A Collective Mandate
In an era where investors and the world are looking to Africa for investment opportunities, the time is ripe for South Africa and the continent to realise industrialisation. What will bring about industrialisation is often a topic for debate. Mike Mabuyakhulu, MEC: KwaZulu Natal Department of Economic Development, Tourism and Environmental Affairs (EDTEA) believes it will be brought on by deepening the manufacturing base, exploiting the marine resources and all the opportunities it offers. Mabuyakhulu dwells on his aspirations for his department and the role of government in achieving South Africa’s economic growth and development and, most of all, how the department, and KZN, can exploit special economic zones and hubs to achieve industrialisation thereby economic growth and development.
by Andrew Ngozo
LEADING EDGE | KZN EDTEA
You have held various portfolios in the provincial government. What can you say has been the major learning for you in these portfolios?
Firstly it is important to highlight that I am deeply humbled by the faith and trust extended to me by the premier of the province to lead this entirely new department of Economic Development, Tourism and Environmental Affairs (EDTEA). It is quite a sizeable portfolio that requires a number of considerations. Foremost is that it necessitates us to be very systemic in the manner in which we approach our work. Then we need balance and, thirdly, we need to be organised so that we ensure that all elements of the portfolio get equal attention. This will ensure that there are no important elements of the portfolio that will be overshadowed by others or by a lack of focus.
What gives me confidence to carry out this mandate is that we have very able men and women supporting our mandate and this will make things easier. It means I will be working with existing intellectual knowledge and an erudite highly skilled management with a successful track record. At policy level this means, we then have to resource and support their initiatives and above all, ensure that we work as a unit.
I believe that I am a leader that is a change agent, who comes in and acknowledges that there is a deep well of wisdom that is within the team. I want to tap into that well. Secondly, one has to be on the lookout for the areas in which you can bring in your own unique leadership qualities that will complement the work already being done. Your style will also ensure that there is collective ownership of the new ideas and new ways of doing things such that everyone is part and parcel of the team.
When you start something new, experience has taught me that one cannot expect to possess a magic wand and make immediate and rapid changes. Instead, one needs to consider your mandate and apply its key elements to bolster and support existing structures.
I believe if I can achieve this, then we will be able to create a formidable team in the province that will have a strong impact on economic progress.
Reflecting on South Africa’s 20 years of democracy, one of the government’s key areas of focus has been inclusiveness; bringing everybody into the mainstream economy. What are your perspectives on the ambitious targets and challenges we have set for ourselves?
After 20 years, we have learned in practice; we have policies that we have put to fruition for those that work and at the same time we know things that have eluded us to some extent. One of the first things that we ought to do, post 20 years, is to embrace the notion of faster inclusive growth which is shared. Going forward, this will be very important because this is a notion that speaks specifically to radical transformation in the economic space. Radical transformation is not about undermining the constitution and constitutional injunctions. It is not about finding scapegoats to apportion blame for the challenges that the country is facing. It is also not about creating polarisation in the nation. Instead, it is about acknowledging that we need to be able to find that transformative agenda that will catapult us to a higher pedestal of growth, unlike what has been experienced in the past 20 years.
So, from where we are situated, radical economic transformation is about bold and decisive decisions that will move the country forward.
The second element is about the provision of holistic strategic leadership which will galvanise a social accord between all social partners in South Africa. This will be an accord with partners in the private sector, labour and those in civil society. My reasoning is that if we all agree about the sacrifices we all have to make for the greater good then we may yet win the war against the triple challenges of poverty, inequality and unemployment that South Africa faces. I stress that this is not about pointing fingers at one another, but about each of the social partners standing up to be counted.
The third and final element in my view, is about the state using its regulatory interventionist power. In my view, the state has four roles and chief among these is to be an enabler of development and growth initiatives. The state is also the facilitator among the social partners in order to take the collective interests of the country forward. It is also a catalyst that generates ideas that can propel us to a point where we can compete with our peers anywhere in the world. This will put us in good stead to be able to defend and advance South Africa’s interests. Further, the state has the power of direct intervention in areas that require such action. From an economic perspective, this can be done in two ways: that is using its regulatory power and the public fiscus to intervene in the economy and create conditions, that affirm the previously disadvantaged such as women or the youth.
Can you elaborate more on the KZN government’s economic approach of creating special economic zones where the emphasis is to exploit the natural resources in a given area? What progress has been made thus far?
The world has developed a body of knowledge with regard to economic zones which are also known as export processing zones or industrial development zones elsewhere. When we began in South Africa, in 2000, we noted that there are at least four industrial zones that have been historically supported in this country. Two of those are in the Eastern Cape namely the Coega Industrial Development Zone (Coega IDZ), and the East London IDZ. The other one is in Johannesburg while the KZN has the Richards Bay IDZ. With the exception of the two in the Eastern Cape which saw a massive injection into them, the other pair was struggling to gain traction solely because they did not receive the attention afforded the two in the Eastern Cape.
