Monday, 19 August 2024
Let us harness improved confidence to drive inclusive growth
Dear
Fellow South African,
Over the last few months, we have seen a growing confidence among investors,
businesses and citizens about the prospects for our economy.
The latest Business Confidence Index published by the South African Chamber of
Commerce and Industry (SACCI) points to an increase in business confidence
since the elections in May. This sentiment is evident in the Johannesburg Stock
Exchange’s All-Share Price Index, which increased by about 8% from the end of
May to the end of July 2024.
This is welcome news, particularly in light of the most recent employment
figures released by Statistics South Africa, which show that unemployment
remains extremely high at 33.5%.
Business confidence is so important to our efforts to create jobs because it
signals an improved business environment and encourages new investment. Greater
investment in the economy enables faster growth and more job opportunities.
For several years, the country has experienced low levels of business
confidence. Business confidence was negatively affected by the prolonged
electricity crisis, state capture, concerns about corruption, the decline of
state-owned enterprises and the manner in which law enforcement agencies had
been compromised.
Investors have also been concerned about obstacles to growth, such as delays in
the release of broadband spectrum, inefficiencies in ports and rail operations,
and regulations that have slowed down licencing processes.
The successful holding of our national and provincial elections in May and the
formation of the Government of National Unity have had a positive effect on
business confidence. The progress we have recorded in our reform process thus
far has also contributed to the improved sentiment.
We have shown our determination to tackle corruption. Bodies like the National
Prosecuting Authority (NPA), Special Investigating Unit (SIU) and the Hawks are
reinvigorated and have brought several high-profile cases to trial. The
permanent establishment of the NPA’s Investigating Directorate has given
further impetus to the fight against corruption.
Crime is being tackled. Across the country initiatives such as Operation
Shanela have upped the war on crime. We are clamping down on illicit mining
operations. Criminal syndicates involved in cable theft and extortion at
construction sites are being dealt with.
Through a concerted effort from all stakeholders, we have confronted the
electricity crisis. We have now had more than 140 consecutive days without load
shedding. There has been a huge increase in new power generation capacity.
Investors have seen the growth opportunities in the far-reaching energy reforms
we are undertaking. Just last week, I signed into law the Electricity
Regulation Amendment Act, which will enable the establishment of a competitive
electricity market.
The progress we have made in electricity gives us confidence that we can
overcome the problems on our freight rail lines and in our ports. Transnet’s
recovery plan is showing progress. The private sector is providing significant
technical support and resources to Transnet Freight Rail and Port Terminals.
In Gauteng, the Western Cape and KwaZulu-Natal, new state-of-the-art passenger
trains are ferrying commuters along refurbished and newly reopened rail
corridors. This saves users considerably in terms of commuting time and
transportation costs.
We have made changes to immigration regulations that make it easier to attract
skills, investment and tourists into the country. We have also significantly
speeded up approval processes for water use licences and energy projects, and
released broadband spectrum to unleash the potential of our telecommunications
industry.
We are also making progress on infrastructure investment. According to
Nedbank’s Capital Expenditure Project Listing, the value of fixed investment
project announcements in the first half of this year rose to approximately R800
billion. This was up sharply from just over R190 billion in 2023. The public
sector accounts for most of these projects, in areas such as energy,
transportation, health facility upgrades, roads and housing.
As Government, we held a meeting with business leaders last week. Business
expressed optimism about the recovery and growth of our economy. They committed
themselves to a new era of partnership with government. We agreed on key
actions we must now take to build on the progress that has already been made.
We cannot rebuild our country unless all South Africans work together. We will
continue to work with business, labour and other social partners to drive the
structural reform process that will boost inclusive economic growth and jobs.
There is indeed an air of optimism in our country. Let us harness this
confidence and goodwill to increase the momentum of our shared efforts to build
and strengthen our economy.