Implementation of Government Programme of Action following 2016 SoNA by Minister Gugile Nkwinti


08 Mar 2016

The economic sectors, employment and infrastructure development cluster, held a media briefing on the implementation of the government plan of action for the post State of the Nation Address 2016. The briefing was attended by the Minister of Rural Development and Land Reform, Mr Gugile Nkwinti; the Minister of Higher Education, Dr Blade Nzimande; the Minister of Small Business Development, Ms Lindiwe Sizulu; the Minister of Agriculture, Forestry and Fisheries, Mr Senzeni Zokwana; the Minister of Labour, Ms Nelisiwe Mildred Oliphant; and the Minister of Economic Development, Mr Ebrahim Patel.

Questions and Answers

Journalist : My question is to the Minister of Labour. Minister, firstly, you have not attended a portfolio committee once since 2009, as I recall. Will you put a request in to Ms Lumka Yengeni , seeing as that she is clearly not ever going to invite you, to perhaps come and brief the Members of Parliament, so that oversight can take place. Secondly, your special advisor Mr Mkhize, is he still in your employ? If so, what effect has the forensic audit that was done about him had on his continued employment by you?

Journalist : Minister Nkwinti , just last week, when President Zuma opened the National House of Traditional Leaders, he raised the prospect of shifting the land claims date from 1913 to the 1800s. Is this something that the government is investigating? Logistically, is that really possible?

Journalist: I would like to ask Minister Zokwana about that R16 billion cost of the drought. How is that calculated, and what is included in it? Regarding the budget allocation for land reform, if I understand correctly, it is significantly lower than what is required. May I have your comments, please, and what does this slowdown mean in terms of the ruling party’s objectives?

Journalist: Ministers, page six of the media statement states: “We are negotiating with a Chinese consortium to invest US $9 billion.” Could you please give some indication of who this consortium is and, if you can, what is it about? The platinum fuel cells matter -- which one is this? Could you please give me a a few more details on that?

Journalist: At what stage will the government declare the drought a natural disaster? Are there discussions under way, given the date and other constraints? If there is no plan to declare the drought a natural disaster, what would have to happen for you to be persuaded to do so?

Minister Oliphant : Firstly, I attended the Labour Portfolio Committee meeting three weeks back, where I addressed them. I do believe that there is a separation of power. When we attend portfolio committees, we attend on the basis that the chairperson invites us. I was invited twice and I attended those meetings. I was invited three weeks back, where I briefed the Committee on the current projects. I can not barge in there, as I can attend only on the basis of an invitation by the Chairperson, and I have attended when I was invited.

Secondly, on the issue of Mr Mkhize, there was an investigation about which I was not really informed, except for a draft report that was submitted to me. Later, I formed a task team to further investigate those issues, because the first report that was given to me did not have facts. Also, when you look at the reports from National Economic Development and Labour Council (NEDLAC) from 2009 to 2013, there was no indication that there was maladministration. That was why I advised them to go through those NEDLAC reports. At the same time, the matter was given to SAPS to investigate. If there is criminality, then they have to take the responsibility. In terms of the constitution of this country, a person is innocent until proven otherwise, so that is what I am waiting for. If there is criminality, then SAPS has to take action.

Minister Nkwinti: Let me welcome the Members of Parliament. Thank you for coming! On the question of shifting the land claims dates from 1913, the President has said this on several occasions -- it was not the first time. I think this must be the third year running he has made this comment when he opens the National House of Traditional Leaders. So it has not come forward formally. It has not come through to us, to say this is what we should do. These are the President’s comments, and hopefully that matter will be dealt with. When it is brought forward to us, we will address it.

Minister Zokwana : The first  question dealt with the R16 billion that had been calculated by individual stakeholders in agriculture, and we did not debate this with them. Government has to look at different ways it can enable and assist struggling farmers, so we have obtained a promise that R500 million has been set aside to assist farmers with soft loans. Another view has been put forward that maybe we need to approach the Treasury to stand surety for some of the indebtedness of farmers. Not that the money from government is R16 billion -- it may come in different forms and those discussions are taking place, as we have to attend constant meetings with the stakeholders.

