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00:00Let's just start here with some of the implications from the war in the Middle East, the conflict
00:05in the Middle East.
00:06What, if any, has that affected the department that you oversee?
00:12Well, I think the Middle East conflict has affected not just South Africa, it's affected
00:17the entire globe.
00:18And we see that with trade routes.
00:22But South Africa is strategically positioned.
00:24We sit on the tip of Africa, and that possesses an opportunity for trade routes to come past
00:31Cape of Guido, past South Africa, and explore that as a new channel, as opposed to the channels
00:36that are now currently closed due to the conflict.
00:39We also are an entryway into the whole of the African continent.
00:44We have the African Free Trade Continental Area, which speaks to tariff duties, zero tariff
00:52duties, and all of that.
00:53So, while the conflict, obviously, has implications when it comes to cost of fuel, which would,
00:59you know, increase many things, cost of living, food, and that is a crisis that we will have
01:05to navigate.
01:05And, you know, government is at the forefront in negotiating with the multiple of stakeholders
01:10on how we mitigate some of those effects.
01:12Have we already seen some of those windfalls that you alluded to, Cape of Good Hope, some
01:17ships being rerouted?
01:18Are you seeing that already, evidence of that?
01:20So, no, I'm not seeing that just yet.
01:23But, you know, Minister Barbara Creasy is currently on stage, and she was highlighting some of the
01:29logistical trade routes that have been opening up, but also focus on our freight rail routes
01:37that are opening up, connecting the ports with further inland provinces.
01:42And also inviting private companies to take up investment opportunities when it comes to opening
01:49up our rail networks, opening up what we now have, the Durban Container Corridor.
01:54And that Durban Container Corridor runs from Gauteng to the Richards Bay.
01:58I mean, that is a project that is also currently in the pipeline with the Department of Transport.
02:04So that could get more investment?
02:07Yeah.
02:08So basically what it means is we invite investors to partner with government to, you know,
02:15better collab on those private partnerships and public partnerships.
02:20And basically it's just trying to ease the route, make it more quicker, make it more efficient,
02:24so we'll be able to get goods moving quickly, moving out of our ports in a timely manner and obviously
02:30export them out.
02:31Was that happening prior to what's happened in the Middle East or how has that changed?
02:37So, you know, these things take a long time.
02:39We have to do all our feasibility studies, our socio-economic partnerships and, you know,
02:44in conferences like this it's about making pledges, but those pledges need to turn into actual, you know,
02:52opportunities and actual jobs and the actual investment needs to come.
02:55So it has been a work in progress, but as we know, legislation, policies,
03:00all that takes time because it goes through an extensive consultative process with the public, importantly.
03:06So, you know, the initial work has been done, but we are obviously spearheading that now,
03:13giving rise to not just Middle Eastern conflict, but there's been a lot of geopolitical shifts
03:18that are happening almost simultaneously.
03:21And, you know, South Africa has realised that they need to mitigate a lot of those risks.
03:26And it's also why the DTIC, we have what we call the Butterfly Strategy.
03:31And what our Butterfly Strategy has done is, if you picture a butterfly, you know, we picture Africa
03:37as the body of the butterfly with the wings being, you know, the Asian markets, the Latin American markets.
03:43And basically just saying that we are going to try and diversify our groups.
03:49So we aren't just centred with, you know, certain countries to minimise that risk.
03:55And there are 27 priority markets, 27 new and emerging markets that is our focus.
04:01Obviously, we can't do every country and every market, but we've identified the key ones for South Africa.
04:10Are there any countries from the Middle East that are part of that strategy?
04:13So, yes, the Middle Eastern countries are part of that.
04:16The Gulf is a part of that.
04:18So it is ongoing work.
04:21And I think what's important is that we find, you know, that mutual beneficial relationship.
04:27You know, no country wants to get into a partnership or into MOUs and into agreements
04:32if both countries are not going to prosper at the end of the day.
04:35So it is, you know, ongoing negotiations, travelling back and forth with our counterparts
04:42just to get those, you know, MOU agreements across the line, which can be a little long,
04:47sometimes longer than what private, you know, business would like it to be.
04:51But, you know, we have to get it right and we have to get the foundations and the basics right
04:55in order to see that investment, you know, become a reality.
04:59Have you seen a shift in investment flows?
05:02I know the priority for South Africa is to talk about the evolving story and the recovery, the turnaround.
