Hansard: NA: Mini-Plenary 2
House: National Assembly
Date of Meeting: 14 Sep 2023
Summary
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Minutes
UNREVISED HANSARD
MINI PLENARY 2 - NATIONAL ASSEMBLY (VIRTUAL) THURSDAY, 14 SEPTEMBER 2023
PROCEEDINGS OF HYBRID MINIPLENARY 2
Watch video here: Mini-Plenary 2
Members of the mini-plenary session met on the virtual platform at 14:00.
The Acting Chairperson Mr M G Mahlaule took the Chair and requested members to observe a moment of silence for prayer or meditation.
The Acting Chairperson announced that the virtual mini-plenary sitting constituted a meeting of the National Assembly.
THE IMPORTANCE OF MULTILATERALISM IN ADVANCING INCLUSIVE GROWTH AND SUSTAINABLE DEVELOPMENT FOR THE SOUTH AFRICAN ECONOMY
(Subject for Discussion)
Ms J HERMANS: Hon Chairperson, allow me to debate by making a critical observation made by the United Nations General-Secretary Mr Antonio Guterres at Davos in 2021. He said, I quote: “We need one global economy with universal respect for international law; a multipolar world with strong multilateral institutions”.
He said this within the context of the world battling with the COVID-19. We witnessed the uneven distribution of vaccines and vaccine hogging partly driven by narrow nationalism and inadequate global distribution of how a pharmaceutical product bringing a short focus to the need to strengthen inclusive multilateralism practically. The experience of the pandemic has underscored the vital importance of multilateral institutions in facilitating, co-ordination, co-operation and common responses. Multilateralism has at its core the upholding of international law and international system in which sovereign state co-operate to maintain peace and security advancing sustainable development, ensure the promotion and protection of democracy, human rights and fundamental freedoms for all, and promoting co-operations based on the spirit of solidarity, mutual respect, justice and peace.
The emergence of Brazil, Russia, China and South Africa, Brics, brought hope for regions, long sufferings and the effects of underdevelopment. Brics continues to achieve global importance for its agenda but needs to sustain its relevance to develop, mentor pursuits, enhancing and improving global governance by promoting a more agile, efficient representative, democratic and accountable international multilateral system.
In 2009, at its inaugural summit in Russia, Brics spelt out its reform and development agenda. Its reform agenda sought a more equitable, fair and democratic global governance system. This improve multilateral system would have the United Nations at its centre, drive the reform of the global financial system and its institution and mobilise the global community towards development particularly that of the less developed regions of the world.
The partnership in our view represents a significant shift towards multilateralism, international relations and offers various opportunities to member countries and other developing state.
Brics exemplifies this shift and it stands as a challenge to the dominance of Western powers in global affairs. It emphasises the importance of multilateralism in addressing global challenges, including economic issues, security concerns and environment problems.
In advancing multilateralism, we need a reform of international institutions like the United Nations, the International Monetary Fund, IMF, and World Bank to reflect the changing global power dynamics and give a stronger voice to emerging economies.
Greater co-operation and development amongst Brics nations is more evident in reforming the international financial architecture. The new Development Bank established by our Brics countries provides an alternative source of financing for infrastructure and sustainable development project member and other developing countries. By promoting trade, investment and financial co-operation, Brics reduces dependency on Western dominated financial institutions and foster economic growth amongst members’ states. South to south co-operation is a critical aspect of encouraging co-operation and collaboration amongst developing countries through an exchange of opportunities for knowledge sharing, technology transfer and capacity building.
Brics has established joint initiatives in areas such as agriculture, health care and science and technology to address common development challenges. The platform Brics has created has enable regular political dialogue and diplomatic co- operation.
Member countries exchange views on the regional and global issues, coordinating positions on matters of mutual concern and work together on conflict resolution and peace keeping efforts. This step diplomatic engagement enhances the influence of Brics countries in international negotiations and help shape global policies. The world is moving at a great speed in technological development.
If we do not keep up, we would become irrelevant trading partners without skills and proper plans, we will fall behind and our development will be delayed.
Our Brics partners fortunately are leading in digital technological in the digital and technological spheres and our partnership and mutual co-operation will be critical in ensuring technological transfers. We need to leverage the technological advantage that they have to our own advantage.
South Africa continues to be a critical conduit for the development of Africa and attracting investment. The development of Africa is largely directed by South Africa. Through the successive Brics and the expansion of multilateral relations, the African continent will be the most desire destination for investment. However, this will only happen under a multilateral system that is mutual beneficial for all partners involved in the trade.
Together as Brics countries, we in campuses a staggering 51% of the world’s population and contribute over 25% to the global GDP. Our combined influence and potential cannot be understated and it is critical that we harness this power to fasten economy growth co-operation and sustainable development.
We must also acknowledge to the potential of Brics as a catalyst by advancing sustainable development. Our nations are rich in natural resources and possess vast innovation capabilities. With these tools in hand and a shared commitment to ending poverty, we can create a prosperous equitable society.
As the ANC-led government, we have historically being dedicated to the struggle against apartheid and the promotion of equality and justice. Through our unweaving commitment to these principles, we have emerged as a portent force in shaping South Africa’s identity and global image.
In the context of Bricks, the ANC’s involvement has been vital in championing the interest of South Africa and the African continent at large. By actively participating in Brics, the ANC has sought to leverage the resources, experiences and opportunities presented by this alliance to address the pressing challenges facing Africa.
One of the most significant contributions of the ANC to the Brics alliance has been in the norm of economic co-operation preparation. South Africa under the ANC leadership has been an active participant in promoting trade and investment amongst member countries by facilitating the exchange of goods, services and ideas. The ANC has foster economic growth and development not just but for South Africa but for the entire continent.
The ANC is deeply interested in the kind of global order that will safeguard our common interest and belong to the
progressive family of nations and the regions that seeks to free themselves from neocolonial, capture and imperialist plunder.
As the ANC, we seek to cover on democratic and development part that put the interest of the people and the sustainability of the planet first. As the world undergoes multiple transitions and crisis, we urgently need to be more inclusive, equitable and just and have a just system of global governance.
Hon House Chairperson, we have been requested and a time cohost to choose sides in the context of completing global powers, we reiterate our position as South Africa that we believe that conflict should be resolved through dialogue and not choose sides. We are for global peace and multilateralism where all countries are treated as co-partners in the global trading system and the international financing architecture. That’s why we have relations not only with Brics but we include the G20 countries, the USA and other non-alliance countries.
Hon Chairperson, we believe that Brics represent a shift towards multilateralism but promoting co-operation, dialogue
and co-ordination amongst member countries and other developing nations. It offers opportunities for economic development, political influence and global governance reform contributing to a more balanced and inclusive world order characterised by peace and sustainable development. I thank you.
Debate concluded.
Ms E L POWELL: Hon members, this debate occurs during a season of escalating contestation in the global arena where increasing confrontation between major powers, polarization, ultra nationalism, populism and economic protectionism are on the rise. Whilst international cooperation is now more essential than ever, multilateralism is on life support.
This is largely as a result of the failure of global governance institutions to reform in a manner that gives adequate representation to all blocks and the subsequent resurgence of dangerous bipolarity as dictatorial systems offer political protections to unstable democracies.
In the battle of ideas between open societies and closed systems between liberalism and tyranny, it is clear that the
ANC's historical values no longer inform our country’s once respectable international standing. Rather, the ANC’s short- term party-political interests inform our nation’s foreign policy objectives. South Africa, a land once filled with promise and potential, now stands at crossroads in history. The ANC has led us down a treacherous path of decline in this rapidly changing global landscape.
Our beloved South Africa now flounders in a sea of ineptitude with the ANC's economic policies and incompetence having brought our nation to its knees. South Africa’s standing in the international community has been eroded by years of state capture, and our once mighty economy is now overshadowed by rising African superpowers, leaving us a mere shadow of our former selves.
The ANC has consistently revealed that despite their empty rhetoric, they simply do not care about freedom, democracy, or human rights, and they lack the courage to defend and promote the very principles that paved the way for our Freedom.
