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DAVOS — Unusually, Cyril Ramaphosa arrived late for Team SA’s scheduled press conference, having been caught up with other world leaders. He made it in time to answer questions around the terms of reference for the State Capture report – and other issues that have the SA public’s attention. Ahead of his arrival, cabinet ministers Rob Davies, Ebrahim Patel and Jeff Radebe fielded questions. Here’s what happened. – Alec Hogg
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Well, good afternoon Ladies and Gentlemen. Thank you for joining us here in the room and live online. My name’s Oliver Cann, I work for the World Economic Forum. Now we’re innovating at this special media briefing with the Deputy President Cyril Ramaphosa. Unfortunately, the Deputy President is on his way, but we have his room for a finite period, so we thought we’d reconfigure the format somewhat and to start with the question and answer, I have three very high ranking, excellent ministers here to take some questions and to give some perspectives on the South African experience here at the annual meeting 2018. We hope that the Deputy President will be along very shortly along with his colleagues. So to my immediate left, the Minister of Trade and Industry, Rob Davies, moving along and missing out the space in the middle, of course Minister in the Presidency responsible for planning, monitoring, evaluation, Jeff Radebe and then we have Minister of Economic Development, Mr Ebrahim Patel. So let’s just have a Q&A session for a bit and we’ll see what happens in a few minutes. How about a show of hands, why don’t we get a bit of an interest and see who wants to answer any questions? Can I see some hands? We’ll take three at a time. I know who you are but remind us where you’re from sir, and your name for those who don’t.
Alec Hogg from Biznews.com. Really, just an overall … two things: one general and one specific. From a general perspective, just the difference between this year and last year. All three of you were here last year. And specifically from a national government perspective, the water crisis in the Cape.
The crisis with water in the Cape, from one year to the next. Pass the mic to the lady in the front row.
My questions were regarding a Chinese company. South African Parliament is investigating the tendering process of Transnet with CRRC, a Chinese railway corporation about kickbacks and the local addition. I’m wondering what the latest progress is and if that influenced China’s investment in South Africa in any way. Thank you.
Thank you, ma’am. I’m transferring there to the second row. We’re doing three at a time. Everybody else get your questions ready. You’re next.
CNBC – Alfred Ladd. A simple question. “What do you think is going to be the greatest challenge?” You’ve said that you’re going for policy certainty. You said you’re going to deal with corruption. What else do you think you need to sort out to make sure that foreign investors keep coming back to South Africa?
A good question to ask and we think that we should mention South Africa as the emerging market of 2018. Where do you want to start? Do you know the difference a year makes? Who’d like to take that question?
I’m sure we’ll all say something about that. I think that what we are detecting this year is a much more optimistic view about South Africa than we had last year. I think that the vision that has been enunciated by the Deputy President and the President of the ANC, and the fact that we have a transition and that there is now strong commitment. By the way, those of you that don’t know, the terms of reference of the commission into state capture and corruption are now being published and that process will begin. I think that all of that indicates that we are beginning to get on top of some of our biggest challenges. I believe (and I’ve noticed with all the investors and significant businesspeople I’ve interacted with over the course of the last few days) that they are all very welcoming of all of this and I think that is creating a platform on which we can build and strengthen our investment relations.
Let me answer the other question. Apart from dealing with the corruption… apart from greater policy certain… what else? I think that over the years, we’ve been trying and against the headwinds of some of the issues that have not been adequately dealt with (as I’ve just mentioned), we’ve been trying to do a few things. One is to identify – concretely – investment opportunities in our country. Then also to try to facilitate the investment experience with the establishment of a one-stop shop (Core Invest South Africa). In fact, this year, we brought the head of Invest South Africa here as well and the whole intention is that many foreign investors as well as domestic investors will respond to an identification of concrete opportunities. They will want to know what support programs we put in place. They will want to know what the conditions and terms are in return for those.
I think where we’ve done this – and we’ve done it reasonably well in some parts of our economy already (the motor industry sector, for example where the automotive production development program has created a considerable amount of certainty, which is supported by a nice number of investments) – that has had a positive response. The one-stop shop: physically, you will see representatives of a number of governments that take regulatory decisions, ranging from Home Affairs about immigration permits, the Department of Labour, the Environmental Affairs regarding environmental impact: all of those departments are represented. Even when they’re not, they’re contactable on line and the whole intention is to allow the investor to come to a single one-stop shop and then to have an easy passageway. We don’t just say ‘we’ll go to this or that office’ but actually, there’s a coordinated and single channel.
