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Date: 10/10/2005
Source: Gauteng Provincial Government
Title: Shilowa: Commonwealth Investment Forum


  Address by Premier Mr Mbhazima Shilowa at the Commonwealth 4th Investment Forum

Director-General of the Commonwealth Business Council, Dr Mohan Kaul,
Chief Executive of the NEPAD Secretariat Prof Firmino Mucavele
Ministers of Finance
Minister of Trade and Industry Mandisi Mphahlwa
MEC for Finance and Economic Affairs Paul Mashatile
Distinguished guests
Ladies and Gentlemen

It is my great pleasure to welcome you to Gauteng tonight at this Gala dinner for the fourth Commonwealth Investment Forum (CIF). It is an honour for Gauteng to be a sponsor and to host this dinner. The CIF is an important event in the continent's and international economic calendar, and an opportunity for African and international business leaders to come together with governments, with the aim of increasing business and investment.

2005 has been a very busy year for Africa in the international agenda. The United Nations (UN) High-Level Dialogue on Financing for Development in June, the commission for Africa, the G8 Summit in Gleneagles in Scotland in July, as well as the General Assembly Millennium Development Goals Review Summit in September, have all put Africa at the centre of the international agenda. Some real progress has been made in debt relief and aid, and the challenge of trade reform made clear.

As we gather here today, South Africa as a country we are engaging in the process of producing a report for the African Peer Review Mechanism, which is part of the New Partnership for Africa’s Development (NEPAD). We are reviewing what success we have made in democracy and good political governance, economic governance and management, corporate governance and socio economic development.

My primary job this evening is to describe how this province and South Africa are creating new and exciting opportunities to investment and trade, and not to draw up a balance sheet of Africa's progress. But I think it is appropriate, given the great importance of the economic ties between Gauteng and the rest of the continent to say something about the wider picture.

Africa is currently experiencing its best economic performance in many years. That is very good news. The continent's economies are benefiting from global expansion, notably through higher demand for commodities at higher prices, as well as and improved macroeconomic management and lower inflation.

The aggregate eight-year high of 5.1 per cent growth in 2004 is more than a dry statistic. It makes for real changes in people's lives - for example, almost one in 10 Africans has gained access to mobile telephony in the past few years - a communication revolution that creates endless new possibilities for families, education, and the ability to earn a living. I am proud that many of these opportunities have been created by cellphone operators based in this province.

Such progress, however, masks real divergences between countries. The vulnerability of the continent and its peoples is starkly illustrated by the fact that while the general rise in global commodity prices gave a positive impetus to African oil and metal exporters, at the same time many West African countries facing catastrophic losses from lower prices for cotton and cocoa. The Francophone zone faces new challenges due to the appreciation of the Euro - an experience well-known by exporters in this province due to the appreciation of the Rand. These fluctuations remind us that in the global economy external shocks and changes are beyond the control of any one economy.

Global competition is more intense, and discrimination against Africa's natural advantages through unfair trade policy is still an obstacle to growth. It is thus important to pursue Africa's integration into the global economy and remove discriminatory trade policies, as well as stepping up efforts at growing African trade. Intra African trade remains well below that of other markets - under 10% compared to 37% in Europe.

The NEPAD thrust to improve market access, and the commitment of regional economic organisations to this process - is important to enable Africa to adjust to global trade reforms. The removal of cross-border barriers is also required to help boost investment in infrastructure, which requires planning at a regional level, with a medium to long term perspective, and the early involvement of the private sector to ensure that projects are viable and sustainable. We strongly support these reforms.

Business has a key role to play with civil society, governments, the professions and the Diaspora in helping to realise these broader changes.

Creating good conditions for doing business is a fundamental goal of NEPAD and an area, which depends almost exclusively on Africans taking responsibility for change. This is a job for Africans to lead, but we welcome allies and partners in all parts of the world.

We so, however, remain acutely aware of the problems and difficulties, which still weigh heavily in our societies - HIV/AIDS, malnutrition, and poverty.

But there is a quiet, underlying confidence among leaders in government and business that Africa is on the right track. With the right policies, efforts and with focus, development returns are possible and the man and woman in the street can expect to see a return.

Perhaps I could now turn to explain how in Gauteng we have set about creating a positive environment for business. We have realised the strategic objective of turning the Gauteng Province into a globally competitive investment opportunity. In the past the riches of its soil delivered its wealth, but today the province is offering a new form of gold - its human capital.

