ADDRESS BY DEPUTY PRESIDENT ZUMA TO
THE GERMAN CHAMBER FOR INDUSTRY AND TRADE
Members of the German Industry and Trade Organisations
Members of the Diplomatic Corps
Ladies and Gentlemen,
Allow me to begin by thanking the Deutscher Industrie
und Handelstag, (German Chamber for Industry and Trade),
the Suedliches Afrika Initiative der Deutschen Wirtschaft
(German Business Initiative for Southern Africa) the
Afrika Verein (The Africa Association) and the Bundesverband
der Deutschen Industrie (Federal Association of German
Industry Association) for their initiative in organising
this important gathering.
It would be appropriate for me to pay tribute to all
these organisations for their ongoing endeavours to
actively promote economic ties between Germany and South
Africa, the Southern African region and Africa as a
whole, while creating a better understanding of the
challenges and opportunities on the continent. We owe
you our gratitude for your significant contribution
in this regard.
Germany remains one of South Africa's foremost economic
partners, as manifested by the growing trade and investment
flows between our two countries. In fact our economic
relationship is of a growing, strategic nature, with
great potential for further expansions.
South Africa offers attractive opportunities to German
investors. It is therefore not surprising that a sizeable
portion of South Africa's foreign direct investment
comes from the expansion of existing German investors
in South Africa. This investment reflects the confidence
that they have in the political and economic future
of our country.
Mr Chairperson, since 1994 we have succeeded in building
a constitutional state, including the establishment
of independent constitutional bodies such as the Independent
Electoral Commission, the Human Right's Commission,
the Gender Commission and the Public Protector. I am
sure that German people will recognise many elements
in our constitution that resemble their own.
Our society is irrevocably based on the rule of law,
our people having accepted the binding force and legitimacy
of decisions taken by our legislature and judiciary.
We have eliminated political violence and conflict.
This has allowed us to focus more effectively on the
task of overcoming the legacy of our past and transforming
Our President Mbeki announced an economic action plan
in his state-of-the-nation address to Parliament at
the beginning of the year wherein he identified specific
programmes to accelerate the growth of our economy.
This was an important watershed for several reasons:
firstly, it signified a progression from the initial
focus on macro-economic stability to micro-economic
reform; secondly, the level of co-ordination in government
to develop this action plan is unprecedented; and thirdly,
the plan is action orientated.
In order to create the growth required to provide new
economic opportunities and jobs for South Africans,
we have embarked on a process of transforming our economy.
I am pleased to state that we have made steady progress.
The economy grew by 3% in 2000 and a similar performance
is forecast for 2001.
This is the fastest rate of growth since 1996 in spite
of the financial difficulties experienced in other parts
of the world, and is strengthened by a strong consumer
confidence, with inflation under control and interest
rates remaining steady.
In support of investment, a new tax incentive is proposed
for companies investing in approved strategic industrial
projects. Tax depreciation rules applicable to small
business in the manufacturing sector will also be favourably
On the path we have followed since tabling a macro-economic
strategy in 1996, South Africa's focus has been firstly
on building the foundation for sustainable long-term
growth. Taking into account the global environment,
economic growth is expected to continue strengthening
across most sectors next year.
Manufactured exports in particular have grown rapidly
in the last few years, across almost all manufacturing
sectors. Chemicals, metal and metal products, machinery,
auto and auto components have registered particularly
strong growth. This is graphically illustrated in the
automotive sector in which German companies played a
A few years ago South Africa's involvement in the motor
vehicle export industry was very minimal. Currently,
BMW produces the 3-series BMW, driven by people in the
UK and other parts of the world, using right-hand drive
vehicles. Exports of motor vehicles have thus risen
from R58 million in 1995 5o almost R8 million last year.
Vehicle exports from South Africa are expected to exceed
100 000 units in 2001. Component exports grew from R987
million in 1995 to R2,25 billion in 2000.
Other areas of priority identified by our Government
Inter alia, to pay specific attention to development
in historically disadvantaged areas through the Integrated
Sustainable Rural Development and the Urban Renewal
To take specific steps to address the challenge of promoting
small, medium and micro enterprises; and
Black economic empowerment, as a fundamental moral and
Allow me to make a few comments on the issue of black
economic empowerment and outline the rationale for the
policy. Apartheid policies denied black people an opportunity
to participate meaningfully in business through a litany
of laws and policies., This created a racial skew in
the distribution of wealth in South Africa.
This irregularity, if left unattended, poses a threat
to our democracy and social stability. Thus the policy
is a business imperative rather than mere political
It encourages the participation of black business in
the economy through partnership, joint ventures, and
through public procurement.