05:08But how would you say the investment position and the narrative really is where we're sitting at this point,
05:15at the end of March, considering all the geopolitical development?
05:18Yes. So, well, we just had, well, I just had a very quick briefing from one of our economists on
05:24Saturday.
05:25And he has put South Africa's investment confidence at an all-time high, you know, in the last few years.
05:33And that is a direct result of the government of national unity, because what that presents,
05:38it shows the world that we are a democratic country, that we honour the voting of our people.
05:45You know, the GNU also is now a collaboration of political parties.
05:49And I think that has boosted South Africa forward, because we have seen major reforms that we haven't seen in
05:56the past.
05:57I also, you know, we're doing very well when it comes to our economics.
06:02We are off the fat if gradeless. We have stabilised our debt.
06:05You know, we are holding steady. So that is creating a more favourable condition.
06:12We've also seen some major reforms in our energy.
06:14As you know that we've been struggling with load shedding for a number of years.
06:19And without electricity, you know, business can't operate.
06:22Yeah.
06:22So we have seen, the Minister of Electricity was just on the platform now, unbundling of ESCOM.
06:28He's prioritising that. So we do get independent producers onto our grid that they can also supply to business.
06:36So we are seeing those reforms come in and it is looking favourable.
06:41You know, the President said that South Africa is open and we are ready.
06:45And we do want and need that investment into our country.
06:48We also grapple with high levels of unemployment in our country.
06:53So, you know, that is our apex priority for the people of South Africa.
06:57What do you do with that information then?
07:00You know, if you hear that investment is at a top business, investment confidence is at a top level.
07:07What do you, from your perspective, what's your next move, I guess, from there?
07:12Well, I suppose it's to reinforce that.
07:14And the way we reinforce that as government is to make sure that we provide
07:18a predictable, sustainable environment.
07:21You know, it's not government's role to create jobs.
07:24That's the private sector. They must be able to do that.
07:26What we need to do is provide the framework.
07:29If you walk around this room, DTIC is now also soft launching what we call the Fusion Centre.
07:35And the Fusion Centre is essentially the one-stop shop for investors to come into the country.
07:40Because we understand in the past, you know, investors have been sent from pillar to post,
07:44pillar to post, and, you know, then you lose the investment.
07:46So we're saying, come to our portal.
07:48It is on the DTIC's website.
07:51Register your company, and we will help you and track your progress.
07:54So if you get stuck at perhaps a municipal level with regards to a building plan,
07:59a water licence, you know, we'll be able to track that and intervene to make that process
08:04a lot smoother, a lot more efficient, and a lot more quicker to do business in South Africa.
08:09So that's just one of the measures that we are now implementing.
08:12And I believe it will be a great success.
08:14How do you look at BEE and some of those policies around that?
08:19Because in some ways, that's hindered some of the investment that's come into the country.
08:23Yeah.
08:24So, once again, DTIC has a program.
08:26It's called the Equity Equivalent Investment Program.
08:30Information can also be found on our website.
08:33The President has literally just mentioned it now in his open remarks.
08:36And it's to say that we understand that not all global companies may be ascribed to the
08:42transformation policies and legislation of South Africa.
08:45But they want to so badly invest in our country.
08:48And we cannot turn away tens of thousands of jobs because of one aspect.
08:55So we are saying, come, join this program.
08:58There are other ways that you can contribute meaningful to our policy program, such as the
09:05transfer of skills.
09:06We have a high number of unemployed youth.
09:10We need to upskill for future manufacturing opportunities,
09:15future business opportunities, future job opportunities.
09:18So come and transfer those skills.
09:19And we can find other avenues for you to come and do business in South Africa.
09:24But, you know, we can't say we're open for business and open for investment,
09:29and then turn people away.
09:31So it's unlikely that we'd see any of those policies change for telecom providers,
09:36for tech companies?
09:37So, telecom providers, you may be alluding to one in particular.
09:40You know, that is underway.
09:42We have the minister.
09:43Minister Malazzi is hard at work at dealing with that.
09:45And I believe that they will also be making maybe an equity equivalent investment into the country.
09:51But also, you know, legislation, it's a parliamentary process that needs to unfold.
09:56And I believe there are, you know, private members' bills that are being introduced already,
10:02that's open for public comment.
10:04And, you know, the repealing of laws, the introducing of new laws,
10:07it's a legislative process that requires that armed state to drive.
10:13But also it requires the African citizens.
