Address by President Jacob Zuma in response to the debate on The State of The Nation Address National Assembly, Cape Town, February 20 2014

Honourable Speaker,

Honourable Deputy Speaker,

Honourable Deputy President, Mr Kgalema Motlanthe,

Honourable Ministers and Deputy Ministers,

Honourable Members,

Fellow South Africans,

Thank you Honourable Speaker for the opportunity to respond to the debate on the 2014 State of the Nation Address.

Allow me Honourable Speaker to extend a warm welcome to the Minister of Local Government of the Palestinian National Authority, Dr Al-Koni and his delegation, who are in the country for bilateral discussions with our Cooperative Governance and Traditional Affairs Ministry. 

Their visit will further cement our relations with Palestine.

We also welcome students from the Glen Agricultural College in the Free State and also the representatives from the Kalkbay fishing community.

Samukela zonke ezinye izivakashi ezikhona namhlanje lapha ePhalamende.

Honourable Speaker,

Let me thank all Honourable Members who participated in the debate.

Our message has been loud and clear.

Twenty years of freedom and democracy have changed the face of our country. The last five years have further advanced change and a better life for all, especially the poor and the working class.

Our country is a much better place to live in now than it was before 1994.

The freedom loving people of our country led by the African National Congress (ANC), put an end to apartheid, established a thriving constitutional democracy and laid a firm foundation for progress towards inclusive growth and prosperity.

Indeed, we have a good story to tell.

The ANC government is the first to admit that more must still be done. Some communities are still waiting to experience the change that has swept across other areas.

We have made progress under difficult conditions, especially in the past five years. 

Our government came into office during a crippling recession. As a result of the economic crisis, government has accumulated more debt to support the economy, increase infrastructure investment and maintain social programmes. 

Hence, national government debt is expected to reach 45% of the GDP in 2015. 

This is still relatively low compared to some developed and other emerging-market countries.

The government's level of debt was 48 percent in 1994. This level was reduced to 46 percent in 1999, and reached the lowest level of 27 percent of GDP in 2008, before the impact of global financial and economic crisis. 

The Minister of Finance will deal with such matters next week in the Budget.

Honourable Members,

The more we tell the good story of the success of our country, the more we realise how much more we still have to share with the country and the world.

Let us take the dynamic growth in telecommunications as an example. The sector's revenue grew to 179 billion rand in 2011, having been worth 8.2 billion rand in 1993.

There are 67 million registered sim cards and by 2012, 14 million people used the Internet, with many doing so via cellular phones. 

By January 2013, there were more than six million registered Facebook users in South Africa, and over five million Twitter users, with over half tweeting from a mobile phone. 

That indicates a growing modern economy.

Honourable Nkwinti also reminded us of the good story of rural development!

Izindawo zasemakhaya ezazinganakiwe sezakhelwa imigwaqo. Abantu emakhaya sebekhanyisa ugesi. Sebethola namanzi ahlanzekile. 

Izikole zikanokusho ziyakhiwa emakhaya, nemitholampilo imbala. Ezolimo nazo ziyakhula. Indlala siyayixosha impela. 

Yingakho nje sithi leNingizimu Afrika esihlala kuyo namhlanje, ingcono kakhulu ukunale esasiphila kuyona ngesikhathi sobandlululo.

Yebo, kusekhona okusadinga ukwenziwa. 

Zisekhona izindawo ezingakathuthuki. Basekhona nabantu abasalinde izidingo. Sithi kubo bonke abasalindile, ababekezele sizofika nakubona. 

Lohulumeni awusoze uphumule ungakaqedi ukushintsha zonke izindawo ezihlala abantu, ikakhulukazi abampofu.

Ngisho kungasithatha iminyaka, siyogcina sifinyelele kuzonke izindawo. 

Honourable Members,

The ANC government has learned from the experience of the past 20 years. We know what policies work and what does not work.

Honourable Meshoe is curious about what we are going to be doing in the next five years.

The next five years will be about moving South Africa forward, building on the successes of the past 20 years and the past five years.

We will focus yet again on the five priorities we had identified in 2009. 

These are education, health, the fight against crime, rural development and land reform as well as creating decent jobs. 

We will also continue to expand access to housing and basic services.

More importantly, after the elections, the country will enter a new radical phase in which we shall implement socio-economic transformation policies and programmes that will meaningfully address poverty, unemployment and inequality.  

It is a phase of focusing on economic transformation in particular.

We have achieved political freedom, now we must achieve economic freedom, and ensure that the ownership, management and control of the economy is deracialised further.

We will also ensure that we build an inclusive economy whose growth will result in more jobs for our people, building on the current successes in job creation.

