Eastern Cape Business 2016 edition

SPECIAL FEATURE A period

SPECIAL FEATURE A period of positive growth and development The year 2015 marked 60 years since South Africans from all walks of life adopted the Freedom Charter in 1955, in Kliptown, Soweto, as well as the 25-year anniversary of the release of Nelson Mandela from prison and the unbanning of the liberation movements. “They declared amongst other things, that South Africa belongs to all who live in it, black and white, and that no government can justly claim authority unless it is based on the will of all the people,” said President Jacob Zuma. In a year that saw world economic and political uncertainty, South Africans still had much cause to celebrate. Great strides have been made nationwide in building schools and hospitals, major efforts are underway in terms of job creation, skills development, SMME growth, the empowerment of women as well as innovation. After a tough period of loadshedding and energy instability, Eskom seems to have the national grid stabilised as well as solid plans for the expansion of our infrastructure. South Africa also hit the world headlines through the discovery of a new species of human relative (“Homo naledi”) at the Cradle of Humankind World Heritage Site, a local doctor successfully completed the world’s first penis transplant, and Trevor Noah captured a slice of America’s cultural empire by taking over as host of Comedy Central’s The Daily Show. National priorities The national government has rededicated itself to eradicating racism and all related intolerances in our country. President Zuma has stated that the country’s ambition of achieving a growth target of 5% by 2019 is at risk because of slow global growth as well as domestic constraints in energy, skills, transport and logistics amongst other factors. However, the situation was more promising on the jobs front as Statistics South Africa’s report on the last quarter of 2014 showed that there were 15.3-million people who are employed in South Africa. “Jobs grew by 203 000,” said Zuma, adding that the economy still needed a major push forward. Zuma also presented government’s nine-point plan to ignite growth and create jobs. EASTERN CAPE BUSINESS 2016 64

SPECIAL FEATURE “A lot has been achieved in the past year. We believe that our nine-point economic intervention plan on the economy will consolidate the achievements, and ignite much-needed growth,” said Zuma. South Africa has the 24th largest economy in the world and contributes 30% of sub-Saharan GDP despite making up only 6.5% of the population. Sound financial management has seen South Africa’s macro-economic fundamentals become very strong off the shaky base that the apartheid regime created. In particular, prudent controls meant that South Africa was able to withstand the shockwaves sent around the world by the international financial-sector meltdown. The country is recognised for an abundance of mineral resources, accounting for a significant proportion of both world production and reserves, and South African mining companies dominate many sectors in the global industry. South Africa produces 10% of the world’s gold (it is estimated that onethird of the world’s unmined gold reserves remain in South Africa). There have been an increase in mineral beneficiation, which the government has targeted as a growth sector. Economy National Government’s 9-point growth plan 1. Resolving the energy challenge. 2. Revitalising agriculture and the agro-processing value chain. 3. Advancing beneficiation or adding value to our mineral wealth. 4. More effective implementation of a higher impact Industrial Policy Action Plan. 5. Encouraging private sector investment. 6. Moderating workplace conflict. 7. Unlocking the potential of small, medium and micro enterprises (SMMEs), cooperatives, township and rural enterprises. 8. Reforming state-owned companies, information and communications technology infrastructure, water, sanitation and transport infrastructure. 9. Operation Phakisa, which is aimed at growing the ocean economy and other sectors. The discovery of diamonds and gold in the 19th century laid the platform for the development of South Africa as an industrialised economy. Wool, wine and mohair were the country’s only exports before minerals were discovered. Although mining plays a far smaller role in the economy than it used to, it still contributes significantly to GDP, employment and taxation income. Demand for platinum, iron ore and manganese from the new global powerhouses of China and India is motivating investment in the sector in South Africa. Mining companies account for one-third of the market capitalisation (R1.86-trillion) in the country’s stock exchange, the JSE. One of South Africa’s fastest-growing manufacturing sectors, catalytic converters, also owes its existence to the minerals, which are important constituents of converters. One of the central planks of the South African government’s economic policy 65 EASTERN CAPE BUSINESS 2016