Comment on behalf of Mr Kevin Hustler, CEO of the Nelson Mandela Bay Business Chamber As always, the Nelson Mandela Bay Business Chamber looks to the State of the Nation address to provide indications of concrete results of action and the implementation of measures aimed at ensuring the socio-economic stability of South Africa.
In this, the twentieth year of freedom and democracy in South Africa, evidence of sustainable economic growth and development is imperative to the country’s continued attractiveness as an investment destination. SONA 2014 was short on detail and evidence of tangible evidence of success.
President Zuma’s acknowledgement that a space should be made for active civil society is well received in light of the work of the Nelson Mandela Bay Civil Society Coalition, which has led the way in Nelson Mandela Bay for close collaboration between local government, business and civil society leaders to create a better city for all through a focus on service delivery, integrity and transparency. An emphasis on critical need for government, business and civil society to work together to tackle poverty alleviation and job creation underscores the vital efforts made by the Civil Society Coalition.
There are a number of areas, however, that were not adequately addressed, including job creation, critical infrastructure development including roads, water and electricity, catalytic projects, education, corruption, and the provision of basic services.
Government continually states that it will create millions of work opportunities. It should be noted, however, that the private sector is the key to unlocking sustainable jobs into the future. For business to flourish and contribute towards the proposed job creation numbers, it needs an environment that is conducive for it to thrive. An environment conducive to business includes a significant reduction in the bureaucratic red tape in establishing a business and the mire of compliance regulations that overburden the administration of business. It includes tax relief incentives in establishing new investments, as well as infrastructure investments and development that leads the way in building confidence and attracting greater private sector investment, particularly in the area of manufacturing.
We also need a functioning and engaged local municipality that takes the concerns of local business seriously and comes to the party with solutions to ensure that business thrives so that we all, together, can build not only the regional economy, but a national economy that can address the issues of job creation, inequality and poverty alleviation through a sustainable private sector. President Zuma’s report that strikes in 2013 were fewer and of shorter duration is noted. But the serious impact that strikes of any nature have on productivity and the international reputation of South Africa as an investment destination must be tackled as a matter of urgency.
For 20 years, citizens of this country have been promised the eradication of the bucket system, both on a national and a local level. To date, Nelson Mandela Bay is sitting on millions of Rands allocated to this project which has not yet been unlocked to restore the dignity of the citizens of this region. It was with disdain that we hear the claiming of success in this area, as the local residents of this region have clearly expressed their lack of tolerance on this particular matter for many years.
We have heard the rhetoric surrounding the fight against corruption and mal administration for years from all levels of leadership in government, but we are not seeing significant effects of steps taken with regards to the Auditor General’s reports or special investigations. There is little to no punitive action taken against corrupt individuals, and the Eastern Cape is seeing no remedial actions taken on the recommendations in many reports. Corruption is now endemic inside the administrations across the country, province and local administrations and requires action rather than words.
The President painted a good picture regarding infrastructure investment over the past 20 years.
However, the Eastern Cape has been sadly lagging behind the rest of the country with regards to investment in the last 20 years, and particularly in the last 5 years. The road from Port Elizabeth to Addo is in a severe state of disrepair, costing the citrus industry more than R60 million per annum in lost revenue due to damaged fruits. As our prime export and tourist route to the Addo Elephant Park, and the greater Sunday Rivers Valley, it is an indictment on the department of transport and the department of tourism that this road has been allowed to deteriorate to such an extent. Effective transport links are crucial to the growth and success of business in this country.
The fact that Nelson Mandela Bay has not had a functioning integrated public transport system since the World Cup in 2010 is an indictment on the leadership of this metro and the national ministry of transport, and cannot by any means be claimed as a successful roll out of the programme in the country. The IPTS needs to be addressed as a matter of urgency and resolved to the benefit of all citizens of Nelson Mandela Bay, who require reliable and cost-effective transport to their various destinations. Business and the community are beyond the point of frustration with regards to the corruption, in-fighting, and the total lack of leadership and progress with regards to this capital intensive project.
It was demonstrated during the drought season of the past 5 years that we do not have sufficient security of water supply for this metro to ensure that both industry and its 1.1 million citizens can be sustained during an extended drought period.
The building of half the Nooitgedacht low level scheme through disaster relief funding has not solved the problem – an additional R 400 million is required to complete pipeline to ensure that metro is not put at risk during future drought seasons. This threatens and places a stranglehold onthe economic survival and sustainability of local businesses. It is a significant inhibitor of both local and international investment, as the security is neither assured nor secured.
Electricity infrastructure is in no better state – our network and our substations are crumbling due to insufficient investment over the last 20 years, with substations exploding and a tremendous increase in dips in electricity supply causing production line stoppages and millions of Rands in losses to the manufacturing sector.
Along with the High Energy User Group of Nelson Mandela Bay, the Business Chamber has lobbied extensively regarding high tariffs, not only with the Nelson Mandela Bay Metro, but with the dti and the parliamentary portfolio committee on energy, as well as with NERSA and Eskom on all available platforms over the past 5 years, to no avail.
The electricity pricing of this region for high energy consumers in particular is amongst the highest in the country, not to mention compared to comparative nations around the world. This, too, inhibits further investment by our existing industry base, and puts off future foreign direct investment. Six of these companies have already lost 950 jobs in the last two years. If government wishes to retain and create jobs in the private sector, our pleas need to be heard and actioned to ensure the competitiveness and sustainability of business, which is the backbone of the economy.
It was interesting to note that while large electricity supply projects and dam infrastructure projects were mentioned in other parts of South Africa, no mention was made regarding the Thyspunt nuclear plant, the Umzimvubu Dam, or even a hint with regards to Project Mthombo – all catalytic projects that have been proposed for the Eastern Cape with very little concrete commitment from national government. We need to ensure delivery for both economic and rural agrarian growth, as well as ensure sustainable job creation and assisting in lifting communities out of poverty.
We are pleased to not the increase in the enrolment of children in schools and moves towards making Grade R compulsory for all children. The Eastern Cape is sorely lacking high-calibre schooling facilities at all levels, especially in the rural areas. There are hundreds of mud schools in the region, which require urgent replacement with environments conducive to learning. The pass rates in the subjects of maths and science have diminished severely in the past 5 years, according to the national department of basic education. We continue to advocate for a strong focus on maths and science education, to ensure that South Africans have the knowledge base and skills to support future investment and meet its demands.
The Business Chamber was pleased to note references to the following in President Zuma’s address:
- A focus on the importance of alternative and renewable energy sources and development of bio fuels. We are delighted with the number of wind turbine projects around Nelson Mandela Bay, and appreciate government’s assistance regarding the development of the renewable energy sector.
- The roll-out of improved fibre-optic networks, which connect individuals and enable South African businesses to participate in the global economy.
- The emphasis on local procurement practices, particularly as they relate to and benefit the automotive sector.
- The focus on intra-Africa relations, and look to the proactive inclusion of the Eastern Cape business community, particularly from Nelson Mandela Bay as an economic hub.
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