Land reform an absolute economic necessity – Cyril Ramaphosa

Address by South African President Cyril Ramaphosa at the Discovery Leadership Summit 2018

Allow me to express my appreciation to the Group Chief Executive of Discovery, Adrian Gore, for inviting me to participate in this leadership summit.

This summit takes place at a moment when the world is in dire need, not of leaders, but of leadership.

It is in need of women and men, in business, in politics, in the unions and in broader society, who will provide leadership on those issues that most affect the global community – poverty, inequality, youth unemployment, climate change, terrorism, narrow nationalism, chauvinism and intolerance.

As several of the speakers here today would attest, it is not necessarily difficult to be a leader.

The difficulty lies in providing leadership.

This is not a task merely for presidents and prime ministers, but for all those in positions of responsibility who have a chance and the means to contribute to a better world.

I am certain that through this summit, with the lessons that will be learnt, many who have the chance to make a difference will also find the means.

As a country, South Africa is in great need of leadership – from people who have the commitment, the vision, the capabilities and the determination to confront the many challenges of the moment.

History has bequeathed to this generation a devastating legacy of poverty, inequality and underdevelopment.

Even 24 years after the advent of democracy, it continues to deny millions of our people the skills, assets and opportunities to participate in meaningful economic activity.

We must acknowledge that over the course of the last decade, the progress we had made in addressing this legacy has been set back by a lacklustre economy, declining investment, policy incoherence and uncertainty, and the effects of corruption on a dramatic scale.

As a measure of the malaise, since the end of the 2008 global financial crisis, our country’s economic growth has not risen above 2% year on year.

At such levels, economic growth cannot keep up with population growth, and the number of jobs created cannot keep up with the number of people entering the job market.

While we have made great strides in bringing millions of our people out of poverty, we are faced with an unemployment crisis.

Unless we are able to revive our economy and create jobs, the majority of South Africans will be denied real, meaningful opportunities to create a better life for themselves and their children.

We need to grow our economy at a far greater pace.

We need to return to the levels of growth we were able to achieve before the global economic crisis, and we need to surpass them.

As we undertake the work required to do so, we must remain mindful that growth is not an end in itself.

Growth is a means to an end.

It is a necessary, but not sufficient, condition for broadening prosperity.

Growth is vital to our efforts to reduce poverty and create employment, to improve health outcomes, to make society safer and to better the lives of all people.

Growth is a necessary, but not sufficient, condition for the achievement of a more equal and cohesive society.

It is therefore essential, if we are to achieve a South Africa that is free, equal and prosperous, that we strive for growth that is inclusive and sustainable.

This means, in the first instance, that growth must address the exclusion of black and women South Africans.

It must create employment on a massive scale, bringing into the mainstream economy millions of young black men and women.

As we direct investment to those parts of the economy with the greatest potential for employment creation, we have to confront the changing nature of work.

We have to create jobs for the unemployed of today, while preparing our workforce for the jobs of tomorrow.

The rapid technological advances of the Fourth Industrial Revolution are fundamentally changing the nature, profile and location of work.

We need to be ready not only to adjust to this reality, but to play an active role in shaping the new world of work.

We will soon be establishing a Digital Industrial Revolution Commission, which will develop a comprehensive national plan to enable South Africa to take effective advantage of the Fourth Industrial Revolution.

One of its central considerations must be the availability of suitable skills, particularly among the youth.

The country’s severe skills deficit is a central factor in the exclusion of black and women South Africans.

We have achieved nearly universal primary school attendance and have almost a million students in institutions of higher learning, but we are still not achieving the quality outcomes that we need.

We must pay particular attention to making our education system more responsive to the needs and demands of our economy.

This must, of necessity, be a joint effort.

The private sector has a huge role to play in offering learnerships, internships and on-the-job training opportunities.

Companies need to work closely with technical and vocational colleges to ensure the relevance of curricula and the suitability of the skills taught, and to smooth the path from education into employment.

Another reason for economic exclusion is the lack of access by black South Africans to land and other assets.

Without assets, most South Africans are unable to accumulate wealth, are unable to break the intergenerational cycle of poverty, and are unable to finance whatever entrepreneurial ventures they may conceive.

The current focus on accelerated land reform is therefore a vital opportunity to address economic exclusion.

Land reform is not only about correcting a grave historical injustice; it is also an absolute economic necessity.

Through fair, transparent and comprehensive land reform, we seek to unlock the full economic potential of our land and its people.

Those who have lived on the land for generations will have the right and the means to work it.

Emerging farmers will have the land, security and support they need to establish viable businesses.

Poor people in urban areas will have affordable housing in areas that are located near to economic opportunities and social amenities.

Accelerated land reform, undertaken within the framework of our Constitution and in adherance with the law, can be an effective catalyst for greater agricultural production, rural development, employment creation and broader economic growth.

A central element of our effort to promote inclusive growth is an ambitious investment drive to raise more than $100 billion in new investment over five years.

This is informed by the understanding that only a massive increase in investment in the productive sectors of the economy will create the growth we need to make a meaningful impact on unemployment.

It is less than a week since we hosted more than 1,000 investors in this conference centre for the inaugural South Africa Investment Conference.

The conference showcased a portfolio of bankable investment projects across the economy for investors’ consideration.

We announced a range of reforms to improve the ease of doing business, and engaged with stakeholders on the issues that they find hamper further investment.

