Opening Remarks by Ambassdor Mxolisi Nkosi at the Coega Seminar

Held at the South African Embassy in Brussels

7 February 2013

 Esteemed Representatives of Private and Public Sector Companies,

Honourable Representatives of Coega,

Ladies and Gentlemen,

I feel profoundly honoured and privileged to welcome you to South Africa House  on this auspicious occasion.  I thank most sincerely for attending this investment seminar which holds real prospects for profitable and rewarding returns for your companies and shareholders.

After the first democratic elections in April 1994, the South African government was faced with the task of restructuring the economy in order to address the socio-economic imbalances of the past. The South African economy was in a deep-seated structural crisis underpinned by policies and institutions that had resulted in a declining economy designed to meet the needs of a minority, and characterised by extreme inequalities in income and wealth which was reflected in a  Gini-coefficient that was among the highest in the world.

Adding to the bleak economic scenario was the inheritance of an economy and state machinery that was in a far worse condition than previously imagined. As a result, the democratically elected government adopted various policy frameworks for fast-tracking economic growth and development and increasing employment such as the Reconstruction and Development Programme (RDP), the Growth, Employment and Redistribution (GEAR) strategy, and the Accelerated and Shared Growth Initiative for SA (ASGISA), and now recently the New Growth Path (NGP) and the National Development Plan (NDP) which outlines ambitious targets in South Africa’s economic trajectory.

During the State of the Nation Address in February 2012, President Jacob Zuma announced a bold and ambitious programme aimed at expanding the roads, rails and ports infrastructure as part and parcel of a comprehensive programme of developing South Africa’s economy.

The programme focuses on the development of the rural, road and water infrastructure; improvements to infrastructure in the logistics and industrial corridors; the development of an economic and industrial zone in the Eastern Cape province; and the expansion of the iron-ore rail line along the West Coast of South Africa.

The expansion of ports and the road and rail infrastructure is in line with the African Union’s (AU) recently-launched Programme for Infrastructure Development in Africa (PIDA), which is led by President Zuma. Speaking at the launch of the Programme, President Zuma said that “Africa’s time has come and without infrastructure our dreams will never be realised. We cannot trade on the continent because of the lack of communication. The infrastructure that we want to create will provide new opportunities for the continent”. The PIDA seeks to develop the transport, energy, water and ICT infrastructure in order to improve interconnectivity thereby unlocking the potential for intra- African trade.

The Eastern Cape has not been left unaffected by the many serious challenges faced by the national government. As the third most populous province following Gauteng and KwaZulu- Natal, the Eastern Cape has a very different economic structure in comparison to the national economy, namely a large public sector and a very small mining sector. However, manufacturing, mainly in the automotive sector, and agriculture outputs of the Eastern Cape are comparable to the national profile.

The Coega project, located in the Eastern Cape, is part and parcel of a broader national strategy of developing the South African economy and endure its integration into the global economy. It is a multibillion-dollar project linked to the deep water Port of Ngqura. Strategically the South African government has taken a decision to establish this customised IDZ for heavy, medium as well as light industries.

It is envisaged that the Coega Project would create a significant number of jobs through increased manufacturing, mainly resulting from Foreign Direct Investment (FDI). The value proposition of the IDZ is based on the abundant mineral resources in South Africa as well as IDZ-specific incentives which are to be developed. The development of the IDZ alongside a deepwater port would position industries located therein in a strategic location for global trade . The plan to beneficiate the country’s mineral resources forms part of the broader national strategy to transform the South African economy from exporting raw materials to the development of primary and secondary industries and tertiary goods and services.

The Project, has the potential to redirect economic activity to a relatively marginalised province and therefore would help achieve the objectives of spatial development.

Many of the programmes announced by President Zuma during the State of the Nation Address are well under way and offer tremendous profitable opportunities for overseas investors. One example of this is the contract that was awarded to the consortium led by Tractebel Engineering, that is represented here today, to perform the Engineering and Project Management Services for ESKOM’s 100 MW Concentrated Solar Thermal Demonstration Power Plant in Upington in South Africa. This project is being financed by the World Bank, Clean Technology Fund, African Development Bank and Agence Française de Development.

In conclusion I would like to use this opportunity to mention the very important Belgium Business Delegation to visit South Africa in the month of October. As most of you know, this delegation is to be led by His Royal Highness, Prince Philip. I would really like to encourage you to make the effort in joining this delegation. Not only is October the most beautiful month of the year in SA with all the flowers blossoming after the winter months, but the size of the delegation offers a scale that would enable you to meet the right people and be exposed to the most important events.

Finally, I am very pleased to welcome Nkuli Mxenge and Keith du Plessis who are representing the Coega Development Corporation.

I trust that you will find this seminar meaningful, and I wish you success.

Thank you.press-release