We have put before the country the National Development Plan which will be an integral part of the draft Medium Term Strategic Framework that will be discussed by the first Cabinet lekgotla after the appointment of the new government.

Within the NDP vision, three critical policy instruments will continue to drive government's policy agenda. 

These include the New Growth Path, which promotes inclusive job creating growth, the National Infrastructure Plan and the Industrial Policy Action Plan.

Honourable Bhoola, we are indeed working to promote an inclusive economy and one that is not run by the minority perpetually. Over 600 billion rand in BEE transactions have been recorded since 1995.

However, fronting has also escalated, thus distorting the picture of transformation.

The Broad-Based Black Economic Empowerment amendment Bill was signed into law on 27 January 2014 which seeks to prevent the distortions such as fronting, while also reorienting BBBEE towards the productive sectors of the economy such as industrialisation.

Work is also underway to establish a BBBEE Commission and to implement various aspects of the law to create meaningful opportunities for black people, women, youth and persons with disabilities.

Honourable Mulder decried affirmative action but in looking at statistics, it is clear that we need to do more.

The number of Black people and women in senior management has increased from less than 10% in the 1990s to over 40% today, which is a good achievement for the country. 

But it is not enough. Each year, the Employment Equity report releases statistics that indicate that the economy is still controlled by white South Africans in terms senior and top management positions.

We must therefore intensify the implementation of affirmative action policies in order to deepen reconciliation and social cohesion in our country.

Honourable Members,

Many speakers have referred to employment. 

Some speakers have highlighted the jobs growth of 653 thousand net new jobs created in the past twelve months that contributed to the highest level of employment yet in our history. 

Others have pointed to the continuing large challenge of unemployment and the need to create new jobs. Both these views are correct. 

We lost many jobs during the global economic crisis, as many countries did. But what is important to note is that all those jobs have been recovered and the economy has created additional new jobs.

However, let me also remind some sections of the opposition that the private sector accounts for over 70 percent of GDP and roughly about the same proportion of employment in the country. 

The private sector is therefore the primary job creator. 

The role of government is to create the right environment for business to operate optimally. 

We have been playing that role as we believe that the state must intervene actively in the economy in the interests of the poor and the working class.

Minister Davies spoke about many  incentives that we have put forward to encourage investments and job creation in various sectors.  

We also have a few other interventions to boost job creation. 

The Jobs Fund that we launched in 2011 with a startup capital of 9 billion rand has processed more than 3 000 applications. 

The Jobs Fund has approved 66 projects and has committed more than 3 billion rand. To date, more than 8 000 new permanent jobs have been created, and 4 000 short term jobs.

More than 25 000 beneficiaries have received training.

In addition, the development finance institutions have also been directed to invest in job creating projects. 

The Industrial Development Corporation (IDC) has approved more than 50 billion rand in new industrial funding over the period of this administration. This has been in projects ranging from agro-processing, film-making, the auto sector, steel and engineering, clothing and textiles, mining, the green economy and tourism.

The Public Investment Corporation (PIC)has committed in excess of 38 billion rand in enhancing the productivity of the real economy, through economic and social infrastructure, enterprise development and renewable energy. 

Over 45,000 direct and indirect jobs have been created.

In addition, last year I announced the National Green Fund with an 800 million rand allocation to promote investment in the green and lower carbon economy. 

This fund is completely over-subscribed with applications to the tune of some 10 billion rand. 

Investment of over 400 million rand has been approved in job creating green economy projects in municipalities, other organs of state, community organisations and the private sector. 

Honourable Speaker

The formal economy cannot absorb all work seekers, which is why our Expanded Public Works Programme continues to be a success, having benefitted 3,5 million people during the past five years.

The Democratic Alliance pretends to have a problem with the programme but at the same time claims success in implementing it in the Western Cape, as Honourable Harris did yesterday. 

The fact is this innovation has made a massive impact in the lives of the poor.

Programmes such as working on waste, wetlands, water, fire and the Environmental Youth Services Programme have created about 750 thousand work opportunities and more than 200 thousand full time equivalent jobs since 2009. 

More than half of these beneficiaries were youth. These are the young people that Honourable Motau said are frustrated and desperate. 

Actually government is doing a lot to deal with that frustration.

We also have about 200 000 participants in the Community Work Programme currently, who will obtain skills to enable them to join the formal labour market. 

This is yet another good story of the democratic administration.

Honourable members,

As part of the continued engagement with the youth on matters of youth development and employment, a Presidential Youth Indaba, under the leadership of the Deputy President will be launched. 

