Kgalema Motlanthe Foundation

Programme Director;
Xolani Xala, Founder and Chief Chairman of South African Business Abroad;
Rudi De Sousa, Director of South African Business Abroad;
Sir Tony Baldry, British Conservative Party;
Government Officials and Representatives of the Diplomatic Corps;
Members of Civil Society;
Business leaders and CEOs;
Members of the Media;
Ladies and Gentlemen,

Thank you for inviting me to address you in Granger Hall this evening, as we celebrate the launch of South African Business Abroad (SABA). It is a great honour to address such a distinguished congregation of leaders in business and technology as well as civil society. It carries significant import that such a cross-section of society is critical to the evolution and progress of any nation.

We gather here tonight emboldened by an overarching desire to spur the next phase of South Africa’s economic development. In doing so, we are ever conscious of the country’s inextricable connection to greater sub-Saharan Africa and the current economic climate.

Our focus tonight, in line with SABA’s strategic aims, is on enhancing South Africa’s capacity to address social and economic issues through trade, as we introduce a significant new player in sub-Saharan Africa relations.

The importance of the creation of SABA is manifold.

Firstly, it is of great consequence that the organisation’s mission is keenly aligned with the values outlined in South Africa’s constitution.

Your aim to ‘break down the barriers created by the policies and practices of the past and unite South Africans in business regardless of creed, race, sexual orientation, and cultural or ethnic background’ advances the ethical and democratic imperatives of the post-apartheid state.

Secondly, the recognition of the need for an economic framework that is oriented towards inclusion and conscious of socio-economic challenges reflects South Africa’s founding values.

As Former President Nelson Mandela noted, at his first State of the Nation address:

“And so we must, constrained by and yet regardless of the accumulated effect of our historical burdens, seize the time to define for ourselves what we want to make our shared destiny. 

Thirdly, it is incredibly encouraging to witness South Africans living overseas, who remain actively and patriotically engaged in considering the interlinked development, progress and significance of the country and continent

And lastly, it is critical that an umbrella body exists that advances business relations and interests, by serving as an autonomous regulatory body, networking forum, watch-dog and partner in the development of the South African economy and society.

For these reasons, among many others, the creation of SABA is timeous, imperative and welcome.

Programme Director,

Tonight’s launch is guided by an old African proverb that states: ‘Until the lion learns to write, every story will glorify the hunter’. It connects with SABA’s aim to reignite the country’s next phase of economic growth and development.

Such a theme asks for the creation of solutions to current challenges through acknowledging our common agency, while recognising the richly diverse potential of South Africa.

Consequently, in providing a backdrop for the consideration of this proverb, my address will outline:

  • The present economic climate;
  • The framing of economic inclusion;
  • Current data on poverty, inequality and the distribution of wealth;
  • State Capture and its effects; and
  • The developments of the skills base, education and relations that will advance South African society.

Thereafter, I look forward to engaging in an interactive session that allows us to discursively think through some of the ideas outlined in this address.

In considering tonight’s theme, I begin with a brief consideration of South Africa’s present economic landscape and recent statistical data.

Two decades have passed since the country’s first democratic election in 1994. While massive strides have been made in improving the lives of all South Africans since then, we now look to future progress in furthering the quality and experience of democracy.

As such, a statement made by Former Minister of Finance, Pravin Gordhan, three years ago has resonances with tonight’s interests.

Reflecting on advancements in the economy, he maintained:

‘We now face the challenge of effecting further changes in the economy and society, through the next or second phase of this profound historical transition, to a society premised on social and economic justice. We must judiciously use the powerful levers of the state, in partnership with communities, trade unions, with schools and tertiary education institutions, and most importantly with the private sector, to prosecute the next set of changes.’[1]


With this in mind, I invite us to consider the following:

Earlier this year, a report from Statistics South Africa revealed the country was in a ‘technical recession’, after two successive periods of contracted growth, with the economy experiencing a contraction of 0.7% in the first quarter of 2017.

This was influenced by the contraction of all industries, with the exclusion of the agriculture and mining sectors.

However, last week’s report revealed a recovery in the second quarter – with an expansion of 2.5% – that was fuelled by growth in the Agriculture, Foresting and Fishing Industries.[2]

Consequently, there is a need to create an environment of economic stability that will invite and encourage investment in the country’s economy. Simultaneously, we should remain cognisant of the fact that sluggish growth is a global concern, and as such does not singularly affect South Africa.

As Minister of Trade and Industry, Rob Davies recently noted:

‘According to the International Monetary Fund (IMF), the global economy grew by just 3.1% in 2016, the slowest rate of growth since the onset of the Global Economic Crisis. The global growth outlook for 2017 and 2018 remains modest at best, with growth expected to reach 3.5% in 2017 and to 3.6% in 2018.’ [3]

Nevertheless, in considering the climate that necessitates economic progress and SABA’s vision, we are required to take note of how poverty, unemployment and inequality continue to affect the lives of all South Africans.