Examples of the ANC's betrayal of our democratic principles are plentiful. Most recently, whilst observers from the SA Development Community, SADC, confirmed that the Zimbabwean
election in August was marred by violence, intimidation, and irregularities. President Cyril Ramaphosa’s attendance at President Emmerson Mnangagwa's inauguration revealed yet again the ANC ... [Inaudible.] ... and people, and our country's commitment to constitutionalism.
President Cyril Ramaphosa hobnobbing with autocrats and dictators like Mnangagwa's while Zimbabweans suffer under a repressive regime is yet again indicative of the ANC having forsaken the principles of freedom and democracy that were the bedrock of our hard-won victory against apartheid in 1994.
During the recent BRICS summit, President Ramaphosa’s reference to building a shared vision for a better world took aim at the prevailing Liberal Democratic World Order. Despite South Africa having derived little to no economic benefit from its membership of BRICS, it appears that under the guise of so-called global governance reform, certain partners within BRICS would rather see a world in which values such as democracy, freedom, human rights, and justice are optional.
The ANC led government was unable to shed light on the evaluation criteria that guided our country's support for new members such as Iran and Saudi Arabia. Whilst only three of
BRICS current member states can be considered free democracies, adding two new member states run by authoritarian regimes may now tip the scaled in favour of an illiberal, oppressive and autocratic approach to foreign relations and trade.
Hon Chairperson, why have we not pursued a single trade agreement with BRICS members to date, considering the expanded market access and reciprocal benefits this would entail? We have not done so because BRICS is not about multilateralism or economics. It is about mounting a dangerous counterbalance to perceived Western hegemony which now poses a potential threat to South Africa's relationship with our largest trading partners.
Chairperson, South Africa's role in the international arena is pivotal to provide future prosperity and security. Whilst multilateralism must remain a cornerstone of our foreign policy, enabling us to address global challenges and advanced national interest, our principles and values must guide our international engagements and agreements. We must uphold human rights, democracy and justice on the global stage unapologetically.
Here, South Africa must actively seek to shape the World Order and advocate for a fair and open economic system that benefits the Global South whilst preserving our values and liberal orientation.
In a multilateral world, a DA led South Africa would continue to champion the democratic principles enshrined in our Constitution, using our influence to restore democracy and hope in our region and the developing world. We cannot stand idly by while our nation is laid down the path of decline by a failing former liberation movement that is desperate to cling onto power. It is time to reclaim South Africa's promise and potential, 2024 beckons. I thank you.
Ms N MHLONGO: Chair, I will not be switching on my video, I‘ve got load shedding. I'm worried about my network connectivity if I were to switch on my video. House Chairperson, we are elated to witness the growing appreciation of the ongoing contestation. This marks a pivotal moment in global history.
We are not merely discussing multilateralism because it is a trending topic, we are championing it because the era of unipolarity has drawn to a close.
The period of the United States of America’s dominance in the global economy and international affairs has reached its conclusion. The swifter we come to terms with this, the better for South Africa, SADC and indeed the entire Africa. This is precisely why as the EFF we ardently advocated for the unity and fortification of BRICS. We perceive BRICS as a crucial mechanism to advance multipolarity and to counteract the new colonial pressures that afflict the Southern Hemisphere.
Our discussions on multipolarity and multilateralism transcend near symbolic rhetoric. Billions worldwide yen for a just, equitable and inclusive World Order, an order where decisions on international affairs, trade and economy stem from mutual respect and shared developmental goals rather than the looming shadows of wars and sanctions.
The world’s populace has grown weary of overreaching hegemonic inclinations. There's a collective desire to ensure that each nation's voice is not only vocalized but valued and respected. Such multilateralism is the path towards true inclusivity, substantial growth, and the eradication of neocolonialism.
In this envisaged World Order, multilateralism and neocolonialism cannot coexist. For nations like South Africa
and the broader SADC, this emerging multilateralism offers invaluable opportunities. These include forging partners with the East, South America, and Russia to obliterate lingering deficits of social infrastructure, especially within health and education.
We should strategically align ourselves with nations possessing the progress of enhancing our energy generating capacities, diverting our focus from where independent power produced from mere independent power producers.
For SADC and Africa as a whole, establishing a seamless logistical network is crucial. This network will facilitate the movement of people and goods across our vast continent effortlessly. Without the fundamental infrastructure, roads and railway bridges, the commendable intentions behind the Africa Free Trade Agreement will remain hollow. Addressing human development, particularly in sectors like health and education is the bedrock for countering poverty and inequality in our continent. It is the foundation upon which we can unify our voice.
Such unity empowers us to negotiate meaningful multilateral agreements that cater to our continent’s unique needs. If we
overlook these fundamental challenges and neglect to build these vital infrastructures, the promising potential of the building multilateralism will remain elusive.
The EFF remains steadfast in its belief that the ruling party lacks the vision and capability to genuinely embrace this new global paradigm. They are ... [Inaudible.] ... legitimacy, even SADC can attest to this. Only the EFF has the vision and determination to reestablish South Africa's stature in the global political arena. I thank you, Chairperson.
Mr F J MULDER: Hon House Chair, in an increasingly interconnected world, multilateralism has become a key factor in dealing with transnational problems and guaranteeing global stability and sustainable development. Multilateralism strengthens the global economy by making developing countries competitive. The multilateral system, even in the face of heightened geopolitical tension and big power rivalry remains the unique inclusive vehicle for managing mutual interdependencies in ways that enhance national and global welfare.
Businesses can conduct business more easily between signatory nations, thanks to established commercial norms. Additionally,
greater protection for international intellectual property rights is possible. The advantages of a single agreement over multiple ones are that despite the fact that multilateral agreements are frequently complicated by their very nature.
They actually saved countries the time and energy required to negotiate individual agreements with their potential trading partner.
But, hon House Chair, on the contrary, I should also warn against the following; when a country joins a multilateral agreement, it typically seeds some degree of sovereignty over how it conducts its business with other nations, which is frequently in direct conflict with the democratic values upon which it was founded. Some parties benefit, but some parties also suffer. The low prices of goods imported from rival countries may have a negative impact on certain industries with pardonable countries.
Hon House Chair, while recognising the advantage of the expansion of South Africa’s trade horizons with Brazil, Russia, India, China, South Africa, BRICS, for instance, and the Group of 20, G20, as well as the wealth of natural, mineral, and cultural resources our country has to offer.
One should also consider the dominance of China, unbalanced economic structures of member countries with the fact that South Africa is the weakest economic link in economic and technological development, with the least gross domestic product in this company.
The limited power for an assertive and independent position in this group could erode South Africa’s domestic economy because many products from BRICS countries directly compete to those of South Africa. Considering the fact that South Africa is structurally weakened by ANC-led government policies, state capture and corruption.
South Africa needs to be more competitive, to realistically benefit from multilateral agreements and to be cautious to sell out our rich resources to developed countries. Thank you, House Chair.
The DEPUTY MINISTER OF INTERNATIONAL RELATIONS AND COOPERATION
(Mr A Botes): Hon House Chair, hon Mika Mahlaule, hon members of the National Assembly, Cabinet members. South Africa’s foreign policy, House Chair, is deeply rooted in multilateralism, the African Agenda and the deepening of cooperation amongst nations of the global South and dialogue
with the north. It is within this policy paradigm of concentric circles that the idea of a prosperous South Africa and a prosperous Africa has its roots.
Hon House Chair, we want to acknowledge that the deepening of global economic crisis requires and demands greater cooperation and not rivalry among member states and the fairness in the international system. The triple challenges, therefore, of unemployment, poverty and inequality cannot necessarily be mitigated without, House Chair, having a correspondent interaction with the global South, in particular with member states of the Brazil, Russia, India, China, South Africa, BRICS, group of companies the Group of 20, G20, the Group of Seven, G7, the nonaligned movement and various other multilateral types of countries.