It will bring together young people in dialogue, to assess where we are and what contribute steps to we need to take to advance youth development.

As you can see Honourable Members, we are a government at work to boost economic growth and promote job creation, working with business, labour and other sectors such as the youth.

Honourable Members,

Another good story of our 20 years of freedom is the advancement of worker rights and aspirations. 

It is the story of promoting trade union workplace organising, collective bargaining, equal pay for equal work, health and safety, affirmative action, skills development, minimum wages for workers in vulnerable sectors, the right to strike, and the right to peaceful protest. 

We agree that worker strikes should not be violent and reiterate our call to employers and labour to use the country's impressive labour relations framework to resolve shop floor issues. 

But we cannot reverse the gains workers have scored over the past 20 years.

In fact, we continue to promote the rights of workers.

We are working with social partners on the amendment of the Labour Relations Act in order to provide security for temporary workers in the employ of labour brokers which Honourable Tshabalala referred to. 

These workers get paid less than other workers doing the same job. 

They have no access to social benefits and cannot join trade unions to exercise their freedom of association and worker rights enshrined in the Constitution. 

Honourable Members,

Many speakers have spoken about the work we have done in extending basic services.

We have done exceptionally well in extending these services, however, some Honourable Members pointed out some deficiencies in the chain of service delivery in some areas.

Some Members spoke about infrastructure problems in water provision and other challenges in local government, which were raised by Honourable Botha.

The Municipal Infrastructure Support Agency supports struggling municipalities with infrastructure planning and maintenance. This is done through the deployment of technical experts to help them with services such as water supply, electricity or sanitation. 

Honourable Members have also expressed concerns about the negative audit findings by the Auditor General against departments.  

Also of concern is the excessive use of consultants in provinces such as the Western Cape where the Auditor-General has raised concern about the expenditure of over 10 billion rand on consultants.

While acknowledging the concerns of the Auditor-General, we are also encouraged by the findings made by our former Auditor General who noted the emergence of a "pattern of positive outcomes" in government spending and accounting. 

He also advised that we needed to move quickly to sustain these improvements. 

According to Mr Nombembe, not all negative findings were related to corrupt activities, as some members of the opposition want us to believe.

Instead he identified "the high vacancy rate and staff acting in senior management positions, including that of accounting officers as part of the problem."

Since the enactment of the Public Financial Management Act, there have been a host of measures to try and improve financial management in the public service, led by the National Treasury. 

Departments with negative audit findings are required to prepare audit improvement plans that set out clear actions to be taken to fix the problems identified by the AG.

Financial management experts are made available to departments, agencies and municipalities that need support in strengthening financial management systems and controls.

Departments are also expected to employ the right personnel and to train those who need skilling in financial management. 

In addition, the National Treasury has published the Municipal Financial Misconduct Regulations for public comments that will come into effect from 1 July 2014.

We will continue to invest in improving financial management capabilities of the public service nationwide. It is for this reason that in 2011, we invoked Section 100 1(b) to take over the administration of certain departments in Limpopo province.

I am pleased to report to the house that Limpopo has turned into a good story!

Limpopo had accumulated unauthorized expenditure of 2.7 billion rand which dated back to 2001. A total of 2.2 billion rand has been cleared, cash management controls have improved and the province currently has a cash surplus of 4.2 billion rand.

New leadership has been appointed within the Limpopo Provincial Treasury, and systems to manage the tender and procurement processes are being put in place. 

Wasteful practices have been eliminated and the Department of Education is delivering textbooks at a lower cost.  

More than 2 000 qualified educators who were previously working as temporary teachers have been fully appointed and permanently deployed to the schools where their services are required. 

Progress is being registered in other departments as well, including health, roads and transport.

Many officials in the Limpopo province are being held accountable for their actions that led to the need to intervene. 

Prosecutions are underway by law enforcement structures. Forensic investigations have produced 38 cases and 42 people have been arrested for corruption.

The Limpopo turnaround is a remarkably good story. We congratulate the province.

We had also taken over some departments in the Free State in 2011 and they have also registered a good story.

Major financial management improvements in the Free State Provincial Treasury and the Department of Police, Roads and Transport are clearly evident. 

Both departments are observing high levels of compliance to budgetary and other legislative prescripts as well as achieving positive audit outcomes. 

The Free State Department of Police Roads and Transport achieved has for the first time since 2007,received an unqualified audit opinion while the Provincial Treasury has achieved a clean audit outcome for two consecutive years.

We congratulate the Free State as well for this successful turnaround.

The success of the interventions demonstrate the seriousness of this government when it comes to improving governance and financial management. 