However, that said, we are in the right direction because other emerging economies are making use of the special economic zones as a focal point to drive industrialisation and deepen manufacturing. A case in point would be China, who have been able to gain, strategically, from that. The same, albeit to a certain degree, can be said about India and many others. Thus, at a time when we are chasing the foreign direct investment (FDI) that’s coming into the country, it is opportune, I believe, to rethink our approach. So far the net beneficiaries of FDIs have been mainly the United States and China. According to reports, South Africa was only able to attract R5.4 billion in 2012, yet we are still the most attractive on the continent. As such, the special economic zones pose huge opportunities and benefits. However, the success of these economic zones will be underpinned by their offerings.
With all things being equal, we should ask ourselves: What is it that will persuade an investor to come to South Africa instead of the next destination? Within that context, therefore, special economic zones are the medium that will enable us to realise industrialisation, modernising our economy and linking our efforts of modernisation with the huge infrastructure rollout programme that will reach about R4.2 trillion in the next 15 years. For us this is the way to go. The strategy is to create the backward and forward linkages between the two special economic zones, the Richards Bay IDZ and the Dube Trade Port IDZ which is soon to be approved at national level and the nine industrial hubs in other districts. The message that’s being conveyed, is that these zones are the platforms for opening up our economy and stimulating growth in order that whatever productive capacity that we are able to achieve in these industrial hubs will be linked to the special economic zones.
There is quite a lot of talk about the potential of the untapped maritime sector. What are your perspectives about the maritime sector vis-à-vis the potential it holds for the province?
KZN is lucky to be blessed with the 10th province, the Indian Ocean with its nearly 900km coastline, which we have not even yet started to fully exploit. We also have the two biggest ports which, between themselves, handle between 65% and 80% of the country’s imports and exports. That, alone, is an advantage. We are also cognisant of the fact that almost 94% of trade is seaborne, and it shall remain so for a long time to come. The manner of operation in maritime is changing where operators are moving away from small shipping lines into mega ships creating hubs port where people will be moving from hub to hub. For instance this can be moving from Shanghai, the biggest port in the world to the Port of Rotterdam in the Netherlands. With this in mind, we want to position ourselves in such a manner that we have a hub or port with unrivalled container handling capabilities. Hence we place emphasis on the need to invest in the dugout port in Durban which will be able to quadruple our capacity from the 2.7 million/TUs to about 20 million/TUs by 2040. It will be a huge and gigantic jump if that project materialises. That project is not only in the best interests of South Africa but of the region as well. It will become a phenomenal game changer and not just in nominal terms. It will change the face of the economy and that of the province, as it were, in a manner that has never been imagined before.
However, over and above that, in preparing ourselves to seize the opportunities in the blue economy as we call it, we want to exploit what other nations have done in this industry: to exploit the comparative advantages available. We would want to learn from the Malaysians, among others, who came up with the concept of Life Centres. KZN appreciates the fact that the national government is willing to look at a pilot project of this nature. This will have a particular focus on those sectors that will allow us to catapult the maritime sector to the top such as marine transport, marine aquaculture and the natural capital that exists in our oceans like shale, oil and gas. This does not by any means denote that focus will shift from tourism because we are in discussions with partners in the Seychelles about the possibility of a yacht event. This is only one of the many possibilities and opportunities we are exploring.
The KZN government has created a maritime centre of excellence where our people will be equipped with skills in this sector as we realise that maritime has the potential to create 800 000 jobs. This will stand us in good stead against such countries as the Philippines and Indonesia where either boasts of having one in every four seafarers in the world. This shows how they have been able to successfully prioritise the maritime sector and thus position themselves well in that regard. Briefly, we are hard at work to ensure that we explore all the opportunities that are availed by the maritime sector.
Looking ahead to the next few years, after your tenure, what do you hope to look back on?
South Africa has a National Development Plan (NDP) and the KZN province has developed a Provincial Growth and Development Plan that is fully aligned to the NDP. It is fully synergised with the NDP so that not only are we pulling in the same direction but our actions are synchronised. The Provincial Growth and Development Plan has set specific targets, hence we have 18 working groups whose sole focus is the implementation of the plan. This tenure of our administration, more than ever before, is about us taking the baton from the previous administration and running with the implementation of that which is espoused in the plan.
Secondly, it is about us being able to quantify what would have been achieved by 2019 as part of the targets that have been set for us to achieve by 2030. We are running a relay race and each of the runners has to come to the party. I always say ‘Collective responsibility begins with individual responsibility’. Hence, my responsibility to contribute to the collective is for the Team EDTEA to meet the set targets to the best of our ability to ensure that the success of the team is bolstered by our own contributions. When our tenure comes to an end, we want to look back and say we have run a good race, we fought a good fight and we weathered the storms. We may have been battered in some instances but we were able to win both the skirmishes and the major battles for it is the sum total of both the skirmishes and the battles that wins you the war.