Download - Economic Development Department

DIRECT SELLING ASSOCIATION (DSA) AWARDS
LUNCHEON
MAROELA ROOM, SANDTON SUN CONFERENCE
CENTRE
SPEECH BY
DEPUTY MINISTER OF ECONOMIC DEVELOPMENT
PROF HLENGIWE MKHIZE, MP
22 MAY 2013
12H00
Richard Clarke, DSA Chairman and Executive Chairman of
Table Charm,
Ernest du Toit, DSA Vice Chairman and CEO of Annique
Health and Beauty,
Direct Selling Association Directors,
Executive Management of DSA member companies,
Distributors from DSA member companies,
Members of the Media, Academia and Learners
Ladies and Gentlemen,
Good Morning.
Introduction
Mr. Richard Clark and Directors thank you for this extraordinary
invitation to the Awards Luncheon of 2013. My participation in
the forum is due to the hard work of your Co-Convenor Renier
Schoeman and a comrade in the ANC’s Progressive Business
Forum (PBF). I also want to acknowledge the other PBF Co
Convenor, Daryl Swanepoel who is with us.
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Our Economic Realities
In the context of our economy Africa’s economy is expected to
grow by 3% and 4.1% in 2013 and 2015 respectively. Factors
that will contribute to an improved medium-term performance
include expanded public-sector infrastructure investment,
new electricity-generation capacity and strong regional
growth.
These rates of economic growth are still too low in view of the
fact that South Africa should grow at a sustained rate of 6% in
order to be able address its triple the challenges, namely,
the 25% rate of unemployment, poverty and the shortage of
critical skills.
What is desirable is to achieve an inclusive
growth expansion relative to the social and developmental
challenges we face.
Today, South Africa is still one of the most unequal countries in
the entire world. Its Gini co-efficient, which measures inequality,
is the worst of all the countries reported on the World Bank’s
World Development Indicators. Deep inequalities go hand in
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hand with high levels of joblessness and social instability
including deadly conflicts.
Policy Responses
Government has formulated policies aimed at tackling the
growth of our economy. We have adopted a long term
development blueprint called the National Development Plan
(NDP) 2030. This is our bold statement, which sends a
message to everyone including investors that, we are shaping,
inspiring and unlocking the future. Our former Minister of
Finance, who is today the Minister of National Planning, had
this to say, during the launch of the country’s overall vision of
how South Africa should position itself:
“The plan we hand over today is about the actions that
all of us must take to secure the future chartered in
our Constitution.”
As you might be aware, the South African Constitution protects
socio-economic rights.
The NDP spells out, the enabling milestones, such as:
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 Establish a competitive base of infrastructure, skilled and
competent human resource and an enabling regulatory
framework
 Broaden ownership of assets to historically disadvantaged
groups such as women, and rural communities
 Enhance the quality of education and attainment of critical
skills in fields like engineering, finance and ICT
 Produce
sufficient
energy
to
support
industry
at
competitive prices, ensuring access for poor households,
while reducing carbon emissions per unit of power by
about one third.
 Ensure that all South Africans have access to clean
running water in their homes.
 Make high speed broadband internet universally available
at competitive prices.
 Realise a good trade surplus, with one-third produced by
small-scale farmers or households.
 Broaden social cohesion and unity while redressing the
inequalities of the past
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 Play a leading role in continental development, economic
integration and human rights.
The
New
Growth
Path
and
the
Industrial
Policy
Frameworks
The Government has aggressively introduced interventions that
are intended to drive industrial development such as the
Industrial policy Action Plan (IPAP), IDZ and now SEZ, as
well as the government’s blue print for promoting inclusive
growth which is driven from my department, the Economic
Development Department, namely, the New Growth Path.
Through the New Growth Path, we aim amongst others to
introduce measures that will sustain overall economic growth,
eradicate poverty and create decent jobs. The New Growth
Path identifies key Jobs drivers and sectors that need to be
supported in order to create the 5 million new jobs that South
Africa requires by 2020.
