Statement delivered by Minister Cwele at the Debate on the State of the Nation Address 2017 at the Parliament of the Republic of South Africa 15 February 2017

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Honourable Deputy Speaker

His Excellencies, President Jacob Zuma and Deputy President Ramaphosa 

Fellow Ministers and Deputy Ministers

Honourable Members of Parliament

The leadership of SALGA

Fellow South Africans

 

His Excellency, President Jacob Zuma declared 2017 as the Year of Oliver Reginald Tambo in honour of the centenary of the birth of this selfless patriot and gallant fighter for the liberation of South Africa. The President also called for unity of purpose to sustain our national reconciliation project and to relentlessly pursue inclusive growth by implementing radical economic transformation. 

Nearly 32 years ago, Comrade O R Tambo made a similar call in London, while addressing a leading conservative MP in British House of Commons, Norman St. John-Stevas who, while accepting he would like to see apartheid end, asked if the ANC was committed to the political philosophy that goes beyond ending Apartheid. For instance, the Freedom Charter has some definite views about nationalisation and land distribution; President O R Tambo succinctly responded;

“Well, the Freedom Charter is not formulated on the basis of any ideological positions. The Freedom Charter simply looks at our situation in which there is great wealth – immense wealth – concentrated in the hands of a few while the majority of people are living in disparate poverty, and we say how do we adjust this position? How can this wealth be put at the service of the people as a whole? What are the mechanisms? And we start by accepting it cannot go on, we cannot have a system which maintains this juxtaposition of immense wealth and immense poverty”.

 

Mr President, we have heard and heeded your clarion call for radical economic transformation in favour of all South Africans which is uppermost in the agenda of the ANC. The majority of South Africans responded positively to this call for inclusive and growing economy, as envisaged by the National Development Plan to help us deal with our persistent problems of poverty, unemployment and inequality. 

The South African economy cannot grow while 50% of our people are excluded or marginalized in the periphery of the mainstream economy. The overwhelming majority concurs with the President that the structure of our economy in terms of ownership, management, control and active participation remains unfairly skewed in favour of few and against the majority especially the poor. This has been going on for more than a century. It now requires decisive and bold policy measures by the political and economic leadership to normalize the economy to yield equitable shared rewards from growth. 

 

Ngamafushane sithi, uhulumeni ka Khongolose uthi sesifikile isikhathi sokuthi nabansundu baxhamule, bazuze futhi babambe iqhaza kuyoyonke imikhakha yomnotho. Iningi labantu bavumelana nawe Mongameli ukuthi umnotho ngeke ukhule uma kudla indoda eyodwa kodwa kufanele kuvulwe amasango, izithebe zabelwe bonke abazimisele ukusebenzela ukuthuthukisa uMzansi. Loku sikwenza ukuze sinqobe  ukusweleka kwemisebenzi, sehlise ubumpofu futhi sinciphise igebe phakathi kwabadla idombolo likapondo nabadl’ imbuya ngothi. Siyazi ukuthi loku ngeke kwehle njengemana. Njengohulumeni onakelelayo sizosebenzisa amadla kahulumeni (umthetho, iziqondiso, kanye namandla okuthenga) sivule amathuba kwabanyama, abesifazane, abakhubazekile, osomabizinisi abasafufusa kanye nakulusha olukhungethwe ukuswela imisebenzi ukuze nabo bahlomule babeyingxenye yensika yomnotho wonkana. 

 

All these measures are part of ehanced implementation of the National Development Plan (NDP).

The NDP proposes three phased implementation of priorities for the ICT sector; in the short term, the NDP calls for an urgent need to review policy to improve access through competition in services, fast-tracking of local loop unbundling; urgent availability of spectrum for next-generation services; provide for low-cost high-speed internet bandwidth. By 2020 it calls for universal broadband penetration at minimum speeds of 2 mbps. Post 2020 it calls for multi-stakeholder collaboration in innovation, local content, multimedia as well as in software and applications development.

What has been done towards NDP targets?

The CSIR reports that in the last three years the ICT industry has invested R78 billion in infrastructure. The country has already started to see benefits of this accelerated investment, where the Network Readiness Index and usage improved. This and other measures driven by our government has helped to steadily push up the WEF Global Competitive Index from 56 in 2014 to 47 in 2016 out of 140 participating countries.

In September 2016, our ANC government adopted the Integrated ICT White Paper. We are using this policy lever to deconcentrate this industry. We will use open access networks and our natural resource, spectrum, as a strategic levers to induce real transformation and lowering of barriers to entry for blacks, small businesses and marginalized groups. We have been heartened by positive inputs by the industry during the consultations we have been conduction since November 2016 on how best we implement this White Paper. Those who are currently excluded are not vengeful. They brought the most innovative proposals to implement our policy without destroying the sector. This confirms the President’s assertion that it is not about taking from the ‘haves’ but the sharing with the ‘have-nots’. We will finalise consultation soon in order to prioritise the implementation and introduce necessary legislative and regulatory changes without delay.

In October 2016, our ICT Sector Council, finalised new ICT Sector Codes, which are now operational. These sector codes move beyond share ownership and management control to prioritize other areas such as enterprise development, preferential procurement as well as skills development. The ICT Sector Council is assisting the industry to improve compliance and to eliminate fronting. Our council is currently doing provincial roadshows to assist the beneficiaries to take advantage of the new opportunities presented by their ANC government.

Broadband Roll-out

Honourable Members,

Broadband or fast and reliable internet is critical for a development and global competitiveness. 