The second question is, what will it take to make me understand that this drought is a natural disaster? This view has been propounded by one of the political parties, not taking into account the fact that we have been doing estimates of crops that will tell us how much maize we will be able to order or import. The results have proved to be positive, because the latest estimate is that we will be able to harvest 7.2 million tons, and that will expose us to 1.2 tons of white maize and 2.7 tons of yellow maize. As there have been changes since January in terms of rain patterns, it is questionable whether one should declare a natural disaster. If one did that, the banks would reduce their exposure to agriculture in favour of planning for imports, and reduce their investment in agriculture in future.

By the way, we are involved in a programme as a Department of visiting provinces that are affected by the drought, and in most of them conditions have improved, thanks to the Department of Rural Development and other organisations. Yesterday I met with Gift of the Givers, and they briefed me on what they have been doing with others to assist farmers in communities to deal with this drought. We are worried about the coming weather, so there are plans to deal with that and I do not think that declaring a national disaster will be fruitful now. In most municipalities, including the Western Cape, only two areas were declared as having been affected by drought. This has often been the case, except in the six provinces. What we are doing is assisting farmers, and I can assure you that those farmers are getting the ear of government, as we are sitting in the ANC raising their issues. By the ways, representatives from Grain South Africa have met with the Department, so their views are well taken care of, and they know that.

Minister Nkwinti : I think on the question of the VSL, Impala platinum is the company engaging the government on this work.

Journalist: Forgive me, Minister, was that in response to my question? My question was not answered. In the statement, there was a specific figure given about a project, and I want to know what this is all about. Just to say that is it is Impala is not helping me. What is this project about, please?

Journalist: Could you also give detail about what the R16 billion covers -- is it loss of stock and maize? I just want to know what this is all about.

Minister Zokwana: Our understanding is that farmers are worried about their ability to plant, come the next season, and the fact that they are highly indebted to development banks. Hence we have said to the Agricultural Development Company (ADC) and the Land Bank, help the farmers to keep working by making sure that the loans will not further expose them to anything. The funds set aside by the government to assist in the drought will also come in handy. But the debate is ongoing. Yes, there are issues about loss of stock, but you must remember that agriculture is not only exposed to this kind of drought. The highest cost that farmers are incurring is due to the fact that most of the inputs that we need in agriculture are imported. You speak of fertilizer, you speak of tractors, and you speak of most of the other things. You will see that our farmers are less protected by government than they were before 1994, when we opened the sector to other kinds of participation and took away covers -- like the Maize Board -- which would cushion the situation. I hope that as we debate this drought, we are going forward. What we must do to make sure that the country is in a better place, is to change methods of doing things, and doing more to find cultivators that will stand the drought conditions. I think that as a Department we are thinking beyond the drought. I think we have a buy-in now with the participants, and that we need to do things more smartly. We must make sure that we use better methods -- how we use water. The fact that we have less acreage under irrigation is also a risk, because we could have had more maize production.  Wheat is also a challenge, because half of our wheat is imported, irrespective of whether there is rain or not. 

Journalist: Thank you very much. I was just seeking clarity in terms of this specific question. There is a current discussion as you know, that there is an association in the Musina district, and they are in current discussions with a Chinese investor in the sector around methodological technology, steel and the mining construction sector, who are going to be investing this amount of money. Those are the kind of discussions, but at this point because we have not concluded a stakeholder engagement, we are unable to give full details of this particular project.

Minister Nkwinti : The Minister of Finance, as well as the President and the ministers, all of them indicated that we have to spend within our means. Therefore we have to do a lot of re-organisation and rationalisation of the budgets. That is not something that is a result of the global financial situation that we find ourselves in. It is something that all of us as government departments are supposed to do. We have to plan according to the money we have for as long as we going through the situation we are in right now.

Journalist: This is a follow up question. Minister, did I hear you correctly when you said six provinces have been affected by the drought? I thought it was only five, and if it is six, then which one is the latest? Agri SA, Grain SA and a whole other range of farming businesses have been on public record, calling on the government to declare the drought as a natural disaster. Those are organisations directly involved in the agriculture sector, and I just wanted to find out how far discussions were, because the drought task team had requested government to help assist in paying farm workers up to R1 000 a month. Where are those discussions? There has been a request from the drought task team which has brought everyone together, including government departments and the Industrial Development Corporation (IDC) that there should be surety. How far is that process? There is a concern that farmers will be in a very difficult position by August, when a series of loans are due. There are issues that were raised under the National Credit Act so that an extension of loans would not be possible. Where are these discussions?

