Address to the National Council Of Provinces,
11 November 2003
Honourable Chairperson of the National Council of Provinces,
Leaders of SALGA,
Honourable delegates to the National Council of Provinces,
At its Lekgotla in July, the Cabinet once more focused
on the critically important issue of the struggle against
poverty. In this context, it observed that our country
is characterised by two parallel economies, the First
and the Second. The First Economy is modern, produces
the bulk of our country's wealth, and is integrated
within the global economy.
The Second Economy (or the Marginalised Economy) is
characterised by underdevelopment, contributes little
to the GDP, contains a big percentage of our population,
incorporates the poorest of our rural and urban poor,
is structurally disconnected from both the First and
the global economy, and is incapable of self-generated
growth and development.
To respond to the challenge of this Second Economy,
we have examined the system of "Structural Funds"
instituted by the European Union in respect of its regional
policy, which is based on financial solidarity of transferring
a portion of the EU's budget to the less prosperous
regions and social groups within the EU.
The EU programme is premised on the reality that ''the
market cannot be relied upon to meet the development
needs of the 'less favoured regions' within the EU,
guarantee the achievement of the centrally important
objective of social cohesion, and provide the means
for the implementation of 'strategies for catching up".
In the same spirit, the Cabinet has resolved that the
development of the Marginalised Economy requires the
infusion of capital and other resources by the democratic
state to ensure the integration of this economy within
the developed sector.
The Cabinet's decisions will necessarily involve active
partnership with provincial and local governments and
other social partners. Among the key strategies to meet
the growth and development challenges of the Second
the Integrated and Sustainable Rural Development Programme
the Urban Renewal Programme (URP);
the Expanded Public Works Programme;
a major boost to infrastructure spending, with an emphasis
on improved underdeveloped regions and communities;
further support to local government's preparation and
implementation of Integrated Development Plans (IDPs);
the development of SMME's and cooperatives, in both
urban and rural areas;
black economic empowerment, and special programmes for
women's economic development ;
the expansion of micro-credit to enable the poorest
to engage in productive economic activity;
the incorporation of the unemployed within the Skills
Development Programme, especially as implemented by
the continued restructuring of our system of education
so that it gives our youth the necessary skills to engage
in economic activities of benefit to them;
agrarian reform, including a Farmers Support Programme
and forestry development in the interests of communities;
the creation of the echelon of Community Development
Workers to help build social cohesion in the Second
Economy, and to help to develop strategies and forge
links that can transform the Second Economy.
The Cabinet made the determination that the advances
we have made with regard to the First Economy, during
our first nine years of our liberation, have put us
in a position to meet the objective fundamental to our
strategic outlook, to reduce the numbers of those dependant
on social grants, by enabling them to pull themselves
out of poverty by engaging in gainful economic activity
and exercising their right to human dignity.
In our first decade of freedom and democracy, we have
had to tackle immense challenges with limited resources
in all spheres of government. One of these challenges
is meeting our water requirements in a sustainable basis.
Early in November, the Consultative Group on International
Agricultural Research (CGIAR) launched their Challenge
Programme on Water and Food and warned that one in three
of the world's people will be affected by water shortages
in 2025 and that the annual crop loss in Africa could
be as much as the entire grain harvest produced by the
US and India.
By 2025, CGIAR predicts that sub-Saharan Africa will
show the highest increase in water consumption of any
world region and that Africans without access to clean
water will more than double to 401 million and possibly
523 million people.
This year, 2003, is designated as the UN International
Year of Freshwater. We are proud of our own achievements
in providing, as of June this year, 9 million residents
with fresh, running potable water.
Following on our highly successful hosting of the World
Summit on Sustainable Development, we have hosted a
Commonwealth conference on local government and we are
implementing intergovernmental programmes in accordance
with Agenda 21, Habitat and the next WSSD cycle beginning
in 2004 relating to Water, Sanitation, and Human Settlements.
It is critically important therefore that we, in South
Africa, the largest economy in sub-Saharan Africa, are
not complacent and take every possible measure to ensure
that we implement viable policies consistent with the
needs of our people and these international agreements.
These also include the Millennium Declaration Goals,
the objectives of the ILO programme, Working Out of
Poverty, and the New Partnership for Africa's Development
Despite our resources limitations, we are pleased to
say that the government has delivered services to our
people in a way that has turned the tide against many
centuries of colonialism and apartheid characterised
by the ever-increasing impoverishment of the majority.
I commend to the National Council, the government's
Towards a Ten Year Review, for consideration and debate.