Indeed some forward-looking German companies, such
as Deutsche Bank, are already taking business advantage
of black economic empowerment by partnering up with
black owned consortiums in successfully bidding for
As we all know, the transformation exercise in our
economy takes place within the context of globalisation.
Attempts by the trading economies in the developing
world to create a more equitable, rules-based world
trading system are gaining momentum and should hopefully
culminate in a new round of WTO negotiations this year.
It is imperative for South Africa to play a big role
in these efforts as we are among the larger economies
in the developing world and particularly on the African
Ladies and gentlemen, allow me to turn to our continent
Africa and highlight some of the positive and exciting
developments taking place there.
As we enter the 21st century, we do so alive to the
fact that the last four decades have been turbulent
for Africa. We are fully cognisant of the many challenges
that lie ahead before Africa can claim its rightful
place amongst the nations of the world. We recognise
that things cannot be allowed to happen as they always
have if we are to achieve our objectives.
But I believe, as I stand before you that we are at
the dawn of the African century - a time in our history
when we as a people of the continent are resolutely
turning our backs to its ugly past.
The continent has set itself a daunting challenge of
revival into the new millennium and a new generation
of leaders have unambiguously rejected military and
other unconstitutional regimes.
South Africa will continue to build strategic trading
relations with the trading economies of the developing
world, because economic growth in the 21st Century will,
to a large extent, occur in the economies of the south.
Thus the Southern African Development Community (SADC)
Free Trade Agreement is a key instrument and regional
economic integration needs to be strengthened further.
Africa and other developing nations are faced with
the challenge of ensuring that globalisation is not
allowed to further widen the gap between the world's
poor and the world's rich - to ensure that the poor
also benefit from it.
South Africa's approach is to strengthen regional and
continental co-operation and unity, so that we are better
equipped to engage the broader international community
in these matters and to ensure that we are in a better
position to take advantage of economies of scale.
Through our involvement in the regional development
body, SADC and other African initiatives, we have moved
a step closer to meeting these challenges. At the same
time, the Organisation for African Unity, soon to evolve
into the African Union, has mandated Presidents Mbeki,
Bouteflika of Algeria, Obasonjo of Nigeria, Wade of
Senegal and Mubarak of Egypt, to lead the process of
developing a revival plan for Africa, namely, the Millennium
African Recovery Programme.
This plan will be presented to the OAU Summit in Lusaka
In fact, this was one of the key issues discussed by
President Mbeki during his meeting with Chancellor Schroeder
in Berlin last week. We were encouraged by Chancellor
Schroeder's positive reaction in agreeing to support
The Millennium Africa Recovery Programme (MAP) is a
plan that calls for a new partnership between Africa
and the international community, especially the highly
industrialised countries, to overcome the development
chasm that exists between them and the continent.
The key priority areas of the programme are peace,
security and good governance; investing in Africa's
people; diversification of Africa's production and exports;
investing in ICT and other basic infrastructure and
developing financing mechanisms; reducing poverty and
attaining the international development targets for
health and education.
These priority areas must be implemented simultaneously
and in interaction with one another. It is a plan in
which African leaders will take joint responsibility
for a comprehensive programme of action.
As we embark on this programme of action, our leadership
on the continent envisages the development of a new
partnership with developed countries and multilateral
institutions based on the following principles that
underpin the programme:
ownership and leadership by African countries themselves
(this is seen as an imperative if the plan is to succeed);
partnership with the West, i.e. developed and industrialised
countries, to reverse unequal relations that characterised
past trade relations and
a comprehensive plan that addresses Africa's development
The key programs of the Plan centre around:
peace and security;
commitment to democracy and human rights;
human resource development;
diversification of production and
The Millennium African Recovery Programme clearly signals
Africa's commitment to seeking solutions that will stand
the test of time and recognises the inextricable links
between democracy, an end to conflict and economic development.
South Africa, accounting for a large percentage of
economic activity in Africa has an obligation to lead
in showing that the objective of African recovery is
a possible one. As a starting point, South Africa needs
to explore the opportunities provided by multilateral
institutions and programmes to increase market access
to both the developed world and the developing world.
Vehicles such as the South Africa-European Union Trade,
Development and Co-operation Agreement and the US-initiated
Africa Growth and Opportunity Act provide Southern Africa
and Africa with growing opportunities to expand our
productive capacities and engage new markets in a focused
and effective manner.
It is against this background that we are saying that
there are exciting and attractive opportunities for
the private sector of the Federal Republic of Germany
to enter into a genuine, equitable partnership with
us based on mutual interest and shared commitment.
We do not doubt that our time has indeed come. We trust
that Germany will be counted amongst the nations that
will take up the call and walk with us towards the African
I thank you.