Members of the Presidential Economic Advisory Council,
It gives me great pleasure to welcome you to the first meeting of the Presidential Economic Advisory Council.
Thank you for accepting my invitation to serve on this Council, and to provide counsel on the economic policies we should pursue to meet the developmental needs of our country.
We have sought to gather together within this Council experts in a broad range of disciplines, people with extensive and varied experience.
We have sought individuals who have done work in South Africa, on the African continent and in other parts of the world.
I announced my decision to establish such a Council in my first State of the Nation Address.
I said this Council would ensure greater coherence and consistency in the implementation of economic policy and ensure that we are better equipped to respond to changing economic circumstances.
As we reflect on the Terms of Reference of the Council and discuss its working arrangements, it is my hope that the Council will direct its efforts towards practical solutions to the complex and pressing challenges our economy faces.
It is clear that we meet at a difficult time for our economy, when many key indicators confirm the extent of the economic malaise that had set in in the aftermath of the recession.
Our country has made great strides in improving the lives of South Africans since 1994.
However, our economy does not perform at the same level as other upper middle-income countries.
This is due to the uneven distribution of income and wealth in our economy, inherited from our difficult past.
On measures such as the under-five child mortality rate, life expectancy and school completion rate, we lag behind our peers.
Poverty is rife, with nearly half of the population considered chronically poor at the upper bound national poverty line.
Poverty tracks the patterns of our past closely.
It is highest in Limpopo and the Eastern Cape, and lowest in the Western Cape and Gauteng.
Poverty is overwhelmingly black.
It also has a disproportionate impact on children, those living in rural areas, and people with little or no education.
Unemployment remains stubbornly high.
On the narrow definition, the unemployment rate stood at 29 percent in the second quarter of this year.
Our economy has lost its competitiveness, ranking 82nd among 190 countries in the World Bank’s Ease of Doing Business Index.
Business confidence has reached historic lows.
In the State of the Nation Address in June, at the beginning of this sixth administration, I said government would reach some key milestones by the time the Medium Term Budget Policy Statement is delivered at the end of October.
Though we have much to do to strengthen the capacity of government to drive execution, good progress has been made in implementing these actions.
Our work towards an effective visa regime for tourism and high skill immigration is underway.
For example, the Minister of Home Affairs has abolished the requirement that children entering South Africa should present unabridged birth certificates.
Visa waivers have been extended to visitors from several countries, requirements have been simplified for countries such as China and India, and an e-visa system will be piloted from next month.
A policy directive on the release of spectrum was issued and the regulator ICASA has begun the process to license this spectrum.
An integrated and comprehensive youth employment strategy is under development, coordinated by a project management office set up in the Presidency.
Engagement with organised business on the Ease of Doing Business Roadmap has begun.
Invest SA has commenced work to improve key indicators such as starting a business, registering property, dealing with construction permits, paying taxes and trading across borders.
We will soon be appointing the Investment Advisory Council and the SOE Council to commence work.
The Integrated Resource Plan, dealing with our energy strategy and policy, is under discussion at Cabinet and will soon be released.
The paper detailing our approach towards Eskom will be tabled at Cabinet shortly.
This is a very important exercise, because it consolidates all the work by Eskom’s board and management, government departments and the various task teams advising government to turn around our electricity entity and to reform energy markets.
It will enrich the process to bring Eskom to financial and operational stability by creating a reference point for implementation.
It is important that we provide the market with clear signals of the nature and contours of our reform process.
The paper will also help to inform ongoing engagement with social partners, especially as we seek a just and contextually sound approach to the energy transition underway globally.
We have shown that we can play a leading role in creating a renewable energy sector.
The Department of Trade, Industry and Competition is convening various sectors to develop Industrial Strategy Masterplans.
This complements the work done by the Public-Private Growth Initiative, which seeks to unlock significant investment from the private sector.
The Infrastructure Fund is in the process of being formed.
Progress on these initiatives will be presented at the South Africa Investment Conference to be held in November this year.
At Nedlac, we are monitoring the commitments made at the Jobs Summit as we work towards our job creation target.
All of these initiatives and reforms provide reasons for hope.
Our latest approach to the international bond markets was met with enthusiasm, with reasonable pricing.
Growth rebounded in the second quarter of 2019, with GDP growth of 3.1 percent on a quarter-to-quarter basis.
This was driven by growth in mining, finance, government and trade sectors.
Much work is being done to improve confidence and regain credibility and trust by implementing those reforms that already enjoy support and have been under discussion for some time.
Many of these reforms have been advanced in the paper produced by National Treasury’s microeconomic policy unit.
The Medium Term Strategic Framework, which is government’s programme of action for the next five years, will focus on those catalytic actions that will spur the economy into action.
The National Planning Commission is producing work to inform our macroeconomic stance in the years to 2030 and beyond.
The opportunity before us is to develop an economy for the future.
In the work I did as co-chair of the ILO Commission on the Future of Work, it became clear that the ruptures brought about by technology, climate change and new modes of working can be managed.
Shared prosperity demands that the right technology is combined with private and public investment to create sustainable jobs in the green economy, the care economy, infrastructure development and in townships and rural areas.
Once again, allow me to thank you for your presence here today.
We appreciate the time and the effort that you have committed to this responsibility, and we look forward to your contributions to help us shape an inclusive and sustainable economy.
I thank you.
Source: The Presidency Republic of South Africa