Opening Remarks by Deputy Minister Landers during his Working Lunch with the European Union Ambassadors accredited to South Africa, Pretoria, 05 March 2019
Ambassador Marcus Cornaro, Ambassador of the European Union to South Africa
Heads of Mission of European Union Member States accredited to South Africa
Head of the European Investment Bank Offices in South Africa, Mr Tom Anderson
Officials from DIRCO and the European Union Delegation to South Africa
I wish to commence by expressing my sincere thanks to the European Union Delegation to South Africa for the invitation to this luncheon and I am grateful for the opportunity to engage with you all today.
As Strategic Partners it is imperative that South Africa and the European Union maintain frequent and open dialogue at all levels, both formally and informally, in order to take stock of relations, discuss and debate key issues in the relationship, foster a better understanding of our approaches to international issues, especially when they differ, and of course, consider means of addressing challenges in order to push forward our domestic and global agendas.
I am hopeful therefore that going forward, both sides will make a more concerted effort to regularise this engagement.
South Africa welcomed the hosting of the 7th South Africa-European Union (SA-EU) in Summit Brussels in November 2018, after a long hiatus, and provided much needed impetus to relations.
The Summit reaffirmed the strength of the Strategic Partnership based on shared values and interests, including effective multilateralism, the promotion of peace and security, human rights, democracy, the Rule of Law, free and fair trade, and sustainable development across our regions.
We greatly value our Strategic Partnership with the EU because of the EU’s support for South Africa’s economic and development agenda, and in particular for South Africa’s national priorities contained in the National Development Plan.
As you are all aware, Foreign Direct Investment (FDI) is a critical driver of economic growth for both developing and developed economies as it strengthens productive capacity through transfer of technology, knowledge transfer, job opportunities, human capital and production processes. It also brings greater capital inflows which in turn generates greater trade flows.
South Africa therefore acknowledges the role of the EU as South Africa’s leading trade and investment partner. Enhanced inward investment flows to South Africa will help us overcome the triple challenges of unemployment, inequality and poverty.
You are all aware, South Africa, like the EU, is not without its domestic challenges. Our Finance Minister, Mr Tito Mboweni, recently delivered what can only be seen a “budget for tough times”. It is a budget that is conscious of our financial constraints but also one which recognises that South Africa is a developmental state. It is also one that acknowledges the impact of what is commonly referred to as “State Capture” on South Africa’s growth projections and ambitions.
An analyst recently likened present day South Africa to a post-World War Two Europe. He said that it would take commitment, sacrifice and time to rebuild, and it would take years for the residence to regain some of what they had lost.
He went on to say that expectations in South Africa need to be managed and that whilst there are very obvious positive signs in terms of the elimination of corruption, the reality is that it will take years to resolve these current challenges.
It is significant that, under the leadership of President Cyril Ramaphosa, we are already fighting back, exposing wrongdoings, working to returning stolen monies, and most importantly, taking steps to ensure that the prosecution of perpetrators is fast-tracked
In his State of the Nation Address, President Ramaphosa set out five urgent tasks that will underpin everything that Government will do in the short to medium term.
- Firstly, we must accelerate inclusive economic growth and create jobs;
- Secondly, our history demands that we should improve the education system and develop the skills that we need now and into the future;
- Thirdly, we are duty bound to improve the conditions of life for all South Africans, especially the poor;
- Fourthly, we have no choice but to step up the fight against corruption and state capture and
- Fifthly, we need to strengthen the capacity of the State to address the needs of the people.
These are not small tasks and we will naturally rely on our partners, like the European Union, to support us as we go about the work of Government.
We want to reassure you that we are improving the investment environment by, among other things, ensuring policy certainty and consistency, improving the performance of state owned enterprises and consolidating fiscal debt. We are working alongside our social partners in business, labour and civil society to build a new and inclusive growth path for South Africa.
The biggest concern for most South Africans, and no doubt for investors and partners as well, is the future of our state-owned entities (SOEs), notably Eskom.
A notable announcement to come out of the budget is the introduction of a "chief reorganisation officer" for all state-owned entities (SOEs) seeking a government guarantee, with rules for the guarantee also being tightened. We believe this to be a very positive development.
I am aware that the European Investment Bank (EIB) is a lender to ESKOM, amongst other private and public sector entities, with two loans under its current lending mandate, and will therefore be deeply interested in the details of the unbundling of the power utility as well as the imminent audit of Eskom’s power stations.
The establishment of the joint Special Cabinet Committee on Eskom, chaired by Deputy President Mabuza, is part of Government’s coordinated efforts to bring financial, operational and structural sustainability to Eskom. The Committee is required to monitor energy supply on a daily basis.
The interventions and reforms in the budget combine both short term interventions – such as the fiscal support – as well as the first steps to longer term structural reforms. We will of course share this information with you in due course and hope to receive the support of the EU as these processes unfold.
We are also preparing for our 6th national and provincial elections on 8 May 2019, shortly before the EU Parliamentary elections. Notably, sixteen countries in Africa and more than 30 European countries will hold Presidential, Parliamentary, State and or local government elections this year. You will agree that this is an important year for governance and democracy in Africa and Europe alike.
Although South Africa’s assessment of the overall performance of the SA-EU Strategic Partnership remains dynamic in all areas of cooperation, dialogue between South Africa and the EU could be enhanced to improve cooperation in regional, African and global matters.
A key element of the Strategic Partnership is the common commitment to promoting an agenda of development, peace, security and stability in the world. The 7th SA-EU Political and Security Dialogue Forum, which has been set down for 21-22 March 2019 in Brussels, will be an important platform for the discussions on security, as well as regional cooperation and integration.
The nexus between security and development will be an even more important agenda item in 2020 when South Africa takes over the Chairship of the African Union.
South Africa and the EU share similar values in respect of democracy, human rights, women’s empowerment, and the building of socially cohesive and just societies. I have just returned from Geneva where I participated in the 40th Session of the Human Rights Council, reaffirming that human rights are unmistakably central in South Africa’s foreign policy.
As committed multilateralists, South Africa and the European Union are equally concerned about the rise of unilateralism which threatens to undermine our collective commitment to democratic values and respect for human rights. Multilateralism is not merely as an instrument of our diplomacy, but should be general principle for conducting international affairs.
South Africa is therefore encouraged by the recent entry into force of the EU-Japan Economic Partnership Agreement (EPA), the biggest trade agreement ever negotiated by the EU. The EPA is a powerful signal to the rest of the world and underscore a narrative valuing multilateralism over bilateral deals, and internationalism over nationalism; important statements in the current global political and economic environment.
We are also following the UK’s exit from the EU closely, and are engaging with the UK government to ensure that existing trade and investment relations that must be preserved. Minister Davies stated last week that he wants to conclude the trade agreement with the UK early this month and there is hard work being done on concluding the discussions on the outstanding issues.
Thank you again for this opportunity and I look forward to frank and robust discussions on matters of domestic, regional and global importance to South Africa and the EU.
Enquiries: Mr Ndivhuwo Mabaya, [email protected] / 083 645 7838
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