Sunday, August 3, 2014




Some commentators would have us believe it’s all doom and gloom for the economy, but South Africa’s economy remains robust and is teeming with potential.

Recent investments around the assembly of trucks, the manufacture of trains and moves to strengthen our ocean economy, for example, demonstrate government’s commitment to its programme of growing the economy and creating jobs.

They give us every reason to be confident that the economy can overcome the sluggish global environment and the recent labour unrest to rise to the 5 percent growth we envisage by 2019.

Just two weeks ago a Chinese company, First Automotive Works (FAW) invested R600 million in a truck assembly plant in the Coega Industrial Development Zone in the Eastern Cape.

The investment is a vote of confidence in South Africa’s economy and again proves that our country has the ability to attract and host global multinational companies.

“South Africa is a pearl shining brilliantly in Africa and boasts unique conditions for development,” said Chinese Ambassador to South Africa Tian Xuejun, ahead of the launch of the FAW investment.

This manufacturing plant augurs well for South Africa’s standing within the global automotive manufacturing sector and its goal to double local vehicle production by 2020.

Importantly, it also contributes significantly to its national goals of socio-economic development as it will create sustainable jobs in the Eastern Cape and the opportunity for skills development and training.

This investment also demonstrates government’s commitment to provide an environment that is conducive for business to flourish.  During the opening ceremony President Zuma reaffirmed South Africa’s desire to support global companies which want to take advantage of opportunities in South Africa. 

To further advance South African’s automotive manufacturing sector, government has completed the preparatory work for an Investment Support Programme for medium and heavy commercial vehicles.  This will help position the country as a destination of choice for the assembly of medium and heavy commercial vehicles.

Moreover, the government has undertaken to drive job creation in those areas that it can influence. We strongly believe that this will cascade down and stimulate activity in the private sector (in these areas).

In another recent development the Passenger Rail Agency of South Africa (Prasa) has completed the design of a next generation commuter train which boasts the latest technology the rail industry has to offer.

This special milestone highlights the government’s commitment to build infrastructure that will stimulate the economy and support local procurement.

Prasa will spend R51bn on 600 trains over the next 10 years. These trains will be manufactured at a new factory in Ekurhuleni, Gauteng.

The acquisition will bring the rail industry to its former glory, revive the country’s rail engineering sector and contribute to economic development and localisation.

The government is investing R1bn in the Ekurhuleni facility which will house the manufacturing plant, a training facility and fully fledged industrial park.

The manufacturing process will source 65 per cent of its content locally. The project will create 8 088 direct jobs and over 33 000 direct and indirect jobs over the 10-year period. A total of 19 527 people, including engineers, artisans, technicians, train drivers and technologists, will be skilled during the life of the project.

Another positive development is the launch of Operation Phakisa which fast-tracks delivery projects through detailed problem-solving, implementation plans and practical actions.

This initiative introduces a more effective and efficient way of delivering on government’s programme.

Operation Phakisa is an adaptation of the Malaysian system of initiating, implementing and monitoring their respective programmes. One of the departments to pilot this project is the Department of Environmental Affairs.

Research by the Department of Environmental Affairs shows that South Africa’s oceans could contribute between R129bn and R177bn to GDP and create between 788 000 to 1 million jobs by 2033.

Government has identified marine aquaculture, marine transport, offshore oil and gas exploration and marine protection as the main focus areas.

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