Journalist: On the view that has been aired by the President on the issue of land claims, has groundwork been done with regard to that, and will that be something as a Department that you would support? And a last question to Minister Oliphant, just an update with regard to the issue of the minimum wage, when can we expect finality on that?

Journalist: On the question of the expected food price increases, we know that your average basket of food is going to have quite an steep increase according to the Agricultural Research Council. I think that last week, the chicken producers were saying that they were expecting the average two kilogram of chicken to go up in price by more than R7. Is government concerned about this? Are you going to be appealing to retailers to not pass this increase on to consumers?

Journalist: Minister Nzimande, so that you do not feel left out. I was at Stellenbosch University last night and all was calm and wonderful, and learning was taking place. Are we making progress in the higher education sector, and how far are we with all the “falling” taking place?

Journalist: Minister, just a follow up on food inflation and the chicken issue, specifically with regard to the African Growth and Opportunity Act (AGOA). The first American imports are coming in. My understanding of that is that at least 50% of that will go to disadvantaged communities. I am trying to figure out on what basis they will be encouraged to pass on, or not to pass on, the added cost to the consumer. Is there something to regulate this, because I suppose that as first time entrants they want to make as much profit as they possibly can, and they want to sell their quota of chicken they get at the highest price. Given the rising inflation, how are we going to balance these competing needs? The second point of clarity is about the exploration of shale oil activities. This is new to me, and my understanding is that this has not been decided yet. Can you indicate to us if this is going to commence in the New Year? Who are the people that have been given the exploration licences? How many exploration licences have been approved at this stage?

Minister Zokwana : On the question of the six provinces, KwaZulu-Natal was the first province to be declared partially as a drought-stricken area, and then the whole province was declared as such. Then followed Limpopo, North West and Free State. Western Cape and the other provinces like the Eastern Cape, declared only parts of their provinces, and those processes are still under verification. On the issue of loans, the view was that what those affected claimed to constitute the R16 billion could be met if the government were able to work with the IDC, the Land Bank and others, making sure that the banks and farmers are assisted going forward in terms of making sure that the loans are extended and that they are ready to plant, come the next season. We do have a committee that does the coordination of this drought relief, which is comprised of organisations like AgriBusiness and Grain South Africa. They sit on a regular basis. Our understanding with them is that we need to ensure that we assist farmers.

First we assisted the smallholder farmers, because we used the funds that are directed to assist them when they are not able to plant for the coming season. Therefore there is a broader debate, and I still believe that we are working with them in a way to assist each and every farmer going forward. I am aware that the Western Cape provincial government has used their locations for the purposes mentioned, where they assisted farmers to pay their farm workers in the locations that needed assistance. Those debates are still ongoing because we have to make sure that funds are used properly. R1 billion has been set aside, and we need to agree with the farmers on how we are going to move forward, because we have to sustain farmers for the coming seasons.

The debate about the food prices is true, and I agree with you we need to make sure that retailers do not take advantage of the current situation we are in. Our maize stocks will last us until April, and perhaps some time later than that. Of course there is a panic, but already plans have been made that the importation maize will be done properly. Transet have agreed that they have the capacity to handle it and are able to deal with the process, so t there should be no fear that at one time there will be no feed for livestock, or maize for food for human beings. We need to guard against people being over-exposed on the issue of chicken. I will not say that the arrival of the American chicken pieces will assist in providing food for human beings. I am not going to debate that, but it will of course guarantee that there will be chicken in the shops. I take the point that there is a possibility of chicken going up by 7% or R7. We will take care of that, but we must remember that we are also dealing with the issue of brining, and that if you buy a particular brand of chicken pieces a significant portion of that may be water and salts.

