STATE OF THE NATION ADDRESS 2006
Mbeki outlines growth strategy
3 February 2006
President Thabo Mbeki has identified large-scale state investment in infrastructure, small business and skills development, and interventions targeting specific areas of the economy as key elements of the government's strategy to boost South Africa's economic growth rate and create employment.
R372bn investment in infrastructure
Delivering his State of the Nation address at the opening of Parliament in Cape Town on Friday, Mbeki said the state would plough R372-billion over the next three years into various infrastructure development projects.
These would include massive infrastructure upgrades by state tranport and electricity companies Transnet and Eskom, as well as projects to expand and modernise the country's telecommunications infrastructure and satisfy the demand for water.
The public sector would also accelerate infrastructure investment in the underdeveloped urban and rural areas of the country
through municipalities, public works programmes and other infrastructure funds.
Sectors targeted for growth
Mbeki said the government's growth and job creation strategy - the Accelerated and Shared Growth Initiative of South Africa - had identified a number of sectors of the economy for accelerated growth.
These included business process outsourcing; tourism; chemicals; bio-fuels; metals and metallurgy; wood, pulp and paper; agriculture; the creative industries; and
clothing and textiles.
Work, he said, was "proceeding apace to address such challenges as the cost of telecommunications and import parity pricing with regard to steel and chemicals. We have already reached agreement with the People's Republic of China to protect our clothing and textile sector. The second national telecommunications operator should become operational later this year."
Skills development
Mbeki said the government was
also paying special attention to the issue of the scarce skills that both the public and private sectors would need to meet the country's growth objectives.
"[T]ogether with our social partners, we have agreed to a vigorous and wide-ranging skills development and acquisition programme to meet any shortfalls we may experience," the President said.
This included the imminent establishment of a multi-stakeholder working group, the Joint Initiative on Priority Skills Acquisition, through which the government, business, labour and civil society would "act jointly to respond to the skills challenge in as practical a manner as possible."
Mbeki also listed a number of forthcoming interventions in education and training, including eliminating fees for the poorest quintile of primary schools, targeting 529 schools to double the maths and science graduate output to 50 000 by 2008, and re-equipping and financing the country's Further Education and Training
Colleges.
Mbeki said the government was also determined to allocate more resources to research and development and innovation, and increase the pool of young researchers in the country, and would "continue to engage the leadership of our tertiary institutions focused on working with them to meet the nation's expectations with regard to teaching and research."
The government would also be launching an intensive campaign to link up over 60 000 registered unemployed graduates with companies around the country.
Small business development
Mbeki told Parliament that the government's growth strategy "confirmed the need for us to expand our small, medium and micro enterprise (SMME) sector, paying particular attention ... to broad-based black economic empowerment and the development of women and the youth."
To achieve this objective, he said, the government would take steps to ensure the effectiveness of existing programmes such as the
Small Enterprise Development Agency (Seda), the Umsobomvu Youth Fund, the IDC Small Business Initiative, the Apex (Micro-credit) Fund, and Mafisa (for agricultural development).
"We will also intensify our engagement of the Financial Services Charter signatories to help generate the necessary resources for the development of the SMME sector," Mbeki said.
"Our experience with regard to the development of this sector indicates that we must pay particular attention to issues of access to capital, entrepreneurial training, assistance with marketing, and the development of cooperatives.
"We will also speed up the consultative process to determine the measures we must take to improve the regulatory climate to facilitate the expansion of this sector."
Policy impact assessment
This intervention, Mbeki said, would form part of an overall programme to introduce a "regulatory impact assessment system" to enable the government regularly to
assess the impact of its policies on economic activity in the country.
The President noted that other constraints to growth and development in the country had been identified, including "the cost of doing business and the unnecessarily high cost of intermediate inputs.
"Work is proceeding to address all these constraints, including the limited domestic market and monetary and financial issues," he said.
SouthAfrica.info reporter
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