Address by KwaZulu-Natal MEC for Economic Development, Tourism and Environment Affairs, Mr Sihle Zikalala during the Official Opening of Medway Road Project in Richards Bay

28 NOVEMBER 2017

Programme Director and Chairperson of RBIDZ Board, Mr Mel Clark;

Mayor of King Cetshwayo District Municipality; Cllr Nonhle Mkhulisi;

Mayor of uMhlathuze Local Municipality Cllr Mduduzi Mhlongo;


Board Members of RBIDZ;

Chief Executive Officers;

Senior Government Officials;

Investors and Captains of Industry;

Esteemed Guests;

Members of the Media Present;

Ladies and Gentlemen;

Good Morning.

From the outset, we want to congratulate the management and staff of the Richards Bay Industrial Development Zone for the completion of this important project. We certainly know that in the beginning it was particularly not easy but through your determination and tenacity, you have managed to pull this one off.

Apart from strengthening our status as South Africa’s transport and logistics hub, the importance of Medway Road lies in the fact that the KwaZulu-Natal Provincial Government has a vision of ensuring that this province becomes the gateway to Africa and the World.

This also fits in with our grand vision of driving a new trade strategy both in the Sub-Saharan Region of Africa whilst also encouraging more south and south trade flows. In this regard, our President, His Excellency Jacob Zuma, in his capacity as the Chair of the Southern African Development Community (SADC), has expressed his determination to advance SADC’s Regional Industrialisation Strategy and Roadmap as an inclusive long-term modernisation and transformation mechanism.

This strategy and road map sets out three potential growth paths that feature agro-processing, mineral beneficiation and manufacturing – with a focus on downstream processing and industrial development as well as service sector value chains.  Critically, there is a long-term plan of establishing a single market by 2018 with a single currency. This will stimulate trade and investment, the removal of non-tariff barriers and the harmonization of immigration and customs regulations which is essential for facilitating the free movement of people and goods.

With the establishment of Special Economic Zones such as this Richards Bay IDZ and the Dube Trade Port, our province is rapidly increasing its desirability as an investment destination of choice but also a duct into the African continent.

This new intra-African trade pattern is supported by our country’s skills and logistics capabilities. Over the years, the ANC-led government has been driving an infrastructure revolution which involves construction of houses, provision of water and sanitation, revamping and installation of other basic services such as electricity where they were previously unavailable while also focusing on air-freight, rail and road construction.

With a budget allocation of R9.96 billion for road construction this financial year by the provincial government, our road infrastructure will see consistent improvement that we need to bolster our image as a destination of choice for investment and tourism. As the province we are also benefitting from the national Strategic Infrastructure Projects. These include the northern mineral belt, through increased rail capacity from Limpopo to Mpumalanga and Richards Bay.  We also stand to benefit from the development of the 570 kilometres-long rail network connecting Mpumalanga, Richards Bay and Swaziland that resonates with our desire to promote regional integration.

There are major investments by state-owned transport agencies such as the Passenger Rail Authority of South Africa (PRASA) and the South African National Roads Agency Limited (SANRAL) which has a pipeline of roads development projects in KwaZulu-Natal estimated at R21.6 billion. Already, two major road projects with a combined value of over R174.5 million have been launched here in King Cetshwayo. These include Esitheza Traffic Control Centre in KwaMbonambi and KwaBhoboza Interchange in Mtubatuba.

We have taken up the responsibility of building quality roads and highways across the province because we recognize the significance of a reliable and swift road networks and the role they play in influencing economic development.

It is also remarkable to note that Medway Road, which is owned by the City of uMhlathuze, connects the John Ross Parkway which is also a provincial facility that links this area to the rest of the country. It is thus important to acknowledge the symbiotic association between all tiers of government which is further reflected in the role played by one of our state owned entities, Transnet, through its harbour operations and subsidiary transportation infrastructure like rail. This is exemplary of excellent intergovernmental co-operation and unity amongst all role players to display and join all efforts to bridge the economic divide. The Medway Road project was undertaken by the RBIDZ acknowledging the role of transport in driving socio-economic development.

Programme Director; allow me to briefly reflect on the work of the Richards Bay Industrial Development Zone. Our Provincial Growth & Development Plan identifies manufacturing that is inclusive of diverse sectors and subsectors such as automotive, chemicals and metals; drilling of oil and gas; agriculture and the green economy as key levers to promote export driven economy with prospect of earning the province considerable returns. These are strategic sectors of our economy which have a potential to collapse the triple challenges of poverty, joblessness and inequality.