Honourable members,

We made education an apex priority of our government.

Personally, education is closest to my heart. I want to see every child, especially those from poor households being able to follow their dreams and become engineers, doctors and whatever they want to be in this country. 

Poverty must not be a barrier to education.

Honourable Pandor related the beautiful story of how we have met the Millennium Development Goals of universal access to education and also that the number of girls attending primary, secondary and tertiary education has improved significantly and is among the highest in the world.

It is also important for us to ensure that children with disabilities are also accommodated in schools and provided with support.

Our performance in education, as outlined in detail by Honourable Nzimande, indicates a country that has finally found the right formula on education. 

I trust that we will continue working together to improve education outcomes, so that our children do not ever experience the type of education that Honourable Motsoaledi reminded us about yesterday.

Honourable Moss spoke about the highly successful social security system including pensions.

Honourable Matiwane welcomed grants but cautioned that social grants were unsustainable. 

Honourable Mfundisi also questioned how social grants can be waved as an achievement and asked how we can build a nation on hand-outs.

The grants are the most effective poverty alleviation mechanism in our process of addressing the legacy of apartheid.

It must also be noted that the majority of beneficiaries of social grants, 11 million specifically, are vulnerable children.

The rest of the beneficiaries are older persons receiving the old age pension, persons with disability, military veterans and other vulnerable persons.Social grants therefore assist vulnerable members of society.

Honourable van Wyk reminded us of the good story and progress being made in the fight against crime, including the expansion of the police station network around the country. 

This is in addition to an extensive expansion of the access to justice through building more courts. A total of 43 new courts have been built since 1994, and nine of these courts were built in the 2009 to 2013 period.

This is but one effective way of promoting access to justice.

Honourable Members,

One of the good stories of our freedom is the transformation of the South African National Defence Force into a force for peace which is highly regarded in the African continent and worldwide, due to the role we play in peacekeeping. 

Tomorrow, we will celebrate Armed Forces Day in Bloemfontein. We will pay tribute to the men and women who serve this country with pride and dedication. 

We will also pay tribute to the first commander in chief of the SANDF, President Nelson Mandela.

This year 2014, all nations the world over marks the centenary of the First World War of 1914.

More than 6000 people died in the war including 616 black soldiers who died when the South African ship, the Mendi, sank in the English waters on the morning of the 21 February 1917.

In memory of the many South Africans whose died in the war and in every other conflict, our country will continue to work even harder for the realization of world peace and a better life globally and on our continent in particular.

In this context, we shall selflessly work harder for the immediate establishment of the African Capacity for Immediate Response to Crisis, and the long overdue critical reform of the United Nations to consolidate world peace.

The First World War commemoration will also accord us the opportunity to honour our war veterans and military veterans.

Compatriots,

We have noted the appeal of Honourable Ambrosini about the decriminalisation of marijuana for medical uses. I was touched to see the man I have known and worked with for more than 20 years in this condition.

I have asked the Minister of Health to look into this matter.

Honourable Mfundisi raised the lack of progress in building the road between Koster and Lichtenburg. 

The Presidential Infrastructure Coordinating Commission technical team has informed me that a contract was awarded by the North West Province at the beginning of last year, to refurbish 50 km of road between Koster and Lichtenburg. Work commenced on the road.

However, one of the unsuccessful bidders took legal action against the Provincial Department responsible.  

By the time the matter went to court in November 2013, the Department had already mutually terminated the contract, which had achieved 87% completion of the work. One stretch of road was left incomplete and it is this that poses a hazard for road-users.

The provincial government is working on the procurement process to ensure that the road is maintained and is also completed in the first quarter of this year.

Compatriots,

The State of the Nation Address gave just a short overview of the good South African story. The full story will be found in the 20 year review document that will be launched next month.

There have also been reports from Goldman Sachs as well as Ernst & Young which give an account of what this country has achieved and the work that still needs to be done.

It is a proud story of the successes of a people determined to change their country for the better.

Honourable Godi stated correctly that in celebrating our freedom and achievements, we do so also honouring those who served, suffered and sacrificed for the freedom we enjoy today.

On the 7th of May, we will take the good story forward when millions cast their votes, in celebration of the right to vote that millions of our people gained for the first time in 1994.

We congratulate the youth in particular, for preparing themselves to perform this critical national task of choosing a government of their choice.

We must all, regardless of political beliefs, gender, race or class, join this journey of moving South Africa forward towards prosperity for all.

Honourable Speaker,

Honourable Members,

Esteemed guests,

Compatriots,

We have a good story to tell.

I thank you.

Issued by The Presidency, February 20 2014

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