The last decade has seen a purposeful re-engineering of the provincial economy. Together with the private sector, we have decided to turn the Gauteng Province into a globally competitive investment opportunity, from primary and secondary sector activity to a tertiary focus, especially in services and high value added manufacturing. This structural shift places the province on a new growth path and holds major significance for global and local investors.

Aligned to a pragmatic fiscal policy at national level, the Province has created a stable platform for rapid socio-economic growth. To address this, the Trade and Industrial Strategy of the province is directed by five key thrusts.

We have realigned the manufacturing sector away from the traditional heavy industry input markets and low value added production towards a more sophisticated, high value added production, as well as towards the development of other high value added production activities in the agriculture and mineral sectors.

We are bent on the development of the Gauteng Province as the "Smart" knowledge centre, with a specific emphasis on information technology, telecommunications equipment, research and development and bio-medical industries.

The development of the finance and business service sectors with specific emphasis on financial services and technology, auxiliary business services and technology, corporate head office relocation and business tourism is also a crucial factor for our success.

The province is well geared to address poverty eradication and employment generation. These are initiatives towards the expansion of targeted sectors and business activities in the Gauteng Province. These are deliberately viewed in the context of leveraging the benefits of employment generation through income redistribution and poverty alleviation.

Our thrust on the broad-based black economic empowerment (BBBEE), which seeks to encourage new business activity to draw-in participants at ownership and management levels from a wide spectrum of people. These include those who do not have existing wealth, assets and skills. This implies a focus on newer and smaller enterprises, rather than an expansion of large companies.

All of these thrusts are underpinned by the Gauteng Development Strategy to ultimately create a better life for all our citizens through the long term sustainable growth. This will be done through meeting the socio-economic development needs of our people, creating jobs and addressing unemployment and poverty.

In the context of investments, these programmes are designed to offer local business sectors platforms for growth, but to also encourage opportunities for international trade. But again it is the human capital that has made these a success, many of them being examples of effective Public Private Partnerships (PPPs).

Through this initiative, Gauteng has embarked on building an Automotive Hub that is a unique pioneering concept in South Africa and Africa. It will be in a Supplier Park and will comprised of grouping the different grouping of technologies, suppliers and service providers with automotive manufacturers in Rosslyn in Tshwane. This endeavour is aimed at achieving optimal production through economies of scale.

Through its rapid rail transport project, the Gautrain flagship, is the largest public private partnership ever embarked upon in the province and in the country. The Gautrain will advance economic growth in the province by improving the movement of persons and goods and offering an easy connection between major centres within the province and the Johannesburg International Airport.

The City Deep Transport Logistics Hub is also set to decrease the transportation costs of containerised cargo moving into and out of Gauteng as well as to and from African countries.

The Johannesburg International Airport Industrial Development Zone in the eastern part of the province, will provide an efficient and effective import and export duty-free zone for high value added light manufactured goods export.

Further, a Jewellery Industrial Development Zone will be established at the airport allowing for gold and diamond loans and manufacturing.

The Innovation Hub is another successful PPP example. It is the first internationally accredited Science and Technology Park in Africa. It has created a unique environment where cutting-edge technologies can be developed, piloted and demonstrated. It is a world-class hi-tech business precinct with state-of-the-art infrastructure.

The Constitution Hill Precinct previously the Old Fort Prison, was developed to celebrate South Africa's transition to democracy and houses the new Constitutional Court, the Independent Electoral Commission, the Human Rights Library and the Old Fort living heritage museum.

Another flagship is the Dinokeng project is located just twenty minutes from Pretoria and the Johannesburg International Airport, this strategic tourism investment supplements the province's existing ecotourism offerings.

Its main benefit is its proximity to the Tshwane and Johannesburg cities and the International Airport.

The Cradle of Humankind, a world heritage site which has yielded valuable insight into the origin of humankind, is being developed whilst ensuring that it retains its integrity to increase tourism in the province.

In this spirit, we are delighted that you will continue to work with the Government of South Africa and NEPAD and look forward to working with you all to realise the outcomes of this meeting.

In conclusion, I would like to thank all of you for giving your time and ideas to make our deliberations so fruitful. I wish you a pleasant stay for the remainder of your time in Gauteng and South Africa, and a safe journey home.

Issued by: Office of the Premier, Gauteng Provincial Government
10 October 2005
 

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