 2016 another innovation that came through our rewarding programme aimed at unearthing and recognising innovative public servants, is the Contractor Development Programme in the Free State province. It is a learnership programme implemented by the Department of Police, Road and Transport to develop, train and equip emerging contractors or entrepreneurs with construction and maintenance skills and knowledge on routine road maintenance. This has provided work opportunities to previously disadvantaged people to alleviate unemployment, poverty and intervene towards the development of capacity in the construction industry in order to build a sustainable economy. This innovation can help with the unemployment and skills challenge the country is grabbling with.

In March 2017, the CPSI in partnership with MTN, handed over multi-media computer labs to two schools in Umtata, namely, St John’s College and Ngwayibanjwa. The implementation of these facilities has already contributed to the improvement of matric results of these Eastern Cape schools.

Black Business Council members
Yourselves as the organised business structure in our country, are also central to the service delivery success which government aims to achieve on daily basis.  Your active participation in the decision-making process especially on matters of economy, are fundamental to the realisation of the radical economic transformation to be a reality in our country.  We should never be apologetic about wanting the resources of this country to be shared equally among its citizens.

In fact, the Freedom Charter is very specific when it states:

• The People Shall Share In The Country's Wealth
• The national wealth of our country, the heritage of all South Africans, shall be restored to the people;
• The mineral wealth beneath the soil, the banks and monopoly industry shall be transferred to the ownership of the people as a whole;
• All other industry and trade shall be controlled to assist the well-being of the people;
• All people shall have equal rights to trade where they choose, to manufacture and to enter all trades, crafts and professions.

The Freedom Charter emboldens us to strive the economic freedom without which, our political freedom will ring hollow.

In conclusion:

As the Ministry for the Public Service and Administration, we are ready to join hands with you as the Black Business Council to collaborate in areas where we can improve the quality of service delivery to our people in a humane and Batho Pele way.   Working Together We Can Move South Africa Forward.

I thank you.