10:15I mean, the laws we make are for them, and they need to provide their comment,
10:20and they need to put the pressure on their public representatives and their political parties
10:24to see the kind of future in the laws that will make it easier for doing business.
10:28And if something is not working and hasn't been working for a number of years,
10:32then you can't keep on doing the same thing.
10:36So, yeah.
10:37Do you think it's working?
10:39Well, you have to be more specific on which policy you are talking about.
10:44I'm assuming which policy you're talking about?
10:47Well, BEE and some of the policies around.
10:49Okay, so with BEE, I mean, that was supposed to be broad-based economic employment.
10:53If we just look at our unemployment figures, we're at over 30% unemployment.
10:56I think the numbers, the evidence are there that it hasn't quite worked as it intended to work.
11:02And it's also why, you know, the DTIC, together I think it's with the Deputy President's Office,
11:07is meeting what we are now looking for a review of that policy.
11:12It's a two-step phase review policy where we will look at, you know,
11:18what has been created in terms of job, in terms of ownership transfer.
11:22And let me tell you, I sit with a number of companies.
11:24I was literally just with, you know, the furniture sector.
11:27And there were two individuals in that meeting who says that it is a hindrance
11:31for them to expand and grow their businesses.
11:34So, you know, these policies, they are always sometimes good intentions,
11:39but sometimes in reality, and with the constantly evolving challenges that come its way,
11:45we need to also constantly evolve our policies and legislation.
11:49If I just make one example, COVID-19, no one saw that coming.
11:52And that put a major damper on a lot of businesses' ability to grow and expand.
11:58And, you know, here in South Africa, we've also been dealing with some devastating floods.
12:02You know, so there's, and now we have the Middle East conflict.
12:04So we always have to be alive to these constantly changing scenarios.
12:08And our legislation, policy, form, it all has to deflect, you know,
12:14present, but also future forward thinking.
12:17And maybe just finally, Deputy Minister, I heard the President talking about the automotive
12:21and manufacturing industry.
12:23I imagine that is a big part of your own portfolio that you oversee.
12:28What countries are you potentially in discussion with for increased investment
12:33to support the manufacturing industry here?
12:35So look, that is an industry that's been hard hit in South Africa because of, you know,
12:40cheaper imports.
12:41But also to understand that, you know, so Africans grapple with the cost of living crisis.
12:45So if something is going to be more affordable to them, you know,
12:48they'll likely gravitate towards that brand of car.
12:51But we have seen some improvements in the fact that, you know, Cherry has now taken over a Nissan plant
12:58so that we don't lose the jobs of the plant and those people aren't without their livelihoods.
13:04So what we are saying to these companies, come and bring your manufacturing plants here.
13:09Come and transfer your skills here.
13:12Use our vast South African labor force, who many of them still have the skill.
13:18But for example, Nissan, there are many workers who have the skill to develop cars and produce those cars.
13:23So come and invest, bring your manufacturing here.
13:26We are open for business and we have the resources and people to do that.
13:29I also just want to say, you know, we have our proposition to investors.
13:34It's called our investment booklet. It can be found on the DTIC's website,
13:39where we actually highlight not just automotive sector, but, you know, mining and chemical,
13:45pharmaceutical and all of the bankable projects that we do want to see further investment in South Africa.
13:51And if I can just maybe elaborate on the mineral beneficiation,
13:55following the mining endeavor that happened earlier this year,
13:58we have been very clear to say that, you know, we don't want to see just this mass export of
14:04our raw materials, raw commodities.
14:07Let's build the plants here and let's add some value here and then let's ship, you know, some value added
14:13goods out.
14:14And that is the direction that, you know, the DTIC is supporting and we would like to continue with.
14:18Have you gotten assurances from some countries about this proposition of maybe sharing facilities?
14:23So, so I'm not the person that would make any announcements on those, you know, the Minister for Minerals,
14:33and he is the one who is the custodian of that, but also on other announcements.
14:39On automotive in particular, you talked about the shared facility with Sherry.
14:42Yeah, so like I say, Sherry is one. There are others in the pipeline, but I'm not too sure about
14:49mentioning right now,
14:50because, you know, the deals are very sensitive and, you know, it's a constant back and forth
14:54to make sure that there is this mutual beneficial relationship. So, yeah.
15:02But likely we'll see more of those models.
15:03But likely we'll see more of those, yes.
15:05Okay.
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