In a global environment where a small minority of the world’s population controls the majority of its resources. Nations of the South cannot function in isolation from the multilateral arena and would therefore leave itself vulnerable in a polarised world order.
The global governance architecture House Chairperson, still gives us a voice. It may be so that we have concluded the
BRICs Summit under the theme; BRICS in Africa, Partnership for Mutually Accelerated Growth and Sustainable Development and Inclusive Multilateralism, but it poses an additional obligation on South Africa to continue to reflect on the centrality of multilateralism and the benefits accrued through initiatives such as your New Development Bank and the G20 Summit, which has just been concluded a couple of days back.
The G20, hon House Chairperson, represents approximately 85% of global gross domestic product, GDP, it constitutes 75% of global trade and two thirds of the global population.
Importantly, House Chairperson, credit must be given to the South African government, under the stewardship of President Ramaphosa, for having canvassed the G20 on the membership decision that the African Union now is a fully fledged member of the G20, which will evidently add an additional 1,4 billion people to the discussions of the G20. This is a significant decision. It speaks about leadership foresight from President Ramaphosa and Minister Naledi Pandor.
Hon House Chair, the 15th session of the United Nations Conference on Trade and Development, UNCTAD, held every four years, was last held in Bridgetown, Barbados. And theme of
that UNCTAD conference was From Inequality and Vulnerability to Prosperity for All. A critical commitment made, hon House Chair, in the Bridgetown Covenant was support for African countries in the implementation of the African continental free trade area and the achievement of Agenda 2063.
As we proceed with the review of the first decade of the African Agenda 2063, we must ensure, House Chair, that the next decade of Agenda 2063, will be one of exponential prosperity and development. We must, through our National Interest Framework document, continues to place the national interests of South Africans at the core of our foreign policy agenda.
A key and critical aspect is our ability to trade in the world that is fair and equitable in relation to the mandate of multilateral trade system as embodied by the World Trade Organisation, WTO, which is the single instrument and organisation responsible for managing global trade.
In this regard, House Chair, South Africa will continue to promote and champion universal rules based open, transparent, predictable, inclusive and nondiscriminatory equitable
multilateral trading system under the WTO. This is a mandate that we dare not fail.
Hon House Chair, UNCTAD World Investment Report, 2023, published on the 4th of July shows that Foreign Direct Investment, FDI, flows to Africa declined to 45 billion US dollars in 2022. This reflects, hon House Chair, a concerning trend that we can only handle together as an African continent by service our engagements with the rest of the world.
It puts an obligation on the South African government to continue, therefore, to deepen cooperation with your more industrialised North, but equally so, House Chair, to enhance our existing cooporation bilateral mechanisms with your global South.
We want to make a submission here, House Chair, that global credentials have increased and with this tension we have seen and witnessed a rise on multilateralism. This unfortunately has been occasioned by a challenge of protectionism, narrow nationalism and populism. It is for this reason, House Chairperson, that we support the 2015 Addis Ababa agenda as it relates to Global Framework on Financing for Development, which identifies global trade as a crucial catalyst for
inclusive economic growth, sustainable development, and poverty eradication.
House Chairperson, the Unted Nations, UN, Secretary General, Guterres has established a Global Crisis Response Group which focused on food, energy, and finance as a way to manage the effects of the war in Ukraine, on the rest of the world. As part of this initiative, the UN negotiated the Istanbul Agreement signed in July 2022, the memorandum of understanding between the UN and the Russian Federation to facilitate unimpeded access for food and fertiliser and the Black Sea Initiative.
We want to submit, House Chairperson, that South Africa has played a critical role, as an interlocutor as it relates to the dialogue processes to enhance the matter of food security amidst the war in Ukraine.
House Chairperson, the ability of developing countries to address global crisis depends in large on an equitable provision of predictable, appropriate and accessible means of implementation support.
Our domestic resources alone are insufficient and for the African continent and the developed developing world, what it requires, hon House Chairperson, is for us to deepen partnerships with BRICS member states, with the G7 as it relates to the achievement of the 2030 Sustainable Development Goals and the African Agenda 2063.
As I conclude, House Chair, the South African Cabinet, under the leadership of President Ramaphosa, has developed strategies that will effectively counterbalance volatility with vision, uncertainty with understanding, complexity, with clarity and ambiguity, with agility. We remain proud of our past and we are confident about the future and we will continue, House Chair, to engage on the four concentric circles of deepening multilateralism, transformation of global governance systems, deepening cooperation with your Global South, increasing cooperation with the more industrialised North and championing the Pan African agenda. Thank you very much, House Chair.
Mr W M THRING: House Chairperson, the ACDP notes that multilateralism is an alliance of multiple countries pursuing a common goal. In the right hands, it can be an important tool for promoting inclusive growth and sustainable development.
While it has advantages, it also has disadvantages that can threaten the sovereignty of nations. Influential countries like Britain and the United States are committed to multilateralism as a step toward a multilateral world order or a one world government or New World Order.
During Covid, multilateral agreements were reached by the World Health Organisations pharmaceutical companies, and countries around the world. The ACDP warned against secret agreements, and called for safety, efficacy, and transparency. The Food and Drug Administration, FDA was forced by a court in the United State to reveal documents relating to the licencing of the Pfizer vaccine. Pfizer documents revealed that over 1000 people died during their trial, yet they called their drug safe and effective.
The Health for Justice Initiative in South African took our government to court, in order to obtain information about the contract signed between Pfizer and our government. Clause 5,5 of the contract states:
The purchaser – that is government - further acknowledges that the long-term effects and efficacy of the vaccine are
not currently known and that there may be adverse effects of the vaccine that are not currently known.
Furthermore, Pfizer charged South Africans 32,5% more than it charged the African Union and Johnson & Johnson charged South Africa 15% more than it charged the European Union. Pfizer recently purchased a rival pharmaceutical company called Arena, which produces products that treat immunoinflammatory diseases from Covid injury, for 6,7 billion dollars. So, Pfizer, who caused vaccine injuries, are now also going to be the solution.
Additionally, it was revealed in the European Parliament that the World Health Organisation, through its new draft pandemic treaty is attempting to undertake a soft coup, by creating a new set of laws which ignores existing human rights laws, under the pretext of pandemic preparedness and bio-security agenda. This treaty will remove human rights health protections embedded in the International Health Regulations, IHRs, and will enforce surveillance, censorship, and get rid of freedom of speech, and require governments to push a single narrative.
The ACDP has one message for this type of multilateralism, gone rogue: We will not bow. The ACDP calls on all South Africans and countries who wish to protect their sovereignty, to do likewise. I thank you.
Mr C N MALEMATJA: Thank you. I am here Chair. Can we agree that the video will give me a problem?
The ACTING HOUSE CHAIRPERSON (Mr S O R Mahumapelo): You can proceed without it.
Mr C N MALEMATJA: Chairperson thank you very much. Allow me to take this opportunity to say indeed, the ANC is hard at work. The ANC has got no time for public speaking tournament for cheap political gains at the expense of our previously disadvantageous masses by the apartheid, which is the demigod of the DA. The DA stands without being ashamed and praise the apartheid which they don’t even consider the legacy that apartheid has created.
We are in this trouble of economic exclusion because of this apartheid. An apartheid today is revised, resuscitated by the DA. It has proven in the following metro where they are in charge. In Tshwane they stole R9 billion. The following day
the mayor decided to run away. We are saying all these only because the DA has decided to stand and grind and ensure that they praise this apartheid and try to revive it, which they are not going to succeed.
The ANC has a plan it’s called Economic Reconstruction and Recovery Plan. That is why we have this plan and when we approach this other, including the multilateralism, the core of what we believe Brazil, Russia, India, China, and South Africa, BRICS stands to repress for South Africa, one of the main cornerstones of this collaboration we have established with all BRICS nations in the strengthening of economic and financial linkages between BRICS members countries.