It’s called investment facilitation. We’ve taken a concrete decision to do that and I think it’s been working but I think that now we’ve got a better climate for some of that work to move further ahead. Lastly, let me just say on the question about the parliamentary enquiries. It is the portfolio committee that is dealing with the train industry and of course, they have their own autonomy. It’s not a government process. It’s a parliamentary process. What they’re looking into is not any particular country or any particular contract or tender. What they’re looking into is that we have a number of policies around localisation and those policies… Even in the past, we can point to some success. We have had companies that have responded and where there are contracts and tenders, have come and invested in our country and they’ve established manufacturing capacity.
We have seen that where there are contracts and tenders that have not been the kind of contracts and tenders, which have not passed muster in terms of the criteria of good governance and lack of corruption: not only have these tenders meant that somebody’s pocketed money that they shouldn’t have done or that funds have gone astray, etcetera. Bad enough as that is, it’s also meant very often that tenders have been awarded. Not to local manufacturing but they’ve been awarded to people with imports. We have a number of cases like that. That’s what that enquiry is doing and I think my own view of it has been (for a long time) that they must do the work. They must find whatever they find. The chips must fall wherever they should. We don’t have a direct line of responsibility over the state-owned companies concerned but I think we are very supportive of greater consequence management for people that have not observed the rules because they undermine the very important policy tools of the industrialisation of a country.
Yes. I would like to agree with my cabinet colleague. The major difference between this year and previous years is that there is more confidence, hope, and more cohesion within Team SA. I think that is driven largely by the political developments that have happened since December 2017. Also, even the questions that have been posed today from the investors and businesspeople here in Davos, are indicating that there’s more confidence in the ability of our government, to ensure that we drive our National Development Plan as well as what our Deputy President has highlighted since he arrived here – the issue of a social compact between government, business, and other social partners to drive this program going forward. What is the main challenge? I think the statement of our government party (the ANC) that was delivered by Deputy President Cyril Ramaphosa indicates what we’re going to be seeing in the next 12 months.
The issue of jobs is on top of the agenda. Not only of the governing party, but also, it’s a priority of the South African government. The issue of small and medium enterprises and infrastructure (especially it’s maintenance because it spent a lot of money on self-employment in the past few years), but on the maintenance, there are major challenges. This explains why we are having some of the challenges of water in the Western Cape. As a Central Government, we are totally committed to working together with the Western Cape government and the Metro of Cape Town to ensure that we do everything within our power to deal with the water crisis there. Lastly, I would like to say as well, that the confidence-boosting measures that were started last year are beginning to bear fruit as is highlighted by the strong stance that Minister Davies has also highlighted of dealing decisively with matters of corruption.
You have seen the action that has been taken by the National Prosecuting Authority – even preserving the assets of those companies that are suspected of malfeasance. What is more important, is to consolidate all these measures, going forward.
Well I think my two colleagues have really said it all. I really just want to underline and emphasise: we’ve seen a very positive mood amongst South African businesses and investors in Davos and have paid attention to it. They see a South African delegation that’s come here, that is buoyant, that is confident about growth prospects for this year, and I’d like to say that in our engagement with investors here, it’s clear to us that there’s an appetite. There’s a growing appetite for them to either expand their operations in South Africa. We met with some investors this morning and they were very clear to us. They were waiting to see whether the outcomes of our political processes were consistent with their sense of sustainability and some of them have said, “Look, we’re ready to expand our operations in South Africa. We see it as a great base for our markets in the rest of the African continent.”
We’re indicating we’ve got $25bn ready and available for infrastructure spending, and that provides investors some degree of certainty that we’re putting in place the physical and other platforms that they need to be able to expand their businesses and also that the investment itself will stimulate opportunities and partnerships. I think all of our discussions this year Alec, and I’m sure that in your engagement with people here, you would have seen the same. There’s a positivity. There’s a sense that we can do things, but that window is available and we have to utilise that window. Since you’ve come for Hamlet and the prince has just come in, it’s a good moment for me to end and hand back to you.
Thank you very much. A very warm welcome to the Deputy President, Cyril Ramaphosa. We’re very glad to have you join us. I believe with time pressing as it is (and unfortunately that is a reality) we’ll have a few more questions. If he’s caught his breath, perhaps he’d like to make some brief remarks. As you’re catching your breath, a very warm welcome to Minister of Finance, Malusi Gigaba, who will take us to the end there.
Do you want me to say something?
If you will.
Well I think we should take questions. All I’d like to say is that we’ve had a very successful pilgrimage. As a South African delegation – what we call Team South Africa – to Davos, I think our journey here has paid enormous dividends. I think we’re going back home, filled with a great deal of confidence in the confidence that the international investing community has in us. They have demonstrated that South Africa is still an important destination for investment. With all the meetings that we have had, we’ve had nothing negative that has been said about our country. All we’ve heard has been encouragement. “You’re on the right course. Keep going. We applaud you for the new era that has been unleashed in South Africa” and wishing us everything of the best – that we stick to the course and we follow through with the changes, the reforms, the determination that they have seen us communicating, and the interventions that we are going to make.