In a report titled Poverty Trends in South Africa: An examination of absolute poverty between 2006 & 2015, Statistics South Africa found poverty still blights society.

In 2015, the proportion of citizens living in poverty was said to stand at 55%, that is 30,4 million people. Extreme poverty, measured at R441 per month stood at 13,8 million in 2015. To put that number in perspective, it is just over £26 a month.

Additionally, their Non-financial census of municipalities (NFCM)1 report revealed that the number of indigent household in South Africa has increased. It recorded figures that reached record highs since 2004, that showed 2 in every 10 households were classified as such.2

As recently noted in ‘The Conversation’, which combines university-based research and journalism, ‘Ten percent of the population earn around 55%–60% of all income’[4].

This is supported by a recent report published by Oxfam, coinciding with the World Economic Forum’s annual meeting at Davos, that found that:

‘three billionaires in South Africa have the same wealth as the bottom 50 percent of the population, while South Africa’s richest one percent owns 42 percent of the country’s total wealth’ [5].

We are consequently obligated to find ways to distribute the wealth differentials created and maintained by our financial systems, and progress towards a more socio-economic ethos. This must be cognisant of the statistics addressed above, and consider matters of redress as central to growth and development.

Statistics like these are the motivating force for the founding of an organisation like SABA – that seeks to improve the lives of all South Africans and address historical inequalities. 

In our pursuit of growth, government, civil society and the private sector need to collaboratively ensure that measures are designed to support  vulnerable and marginalised sections of the population, including children, women, youth, people living in rural areas and urban informal settlements, people with disabilities or chronic illnesses, and the elderly.

As Sharon Burrow, General Secretary of the International Trade Union Confederation (ITUC), noted at Davos: ‘Our current business model is inequality by design’. Thus she called for:

‘a new business model based on old principles of social justice where people matter’ as ‘a revolutionary way to reduce inequality’.[6]

Programme Director,

With a view to reignite economic growth, among present imperatives is the need to grow the skills base of the nation. This is essential to fuelling progress. Its pursuit must be inextricably linked with ensuring the production of goods and products that are of quality, value for money and desirability.

Intersecting with this priority is the need for access to education of multiple kinds to cultivate the skills base which is known to catalyse development of many nations in the world.

In an open economic system within the global environment what counts is not only the comprehension of historical injustice that defines modern states, but the ability to rise to the level of the challenges of development and progress.

As identified by Soni, Hay, Karodia and Shaikh, of Regent Business School:

‘There is overwhelming evidence to demonstrate that skills development can play an essential role in promoting sustainable economic growth and the socioeconomic development of countries, with benefits accruing to individuals, their families, local communities, and society in general. Therefore, improving education for the world of work can help improve the incomes of poverty-stricken peasants, provide citizens with more choices in their lives, help alleviate poverty, and help empower individuals who would otherwise be marginalised. Technical and vocational education and training therefore has a major role to play in achieving inclusive and sustainable growth in developing the African continent.’

To stimulate the economy, all South Africans require access to quality and equal education that will facilitate the development of the requisite skills.

As such, SABA’s aim to ‘Promote educational and professional exchanges’ is fundamental and requires being linked to broader and existing efforts to increase access to foundational, tertiary and technical education.

The South African state’s National Development Plan policy document of 2012 is cognisant of the above.

Focused on laying out a roadmap to the attainment of growth and development for the country through the elimination of poverty and inequality, it states:

‘“Economic transformation is about broadening opportunities for all South Africans, but particularly for the historically disadvantaged. It is about raising employment, reducing poverty and inequality, and raising standards of living and education. It includes broadening ownership and control of capital accumulation. In addition, it is about broadening access to services such as banking services, mortgage loans, telecoms and broadband services, and reasonably priced retail services. It is also about equity in life chances and encompasses an ethos of inclusiveness that is presently missing. This includes equity in ownership of assets, income distribution and access to management, professions and skilled jobs.”

These statements are neatly aligned with the views expressed in SABA’s constitution.

What such an accord reveals is the importance of partnerships in taking South Africa forward. Through the active engagement and employ of all sectors, including an engaged private sector; labour unions; civil society and government, our collective goals are capable of being reached.

SABA’s focus on bringing these essential role-players together, through the creation of formal channels, is thus vital.

With this in mind, I turn to a consideration of one such partnership, which brings us together in Granger Hall tonight.

It is evidently clear that commitment to dual progress and development, as part of a mutually beneficial relationship that exists between South Africa and the United Kingdom, must be continuously nurtured, deepened and extended.

The UK represents one of South Africa’s largest trading partners, with South Africa being the UK’s largest trading partner within the Commonwealth[7]. As recently reported, 2015 bilateral trade was measured at £7.6 billion in 2015. Additionally, UK exports to South Africa have seen an increase of 25% in the last ten years, while South African exports to the UK have increased by 5% per annum in the same period.