The BRICS countries approved the strategy for BRICS economic partnerships in 2020 to promote mutual trade and investment, expand market access and foster investor friendly environment across the board. From 2017 to 2021, South Africa’s overall trade claimed by 10% on average. Here we talk of plus – minus
- R830 billion as compared to the 487. The DA is not happy with that and will never appreciate. BRICS, therefore, is an important source for foreign direct investment in key areas such as mining, automotive, transport, energy clean, ITC and others. The investment projects that led to significant job
creation. We have seen that across the country everywhere, including in the Western Cape.
Further, the BRICS Business Council and the BRICS Women’s Business Alliances bring together important commercial networks that promote trade and investment partnerships amongst BRICS countries. In 2015, BRICS countries launched a New Development Bank to finance and support largely infrastructure and sustainable development projects. This was inspired development, which the DA never knew of ... [Inaudible.] ... to produce to them. Instead, they choose to decide and run away from it.
Our membership of BRICS makes a valuable contribution to the implementation of our economy, which is Reconstruction Recovery Plan. For example, growing the tourism industry is one of the priorities of the plan. The BRICS countries are becoming increasingly important tourism market for our country. That is why in the Western Cape they have no respect of tourists. That is the only place where our tourists are humiliated and are abused at the expense of the very same that government which has got no head. In terms of supporting energy security in South Africa, another pillar of our
recovery plan, BRICS countries have experts, the technology as a whole, on how to support Energy Corporation.
In 2020, BRICS adopted road map for BRICS Energy Corporation up to 2025, aimed at building strategic partnerships in energy co-operation. Our infrastructure investment, which is another pillar of our recovery plan – DA - will be able to access funding from the New Development Bank. The inclusion of Argentina, the inclusion of Ethiopia, Egypt, Iran, South Arabia as well as United Arab Emirates as the new members in the BRICS will strengthen the benefit co-operation with South Africa in a way or another. The country will enhance economic partnerships in the key sector to boost economical growth in our country wherein, regardless of colour, everybody will benefit. Unlike before, there was an economy for those that can afford depending on the colour. Today we are saying inclusive economy regardless of skin colour.
Our understanding of multilateral relations is, however, not confined to BRICS. This is evidenced by South Africa’s participation in G20, G77, being active members of multilateral institutions like the World Trade Organization, WTO, United Nations, African Union, AU. Although we support the multilateral co-operation to manage interdependency and
support rules-based trading system as embodied in the WTO, we are concerned that WTO rules exhibit a range of imbalances and inequality that prejudice the trade and developed interests of developing countries, to mention a few.
Rules in agriculture allow developed countries massive trade distorting support to their farm, undermining the comparative advantage of many developing countries on many products and growth security. The other one will be ... [Inaudible.] ... industrial subsidies constraints policy space in a developing country to support the industry but allow advanced economy to provide substantial support to the high technological intensive industries. The third one will be on intellectual property granting protection to patent rights holders to encourage and reward innovation, but unduly limit technological transfer, unduly protect monopoly rands and does not prioritise access to lifesaving technology, including in health, emergency and pandemic.
We have seen people’s rights being violated in the DA-led municipalities, if not metro in Western Cape. They don’t even understand that workers themselves have rights. Instead, they resort to violence. We have seen our own people being denied going to work. It’s simply because we talk of those that are
still operating and thinking that the apartheid system is the way of doing things. We are in a democratic dispensation where any idea is shared. And I want to put it very clear, once you see a person choosing to start howling, insulting, you must know that particular person does not have a plan. The DA does not have a plan. The ANC has a plan - Economic Reconstruction and Recovery Plan.
Global inequality within and between nations requires a more considered approach to develop agenda of WTO to ensure that workers and poorer communities’ benefit from global trade.
Africa’s population has grown significantly since the establishment of WTO. In 1994, it was about 700 million. Today, it has doubled to 1,5 billion people. In the next 28 years, it is projected to grow by further billion people.
Africa has 17 of the world’s population, yet accounts for 3% of global GDP and 1% of global steel and autopilot outputs.
For the African continent and South Africa, the defining economic challenges of our generation is and will be industrialization to find ways to grow more, to grow greener, to grow impressively. We will need to address the historical imbalances in some of the agreements arising from African Growth and Opportunity Act, Agoa of the General Agreement on
Tariffs and Trade that were incorporated in the newly formed WTO. These include measures on agriculture and some African countries, including the tariffs. Our exports are dominated by primary products, while exports are dominated by manufactured products. Through multilateral relations and intensified BRICS co-operation, South Africa’s standpoint is to increase value added exports to China and other BRICS partners and to attract investment in South Africa’s industrial sector.
There is potential to increase exports in automobile, machinery and agro-processed products such as rooibos, wine, essential oils and ... [Inaudible.] ... South Africa and China both participate in each other’s trade exhibition. China invested R116 billion in South Africa in 2003, and in 2019 creating an estimated 5000 jobs. There is a further extensive support for the development of our Special Economic Zones working with chinese authority to address instance of customs fraud and under invoicing. There are a few examples how trade with BRICS partners has assisted the South African economy and the necessity to enhance trade with BRICS partnership and other countries of the world with equity and mutual benefits on world trade system.
It is only through multilateralism that we will see transformed and maturely inclusive benefit work trade regimes for all developed and underdevelopment, including the developing nations. We need entrenched multilateralism to bring an end to the unilateral decision of the western world to destroy economics that do not toe the line with them. We emphasise this point because the United States of America demonstrated this by threat South Africa faced on the termination of Agoa informed our non-aligned stance in Russia and Ukraine conflict. The withdrawal of Agoa would have impacted the South African farmers negatively. It is counter production to have economic development of one country threatened by the unilateral action of another. Thank you so much, Chairperson.
Mr D BERGMAN: Chair, thank you very much. I will also have to please keep my video off. I must just have to say that I look forward to the day when we can have our speeches immediately fact-checked. Based on the abuse hurled at my poor colleague who, I should note, has been subjected to months of gender- based violence, I would say that we are talking about multilateralism, but it sounds like the ANC is talking more about division, and that, of course, is currently the manifesto of the ANC.
But when we talk about multilateralism we debate today and emphasise the significance of multilateralism in advancing inclusive growth and sustainable development for the South African economy. As proponents of a social market economy, we understand that fostering co-operation and collaborations on a global scale is essential for our nation’s prosperity and the well-being of our citizens.
Multilateralism at its core is the belief in collective action and shared responsibility. It recognises that no country can thrive in isolation and that our interconnected world demands co-operation to address the complex challenges we face by embracing a multilateral approach. We will unlock the full potential of our economy and ensure that the benefits of growth are enjoyed by all South Africans. However, when we speak about multilateralism, we must understand that not all organisations are equal, and not all organisations yield the same benefit.
The DA has been pushing the government for a long time to relook its membership in many bodies it belongs to see what their membership is buying the ratepayers of South Africa. How does being a member of those particular groupings affect our trade security and global image?
One of the best means tests was during COVID-19, which organisations were we able to derive benefit from, and which were we disappointed by in times of lobbying and voting, how much input and influence has our membership fee brought us, compared to the benefit in some of these membership forums.
Secondly, multilateralism should promote inclusive growth. It recognises that economic progress should not be limited to a privileged few, but should uplift all segments of society.
Through international co-operation, we can foster an enabling environment for trade, investments and innovation. By removing barriers and promoting fair competition, we create opportunities for small and medium enterprises, entrepreneurs and marginalised communities to participate in the global economy.
Furthermore, multilateralism is crucial for sustainable development. As custodians of our environment, we have a responsibility to address climate change. Protect the biodiversity and to promote sustainable practices. By working together with other nations, we can share knowledge resources and best practices to tackle these global challenges.
Multilateral agreements provide a framework for collective
action, ensuring that our efforts are co-ordinated and impactful.
In the context of the South African economy, multilateralism opens doors to new markets and investment opportunities. That is why the Minister mentioned the Western Cape quite often in the Portfolio Committee of Trade and Industry and Competition in his report. By engaging in international trade agreements, we can expand our export base diversify our economy and attract foreign direct investments. This not only stimulates economic growth but also creates jobs, reduces poverty and improves the standard of living for our citizens. However, we need to play our part domestically by ensuring that we are seen as a viable destination for investing in business prospects.
