press Release - 2016/05/27: SMALL BUSINESSES SHOULD FORM PART OF DTI'S 100 INDUSTRIALISTS - SMALL BUSINESS DEVELOPMENT MINISTER
Addressing delegates attending the 2nd Southern African Metals and Engineering Indaba currently taking place at the IDC Conference Centre, Minister Zulu said the
Government recognised the critical role that SMMEs play in employment creation as well as contribution towards the country’s gross domestic product. She said the Government also recognised the important role that small businesses play in the manufacturing sector in general and the metals and engineering sector in particular.
“We understand the crucial role that the manufacturing sector contributes to the economy; we understand that the majority of companies within the sector are small companies, and we also understand the challenges currently facing the sector in general and small businesses within the sector in particular.
“It is against this backdrop that we are currently involved in the setting up of a major fund to support small businesses and I have no doubt that some of your small business suppliers do need this fund because, despite the fact that you do your best to support them in line with the requirements of the Broad-Based Black Economic Empowerment Act, you also want to see them operate as independents and become tomorrow’s major players in industry. The Gazelles I am referring to are a feeder for the Black Industrialists programme managed by the Dti,” the Minister said.
She added that incubation support is crucial in the metals and engineering sector, adding that, through SEDA, her Ministry had established a number of successful incubators throughout the country.
“We have partnered with Columbus Steel in Middleburg to establish the Middleburg stainless steel incubator (MSI), which focuses on the manufacturing of various stainless steel products. In Springs, we have partnered with Zincor and Impala and have focussed on the beneficiation of zinc and copper metals.”
She said that in Richards’s Bay her Ministry has partnered with BHP Billiton in the establishment of the Downstream Aluminium Centre of Technology, which focusses on downstream cast aluminium beneficiation.
The Minister said she was delighted to learn that SEIFSA launched a small business hub in May 2015, which focusses on helping smaller businesses with compliance, enterprise and supplier development training, amongst other things.
This, she said, creates a potential for a relationship between the department and its agencies, SEDA, SEFA with SEIFSA.
“I strongly suggest that we pursue this. The SMMEs’ clients in the hub could have access to SEFA funding to grow their businesses and non-financial support through SEDA, as well as equipment and grant funding from the Black Business Supplier Development Fund within the Department,” the Minister said.
The Minister also said that the Government could not create 11 million jobs by 2030 without the contribution of the metals and engineering sector.
“This is a task that the Government just cannot do alone. I am of the view, therefore, that the steel, engineering and manufacturing sectors are some of the most important sectors to contribute in creating these jobs because the metals and engineering sector contributes roughly 28-30% of manufacturing and 6% to total GDP. In South Africa, roughly 10 000 companies are directly involved in this sector, contributing about 390 000 jobs. This sector is an important components supplier into mining, construction and the automotive sector.
In conclusion, the Minister said she would like to move beyond narrative to implementation and action.
“And I would like to make this sector a good example of how the Government works together with the private sector in the interest of all of South Africa in the creation of jobs and entrepreneurs,” she said.
press Release - 2016/05/27: WORKERS AND EMPLOYERS REMAIN AT LOGGERHEADS
The President’s statement was challenged by political analyst and Indaba panellist Professor Steven Friedman, who argued that if employers and trade unions saw each other as partners, there would not be a need for bargaining councils, which currently play a major role in South Africa’s labour relations.
Pointing to the opposing interests of employers and employees, Professor Friedman said wage negotiations are often a lifeline for the few working individuals who care for their unemployed relatives.
“Pre-1994 negotiations resulted in political inclusion for South Africa’s black majority. However, economic exclusion still continues, rendering collective bargaining difficult,” he said.
Supporting this view was Metal and Engineering Industries Bargaining Council General Secretary Thulani Mthiyane, who said black workers were historically seen as enemies not only by the apartheid government, but also corporate South Africa, as were the trade union agents who represented them.
“Unfortunately, this hostile relationship between business and trade unions still exists,” Mr Mthiyane said.
Solidarity General Secretary Gideon du Plessis weighed in with a similar view, accusing employers of viewing workers as commodities.
“This is why we will continue to see labour unrest and violent strikes in South Africa. Instead of collective bargaining, we have a situation of winner takes all,” Mr Du Plessis said, arguing that this had led to a fall in investor confidence.
