State of the Nation Address
While we welcome and are encouraged by the positive green shoots which are emerging on a macro level, there is still a lot a great deal which needs to be implemented and actioned to get the country and its metros back on track and well positioned to retain and attract investment and employment.
We are concerned that many of the urgent issues facing Nelson Mandela Bay were not at the forefront of the President’s SONA.
Automotive Industry
For Nelson Mandela Bay, the future of the automotive sector is of strategic importance, and to this end we were hoping to see urgency and action around the amendments required to South Africa’s automotive policies. This is key in providing certainty and retaining much needed investment and employment in the automotive industry and its surrounding eco-system.
Urgent action is required to deal with the loopholes which currently make it attractive for semi-knocked-down assembly to be undertaken in the country. Alongside this, policy needs to strongly incentivise completely knocked down assembly to ensure that meaningful manufacturing jobs are created. Incentive frameworks must prioritise localisation, skills development, supplier development, export growth, real domestic value addition and encourage investment in technology, equipment and machinery. Outdated ad valorem tax taxes need to be addressed and reduced to help make the locally produced vehicles more affordable compared to imports.
Without policy agility, certainty and speed of implementation, South Africa risks further deindustrialisation and the erosion of jobs and its automotive supplier base.
International Trade
In terms of international trade, we welcome the announcement that additional capacity will be made available for trade negotiations.
South Africa’s approach should be to nurture more “international friendships”, intensify our existing trading partners in Europe, the Americas, with other parts of the world such as the Middle East and Southeast Asia, while simultaneously pushing for ambitious trade agreements within BRICS and proactively exploring ways to generate long-term investment opportunities.
We should be aiming to urgently diversify and deepen trade relationships with other countries, and key to this will be driving for trade agreements with BRICS nations; relationships which are based on SA exporting a more diverse basket of finished and value-added products – and not just raw materials. We also need to collaborate with other countries in Africa to promote mutually beneficial trade which incorporates supporting one another to industrialise and produce finished products, thus reducing reliance on costly imported products from outside of the continent.
Municipalities
While we share the President’s concerns that many “local government administrations are weak and governed by patronage rather than technical capacity and merit,” insufficient attention was placed on what actions will be taken to address the many dysfunctional municipalities around the country. This needs to address root causes of these issues including the unintended negative consequences of unstable coalition governments; political interference in the running of the administrative operations of municipalities; and the separation of powers between councillors who should be setting the strategic direction and municipal officials who should be tasked with running the operations of municipalities.
Crime
We are pleased that crime was high on the President’s priority list but the focus in terms of actions, this appears to mostly be concentrated around Gauteng and the Western Cape. This ignores the seriousness of the crime situation in the metro and could potentially displace further criminal activities into NMB. The Bay must be incorporated into national actions to address very serious crimes such as trading in illicit goods, corruption, hi-jackings, kidnappings, extortion and vandalism of critical infrastructure.
Electricity
While it has been encouraging to see the implementation of reforms around Eskom, the issue of distribution of electricity needs to be addressed. The fact that loadshedding has subsided is positive, but unfortunately the lack of maintenance of electricity infrastructure over many years at a local level has resulted in regular power outages and dips which are increasing the cost and risk of doing business.
Water
Gauteng’s water crisis was in the spotlight and there appears to be renewed energy around rolling out initiatives to address this, and as a secondary focus water issues in other parts of the country. It is vital that the water management crisis in NMB, which has been an ongoing issue, is also incorporated into these national initiatives and urgent actions are taken to institute remedy actions.
Education
Basic education and skills development attracted minimal attention but deserves a much more concerted focus. On balance, the education system is not producing the required skills for young people who can be employed by businesses. In particular, we must focus on enhancing mathematical and critical and lateral thinking abilities.
Denise van Huyssteen is the Chief Executive Officer of the Nelson Mandela Bay Business Chamber
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