Load shedding, corruption and government going bankrupt are not the types of adverts that attract the sort of direct foreign investment. Moreover, multilateralism strengthens our voices on the global stage by actively participating in international organisations such as the United Nations World Tourism Organization, UNWTO, and the African Union, AU. We can shape global policies and advocate for our national interests.
Through diplomatic engagement and collaboration, we can build alliances that foster goodwill and promote South Africa’s powerful political presence on the strategic continent.
However, when we act blind to blatant election transgressions in Zimbabwe or miss opportunities to create peace in Botswana, we show the world that we cannot even make a political contribution on a Southern African Development Community, SADC, level, let alone speak out against the coup d’états in West Africa or bring stability to Cameroon. And close off long-term outstanding items on the African Union agenda.
It is important to acknowledge that multilateralism is not without its challenges. It requires compromise, negotiation and a commitment to finding common ground. As proponents of free market policy, we must ensure that the multilateral agreements uphold the principles of free trade, open markets and respect for property rights.
We must guard against protectionism and unfair trade practices that hinder our economic potential. With regard to Brazil, Russia, India, China, and South Africa, BRICS, the newfound partners are not the shining example to save us from these challenges and indeed can pull us deeper into debt.
In conclusion, Chairperson, multilateral, is not a choice but a necessity for the South African economy. It is through international co-operation guided by liberal free-market principles that we can achieve inclusive growth and sustainable development by embracing multilateralism, we can expand our economic horizons. Thank you.
Ms J HERMANS: Hon Chairperson, the debate today was necessary for this House, as Parliament also prepares for the Brazil, Russia, India, China, and South Africa, BRICS, Parliamentary Forum from 27 to 29 September, to discuss measures of co- operation and intensified multilateral relations.
South Africa has much to gain from BRICS from the BRICS partnership. This partnership has changed gears and is accelerating at a rapid pace. The ANC has consistently advocated for advanced co-operation in areas such as science and technology, healthcare education infrastructure development and expanded market access. We believe these are some of the direct benefits efforts that will be derived from this partnership.
The ANC has consistently advocated for enhanced operations in areas such as science and technology -I am repeating myself.
South Africa engages in ongoing bilateral discussions with trade and investment partners around the world, often part of wider bilateral engagements led by the Department of International Relations and Co-operation, DIRCO, and or the Presidency.
Hon Chairperson, we need to minimise our reliance on one main source of exports for our produce and assets. Diversifying our exports is essential for our sovereignty, food security transformation and inclusive growth. The United States is our third-largest trading partner. We value this and need to keep relations amicable with the US and all other trading partners. However, what we will not do as the ANC is to allow ourselves to be vulnerable to the dictates of one global power. It should be the concern for all of us that global power resides within Western imperialism.
We are for respect equal partnership and mutual benefit in trade relations. Our overall approach is to promote South African exports of higher-value products and encourage inward investment. Build on existing areas of co-operation and identify new areas of co-operation with the specific elements that vary among the different partners. That is what
multilateralism is about, which represents the essence of what democracy is.
The threats we received from the US on terminating the African Growth and Opportunity Act, AGOA, because we refuse to take sides in a conflict that has at its core the fight to maintain United clarity is not part of our foreign policy. Neither is it part of the overall objectives of the kind of world that the United Nations envisages.
The principal partnership for multilateralism has at its essence the UN Charter and I would advise those who do not understand the basis of the relationship with bricks to give themselves the time to understand why the relationship is so important for South Africa and the African continent.
As the ANC, we reiterate our unequivocal position that we are friends with all countries in the world, and we are enemies of none. I thank you, Chairperson.
Debate concluded.
THE IMPACT OF UNREGULATED INFORMAL SECTOR THAT GIVES RISE TO THE CIRCULATION OF COUNTERFEIT PRODUCTS, ILLICIT CASH FLOWS AND OTHER SECURITY VULNERABILITIES TO THE COUNTRY
(Subject for discussion)
The HOUSE CHAIRPERSON (Mr M G Mahlaule): Hon Zungula, I can see that you are speaking but we cannot hear you.
Mr V ZUNGULA: Oh, my apologies, Chair, and thank you for pointing that out. It is a painful disappointment that we have to introduce such debates as a country does have laws to prevent the circulation of counterfeit products, illicit financial flows and security vulnerabilities. The poor enforcement of such laws has turned our country to be the world’s playground where people come from anywhere and everywhere to play with the health of citizens, drain the economy and pose serious security risk.
The laws are very clear that if you are not a South African citizen and you want to operate a business, firstly you must be legal in the country, invest a minimum of R5 million, 80% of the staff employed must be citizens, you must use an SA
bank account and the company must be registered with the Companies and Intellectual Property Commission, CIPC.
The reality, however, paints a different picture. People come and do as they please, whilst doing their utmost best to displace locals from the economy. South Africans, black South Africans in particular, are being excluded from participating in their own economy because the country has become a free for all. I dare say, South Africans are poorer as a result.
The informal economy is worth over R400 billion per annum and the real pity that the lack of regulation and enforcement of laws has made South Africans to be spectators in this part of the economy. What is common cause is the number of counterfeit products that are in circulation in this sector of the economy, and with that the state loses taxes, people lose jobs, and legitimate companies lose their profits as a result of counterfeit products.
Our concerns are many. Firstly, counterfeit clothing has flooded our inner cities and kills an already ailing legitimate textile industry. These products are always untaxed and thus add no value to our economy and national fiscus. We do not know where the money made from the sale of these
products go to nor what it is used for. These products cause a strain on our health system, which is already under resourced. We do not know what ingredients go to the illicit foods, drinks and cigarettes. Thus, we do not know what effects they have on the people.
Illicit pharmaceutical products which fail to pass our quality standards are causing continuous health concerns for our people, and at times even make them worse than what they already are. We need to call this for what it is. It is poisoning; it is biological warfare, and the state is turning a blind eye to our citizens being killed with fake and expired foods.
It is reported that South Africa loses $62 billion US per annum to illicit financial flows. This money could be used to fund infrastructure projects that go a long way in eliminating poverty and unemployment. It is also reported that spazas and general dealers that are operated by people who are illegal in the country, fund terrorist activities. Basically, the country not enforcing laws is indirectly responsible for some terrorist activities.
The fact that these traders are illegal in the country and do not use SA bank accounts makes it easier for them to move monies around and fund terrorist activities. The porous borders enable all this criminality. Gun and drug trafficking, goods smuggling, and human trafficking is more commonplace in our country. The lack of action from the government to address this core problem makes it complicit in all of these crimes.
How can the government allow people who are not known and vetted to settle in our communities. When such people commit crimes, they can’t be traced, meaning the government is allowing possible criminals and terrorists to settle freely in our communities and it is the poor and vulnerable that bear the brunt of the government’s carelessness. When these people commit crimes, they just switch communities or go back to their countries and citizens never get justice. This is a painful reality of ... [Inaudible.] ... must be vigorous in strict border management controls, so the movement of people, goods and cash can be tracked.
The Department of Small Business Development must employ inspectors to ensure all traders are trading in line with the respective laws. The Department of Health must ensure health inspectors verify that all the food sold is safe for human
consumption. The Department of Finance must ensure such traders are using SA bank accounts and, most importantly, pay their applicable taxes. How can a person coming from Asia or Europe benefit from the country’s infrastructure, run businesses and make profits, but contributes nothing to the fiscus?
The Department of Home Affairs must do their work and ensure that all people are in the country legally and those who aren’t in the country legally must face the full might of the law. The police must raid such establishments and free all people who have been trafficked and all the weapons and drugs must be confiscated and destroyed. The South African Revenue Service, SARS, needs to enforce taxation and customs duties on all products that enter the country.
This matter of the unregulated informal economy is not only making South Africans poorer, but they are also displaced from the economy and huge security risks are becoming a reality. We saw what happened in Gqeberha when Somalis were burning taxis of South Africans and we saw weapons of war. I thank you, Chair.