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Infrastructure development has been identified as a catalyst
which would reinforce co-ordination and cooperation in
implementing
Government’s
coordinated
projects
of
all
infrastructure
through
the
our
priority
sectors.
development
Presidential
plan
The
is
Infrastructure
Coordinating Commission (PICC), which is chaired by the
President himself. This twenty year project will cost an
estimated R4 trillion. Six hundred (600) projects have been
identified in partnership with the private sector and classified
into seventeen (17) Strategic Integrated projects (SIPs).
Its components can be grouped under the following categories:
 Electricity generation and transmission
 Bulk raw water resources
 Smart ports projects
 Air links
 Advanced manufacturing
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The provision of infrastructure by government creates an
enabling environment for small businesses. It will ensure that
small businesses are able to access markets and distribute
their goods both locally and across the border. However, on
their own the afore-mentioned government policies alone are
not
sufficient
inequality.
for
Direct
arresting
selling
unemployment,
provides
poverty and
another
avenue
in
combating unemployment. An advanced infrastructure will
certainly improve your sells and enable you to enter the
continent.
The Impact of Direct Selling
Direct selling is an integral part of the economy. Direct selling
industry in South Africa has reported growth of an average of
10.7% over the last three years, with a sales turnover in 2012
exceeding R8, 77-billion.
It can become an avenue for the inclusion of youth and women.
South
Africa’s
direct
selling
industry
and
provides
entrepreneurial and income opportunities to over one million
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people of all ages, races and economic backgrounds. It is
encouraging to know that direct selling is an industry with an
open-door approach, offering low barriers to entry as well as
a sheltered and mentored learning environment to newcomers
entering the business.
Direct selling has the potential to dramatically impact on
unemployment levels in South Africa by creating thousands of
jobs for youth and women. The low barrier of entry into the
industry has enabled people without education to engage in the
economy. It is an industry that particularly suits women. 86% of
direct sellers in South Africa are women, and this figure reflects
a global trend where over 75% of direct sellers globally are
women.
Direct selling can turn entrepreneurial and financial dreams into
reality. More than simply creating jobs, direct selling provides
an environment for learning, personal development and
business
building
which
are
critical
elements
of
entrepreneurship. South Africa’s level of entrepreneurship is
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worrying. Total entrepreneurial activity rate in South Africa
is below the global average. Engaging in direct selling and
succeeding
at
it
holds
the
benefit
of
increasing
our
entrepreneurial activity rate.
We need to use this sector to establish the culture of winners.
This sector calls for personal variable and quality.
The Minister of Economic Development, Ebrahim Patel, in
his recent 2013 budget vote speech in parliament, announced
that Sefa and the IDC will together make close to R3 billion
available for youth employment and youth entrepreneurship
over the next five years. Direct selling provides fertile training
ground for unemployed youth by placing them at the
coalface of economic activity. Our strategy should always be
to invest in small businesses in ways which ensure that they
enter the whole value chain.
An added benefit of direct selling is that where the sector
grows, so does the scale of manufacturing goods and
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products sold within it. Thus an increase in the size of sector
through increased demand for its goods and products can
have a ripple effect across the economy through expansion of
the manufacturing sector.
Direct selling falls squarely within the small business sector. It
allows individuals to start small and grow by leaps and bounds
where they begin as sales agent, go on to be distributors, then
partners and finally individual business owners in their own
right. Effective small business support is thus an essential
ingredient to individual mobility and graduation within this
sector. Without it, individuals may easily run out of steam and
see no long-term benefit of being involved in direct selling.
Our resolve for economic inclusion when it comes to small
businesses is to support them across the whole value chain.
In that way, we’ll gradually enable small businesses to take
their rightful place as drivers of the economy and generators
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of sustainable jobs. This calls for a shift in mindset about the
value of small businesses.
Conclusion
These Awards do not only recognise people that have worked
hard but also give hope to those that are entering the market to
be supported, trained and developed. I would like to assure you
of government’s sensitivity to your challenges. You are certainly
our gateway to inclusion for our disabled, youth, women and
rural people.
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