To defuse the tension, Professor Friedman’s proposal for a solution came as a surprise to the delegates who filled up the IDC’s Conference Centre in Sandton.
“What we need is a crisis!
“Saying we need a crisis seems strange. It becomes less odd if we remember what ‘crisis’ originally meant. Today it is often used to talk about calamities. But originally it referred to a turning point. In the early 1990s, there was a real sense of crisis in South Africa. Everyone believed we needed to change course, and that led to the adoption of a new constitution. We need to accept now again that we have a crisis. We need to accept that the current path (of labour relations) needs to change,” Professor Friedman said.
Steel and Engineering Industries Federation of Southern Africa (SEIFA) Operations Director Lucio Trentini, echoed this sentiment, saying labour cannot exist without business, business cannot exist without labour and Government cannot exist without either.
“Government, business and labour are indispensable partners that cannot do without one another. We all share a vested interest in the growth and competitiveness of the local economy in order to preserve jobs.
“Business’s loss inevitably leads to labour’s loss. After all, it is prosperous business that employs more people, while failing business ends up letting go of workers and eventually closing shop. What is needed is a constructive approach that seeks to advance the interest of our industries. We need an approach that focuses on a win-win situation as opposed to a winner-takes-all scenario,” Mr Trentini concluded.
press Release - 2016/05/26: TURBULENT ECONOMIC CONDITIONS CALL FOR URGENT POLICY RESET
Speaking at the 2nd Annual Southern African Metals and Engineering Indaba currently taking at the IDC Conference Centre, Mr Schimmelpfenning said the slowdown in demand from China for commodities, the decline in commodity prices, particularly oil, and the slowdown in investment trade call for a response in the form of prompt and robust policy interventions if SADC countries are to survive the economic storm.
“The difficult economic conditions are going to prevail for some time. It is, therefore, important to reset key economic policies to ensure that Africa does not cease to rise,” Mr Schimmelpfenning said.
He said Africa still had in place underlying drivers of strong economic growth. He said that the exchange rate was the first line of defence as far as monetary policy was concerned. Mr Schimmelpfenning said governments of SADC countries need to advance the economic diversification agenda and strengthen revenue mobilization to create fiscal space.
Commenting on the importance of infrastructure development, Mr Schimmelpfenning said that SADC countries need to think very carefully about the challenge of infrastructure, which can be a major bottleneck to economic growth.
“SADC communities need to make sure that when growth picks up again, infrastructure does not become a bottleneck,” Mr Schimmelpfenning said.
He said that basic infrastructure such as electricity and roads were critical in unlocking any country’s economic growth.
Speaking on the same panel, which focused on Southern Africa’s huge infrastructure backlog and how to finance it, IDC Head of Basic Metals and Mining Mazwi Tunyiswa said without basic infrastructure, it is very difficult to grow the economy.
“In South Africa, we have experienced the impact of the shortage of electricity. When Eskom was unable to meet demand for electricity, economic growth was severely hampered. It, therefore, goes without saying that we need to invest heavily towards infrastructure development,” Mr Tunyiswa said.
He added that it was important for both the public and private sectors to work together in order to fund the approximately R560 billion required to invest in infrastructure within the SADC region.
“Governments should take lead in funding infrastructure projects, but the private sector also has an important role to play. Public-private partnerships will, therefore, be very important going forward,” he said.
He also said that it was equally important for SADC countries to integrate their economies and pull their resources together to fast-track the building and maintenance of much-needed infrastructure in the region.
In addition, Mr Tunyiswa urged South Africa to drive the SADC infrastructure agenda and not to be too dependent on international finance institutions to do so.
Responding to a question from a delegate about the role of the newly- established BRICS Bank, Mr Schimmelpfenning said the IMF welcomed competition and did not see the BRICS Bank as a threat.
“Given the huge infrastructure backlog in SADC, bringing another bank that has a mandate to finance infrastructure development is welcome. There are enough opportunities for everyone,” he said.
In addition to Mr Schimmelpfenning, the 2016 conference line-up also includes other international speakers such as:
- Executive Chairman of the EU Chamber of Commerce and Industry in Southern Africa Mr Stefan Sakoschek;
- US Embassy Economics Minister Mr Laird Trieber;
- International Labour Organisation Acting Director Dr Joni Musabayana; and
- Zimbabwean industrialist Mr Ian Conolly.