The DEPUTY MINISTER OF SMALL BUSINESS DEVELOPMENT: Thank you
very much, House Chairperson. I want to take this opportunity to recognise the Ministers and Deputy Ministers who are on the platform, chairpersons and whips, hon Members of Parliament, hon Chairperson, please allow me to confine my input to three key themes. The first theme is about the definition of the informal sector and how to distinguish it from the illicit economy, which is the subject of this debate. The informal sector is that part of the economy that is neither taxed, nor regulated by any form of government. Here we need to take a multidimensional view of the informal sector.
We need to differentiate the informal sector that provides livelihoods, opportunities to millions of the country’s most vulnerable individuals, such as the urban poor, the female heads of households, disabled people, and rural based families, from the illicit underground economy, run by organised criminal syndicates. The illicit economy run by syndicates, involves products and services which are illegal, including narcotics and illegally imported counterfeit products, cigarettes and alcohol and even human trafficking. With proceeds of these transactions, a major source of funding for organised crime and terrorist organisations. This is a global problem. Illicit international trade is estimated at
$650 billion annually with illicit financial flows, estimated to be about $1,3 trillion. This criminal illicit economy deprives the South African economy of much-needed revenue.
Constraints local industrialisation, for example in the case of clothing and textiles and its leading state assets being vandalised and stripped, like in the case of the scrap metal that is happening in our country. To combat this illicit economy, the ANC government has formed an Inter-Agency Working Group to strengthen the investigation, detention, and combating of illicit trade and financial flows.
There’s also increased collaboration with regional and international law enforcement agencies. Over the past few years, there have been confiscation and seizures of billions of rands’ of illicit goods, mostly at our ports of entry.
Hon Chairperson, having differentiated the informal economy that sustained South Africa’s poor from the illicit economy run by criminal, I will now turn to my second theme which speaks to the positive contribution that the informal sector makes to the economy, given the nature of the informal sector, it is not always easy to precisely quantify the size and economic impact. The most reliable data we have is from Statistics South Africa, which represents 13% of the
economically active population and one point the data shows that there are about 2,8 million people who are either self- employed or work in the informal sector in about 1,8 million enterprises. Like I said earlier, it represents 13% of the economically active population at a modest dependency ratio of 53%. This means that more than 5 million South Africans are sustained through the informal sector. Obviously, complementing by the ANC’s government’s comprehensive system of social protection. This is still small compared to other comparative developing economies where self-employment is between 25% and 40%.
We need to be enabling entrepreneurship and self-employment, and much of this starts in the informal sector. The informal sector plays a critical role in sustaining macro economies, especially in the townships and marginalised rural areas. The informal sector is a key contributor to the household income of the poor. According to Statistics SA in the 2017 survey around two thirds of informal businesses, make more than R750 per month, with 14%, earning more R6 000 per month. This translated into about R30 billion a year into the macro economies of some of the poorest communities. The informal food economy of street traders and takeaways also provides a key source of food for the poorest and most insecure
households. The informal waste pickers reduce waste to landfill and our critical core in the circular economy. I could go on and on but the point is clear, micro informal businesses in our township and rural areas add huge value to their macro economies.
I will now turn to my third and final theme. What can we do as an ANC government to support the informal sector? What have we done already? As a government, our approach is drawn from the policy direction of the governing party, the African National Congress, is clear that much of the Agencies for growth, jobs and transformation will come from SMMEs, including the informal sector. This is followed through into the National Development Plan, which suggests that 9 million of the
11 million jobs we must create by 2030 must come from SMMEs.
Two million of these new jobs should come from macro informal enterprises.
The ANC is also clear that economic birth must be brought into life with a distribution of political benefits. SMMEs are a key to realising economic empowerment and self-reliance. We shouldn’t be clamping down and frustrating the informal sector. We have heard, as a department, about some of the informal sector role-players who sell at the taxi ranks being
harassed by the police. We need to better understand the challenges faced by the informal businesses. Like, for example, some of them sell in areas where there are no ablution blocks, and they need to have access to those and how to support them grow into formal taxpaying enterprises. There are obvious benefits of formalisation.
Our informal panel beaters and auto mechanics in the townships are excluded from auto repair markets because they are not recognised by the insurance agencies. Access to markets was identified as the single biggest challenge faced by informal enterprises. This was followed by access to safe trading spaces, access to funding and red tape. Our support intervention needs to be guided by the needs of informal businesses as we need to continually engage with them, and they are representative structure. As the Department of Small Business Development, we are responding directly to these needs. We are reviewing our national informal business upliftment strategy and are rolling out several programmes to support the informal sector. The informal sector role-players of South Africans were not talking about the spaza shops owned by foreign nationals, illegal foreign nationals. In most of the instances, we are addressing the issue of safe trading spaces with all the necessary infrastructure through our
shared economic infrastructure programme, through which we partner with provincial governments and municipalities to develop markets and trading hubs in townships and rural areas.
This year, we are establishing seven such facilities. We need to put this to scale and call on the other spheres to partner with the department. We are addressing the need for equipment and working capital through the informal and micro enterprise development program, which is a 100% grant offered to informal and micro enterprises, from the minimum grant amount of R500 up to a maximum of R15 000.
This year, we are allocating R20 million to this programme. We have also a number of funding instruments. These include the Township Rural Entrepreneurship Programme, which provides a step-up platform for informal enterprises and support businesses, including bakeries and for confectioneries, butcheries, clothing and textile businesses, taxi and automated maintenance and repair and other trades.
This year’s allocation for Trap is R909 million. Linked to this, we have a partnership with the Wholesale and Retail Seta through which we are targeting 3 000 spaza shops and General Dealers who will be receiving stock up to 6 000 and training
on stock management. We also have a micro-finance programme through Sefa, where we provide group lending facilities through micro-finance institutions that support mainly rural women operated informal enterprises in Limpopo, Mpumalanga, KwaZulu-Natal and the Eastern Cape. This year we are targeting
90 000 enterprises. Sefa is currently engaging the micro- finance sector to reduce the cost of financing to the end user micro enterprises.
We have also developed an SMME and co-operatives funding policy to look at how the R350 billion SMME credit that can be addressed. The policy has been gazetted for public comment.
The National Treasury has also developed a financial inclusion policy. The ANC government is serious about economic inclusion we are also serious about addressing red tape. Here we are establishing Small Enterprise Ombuds through the proposed amendments to the National Small Enterprise Act. We are also amending the Business Act, Act No 71 of 1991. Currently, municipalities have their own systems and procedures as well as cost structures which have created various to doing business, especially for informal businesses. The Amended Business Act will establish a common business licensing framework, licence fee thresholds and give the Minister regulatory powers to intervene in business licensing processes
where necessary. The amendment will also provide for the establishment of intergovernmental structures on business regulations and business licensing. We are working closely with Salga and the Department of Cogta and are also supporting municipalities with their red tape reduction work as part of the District Development Model.
Hon House Chair, we are serious about supporting informal businesses. Supporting informal businesses is key to growing the feedstock of entrepreneurs. We need to empower the country’s growth and job creation. We cannot do this on our own and will be working with all role-players in the SMMEs and co-operatives support ecosystem to achieve this. This is what is contained in our National Small Enterprise Development Strategic Framework and what was agreed on with all key SMME stakeholders in our summit last year. We are busy teaching these partnerships together, we will not fail, and we will not leave any of our small businesses, especially the informal and micro sectors, behind. I thank you, Chair.
Mr A C ROOS: House Chair, South Africa’s vibrant informal trade includes success stories of township takeaways, healing herbs and what G G Alcock, in his book KasiNomics, rightly refers to as, “societies of extraordinary women”. Their Kasi
stokvels provide buying power and financial services to more than one in five South Africans, but the informal sector is broader than spazas and retail and has a dark side that is the subject of this plenary.