During the course of the Conference, several companies announced investments with a total value of R290 billion.

Importantly, almost all these investments will make a direct contribution to growth that is inclusive.

They will assist in diversifying the South African economy, with investments being announced in sectors like mining, forestry, manufacturing, telecommunications, transport, energy, agro-processing, consumer goods, pharmaceuticals, infrastructure, financial services, energy, ICT and water.

These are investments that will create employment in many different parts of the country, requiring many different types of expertise, and promising to create new capacity in several emerging industries.

As we undertake these efforts to achieve sustainable growth, we have been forced by weakened economic conditions – specifically two quarters of negative growth – to announce an economic stimulus and recovery plan to ignite economic activity and restore confidence.

Working within the existing fiscal framework, we have reprioritised public spending to boost growth and employment in sectors like agriculture, township and rural economies, and infrastructure.

In identifying these priority areas, there was a deliberate effort to ensure that growth would be inclusive and sustainable.

The beneficiaries of these interventions are predominantly black, young and women, and specifically people living in townships and rural areas.

Interventions include, for example, a package of support measures for black commercial farmers to enable them to increase their entry into food value chains through access to infrastructure.

Public funding will also be re-directed towards igniting economic activity in townships and rural areas through the revitalisation of industrial parks and the establishment of a township and rural entrepreneurship fund.

Resources are being re-directed towards addressing immediate challenges in health and education – such as school sanitation, hospital supplies and medical staff – which are critical to the wellbeing and productivity of our people.

The stimulus and recovery plan includes the establishment of an Infrastructure Fund, which will consolidate government’s R400 billion infrastructure budget and leverage resources from private investors, financial institutions and multilateral development bodies.

Among the projects that the fund will support are the provision of roads, human settlements, schools, student accommodation and public transport.

Further infrastructure spending is being directed to 57 priority municipalities to cover, among other things, sewerage purification and reticulation, refuse sites, electricity reticulation and water reservoirs.

While these projects will boost productive activity and provide necessary economic infrastructure, the primary beneficiaries will be the poor, the unemployed and marginalised.

This is another element of the stimulus and recovery plan that promotes growth that is inclusive and sustainable.

Ladies and Gentlemen,

None of these efforts to promote inclusive growth will succeed without leadership.

It is at precisely this moment, as we find ourselves at an economic crossroads, that we require courageous and visionary leadership throughout society – in business, in labour, in government and in civil society.

Each social partner needs to play its role.

While it is the private sector that will drive the bulk of fixed investment in the economy, it is government that has to create a conducive and enabling environment.

That is why we are working to reduce the cost of doing business through, for example, reviewing administered prices, improving regulatory efficiency and amending visa requirements.

Government is also introducing further measures to reduce the concentration of economic ownership and control and promote competition across the economy.

Not only does this push down prices for consumers and make South Africa more competitive, but it also creates opportunities for emerging black entrants.

In the current environment, in particular, government has a responsibility to prevent corruption and rent-seeking, which severely damage the capacity both of the state and the economy.

It is for this reason that we are taking decisive steps to end corruption, restore good governance at state-owned enterprises and strengthen critical public institutions.

Government needs to take responsibility for managing public funds responsibly and prudently.

In a severely constrained fiscal environment, we are continuing to invest in growth-enhancing measures and ensuring that education, health and social support – which are critical in pushing back the frontiers of poverty – receive priority.

It is at times like these that we look to business to provide leadership.

South African companies demonstrate a keen commitment to good corporate citizenship.

As they seek to generate decent returns for their shareholders, companies share a common responsibility to ensure that their operations and business practices advance the best interests of our citizens.

This has become even more important as we seek to restore investor confidence in our economy and in our institutions of governance.

Now more than ever, we need capable and decisive leadership at the helm.

Now more than ever, we need companies with an ethical organisational culture that abhors corruption, collusion and other unethical practices.

Now more than ever, we need companies committed to sustainability, who do not prize short-term profit over the economic legacy of future generations.

What we need are companies who understand where we have come from as a country and where we are going – and are committed to be part of a better future for all.

As we grapple with the challenges of the present, we are fortunate to have in the National Development Plan a broad consensus on the future we want to build.

The NDP has as its central purpose the need to unite our nation, unleash the energies of our citizens, grow an inclusive economy, build capabilities, and enhance the capability of the state and leaders working together to solve complex problems.

The task before us is significant.

We have emerged from a period of turbulence and are embarking upon a new path of growth and renewal.

The success of our efforts rests on sound and decisive leadership.

We are energised, we are determined and we have the means to succeed.

Allow me to conclude with a few words from the Vision Statement of the National Development Plan.

It says:

“We are a people at work.

We work to create plenty.

Our work brings us ever closer to our dreams.

Work grounds our dreams even the more fantastic they are.

The reality of work connects us to our dreams.

We work towards goals with patience invested in actual effort.

We invest in our efforts and are not waiting in disengaged expectation.

Because we are impatient to succeed, we work with painstaking rigour.

Our efforts, not so much those of others, make us stronger.

Then we are patient for the results of our efforts.

This kind of patience, gives birth to our new work ethic.

In this work ethic we ground our dreams.

We have built our own houses.

We are confident and self-sufficient.

We are traders.

We are inventors.

We are workers.

We create companies.

We set up stalls.

We are studious.

We are gardeners.

We feel a call to serve.”

It is in meeting that call to serve that we provide leadership.

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