Programme Director
Mr Kunio Noji and Mr Yutaka Kase, co-chairs of the Keidanren Committee on Sub-Saharan Africa
South African Ministers and Deputy Ministers
Charge d' Affaires, Ms Mbele
Distinguished Guests
Ladies and Gentlemen

It is an honour for me to address you, the Captains of Industry, today and I wish to extend my gratitude to Keidanren, Japan's Apex business chamber, for hosting us and for providing us with this opportunity to engage in such a pragmatic manner with the Japanese business community.

We acknowledge that Keidanren as an important vehicle that has contributed positively to Japan's growth trajectory. We have similar institutions in South Africa such as "Business Unity South Africa” and the "Black Business Council” that are at the forefront of advancing South Africa's economic agenda.

I would urge you to actively engage with these organisations going forward so as to catapult our bilateral trade and investment relationship to new heights.

As a developing country, South Africa is taking various measures to free our people from the clutches of poverty and inequality.

These measures are rooted in the National Development Plan (NDP), which is South Africa's comprehensive and pragmatic plan to transform our economy. It also provides for faster economic growth that is more inclusive.

The National Development Plan focuses on boosting our educational levels and promoting industries that are labour absorbing, such as mining, agriculture, construction, hospitality and small businesses. In terms of the Plan we have to grow the more advanced sectors of the economy, such as manufacturing, parts of financial services, telecommunications and business services. The National Development Plan advocates for the provision of a broader social wage to enable even the poorest of people to have a decent standard of living.

To give effect to these priorities, our President Mr Jacob Zuma, has articulated a nine-point plan, which is aimed at boosting economic growth and the creation of jobs. This nine-point plan consists of:

1. Revitalising the agriculture and agro-processing value-chain;
2. Advancing beneficiation (adding value to our mineral wealth);
3. More effective implementation of a higher impact Industrial Policy Action Plan;
4. Unlocking the potential of small and medium enterprises, co-operatives, and township and rural enterprises;
5. Resolving the energy challenge;
6. Stabilising the labour market;
7. Scaling up private-sector investment;
8. Growing the Ocean Economy; and lastly,
9. Cross-cutting Areas to Reform, Boost and Diversify the Economy including in amongst others Science, Technology and innovation, Infrastructure and ICT.

As I refer to infrastructure, allow me to emphasise that South Africa's infrastructure programme has been successful because it is linked to the overall spatial development of the country.

To this end we have launched Industrial Development Zones (IDZs), such as the Coega Industrial Development Zone in the Eastern Cape, and the Dube Trade Port in KwaZulu-Natal.

We have also launched Special Economic Zones (SEZs) such as the platinum hub SEZ in North West province, Saldanha Bay and the solar corridor in the Northern Cape.

These and other IDZs and SEZs, much like regional Abenomics, focus on specific untapped and unsaturated regions with high economic growth potential.

In 2014, President Zuma launched Operation Phakisa, which is a strategy to unlock the economic growth potential stemming from South Africa's vast ocean coastline.

Operation Phakisa consists of the following four (4) work streams: (1) marine transport and manufacturing; (2) offshore oil and gas exploration; (3) aquaculture; (4) marine protection services and ocean governance.

In pursuance of the aforementioned strategy, a study was undertaken to assess the level of contribution that the Ocean's Economy will yield in relation to GDP.

I am pleased to announce that through this strategy the economy could generate an estimated US$13billion by 2033 with a particular focus on Marine Transport and Manufacturing, Offshore Oil and Gas and Aquaculture.

Ladies and Gentlemen, may I add that the aquaculture work stream has the potential to offer a diversified source of supply for Japan's demand for agro-processed products.

The aquaculture work stream consists of a number of initiatives, including one that will implement 24 projects throughout South Africa.

Ladies and Gentlemen, South Africa and Japan have made immense strides within the ambit of the Tokyo International Cooperation on African Development (TICAD) which was initiated by Japan in 1993.

This initiative has enabled the Asian development experience to be shared with, and where practicable, considered for advancing Africa's developmental objectives.

In response to the evolving global context and Africa's own needs, the TICAD process has become much more action-and results-oriented. A TICAD Follow-Up Mechanism which was established at TICAD IV, has increased transparency and accountability, as well as effective implementation of agreed actions by all parties.

We invite you to partner with us in pursuance of Africa's developmental agenda as it relates to ICT, infrastructure and industrialisation.

Distinguished Guests, Africa features centrally in South Africa's foreign national policy directives, as our growth trajectory is inextricably intertwined with the development of the African Continent.

This year we will implement the Tripartite Free Trade Agreement (T-FTA) which is an agreement between the Heads of States of 26 African countries to establish a free trade area now referred to as the Tripartite FTA.

This initiative will expand intra-African trade, promote collaboration between the Regional Economic Communities (RECs) and facilitate joint resource mobilisation and project implementation.

To place the significance of the free trade agreement into perspective, Ladies and Gentlemen, it provides you the Captains of Industry an integrated market with a combined population of 600 million people.

Only China and India have larger populations. This free trade area has a total GDP of US$1trillion (which would put it on a par with Mexico and South Korea, the largest rapid-growth economies after the BRICS.

It also has a projected long-term GDP growth rate in excess of 5%.

Further to this, we recently observed the launch of the negotiations of the Continental Free Trade Agreement at the African Union Summit held in South Africa.

Once established, the continental mechanism will offer you, our Japanese friends, a market of over 1 billion people and a GDP of US$ 2 trillion. This is a formidable market that simply cannot be overlooked.

Within the bilateral sphere, South Africa and Japan share a long historical relationship spanning over a century.

Japan featured as South Africa's 3rd largest trading partner in the world with total trade amounting to approximately USD 8 billion in 2014.