Following technical procurement delays and a failed SITA tender process for Phase I of broadband rollout, we have decided to utilise the capacity of our State-Owned Companies to implement it in line with the provisions of the law.  The aim is to connect government offices to expedite delivery of services to our citizens. It also aims to bring these services closer to our communities so that they can be exploited by local business and citizens. 

With regard to the bigger Phase II broadband rollout to the rest of the country, later this year we will be going to raise funds through the partnership with the private sector as part of our InvestSA 40 priority projects. 

Since 2014, our State-Owned Companies have invested in broadband infrastructure in rural areas. For an example, Broadband Infraco is using its Points of Presence (POPs) to connect local SMMEs to the network to provide services to end-users. Black owned companies such as Galela and Mzinyathi provide services in the under serviced areas of Dr Kenneth Kaunda and Mzinyathi Districts, respectively. This will allow smaller businesses to create new local jobs.

During this year of O R Tambo, USAASA has employed the service of another small black owned company, BrightWave to Build-Operate-And Transfer a network at King Sabata Dalindyebo and Mhlontlo municipalities in O R Tambo District. By July2017, we plan to finalise connecting 542 schools, 65 clinics and municipal offices. 

COST TO COMMUNICATE

Honourable Members

Our youth has realised the power of using internet for their development. We have heard their plight to make data affordable as it is still relatively high compared to our peers. We agree with them that data prices must come down. 

What are doing to achieve this?

  1. 1.The real fall of data costs will be realised when more player and SMMEs are competing in giving services to the people as advocated by the new policy.
  1. 2.In 2016, I issued a policy directive mandating ICASA to conduct an inquiry to see if there is effective competition in the broadband market segments and recommend corrective remedies or regulation to bring price down.  The regulator has put a deadline of April 2017 to do this work. We hope the public will give their valuable inputs in this process. 
  1. 3.Our Internet Service Providers are expanding Internet Exchange Points (IXPS) to more town within South Africa, hence lowering the cost of providing internet. We are also assisting with the roll out in the continent.
  2. 4.Lastly, the rollout of municipal Wi-Fi contributes significantly to providing basic access to many citizens. We have been assisting the municipalities, starting with metros to expand this programme. We were concerned by the pronouncement by the new DA/EFF mayors that threatened this project in some of the metros. We are encouraged by their change of heart as a result of pressure from residents. The ANC government will continue assisting more municipality to implement this project.

Honourable Members

We are doing all these measures to enable our people to exploit the internet economy and prepare them to extract the benefits of the Fourth Industrial Revolution (4IR). For instance, new technologies such as new designs of energy storage will make renewable energy more affordable and sustainable to provide electricity to rural communities. The 4IR requires to priorities mathematics and science education. It dictates that we must skill and re-skill our work force in order to minimize potential job losses as a result of robotics. We need to upscale investment in research and innovation and our entrepreneurial capacity.

POSTBANK – THE DRIVER FOR INCLUSIVE FINANCIAL SERVICES

Honourable Members,

The ANC has repeatedly called for the fundamental transformation of the financial sector. Our efforts are not to collapse the banking system but the focus is on changing their monopolistic behavior. There is a need to review the Financial Sector Charter as it relates to access to finance for small and informal businesses, financial inclusion, affordability and bank charges. The ANC has been calling for opening of space for a variety of sector specific banks or second tier banks such as a construction bank, stokvels bank, cooperative banks, and a variety of state banks in order improve access and affordability to support inclusive growth. 

It is under this backdrop I would like to respond to the urgent need to corporatize the Postbank as directed by the developmental needs of the underserviced and the unbanked. It is a state bank which seeks to promote the universal access to banking while at the same time providing a platform for the disbursement of various state transections such as social grants. 

What is being done to expedite full licensing of the Postbank?

Honourable Members,

In July 2016, for the first time since 2005, we passed the first hurdle of being given a permission to establish a banking company in terms of Section 12 of the Banks Act because we had complied with all the relevant requirement of this phase. We are now on the final but challenging mile of Section 13 authorization to get a banking license. Some of the milestones made since last year are;

  1. 1.The Postbank company registration is being finalised
  2. 2.Six names have been approved and are available to be appointed as board members of the Postbank board after undergoing the ‘fit and proper assessment’ by the SA Reserve Bank.
  3. 3.The financial risk modelling and capital adequacy of the Postbank has been finalized. The bank is well capitalized.
  4. 4.The final and difficult hurdle we are currently addressing in consultation with the Minister of Finance and subsequently the Cabinet, is the resolution of challenge around the Postbank Controlling Company. The challenge is around the interpretation of the banking act which may need amendment. We are currently sharing legal opinions which suggest this may not be necessary. 

The ANC government will work flat-out to meet the 3 July deadline to submit the application requirements to the Reserve Bank.

In conclusion

We would like to apologies to all those who sacrificed for our liberation for the disruption that was driven by hooliganism and unrepentant arrogance of those who were beneficiaries of apartheid during the State of the Nation Address last week. Yingakho abantu bethi “uTambo angalila uma esibona sinje”.

The ANC and other progressive parties did not detract from the historic mission of advancing the National Democratic Revolution in order to improve the quality of life of all our people and build a united, non-racial, non-sexiest, democratic and a prosperous nation.   Tambo was the embodiment of the core values of the ANC; the values of unity, discipline, selflessness, sacrifice, collective leadership, humility, honesty, internal debate and hard work. 

Working together, with all our people, we will work hard to realize radical economic transformation in order to attain inclusive growth that benefits all South Africans. Time for collective action has landed on all our shoulders to inspire and give hope that today is better than yesterday’s Apartheid and in deed tomorrow will be better than today.

I thank you

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