When we think about South Africa’s unregulated informal sector, we need to start by recognising that many South Africans are forced into our informal sector through crippling unemployment. More people in South Africa today are on grants than in work. Seven out of 10 young people in this country, many of them graduates, cannot find work. Then there are the South Africans who cannot get a birth certificate or an ID and the numbers are alarming. In the Phakamisa case, the Department of Basic Education revealed to the court that there were over a million learners enrolled in our schools who are undocumented, of which 8 out of 10 are South African. The DA believes a fair society is one in which our achievements are determined by our own choices and hard work, not by the circumstances of our birth, but almost half of Grade 1 learners drop out of school before matric and what do they do if they could not get documented?
The DA has proposed that mobile units must visit every school on a multi-year schedule and undocumented children in schools
who have been abandoned or whose parents are not in their lives be referred to the nearest Department of Home Affairs office to resolve each case in conjunction with the Department of Social Development. This has become a resolution of the Portfolio Committee on Home Affairs, but every time we raise it the Department of Home Affairs shrugs its shoulders and talks about foreigners, and so these children grow into adults who are shut out from opportunities with no prospect of getting a job, a driver’s license, receiving a grant or being able to participate in the formal sector.
Seventy per cent of informal traders in the Southern African Development Community, SADC, region are women. However, figures published by Statistics SA in 2021 show women’s share of the informal sector in South Africa is shrinking. An Organisation for Economic Co-operation and Development, OECD, Study on Tackling Vulnerability in the Informal Economy found that risks and vulnerabilities associated with the informal economy disproportionately affect women.
This includes physical security threats in a cash-based environment and healthy working conditions. The study found that public health systems play an important role in collecting data on the health and safety of informal workers.
In South Africa, these most vulnerable groups are left unassisted by an uncaring government, subject to the whims of kingpins and competing against foreigners who receive better education and have access to capital through their networks.
Of course, our porous borders have an enormous role to play in the free flow of counterfeit goods and other security vulnerabilities experienced in the informal sector. It is fitting that our Department of Home Affairs Minister was praised recently for saving a person on a plane by allegedly smearing sugar on his tongue, because for those who may not know there is an Afrikaans idiom ...
Afrikaans:
... smeer heuning om ons mond.
English:
This means to butter someone up by telling them stories. We are told that the ANC government are serious about borders and is forming a Border Management Authority, BMA, but after hiring a cadre of millionaire managers and integrating staff from different departments at border posts by increasing their salaries to the highest common salary, the BMA this year asked
for R2,9 billion to do its job but received a mere R250 million. They are just not serious.
A 2022 study on Undocumented Migration, Cross Border Crime and The Role of Technology in Securing Borders finds that South Africa’s weak border controls are an indictment of a weak government with no plan and sadly cross border syndicates have become well entrenched. Under the ANC the number of border patrols has reduced from 35 to just 15 companies. A DA government would increase this number to tackle illicit trade, wildlife poaching, drug and human trafficking, migrant smuggling, organised crime, terrorism, stock theft, and unchecked irregular migration. As it stands, we have a mix of undocumented foreigners able to come and go as they please and vulnerable South Africans struggling to compete. In response, the DA called a Joint Parliamentary Committee meeting in October 2019 and called on Minister Motsoaledi to facilitate an Intergovernmental engagement specifically with our metropolitan municipalities and the SAPS on the roles, responsibilities and funding when dealing with legitimate concerns of South Africans competing with irregular foreigners and pedlars of illicit goods in an unregulated informal sector.
To date, the Department of Home Affairs Minister has done little to nothing, opening the way for vigilante groups to violently deal with the situation and in many cases chase South Africans away from their place of business in the process. The DA will work on these much-needed Intergovernmental frameworks to deal with the legitimate concerns of South Africans living in our cities and work towards SADC regional integration systems and protocols to make the movement of goods and persons safer and more secure at our borders. The DA has a vision of an open opportunity society for all, not only the connected and the corrupt. Where South Africans can compete fairly in formal and informal markets and build a life they value. We must stop these corrupt and callous cadres, we must register and we must vote. Thank you, House Chair.
Ms M R MOHLALA: Chairperson, allow us to first address what many might take for granted, but it is incorrect for the debate today. Firstly, we are discussing organised criminal syndicates that use illegal means to introduce goods into the country and bring in money claiming they are purchasing buffalos in Bela-Bela when in truth this money is part of illicit cash flows. Chairperson, we are referring to people, whether it is a President or his farm manager, who undermine
the security of our country to engage in this meticulously organised underworld of crime.
We aren't simply addressing an unregulated informal sector; we are dealing with criminals integrated into the broader global criminal economy. We are dealing with money laundering that funds terrorist organisations. We are dealing with counterfeit goods in the black market that sneaked into the country bypassing our laws, not just to evade tax but also to conceal goods produced by international criminal syndicates, infringing on intellectual property. House Chair, we are speaking of ... [Interjections.] ...
The ACTING HOUSE CHAIRPERSON (Mr M G Mahlaule): Hon Mohlala! Hon Mohlala! Just a second. My apologies. Hon Papo, your hand is up.
Mr A H M PAPO: Chair, on a point of order: Is it parliamentary for a member to make defamatory allegations of criminality against the President without us debating a specific substantive motion? She made those comments about the President being involved in organised crime and so on and the Rules being clear that you can't do that without a substantive motion.
The ACTING HOUSE CHAIRPERSON (Mr M G Mahlaule): I will check that and get back to you, Hon Papo. Can you proceed, Hon Mohlala?
Ms M R MOHLALA: ... individuals who are fully aware that their actions constitute a crime. It is not merely because of a lack of regulation or weak oversight, it is outright illegal, thus to label it an unregulated informal settlement is both a mischaracterisation and misleading, we felt the need to clarify this from the outset. Going back to 2014 when the EFF arrived in Parliament, we raised the critical issues of illicit financial flows and the crisis of base erosion coupled with aggressive tax avoidance. This doesn't just concern individuals in Small Street in Johannesburg or Marabastad in Tshwane selling illegally imported counterfeit items. Big companies across sectors, be it mining, telecommunications, banking or retail, are involved in aggressive tax evasion.
Banks are engaged in questionable forex manipulations. We must not be side-tracked or misled into thinking this only pertains to a group of foreign nationals operating spaza shops. We are not saying there are no issues with spaza shops in townships and rural localities selling expired counterfeit goods and practising poor hygiene.
We acknowledge these problems and consistently raise them. We are pinpointing a much broader systematic issue, an economy rooted in illicit activities. We must revamp the entire tax framework to eliminate all avenues for aggressive tax evasion. The SA Revenue Service, Sars, needs to build its internal capacity to target multinational corporations explicitly. The same zeal they apply to monitor attendees of the EFF gala dinner should be directed at these global entities. We have advocated for a multidisciplinary task force encompassing Sars, the SAPS, the Hawks, the Financial Intelligence Centre and the SA Reserve Bank for collaborative action. Currently, these bodies operate in isolation. For instance, while Sars might assert Mr Ramaphosa’s declaration of the Phala income and claim his tax affairs are in order, the SA Reserve Bank must state no such income or transaction has been recorded.
Our challenges extend beyond tangible goods and cash. We are also confronted with online illicit transactions and dealings involving multinational firms not bound by specific legislation or taxation. To counteract these criminal elements, some of whom occupy high-ranking positions, we need to implement these urgent and necessary measures, including introducing new legislation. Thank you so much, Chair.
The ACTING HOUSE CHAIRPERSON (Mr M G Mahlaule): Hon members, there was an issue raised by Hon Papo, which I duly went back to listen to and I did not find any direct accusation to the President. The language of the member was generic and, therefore, I do not see anything that the member has said that warrants an unparliamentary language. Thank you very much.
Mr F J MULDER: Hon Chair, the informal economy, also known as the informal sector or grey economy, is neither taxed nor monitored in any way. Although the informal sector makes up a significant portion of the South African economy, it is often stigmatized as troublesome and unmanageable.
While offering the advantage of employment flexibility for some, a large informal sector is associated with low productivity, reduced tax revenues, poor governance, excessive regulations and poverty and income inequality.