The Review frankly assesses how far we have come since
we attained our freedom in 1994. It provides important
indicators of what we need to do as we strive during
our Second Decade of Liberation to advance our goal
of pushing back the frontiers of poverty and expanding
access to a better life for all.
One of the clear conclusions of The Review is that
each and every one of us in the provinces, local government
and traditional authorities have to continue to work
together with national government as partners in order
to discharge our mandate to our people to create a prosperous,
healthy and vibrant multicultural society.
In the State of the Nation address in February, I promised
that we would launch an Expanded Public Works Programme
(EPWP) to promote economic growth and create sustainable
I am pleased to report that the Department of Public
Works together with other Departments, including the
Departments of Environment Affairs and Tourism, Agriculture,
Education, Health, Social Development and Trade and
Industry, provincial and local governments and civil
society formations have come up with a comprehensive
business plan, approved by Cabinet on 4 November 2003,
which will now be implemented in phases.
The EPWP is a nation-wide programme that will draw
significant numbers of the unemployed into productive
employment, so that workers gain skills while they are
gainfully employed, and increase their capacity to earn
an income once they leave the programme. The EPWP is
targeting one million unemployed people in the first
The centre-piece of the EPWP is a large-scale programme
of using labour-intensive methods to upgrade rural and
municipal roads, municipal pipelines, storm water drains
and paving as well as fencing of roads, community water
supply and sanitation, maintenance of government buildings,
housing, schools and clinics, rail and port infrastructure,
electrification infrastructure, and so on.
Some of the approved environmental and cultural programmes
that will also contribute to the EPWP are the Department
of Agriculture's Land Care Programme, the Department
of Environmental Affairs and Tourism's Faranani-Pushing
Back the Frontiers of Poverty Programme, People and
Parks, Coastal Care, Sustainable Land-based livelihoods,
Cleaning up South Africa, Growing A Tourism Economy
Programmes, the Department of Water Affairs and Forestry's
Working for Water, Wetlands and Fire Programmes, and
the Department of Arts and Culture Poverty Relief Programmes.
The critically important area of health also forms
an important part of the EPWP and includes the Department
of Health's Home-based care workers, the Department
of Social Development's Community-based care and support
workers and the Department of Education's early childhood
The economic sector EPWP initiatives include the Department
of Agriculture's community production centres and the
Departments of Labour and Trade and Industry's micro-enterprise
development and venture learnership programmes.
The success of the EPWP will depend on how well all
our spheres of government will work together as partners
to achieve practical results. I would like to share
with you a concrete example of an existing provincial
EPWP project, which is helping to give hope to desperately
poor rural communities. There are plans to replicate
this programme in other provinces.
I refer here to the Zibambele programme that was initiated
in 2000 by the KwaZulu Natal Department of Transport.
Its objectives are to maintain the province's rural
road network and to provide poor rural households, which
have no other source of income with a regular income.
The programme is based on the 'length person' contract
system, which has been used extensively in Europe and
Southern Africa. In 2002/3 there were approximately
10,000 Zibambele contractors maintaining approximately
one-third of the KwaZulu Natal rural road network.
In return for eight days of work a month maintaining
a length of road to agreed standard, households received
a transfer of R334 per month.
The part-time nature of the work, which may be carried
out flexibly within the month, is designed to accommodate
engagement in household tasks and other wage or subsistence
opportunities should they arise.
The work is allocated on a household basis, so that
if the participating household member becomes unavailable,
another household member may take up the activity, and
thus retain the monthly income. Households are selected
for participation at a district level by representatives
of the local community and by the elected Rural Road
Transport Fora using criteria of poverty, unemployment
and female or child-headed households.
The scheme was initially reliant on support from external
consultants, but in-house management and implementation
capacity has been developed and the use of external
consultants has been reduced. The Department planned
to extend the number of contractors to 14,000 by the
end of the 2002/3 financial year and, ultimately, to
a maximum of 40,000 poor households. The budget for
Zibambele in 2002/3 was R55.7 million.
A recent study has concluded that the programme is
cost-effective in terms of transferring resources from
the state to recipients, the proportion of programme
costs spent on labour and the cost of the creation of
a day's work. (Anna McCord, Public Works as a Response
to Labour Market Failure in South Africa, Centre for
Social Science Research, SALDRU, November 2002, Working
Paper No 19, pp. 80-81).
This study has also pointed out that if Zibambele were
expanded nationally and focused just on the maintenance
of the 38% of the provincial road network estimated
to be in poor condition, approximately 134 500 jobs
could be created on the basis of employing one worker
per kilometre, at a cost of R691 million per annum.
Zibambele is a clear example of best practice, which
can be drawn on in the expanded public works programme.
