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Date : 27/10/2006
Source: Kwazulu-Natal Provincial Government
Title: Mkhize: KwaZulu-Natal Growth Awards


Address by the KwaZulu-Natal MEC for Finance and Economic Development, Mr Z Mkhize, on the occasion of KwaZulu-Natal (KZN) Growth Awards, at the ICC, Durban

Programme Director,
Professor Mandla Mchunu, the Director-General of the province,
Mr Sipho Shabalala, the Head of Provincial Treasury,
Deputy Mayor of eThekwini, Councillor Logie Naidoo,
Mrs Manana Nhlanhla, the Chairperson Trade and Investment KZN,
Our host, Mr Dayalan Naicker, the Director of Standard Bank Corporate and Investment Banking KZN,
Mr Themba Ngcobo, the President of Durban Chamber of Commerce,
Members of the media present,
Honoured guests,
Ladies and gentlemen:

This awards programme aims to provide support and recognition to businesses making a meaningful contribution to sustainable growth in the local economy. As a strong believer in the importance of recognising and rewarding hard work, I'm particularly pleased that Standard Bank has given me the opportunity to address tonight's gathering. May I encourage Standard Bank and the entrepreneurs present to keep it up. We expect to see the KZN Growth Awards becoming a permanent feature in our province's economic calendar.

The economy

Ladies and gentlemen, things are really looking up on the economic front. In KwaZulu-Natal, tourism services and manufacturing are the pillars of our economy. For any economy to grow then we must see inflation stay at appropriate levels. According to Statistics South Africa (StatsSA) the official inflation rate is 5,3 percent as at September 2006. This rate is 0,1 of a percentage point lower than the corresponding annual rate of 5,4 percent at August 2006. The decrease could be explained by the decrease in consumer price index (CPI) for transport from 9,1 percent in August to 4,8 percent in September.

The South African economy accelerated in the second quarter of 2006 with gross domestic product (GDP) increasing by 4,9 percent marking a sustained 31 quarters of economic growth since 1998, the longest upswing in the country's history. KwaZulu-Natal is the second strongest economy in South Africa. Our efforts to becoming the strongest in the region. We can do it.

Tourism

Never before has tourism in KZN made such a major impact on the economy. In May 2006, there was 15,1 percent increase to 641 700 foreign tourists visiting our country compared with 557 361 in May 2005. With one tourist creating eight jobs, this represents a pleasing change for the better.

Tourism KZN's strategy 2006 - 2011 projects that growth will accelerate so that by 2011 KZN will have established itself as a globally competitive tourism destination and one of Africa's leading destinations. Tourism contribution to Gross Geographic Product (GGP) will have grown to approximately R35 billion a year and the industry will have made significant progress toward transformation, Black Economic Empowerment (BEE) and the upliftment of previously marginalised communities.

The 2010 FIFA World Cup is really the ultimate stage for our tourism sector to really turn the tide on the unemployment and poverty levels. Year 2010 is not about the 90-minute football game or who wins a match. No it's about how we accommodate, transport, entertain and show off our land to the hundreds of thousands of people who will be coming here for a five-week party. Government is not going to say to you, "here's an idea". The fact that you are entrepreneurs means that you must sell your ideas to the multitudes of people who are coming. And they are coming. As the Minister of Finance Trevor Manuel said on Wednesday when he presented the Medium Term Expenditure Policy Statement, the 2010 World Cup is a once in a generation opportunity for us. This country and its people have to be the ones who score the biggest.

Minister Manuel announced that R15 billion has been set aside to finance the development of infrastructure for optimum realisation of the 2010 FIFA Soccer World Cup. Of this amount, R8,4 billion is for the stadiums and R6,7 billion for public transport initiatives and supporting infrastructure.

That kind of investment will absolutely spur the economy onto greater heights. At this point I want to also encourage you as business and the banking sector, Mr Dayalan Naicker, to look at how you too can contribute to the success of 2010 in the province. Government has laid its cards on the table. Now you as business need to be asking yourselves questions, like, a stadium needs to be built how can I get involved? Infrastructure must be developed, how can I get involved? I just hope that you are not asking yourselves these questions when it's too late!

World Association of Investment Promotion Agencies (WAIPA)

The WAIPA recently requested Trade and Investment KwaZulu-Natal (TIKZN) to host the WAIPA 2006 study tour from developing countries for two weeks. The programme will be hosted in Pretoria for the first week and then in KZN / Durban for the second week. I believe that the study can only benefit our province and our country.