During the same period, Japan became our 2nd largest export partner and 3rd largest import partner on the Asian Continent.

However, it is important to note that although South Africa has been enjoying a trade surplus with Japan over the last 5 years, the composition of the trade basket needs to be addressed.

Upon further reflection, we note that the top 10 South African exports to Japan were moreover commodity based consisting of amongst others, platinum, unwrought or in semi-manufactured forms; iron ore and iron pyrites.

Analysis reveals that these top 10 exports accounted for 90% of total exports to Japan hence implying that exports are moreover concentrated in a few sectors.

As Captains of Japanese Industries the onus is upon you to ensure that these trade imbalances are rectified in favour of a more diversified trade basket.

In pursuance of this aspiration, I propose the introduction of cooperation in the field of innovation, technology and SME development.

This will enable South Africa to effectively up-scale its industrial development objectives.

We are moving towards diversifying the economy through progression towards a knowledge economy and into non-traditional tradable goods and services.
This requires the effective dovetailing of Science, Technology and Innovation (STI), economic and industrial policy objectives.

South Africa also wants to increase the level of research and development (both public and private), upgrade human capacity and skills, enhance knowledge production and knowledge utilization.

In this vein, collaborations on research, development and innovation is encouraged.

Ladies and Gentlemen, South Africa is the leading regional hub location for companies seeking to establish themselves in the African region.

The checklist of primary considerations include our infrastructure capabilities which allow for direct air linkages to the rest of the Continent.

In addition to this, according to the Global Competitiveness Report 2014, South Africa  featured as follows:
?  Number 1 in Regulation of Securities Exchange;
?  6th in terms of Availability of Financial Services and Soundness of Banks;
?  9th & 10 in terms of Efficiency of Legal Framework and Investor Protection respectively; and
?  35th out of 148 countries in Capacity for Innovation

In 2013, one hundred and thirty (130) international companies entered the South African market for the first time.

Our investment climate is as healthy as any other industrialised country.

According to the OECD, in 2014 FDI inflows into South Africa more than doubled to USD 5 billion.

This is in contrast to decreases suffered by Brazil and China.

According to Ernst & Young, FDI projects by Japanese companies increased by 77% and this is a direct outcome of the commitments made at TICAD V.

The depth of the relationship between our two counties is underscored by the fact that SA is the top recipient of Japanese FDI inflows into the continent, specifically 68% of total inflow.

Japanese investments are typically spread across multiple sectors from mining and manufacturing of automobiles to services.

A recent survey conducted by JETRO among Japanese affiliated firms in Africa revealed that more than 50% of the respondent's indicated that their operating profits had increased in 2013. Even better news was that 62% of respondents were expecting the trend to continue in 2014.

Ladies and gentlemen, in the same manner that Japan utilised its hosting of the 1964 summer Olympics to industrialise, South Africa used its hosting of the FIFA World Cup in 2010 to accelerate the significant task of industrialisation: we built the Gautrain (bullet train) that connects the major metropolitan cities of Johannesburg and Pretoria in South Africa's economic provincial hub of Gauteng.

We built a rapid transit system in Gauteng and Western Cape provinces. These are ambitious construction projects that deliver affordable high quality public transport. This is but a part of our good story.

Ladies and Gentlemen, a key priority for South Africa is to diversify our economy away from a strong reliance on resource extraction.

We are therefore putting in place programmes to beneficiate our minerals and leverage our comparative resource advantage to build a dynamic industrial economy.

Our beneficiation programmes includes the Hydrogen South Africa Initiative, the Fluoro Chemicals Expansion Initiative and the Titanium Initiative.

A 100 Kw Fuji Electric fuel cell generator is currently being installed in partnership with local energy engineering solution partners in South Africa.

This bears testimony to our resolve to fully integrate the strategic platinum group metals resource base and location in Africa, with global intellectual property and technologies.

This provides a leapfrog clean energy generation application opportunity to innovators and technology providers, throughout the continent, from South Africa.   

South Africa also has advanced capability and capacity and is globally competitive in many areas of manufacturing.

These areas include mining and transport capital equipment, automotives and autocatalyst production. 

We would like to grow and expand our global participation in these sectors and supply chains through potential partnerships and collaboration.

To this end we have decided to establish two Special Economic Zones which will exclusively focus on the beneficiation of the Platinum Group Metals.
These Zones will offer a suite of incentives ranging from tax allowances, employment incentives and a Customs Controlled Area.

The Black Industrialists policy is part of government's broad industrialisation initiative to expand the industrial base and inject new entrepreneurial dynamism to the economy.

It calls for bolder policy interventions on the part of the state to expand the industrial base of the country. It also calls on us to grow the economy through dedicated support to black industrialists as highlighted in the latest iteration of our Industrial Policy Action Plan.

It is envisaged that through this policy, co-ordinated support will be given to promote the long-term sustainable development of black industrialists.

It is important that we leverage the Memoranda of Understanding in place with institutions like Keidanren to effectively enhance the capacity of our Black Industrialists.

Ladies and Gentlemen, in conclusion I hope that our respective business communities will be able to identify areas of mutual cooperation and partnership.

This is critical in addressing the plethora of economic challenges that we experience in growing global supply chains.

I believe that initiatives of this nature will enable us to catapult our trade ties and benefit from the myriad untapped trade opportunities that currently exist.

The most effective way to achieve this ambition is through the implementation of an institutional mechanism between Keidanren and South Africa's apex business chambers namely, Business Unity South Africa and Black Business Council.

We will undertake to champion this initiative so as to optimally realize the gains that this partnership will yield.

I thank you.

Arigato Gozaimasoo!