Minister Oliphant : On the finality of the National Minimum Wage, there are two critical issues that are still being debated. One is the level at which the minimum wage should be set. Also there are requests by business, and particularly organised labour, and the community must indicate whether there are going to be exclusions or exemptions. Immediately they agree on those two issues, then we will be able to see how we are going to go forward. There should be amendments, particularly when it comes to the basic conditions of employment and the Labour Relations Act. Also, the task teams must indicate when we are intending to implement the minimum wage. After that we will be able to conclude the matter. It depends on whether the social departments agree or not, particularly on the figure and the exclusions.

Minister Nzimande : There is a lot of progress at our universities. Virtually all of them are hard at work with their academic programmes at the moment. I’m concerned about TUT, the Tshwane University of Technology that had had to close its two campuses because of disturbances, and ask the students to leave, as well as UNISA. We are engaging with management and stakeholders, and are urging them to find a solution. They are concerned because the end of the month for most universities will be a halfway mark towards the end of the semester. We are really trying our best to make sure that those institutions are actually back and are functional. We welcome the progress that has been made thus far.

Minister Nkwiniti: On the question of land claims, let me repeat what I said earlier on. Since the President made these comments at the House of Traditional Leaders, this is the third time -- as I said earlier on. This matter has not been brought forward for any action, neither by the President nor by the Minister. Remember, this is not a departmental programme -- it is a government programme. The matter has not been brought to us, and there is nothing to say further than that.

On the exploration issue, the matter is under discussion. Let us leave it until we get a conclusion on the matter, and then we can definitely speak to it.

Journalist : I went with what was said in the statement, and it was very definitive.

Minister Nkwinti : There is a lot of discussion that is going on. The Minister went to the Karoo last month, with his team, including the Director General. They had discussions with communities, and they went to Cradock. That is why I am saying lets leave the matter until there is a report that comes with a definitive report.

Minister Patel : I think during the SONA debate, quite a lot of information was put into the public domain about infrastructure. A highlight to focus on is that we spend more than a R1billion per working day on infrastructure. If you look at the last 12 months, the period we looking at, the infrastructure programme accounted for R290 billion of expenditure. That would be for roads and ports, renewable energy, the housing programme, water and sanitation, but also for social infrastructure -- housing, higher education, basic education and so on. That is an extraordinary amount of money, which is certainly one of the key reasons why we have not gone into recession. The role of infrastructure has exerted a cyclical pressure on the economy, if you like.

The contribution to maintaining growth has been very important. I think what we did in the SONA debate, is we indicated some key outcomes in that programme. 100 000 houses built, even in a period when there has been enormous pressure on budgets across the board. We have been able to connect 265 000 new homes to the energy grid in the last 12 months. We did that for a range of areas and I think it is important that that be seen as not only responding to social needs, but also as a counter cyclical effort. In the period ahead there are a number of major infrastructure projects, where we have done work on funding, environmental impact assessments, getting water use licences, other regulatory matters and so on. Over the next few weeks, we will be able to say a little bit more in detail.

 I think the good news is we are now confident enough that we have resolved most of the key challenges for the next phase of big projects to come in .As we look at Clanwilliam, as we look at the N2 Wild Coast road, you will see some of the details in the printed matter that we have provided. The N3, the Mokolo crocodile water augmentation project – that is the big pipeline which will push water into Lapelale. As we do that, there are also important lessons about the infrastructure programmes -- how to maintain costs, how to keep to schedule, and that is going to be a big focus of our work now, not only to cut the ribbons of our new programmes, but also to incorporate the lessons learnt.

Overall, Chairperson and members of the media, I think what we have seen in infrastructure is a maintenance of high levels of spending and investment. Minister Gordhan, in his budget speech, particularly drew attention to the importance on infrastructure and to the need to maintain spending. He announced the figures for the medium term expenditure framework period, so you will see greater focus in the period ahead on getting new projects on stream and taking heed of the lessons learnt, because infrastructure is like a school -- you learn all the time. You make mistakes, you take what you have learnt and you have to incorporate that in your programmes. I think that broadly, it acts to stabilise the economy.

Journalist: Minister, in your report you mentioned a competition authority. What is in the pipeline in that regard?

Minister Patel : I have got a budget speech coming up, and I have got to be able to say something to attract the media to the budget speech! I invite you to that budget speech.

Minister Nkwinti : The meeting is over. Thank you.