The Limpopo Province has also taken the initiative
to implementing the EPWP in its road infrastructure
projects, under the banner of its Gundo Lashu programme,
which is isiVhenda for "Our Victory".
This is resulting in six times more local employment
creation than if conventional machine-intensive construction
methods were used, without any significant overall increase
in costs, and without sacrificing the quality of the
roads being built.
The workers on the projects are also provided with
training, with the aim of increasing their potential
to earn an income once the projects are completed. By
the end of next financial year, the contractors will
have completed 500 km of rural roads, and created 500
000 person days of local employment.
A recent review by the British Department for International
Development concluded that "the demonstration of
the viability of labour-based methods is likely to be
completely achieved" in the Gundo Lashu programme
(Taylor, G. A. Bester and P. Delius. 2003. 'Limpopo
Province Labour-Intensive Rural Roads Programme (Gundo
Lashu), Output to Purpose Review'. DFID).
Working for Water, with a budget of about R30 million,
has over 300 projects around the country, operating
in all provinces, and currently is providing work and
training opportunities to some 21,000 people. There
is a strong focus on those living in poverty, with concomitant
support for black economic empowerment, women, youth,
disabled and single-parent households, among others.
Growing out of the Working for Water programme have
been several aligned programmes. The Working on Fire
programme is providing training and work opportunities
to a similar targeted group of people, to help prevent
and fight fires. Through the heroic action of a Working
on Fire team, 22 people in KwaZulu-Natal were recently
rescued from certain death.
Similarly, this programme was praised by the forestry
industry for playing a significant role in containing
devastating fires in Mpumalanga and elsewhere in August,
which cost the country about R3-billion.
Working on Fire is piloting its work in seven provinces
at present, with the hope of becoming a national programme
to address fire in a comprehensive and co-ordinated
manner. It has a R20 million per annum budget from Working
for Water, supplemented by significant support from
the private sector.
The Working for Wetlands programme is similarly providing
training and work opportunities in the rehabilitation
of wetlands. It is a fine example of co-operative governance,
working across three National Departments (Department
of Environmental Affairs and Tourism, Department of
Water Affairs and Forestry and Department of Agriculture),
Provincial capacities, local government and the private
These are a few examples of how Government has been
taking progressive steps with our social partners to
address significant threats to our social, economic
and ecological well being. Indeed, we are implementing
our programmes in a pro-poor, transformation-orientated
The youth of our country are significant stakeholders
in our reconstruction and development plans. They are
part of our population many of whom fall in the category
of the "economically-active".
Across all levels of government, we are striving to
ensure that the youth are given the opportunity to create
wealth and income for themselves and for our country.
A lot of energy has gone into infusing a youth development
approach in the public delivery system though the results
are still uneven. Through the National Youth Commission
and the Umsobomvu Youth Fund it has been possible to
provide guidance to departments and interact with senior
managers to ensure that youth development is supported
Youth Development must become an integral part of what
we do in the provinces and municipalities. Youth development
and participation must form part of our development
of Integrated Development Plans.
The partnership between the National Youth Commission,
the Umsobomvu Youth Fund and the South African Youth
Council has developed a strong impetus for the decisions
we took in terms of establishing and implementing a
National Youth Service. In the coming months, we must
scale the National Youth Service (NYS) upwards, from
pilot service projects administered through these three
partners into a coherent national effort involving key
national and provincial departments.
Other innovative interventions that can and must be
made to address the challenges of the Second Economy
are also exemplified by the Public-Private Partnership
ICT initiative between Limpopo Province, Mogalakwena
District Municipality and Hewlett Packard. This exciting
programme is using modern communication and information
technology to bring all-round development to the Mogalakwena
rural area. We must work to expand this kind of programme
to other rural areas.
The March 2003 Labour Force Survey of StatsSA showed
that two million new jobs were created in the previous
seven and a half years, bringing the total of those
employed to 11.6 million. This represents an employment
growth rate of over 2.5% per year.
However, as indicated in the Ten Year Review, the numbers
of those joining the labour market has grown at a faster
rate. Demographic changes, such as more women entering
the labour market, have also intensified the need for
our economy and society to create more jobs.
Our macro-economic policies and micro-economic interventions
have helped to place our public finances and the First
Economy on a radically better footing than they were
in 1994. These improvements have helped to generate
the resources we need to address the challenge of the
Second Economy. This also means that we must persist
in our work to ensure the further growth and development
and modernisation of the First Economy, including its
capacity to absorb larger numbers of work-seekers.