As evidenced by the recent meeting between our finance ministers, this is set to grow in the post-Brexit climate – with a renewed commitment to maintaining and advancing trade relations, with a regional sub-Saharan African focus in mind. The latter is essential as we cannot see South Africa’s future and growth as exclusive and confined to its borders. Driven by the spirit of regional integration, we must always remain connected to our fellow African neighbours and guided by the will to improve the lives of all on the continent.

As stated by International Trade Secretary, Dr Liam Fox:

‘South Africa is a key trading partner to the UK – a long-standing, strong and strategic ally for the United Kingdom in Africa and internationally. It is our largest export market in Africa; the largest economy in the southern Africa region and a fellow G20 member. South Africa is also the largest recipient of UK foreign direct investment in Africa accounting for 30% of total UK foreign direct investment (FDI) in 2014, a value of £13.1 billion.’[8]

Programme Director;

Many companies present here tonight have evidenced a long-term commitment to, and investment in South Africa, the sub-Saharan region and its UK relations.

The creation of SABA can stand to play an important role in assisting the goals of both South Africa and the UK. Through providing an important link between sub-Saharan Africa region and the United Kingdom it can further communication channels and develop relations between stakeholders in South Africa’s continued growth. No doubt, SABA must consider connections to existing mechanisms and linkages such as the SA-UK business council[9].

It would be remiss of me, however, to fail to address a matter of concern to all present tonight. Currently, there is concern over corruption within the utmost positions of political power in our country.

The evidence of this has been increasingly connected to what has been termed ‘state capture’. The humanist vision that held us together under the rubric of social justice can very easily deteriorate into individualism, greed and selfishness that go against the grain of our ideals as a people. Those in power need to be held to the highest ethical standards, which underscored the pursuit of freedom. We need to simultaneously understand that multiple elements, including business, are implicated in this unethical behaviour.

Civil society, the media, the South African public, members of parliament and those in high ranking positions continue to hold those responsible to account – while the courts have upheld the Constitution when called on.

South Africa is not unique in battling the corruption that continues to thrive in multiple established and developing democracies and takes many guises.

Moments like these should cause us to renew our focus on democratic principles and seek to re-energise our efforts towards their realisation in reality.

Over the years, important strides have been made in positioning South Africa as a stable democracy with the necessary institutions and mechanisms for providing an attractive and investor-friendly environment.

In the pursuit of the provision of fertile conditions for investment, South Africa continues to cultivate a favourable legal and business environment; roll-out socio-economic infrastructure; constantly improve our trade and industrial policies and lower the cost of doing business on our shores.

This image needs to be strengthened and maintained through the active effort to ensure that the country is focusing on socio-economic indicators such as political stability, cultivating an investment friendly environment, greening the economy, transparency, predictability as well as having sound macro-economic policies.

Launched here tonight, SABA represents a vital organisation that is demonstrably committed to the state’s development and growth economically, politically and socially.

I look forward to continued engagement and SABA’s development as a true partner in ensuring that United Kingdom and South African relations are strengthened and enhanced through the determined advocacy within the diasporic business community and broader spaces.

SABA presents an important networking platform, serving as a bridge between multiple stakeholders and a forum for augmented engagement on all levels.

In its mission to facilitate these partnerships, the organisation is taking agency to find collaborative solutions to contemporary challenges. These actions are underscored by an optimistic outlook about the vast potential South Africa presents, on the continent and internationally.

Congratulations to SABA and its Founders on tonight’s launch.  More power to their elbows!

As we gather here tonight, we are collectively required to assist the economic growth of South African society that addresses the vestiges of the past and creates a better future for all.

It is then that we can write a history that is not only scribed by our hands, but that has also been tended to by a humanist consciousness.

Keeping in mind the proverb that underscores tonight’s engagement, I end with the words of Haitian intellectual Michel-Rolf Trouilliot:

“. . . But we may want to keep in mind that deeds and words are not as distinguishable as often we presume. History does not belong only to its narrators, professional or amateur. While some of us debate what history is or was, others take it into their own hands.”

 

Thank you for your kind attention.

 


[1] http://www.treasury.gov.za/comm_media/speeches/2014/2014012901%20-%20Speech%20by%20Minister%20Gordhan%20Mail%20%20Guardian%20dinner.pdf

[2] https://www.enca.com/money/breaking-sa-out-of-recession

[3] http://www.dti.gov.za/delegationspeechdetail.jsp?id=4068

[4] http://theconversation.com/south-africa-needs-to-fix-its-dangerously-wide-wealth-gap-66355

[5] https://www.oxfam.org/en/even-it/5-shocking-facts-about-extreme-global-inequality-and-how-even-it-davos

[6] https://www.weforum.org/open-forum/event_sessions/the-future-of-growth-technology-driven-human-centred/

[7] https://www.businesslive.co.za/bd/business-and-economy/2017-05-18-sa-and-uk-start-making-plans-for-post-brexit-trade/

[8] https://www.gov.uk/government/news/uk-south-africa-joint-trade-statement

[9] https://www.brandsouthafrica.com/investments-immigration/international-news/uk-110913

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