We go back home also with almost a bag full of investment commitments. Many of the business leaders that I have met here, have said, “We are buoyed by this new mood in the country and we want to assure you, Deputy President/President of the ANC that we’ve got these projects on the line.” This is precisely what we’ve been hoping to hear in terms of our pilgrimage to Davos. We want to hear the investing world coming to us and telling us ‘your message is clear. It is positive. It is forward-looking and it is the type of message that we can have confidence in. You are going to correct some of the missteps that you’ve had in the past. We believe you and we think we are able to reconnect with you and invest in your economy again’. So I go back home, a very satisfied Deputy President of the Republic.
#WEF Cyril Ramaphosa says Team SA has had a successful pilgrimage to Davos – "I think our journey here has paid enormous dividends. We go back home filled with a great deal of confidence of the confidence the international investing community has in us". HM
— EWN Reporter (@ewnreporter) January 25, 2018
Thank you sir. By my reckoning, we probably have to get back in five minutes so let’s get as many questions as we can. I see three people in the front row with their hands up. Sir, you can just give me your question and pass it along.
Thank you. How likely is it that plans to build nuclear power plants in South Africa, will now be taken off the table?
Thank you, Minister Radebe. Just some feedback on the implementation of the National Development Plan, please.
Mr Deputy President, I just want to get your reaction to the terms of reference for the State Capture report..
I’d just like more details about your plans for growth and also with regards to state capture.
Okay, Mr Deputy President. There were the nuclear plans, the state capture, and plans for growth.
Well, the nuclear plans really… We’ve got to look at where our economy is. We’ve got access to power right now and we have no money to go for major nuclear plant building. All of this really needs to be looked at in our current context. If for instance you’ve got excess power and you don’t have the money (and we’ve already said that this nuclear process is going to be looked at within the broad context of affordability and what we currently have), and this is how it needs to be looked at. If, in our discussions – as we proceed with discussions – we find that it doesn’t in the end really make sense because we don’t have money… That is the type of discussion that we will have.
— Gareth van Zyl (@GarethvanZyl) January 25, 2018
With regard to the terms of reference. I have not seen the terms of reference I must say. I’ve heard that they’ve just come out and I need time to look at them, to study them, and to see the extent to which they are going to enable a Commission of Enquiry to do its work effectively. I know for instance, that the Deputy Chief Justice has been saying that he needs those terms of reference to be out so that he can start with the work. I think the positive thing about the state capture process is this: 1) We are now going to go to the depths of what corruption has been taking place in our state-owned enterprises. I think that is a huge plus. 2) We’ve got an independent judge who’s going to look at all this. 3) This process will go along in tandem with the process that needs to be followed through by the criminal justice system of identifying those who have committed wrongs and making sure that they’re brought to book.
The two should not be seen as mutually exclusive. The two processes will go ahead because where a wrong has been committed, it must be followed through and those who are found to be responsible for that must be dealt with. The growth issue… my colleagues can answer that. One of the things that has been impeding growth is (1) corruption (2) what we’ve been doing with our state-owned enterprises in terms of their dysfunctionality and their weak balance sheets. Once we address that, we’re going to find that investors will find our country attractive for investment, so investors will then come. We’re open for investment. We’re dealing with a regulatory framework in our country and we’re going to deal with all those issues that potential investors have raised. For instance, in the mining industry; the Mining Charter is now going to be thoroughly discussed with key role players so that we find a solution that will unlock our mining industry, so that South Africa can benefit from this commodity boom.
We do not want to miss out on this commodity boom that is unfolding. If the Mining Charter is holding us back, then we must deal with it and find commonality of purpose and views with potential investors. I think another one was directed to you, sir.
The implementation of the National Development Plan: as you know, since 2014 we started the first five-year program of implementing the National Development Plan, starting from education to health, the economy, social cohesion, and nation-building. Every quarter, we do make a presentation to government to see how far we’ve gone in implementing the NDP as well as to define obstacles that still stand in the way of doing that. We’ve just released a mid-term review of how far we’ve come since 2014 and going forward, we need to accelerate the implementation of this program but we need to record as well that the success of the implementation of the NDP does not lie on government alone. It requires collaboration and partnership with the private sector, civil society, and labour. The social compact that the Deputy President has been talking about, has to be accelerated so that jointly, we can show the success of the NDP.
We are very optimistic that we are on track in terms of dealing with all challenges but we have to focus more – as it has been indicated in the January statement. The President of the ANC (Deputy President Cyril Ramaphosa) indicated about two weeks ago, focusing on jobs, jobs, and jobs.
Thank you very much. Thank you for joining us.
Cyril Ramaphosa: The Audio Biography
Listen to the story of Cyril Ramaphosa's rise to presidential power, narrated by our very own Alec Hogg.