Telecommunications

For any economy to grow it must be based on sound telecommunications and infrastructure.

The second network operator, Neotel's entry into the market is expected to help reduce the high costs of telecommunications particularly broadband in South Africa.

The Eastern Africa Submarine Cable System (EASSy), a 9 900 kilometre long undersea fibre-optic cable between Durban and Port Sudan that is expected to slash telecommunications costs in Africa could be operational by 2008. On 16 October, the Communications Ministers of Botswana and Zimbabwe meeting in Cape Town with other Ministers from eastern and southern Africa added their signatures to a protocol for construction of EASSy to begin.

Again, Minister Trevor Manuel said two days ago that spending on public infrastructure is going to grow by about 15 percent a year to reach about R150 billion a year by 2010. These investments are focused on social and household services and infrastructure that expands economic capacity. The proposed budget framework provides R28 billion of additional funds for spending on electrification, roads, commuter rail, housing, bulk infrastructure and research and development.

The South African government has set aside R3,8 billion for public transport infrastructure for the 2010 Soccer World Cup. Addressing the Transport Indaba in Soweto, Johannesburg on Sunday, national Transport Minster Jeff Radebe said a 2010 transport action agenda had been developed and that the World Cup Public Transport Infrastructure and Systems Fund had allocated the first round of funding to the country's municipalities.

KwaZulu-Natal is placed to benefit significantly from transportation and logistics projects. We are aware of the construction of the interchange to King Senzangakhona Stadium among others.

Investment

South Africa was rated the most competitive economy in the sub-Saharan region and the most attractive country in Africa to invest in by the World Economic Forum's 2004 annual Global Competitiveness Index. It is on the back of this fact that our international investment missions have been successful. Against this success, TIKZN is going to increase focus on encouraging domestic investment. Logically no one wants to invest in an economy whose own people do not believe in.

Ladies and gentlemen, I am glad to announce that from 28 October – 1 November 2006 we'll host the very first KwaZulu-Natal Investment and Conference and Exhibition. That event will be co-ordinated by the Department of Economic Development and its public entity, TIKZN. I invite anyone who would like to contribute to the success of that event to contact the Head of Department (HoD) of Economic Development, Mrs Carol Coetzee.

Dube Trade Port

These last two days the two bids for constructing the Dube Trade Port and the new international airport were unveiled. Each presented fresh, exciting perspectives of what the world has to offer in terms of constructing a development of this nature. Without giving too much away I can tell you that I am very impressed with what's on the table and I wish both bidders well.

A1 Grand Prix

We have three more years to host the internationally renowned A1 Grand Prix in Durban. The investment that the province started making last year is well worth the goodwill and jobs that have been created. The second A1 Grand Prix will be in Durban in January. Ladies and gentlemen, businesspeople, we need to see this as an opportunity for us to build the momentum towards 2010. If we make these upcoming grand prix races an international success of the highest quality, who is not going to want to come to KZN? We make the tourists happy now, they are our best advertisers to the rest of the world.

New parliamentary complex

I am pleased to announce that the KZN provincial Executive Council (ExCo) has approved the construction of the new Parliament Complex at the portion of Townhill Hospital site. The provincial Treasury and the Department of Works were mandated to consider all forms of arrangements to finance this project including Public-Private Partnership (PPP) and the disposal of other government assets. The construction of the building is very important because the current one limits the number of stakeholders who can participate by being in the public gallery. As a banker, Mr Dayalan Naicker, I encourage you and the rest of the banking fraternity to look at this project and others around the province and find innovative ways of best promoting BEE business opportunities.

Conclusion

Congratulations to tonight's award recipients. For this provincial government and partners like Standard Bank, all those who strive to contribute meaningfully to our economy are winners. I therefore encourage all our people to locate themselves somewhere in the stratum of our economy. Yes you will make mistakes and encounter problems but then remember the words of the late President of the United States of America (USA), Franklin D Roosevelt, who led America during the great depression, "The man who never makes a mistake, is the man who never does anything".

Sithi halala! Congratulations!

I thank you!

Issued by: Department of Finance and Economic Development, KwaZulu-Natal Provincial Government
27 October 2006
Source: KwaZulu-Natal Provincial Government (http://www.kwazulunatal.gov.za/)

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