This also relates to the important issue of black economic
empowerment, which remains one of the priorities of
our government, both to end the racial disparities in
our economy and society and to address the challenge
of poverty and underdevelopment. Government has also
made significant sums of money available for this empowerment.
The state corporations are also important partners in
The adoption of the Black Economic Empowerment Bill
will also help to expedite the process of this empowerment.
Government and black business have already held a two-day
indaba to follow up on this development.
The fact of this indaba emphasised the need for our
government to continue to interact with a broad cross-section
of our people further to strengthen the people's contract
to build the kind of people-centred society we all want.
Once again, the Ten Year Review emphasised the need
for us to strengthen this people's contract, pointing
to challenges we face to ensure that our social partners
perform to capacity and consistent with the agreements
they enter into.
The successful Growth and Development Summit held last
June, served as a positive signal of the ability of
South Africans to work together to meet our economic
The government is paying the closest attention to the
proper functioning of the Presidential Working Groups,
further to consolidate the people's contract for a better
The Presidential Working Groups create the possibility
for an on-going dialogue between government and representatives
of civil society formations, NGOs, business and trade
unions. As the Council knows, they include the Big Business
Working Group, the Black Business Working Group, Commercial
Agriculture Working Group, the Trade Union Working Group,
the Religious Leaders Working Group, the Higher Education
Working Group, and the Youth Working Group.
I am pleased to report to the National Council that
our dialogue with the various Working Groups has been
highly successful. We are considering the publication
of a Report to the Nation covering the areas covered
by these Working Groups as a practical example of how
much our people are giving practical expression to the
need for all our people to come together in the people's
contract of which we have spoken, to confront the challenges
we face as a country.
On 6 May, we established the Higher Education Working
Group to create a shared understanding of the challenges
of transformation that confront our universities and
technikons. It is critically important that these institutions
produce the relevantly qualified and skilled people
we require to build our society and economy, and sustain
our drive to advance ours as a winning nation.
Recently we also launched the Youth Working Group directly
to engage this important sector of our society. We also
hope to engage in the near future with another very
significant constituency - women, who represent the
majority of our population. Consultations are proceeding
to establish this Women's Working Group.
Since April 2001, the Presidency has engaged with the
masses of our people across South Africa in the form
of the iimbizo. This year, we have gone to the provinces
of the North West and the Western Cape. We still have
to visit KwaZulu Natal, the Northern Cape and Mpumalanga.
The iimbizo have given all of us a unique and personal
insight into the lives of the masses of our people who
have elected us into office. Our top priority is to
ascertain what the actual needs of our people are; how
efficient the delivery of services at all levels of
government is, and to address problems; and whether
governments' policies have had a positive and regenerative
impact on our communities.
In all provinces, we heard compelling personal stories
of genuine concerns and yet we also encountered real
progress and partnerships between the rich and the poor,
the young and the old, men and women - indeed, it is
inspiring to witness at first hand the spirit of vuk'unzenzele.
These direct interactions with the ordinary masses
of our people are an important part of the process of
building and strengthening the people's contract for
a better future. That people's contract will have meaning
only if it impacts on these masses to transform their
lives. That is why it is critically important that we
constantly listen to what the people are saying and
work with them to encourage their involvement in the
struggle to change their lives for the better.
In this regard, I would like to express my sincere
appreciation of the work done by this Council, and the
elected provincial and municipal representatives to
reach out to the people through their own izimbizo.
We must sustain this work and ensure that we follow
up on the observations made by the people to confirm
that we are truly committed to a people-driven process
of social transformation.
Similarly, we must continue to work both to refine
and strengthen our system of inter-governmental relations
and improve our governance capacity in all spheres of
our government. A strong and effective system of cooperative
government is one of the keys to our further advance
during our Second Decade of Liberation.
Equally, we need a strong and effective people's contract
to meet the challenges of the decisive Second Decade.
This Second Decade of Liberation will be decisive for
our country because it will determine whether we succeed
to meet the challenges posed by the existence of the
Second Economy in our country. I am certain that we
will meet our goals in this regard.
But equally, I am certain that we will not achieve
this historic victory unless we join hands in a truly
meaningful manner, in a real people's contract that
unites the majority of our people in action to eradicate
the legacy of colonialism and apartheid.
Hopefully, in the debate, which follows in the House,
we will have the opportunity to address areas of mutual
concern to ensure that we formulate and implement policies
and programmes in which the people in all nine provinces
and all our municipalities have an active and significant
We must move forward together in unity to push back
the frontiers of poverty, to expand access to a better
life for all, to extricate millions of our people from
the Second Economy which condemns them to poverty, underdevelopment,
marginalisation and loss of human dignity.