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February : Excellent meeting with President Ramaphosa yesterday on the PPGI

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15 February, 2019

Excellent meeting with President Ramaphosa yesterday on the PPGI


The below report back, drafted by our Executive Director, Mike Peter, who, along with Alex Thiel of Sappi and Themba Vilane of Mondi attended the meeting with the President and various Cabinet Ministers that was held on 29 January.

Below is a report on yesterday's meeting with the President and some of the members of his Cabinet.

  • The forestry and forest products industry were represented by Messrs Alex Thiel of SAPPI, Themba Vilane of MONDI and myself.
  • President Ramaphosa was accompanied by Minister Tito Mboweni of Finance, Minister Nkosazana Dlamini-Zuma of DPME (whose office has been co-ordinating our engagement with the Presidency), Minister Pravin Gorhan or DPE, Minister Ibrahim Patel of Economic Development, Minister Zweli Mkhize of COGTA, Minister Senzeni Zokwana of DAFF and several other line departments' Ministers, who are responsible for the sectors which have been included in the Public Private Growth Initiative (PPGI).
  • We were delighted to see that not only were the forestry investment projects which we offered, included in the projects for the President's consideration but that forestry was the very first project listed out of 18 projects from 13 Sectors of the economy! This was all the more rewarding as the industry had offered a figure of R18.9 billion in investment over the next five years out of a total of about R500billion for all the Sectors' projects. It may well be that forestry was prioritised because of the rural nature of our investments and that they are in the form of fixed capital, whereas some other sectors' investments weren't as tangible and weren't in rural areas.
  • In total, if the planned investments from all the sectors materialised, it would increase GDP growth from the current 1.2% to between 5% and 7% in the next five years.
  • The President in responding to the presentations and the report, made the following observations and commitments:

    • That the report contained "...wonderful, wonderful news" and that our sectors are to be considered the "holy grail" of the economy and the future of South Africa. He was visibly delighted with the content.
    • That the global mood at the recent World Economic Forum meeting in Davos was extremely sombre and the global economic outlook was poor. This made these commitments from Industry all the more encouraging for the President, as the South African delegation to Davos which included leading business people, brought a sense of optimism to the Davos proceedings and the President can see from these reports from the PPGI, that the optimism wasn't misplaced.
    • The President has been in a state of anticipation for our reports and he feels like this is the "magic moment" which South Africa has been waiting for, in which the public and private sectors, genuinely take each other's hands to build the nation and economy again.
    • He spoke candidly about the trust deficit and "dark corridors" from which we have just emerged as a country and that this initiative can only work if the trust in government is restored. He believed that we had started to build this relationship and that this positive attitude of South Africans even in the face of the worst adversity like we have just come through, was a gift that he believed had been bequeathed to us by late President Mandela.
    • He re-affirmed his commitment to exposing and uprooting corruption wherever it was found, as it had robbed millions of South Africans of a better life.
    • He explained that he was crucially aware that none of this investment, growth and employment would materialise if the inhibitors (which he recognised were mainly in the remit of the State) were not removed. He said these inhibitors, like poor regulation, failed public enterprises etc were our national weakness.
    • He explained how SOEs were being overhauled as they had been both vehicles for large scale looting but also crucial for economic growth, so South Africa had suffered a double blow in allowing the looting and collapse of SOEs.
    • He committed to removing every single inhibitor "...in no time at all" and that they "...will be history".  He cited some like bureaucratic log jams, visas for scarce skills, poor BBBEE charters like in the mining Industry, as examples which would be addressed immediately.
    • He welcomed the candid nature of the talks, as South Africa had passed the stage where we can tip-toe around serious issues  which are holding inclusive growth back
    • He said that the PPGI would be discussed in a Cabinet meeting on 30 January (today), to determine how it can be formalised and institutionalised so that we can meet in due course to review progress from the private sector in investing and progress from the State in clearing the hurdles for such investment.

  • After the President spoke there was an opportunity for questions and answers. We pointed out that while our entire value chain was very willing to invest, that they could only do so if there was feedstock to underpin those investments as one cannot beneficiate that which doesn't exist. We also asked for confirmation that the funding for small-scale black timber growers would be forthcoming, as much of the planned employment of the Industry would be in the form of new entrants into that segment of the Sector. We also pointed out that we understood that Minister Mboweni has little scope for fiscal expansion and that most of the new fibre which is needed to underpin our investment, can be unlocked by having the existing bureaucracy doing its job properly, without needing much from the fiscus. Minister Zokwana responded to our inputs saying that they would certainly assist in unlocking these challenges and that we needed an Industry-DAFF forum (ironically we have several forums with DAFF in some of which we engage the Minister himself). We have heard such undertakings from DAFF many times before in the past but having forestry now featured prominently in the PPGI and on the President's list of "holy grail" Industries, we believe will provide renewed impetus for the State to once and for all address our remaining hurdles.
  • After the meeting in discussions with the DAFF Director-General, Mr Mike Mlengana, he informed us that he had told the President that forestry needed a dedicate department. Once again this isn't a new idea as former Minister Tina Joemat-Pettersen had undertaken to raise the same proposal at the ruling party's Mangaung conference to no avail. Again we believe that with forestry featuring prominently in the PPGI initiative, this too may become a possibility.
  • We urged the DG, as I had done two weeks ago with the Minister at his Service Delivery Forum, to fill the DDG: Forestry position, because as in the past, it has once again been vacant for 18 months. The DG informed us that he has already advertised the post.

 
We will keep everyone informed of further progress on the PPGI and of any further engagements which follow from it.

We would like to sincerely thank SAPPI and MONDI and Messrs Thiel and Vilane in particular, for the leadership which they have provided to the process and to thank our fellow associations for all the information which they provided for the value chains. This greatly strengthened our appeals and submissions and ensured that we featured so prominently in the final documents.

Source: Forestry South Africa


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