It is encouraging to note that, to date, the RBIDZ has contributed tangibly to the ambitions of the province to grow its economy and effect visible economic transformation. Already, the entity has signed investments to the value of R10 billion which represent different key sectors of the economy. Thousands of job opportunities have been created directly and indirectly through infrastructure development amongst other things.

Programme Director, ahead of the World Economic Forum on Africa held in May in Durban, we announced an investment of R4.5 billion in the RBIDZ for instance.

I presided over the signing ceremony which was attended by captains of industry and members of the diplomatic corps representing New Zealand, Zimbabwe and Germany. This was one of the impressive milestones we should be proud of.

As it was widely reported, that partnership involving the RBIDZ, Nyanza Light Metals and a New-Zealand based company, Avertana Ltd heralded a new era and paved the way for the construction of titanium beneficiation plant which will produce titanium dioxide pigment.

We are excited that the construction of the plant will commence next year while production is expected to start in 2019. The Department of Trade and Industry has extended a grant of R17.1 million for feasibility studies and has also approved a further investment allowance to support the project.  About 550 permanent jobs will be created when the Nyanza Light plant is operational while further 1 200 indirect and 800 direct jobs will be created during construction phase.

Ladies and gentlemen, we must hasten to point out that job creation remains central to achieving government’s objective of inclusive growth. We are encouraged by the fact that more than 20 emerging businesses have received intensive training subsidized by RBIDZ. Of this number, 75% were black youth owned and 54% owned by women. Some 60% of the contractors trained by the entity have done work for the RBIDZ, either directly or by way of work required to be sub-contracted in order to meet Contract Participation Goals.

Certainly, we are mindful that genuine growth and equalisation of opportunities across all racial groups would require continuous investment in skills development, hence as government we are prioritising the capacitation of our people especially young people to be able to seize career and business opportunities generated through various industrial developments.

It is pleasing to note that local institutions such as uMfolozi TVET College and the University of Zululand have also developed a keen interest in offering programmes designed to broaden the pool of relevantly skilled and qualified citizens to actively participate in the region’s economy.

Programme Director, as the Provincial Government we want to use this opportunity to extend an invitation to our private sector partners this morning to work with us towards building a stronger collaboration in the process of steamrolling industrialisation in our province and country. Both President Zuma and Premier Willies Mchunu have repeatedly called for closer dialogue between government, private sector, labour and civil society to rebuild our economy. As we would all acknowledge, the ANC led government has piloted a National Development Plan and our own Provincial Growth Development Plan (PGDP) to take South Africa and the province through the next twenty years of accelerated and radically transformed economy.

This period must see South African business increasing its role in the domestic investment to match the state investment in priority sectors such as the energy mix-gas, solar, wind and others. If we show confidence in our own economy, we would be able to attract the attention of foreign investors we need to expand the prospect of inclusive growth.

Over R3 trillion to be invested in infrastructure, such as rail, road, and information communication technology will add to a drive to reduce unemployment to 6% by 2030. Amid a tamed domestic growth outlook and nagging focus by rating agencies on the country’s economy and politics, we are confident that we will pass this period to begin to experience a rising trajectory in the country’s economic performance. We can further take solace that two of the three world rating agencies opted not to down-grade the country’s trade sovereignty last week with only Standard & Poor placing us at `BB’ from rather favourable `BB+’ citing among other things stagnant growth with adverse performance by public finances.

Fitch’s decision to retain South Africa’s credit profile at `BB+’ and Moody’s option to keep the country’s standing under review, should serve as encouragement for all of us to work harder to get the country’s economy back on track. Collectively, we could reverse the current ponderous growth to be able to secure more investments into the diverse sectors of the economy to remain on schedule with growth targets as envisaged in the NDP. Notwithstanding that we are still experiencing high unemployment level in thirteen years it is nevertheless pleasing that the 27.7% joblessness threshold remained unchanged for the worse in the past three quarters. This offers an opportunity to rejuvenate the economic performance.  

There is strong commitment to rebuild manufacturing capacity to ensure that the Black Industrialist Programme is alive to unleash meaningful socio-economic transformation. We are therefore encouraged and motivated by increasing number of developmental projects being unveiled consistently in this region and we are hopeful this would be replicated across the province. But all this would hinge on how all of us in government, business and communities work together towards achieving our ambition of becoming the country and region’s gateway to global trade and tourism.

With these words ladies and gentlemen, please join me in declaring Medway Road officially opened.

I thank you,

Mr Sihle Zikalala, MPL

MEC for Economic Development, Tourism & Environmental Affairs