A year on, SA is poised to start reaping the benefits of renewal
Much work has been done to lay the foundation for meaningful and inclusive growth. We now need to unite behind the goal of building the economy
If we are to increase investment levels towards the National Development Plan's target of over 25% of GDP, up from around 19% currently, the government, business and labour need to work more closely together.
Last October's job summit strengthened the foundation for such co-operation, as did the inaugural South African Investment Conference, where investment commitments of R300bn were announced. This ongoing work is complemented by actions such as those of the CEO Circle, which is using business procurement and finance to accelerate the development of entrepreneurs and the growth of black-owned businesses. Similarly, through the Public-Private Growth Initiative we are working with leading companies to stimulate higher levels of investment and the creation of jobs in key sectors.
For example, we plan to increase tourism numbers by introducing electronic visa facilities for foreign visitors. We aim to increase the number of tourism operators, particularly from the ranks of the previously disadvantaged. We want to increase the footprint of tourists in our townships as well as interesting tourist sites in the rural areas. In the automotive sector, we are building on many years of successful co-operation between the government and private sector. Recently, major international automotive companies announced investment plans worth R40bn for the coming five years, and record car export volumes are being achieved by a number of vehicle manufacturers in SA.
The investment climate for mining is improving. New zinc mining projects have recently been announced in the Northern Cape and so has a large titanium mineral sands project in KwaZulu-Natal. Survey results published recently by the Fraser Institute indicate an improvement in some of SA's rankings with regard to investor perceptions. We are committed to ensuring that any outstanding disputes over our mining regulations are resolved without delay so that we can continue to increase investment in exploration and mining projects and begin to see renewed growth and job creation in this key sector.
With regard to youth unemployment, we have made progress in creating a platform for work experience opportunities through the Youth Employment Service programme. We are confident that the adjustments we have made to our employment tax incentive programme, which currently supports jobs for 1.1-million young people, will continue to make it easier for young South Africans to enter the formal job market and gain work experience.
For the first time in more than a decade, SA is in a position to grow our economy much faster and create many more jobs.
Over the past year, we have pursued a path of renewal and made efforts to build a comprehensive social compact among key role players, creating the conditions for a meaningful economic revival. But we need to act with urgency and boldness - and together - if we are to realise the opportunities before us.
At the heart of our plans is to create jobs for those who are currently unemployed. Our key objective is to enable young people entering the job market each year to find jobs.
Through the economic stimulus and recovery plan announced last year, we have embarked on structural reforms in a number of sectors including mining, tourism, telecommunications and agriculture. To increase significantly the rate of job creation, we are working to remove obstacles to investment, reduce data and communication costs, reduce barriers to entry for new businesses, and increase our competitiveness to expand our exports to the rest of Africa and the world.
Progress is being made. A national minimum wage was introduced from the beginning of this year. Stats SA reports that employment in the formal sector rose by 87,000 jobs in the fourth quarter of 2018. Unemployment remains very high, but a rise in jobs numbers is a step in the right direction. Data released by the Reserve Bank indicates that foreign direct investment in SA rose to a five-year high of R70.7bn in 2018, up from R26.8bn in 2017.
To equip our youth to participate in the global economy, which is undergoing a technology-driven fourth industrial revolution, improved education outcomes are critical. We are working to improve school infrastructure and the overall quality of basic education, just as we ensure greater access to higher education for capable young people. Ultimately, though, it is only through a sustained period of accelerated growth that our economy will create enough jobs for all our young people.Growth requires capable government and institutions that can be trusted to act ethically, uphold the law and serve the national interest.We have taken decisive action to tackle corruption. Corrupt practices in business and state entities are being exposed through inquiries into state capture, the South African Revenue Service, Public Investment Corporation, intelligence services and National Prosecuting Authority officials.We are strengthening law enforcement and prosecutorial agencies to ensure that those responsible are brought to book.We have responded with equal urgency and determination to address governance failures at a number of state-owned companies. The weaknesses in these companies have dragged our economy down, undermined investor confidence, placed great pressure on public money and contributed to an overall rising cost of living for ordinary South Africans.Load-shedding in particular has had dire economic consequences. The government is working tirelessly with Eskom's management to restore the stability and operational efficiency of the grid. The plan to establish three separate entities - generation, transmission and distribution - under Eskom Holdings will improve accountability, funding, transparency and sustainability in the electricity sector.The ongoing expansion of wind and solar power in SA's energy mix has the potential in the longer term not only to improve our environment, but also to create jobs as low-cost renewable energy will help boost our economy's international competitiveness.Over the past year, we have made a good start in tackling the main impediments to faster, more inclusive growth. Now we stand ready to seize the many opportunities that exist for creating jobs and improving livelihoods.South Africans of all races, and from all walks of life, must work together with a common goal - the goal of growing our great nation for the benefit of all.