According to a 2021 survey of Statistics SA, StatsSA, jobs in the informal sector account for nearly one–third of the national ... thus total contributing about 6% of the Gross Domestic Product, GDP.
Chair, the relationship with South African trade partners is jeopardized because cheap counterfeit products cause unfair competition for authorized distributors and the South African government, which is already virtually bankrupt, and it also generates less tax, of course.
Afrikaans:
Die Suid-Afrikaanse regering se onvermoë om die ekonomie te laat groei en ontwikkel is die direkte oorsaak dat die informele sektor uit wanhoop ontstaan het en groei.
Swak regulering en wetstoepassing asook korrupsie laat die deur oop vir onwettige invoere en geldwassery, terwyl werkers in die informele sector geen beskerming teen uitbuitery geniet nie.
Die situasie is die direkte gevolg van ’n regering, wat nie meer in beheer is van ’n gesonde sakekultuur nie, en min vertroue by Suid-Afrikaners en die internasionale gemeenskap inboesem. Dankie.
Ms T L MARAWU: House Chair, I stand before you to address a pressing issue that has a profound impact on our country, particularly on our women, the unregulated informal sector and
its role in the circulation of counterfeit products, illicit cash flows and other security vulnerabilities. It is crucial that we understand the gravity of the situation and disproportionate burden it places on women in our society.
As ATM we are aware of the fact that the informal sector is a significant part of our economy, providing livelihoods for countless individuals, especially women. However, the lack of effective regulation in this sector has given rise to numerous challenges that affect women in unique ways.
One of the most troubling consequences of an unregulated informal sector is the proliferation of counterfeit products. These counterfeit goods are often substandard and cause severe risks to the health and safety of consumers.
Women, as primary caregivers in many households, are often responsible for purchasing and using these products, putting them at a greater risk of harm.
We cannot ignore the fact that some other scrupulous individuals are selling counterfeit sanitary towels to our women. This is not merely a matter of deceptive comments, it’s an affront to the health and dignity of our mothers, sisters
and daughters. These counterfeit products endanger their wellbeing and undermine their self-esteem.
The consequences of such exploitation are dire, leading to health complications and a loss of confidence that affects all aspects of life; from counterfeit cosmetics and pharmaceuticals, to fake clothing and electronics.
The prevalence of these products not only endangers the health of women, but also undermines consumer confidence and damages the ... [Inaudible.] ... businesses.
Under the issues that demand our attention is the use of women as conduits to deposit money in foreign companies. Money transfer institutions like Mukuru have been exploited in this regard, siphoning valuable resources out of our nation. This is not only robbed us of much needed funds for development, but also places the women involved in these transactions at great risk. They become unwitting victims of illicit financial flows caught in a web of exploitation.
To address this, we must strengthen our financial regulation and co-operation with international partners. We must
implement measures to identify and ... [Inaudible.] ... those involved in these illicit activities.
Moreover, we must provide support and guidance to those who have been victimised, ensuring they are not left to bear the burden alone.
Lastly, we must recognise the link between illicit financial flows and poverty in our country. The money that plagues our borders through these illicit channels could otherwise be used to uplift our nation, provides for our citizens and invest in vital infrastructure and social programmes.
The continuing culture of illicit financial flows contributes to the perpetuation of poverty ... [Inaudible.] ... our economic growth and development.
Addressing this issue is not a choice [Time expired.]
Ms G P MAREKWA: Hon Chair, counterfeit goods are costing our economy billions yearly, in the loss of tax revenue.
Counterfeit goods affect all sectors including but not limited to the clothing, manufacturing, engineering and pharmaceutical sectors of our country.
Counterfeit goods are mainly sold in the informal sector, which is one of South Africa’s largest economies and contributes greatly to job creation of an economic development.
This is not to say that only counterfeit goods are sold in the informal economy, not that the informal market is wholesale unwanted.
Chairperson, unfortunately, commercial crime is also increasing in South Africa. During the first quarter of 2023-24 financial year, commercial crime increased by ... [Inaudible.] ... point eight percent compared to the same period of the previous financial year.
Between April and June 2023 the SA Police Service, SAPS, recorded 29 753 commercial crimes. Not all commercial crimes, however, involves counterfeit goods. I think that is very important for us to note.
Commercial crime ranges from fraud, forgery, insurance fraud and counterfeiting of currency. The counterfeiting and an illicit trade in ... my apologies, Chair. Counterfeiting and
illicit trade in counterfeit products and goods to intellectual property rights, amongst others, are included in that.
The Provision of Counterfeit Goods Act are enforced by various disciplines in the SAPS including the detective services, the specialized intervention services such as the National Intervention Unit, the Border Police Division and the Directorate for Priority Crime Investigation, that is commonly known as the Hawks.
In 2020-21 the Hawks received 54 cases related to contravention of the Counterfeit Goods Act of 1997. Through their investigations and tireless efforts, convictions were secured against 15 accused persons with the potential value of R168 million. That is proof to show that this government, the ANC government, is working and doing ... making efforts in making sure that the issues of counterfeit goods and those who are involved in commercial crimes in this country are dealt with.
In 2022 the National Intervention Unit performed 339
self-initiated operations, intelligence driven operations as
well as planned and targeted deployments to address specific incidents of crime.
The respective units conducted operations on gangsterism, firearms and ammunition, drugs, stolen vehicles and counterfeit goods.
The ports of entry environment or border policing profiles such as vehicles at land ports, containers at sea ports and cargo at airports that are identified as high risk, focusing on suspicious persons and vehicles, goods from identified risk countries and the commission of serious crimes including illicit drugs ... [Inaudible.] ... illegal firearms, stolen vehicles, consignments, smart persons, counterfeit goods and contraband.
Hon Chairperson, in July this year a multidisciplinary team from the SAPS clamped down on a sophisticated counterfeit goods syndicate in Cape Town. The take down operation seized counterfeit goods with an estimated street value of more than R100 million. The goods comprised of assortment of well-known clothing brand and illicit tobacco products.
Similarly, earlier this year the police arrested several people found in possession of counterfeit goods worth
R3 million during a raid in the Johannesburg, Central Business District, CBD. This was the culmination of a joint operation consisting of the SAPS, Metropolice, SA Revenue Service, SARS, and private security companies.
In May, again this year, the SAPS seized a container filled with counterfeit goods to the value of around R400 million at the Durban harbour.
These are just some examples of successes by the SAPS to enforce the Counterfeit Goods Act and bring perpetrators to book.
We need stronger partnerships between government, industry partners, consumers, to fight the proliferation of counterfeit goods and other commercial crimes.
We must, further, strengthen our domestic economy to combat commercial crime. Counterfeiting has increased, but not to a degree as it is exaggerated by ATM.
Most counterfeit goods across various formal industries and value chains in textile, clothing, digital technology and pharmaceutical are imported. Therefore, asserting that counterfeiting is heavily driven by informal sector is a bizarre neglect and ignorance on the part of the ATM.
In short, the ATMs motion is logically inconsistent, if not theoretically indefensible at best.
In conclusion, Chairperson, the ANC government is currently at work to strengthen and to clamp down on counterfeit goods, especially at ports of entry to ensure that no counterfeit goods and undocumented foreign nationals enter our country. I thank you, Chairperson.
Ms W R ALEXANDER: Good afternoon, Chair.
The HOUSE CHAIRPERSON (Mr M G Mahlaule): Hon Alexandra?
Ms W R ALEXANDER: Let me switch my camera on. Thank you. In the words of one of Mi Casa’s well-known songs from which I draw inspiration, it says: “The streets we live upon the streets we walk upon they give us life.” Because of unemployment rise and the rise of the cost of living, many
people are forced to work in the informal economy, particularly street trading. It is difficult to measure the size of the informal economy, but studies indicate that more than 60% of employed people work in it, worldwide. Africa has over 80% and this trend is increasing.
It is the responsibility of local government to create bylaws governing informal trading. In spite of this, the metropolitan authorities have forced several informal traders out of their livelihoods. Trade permission is granted only after leases are issued and applicants wait months for permission to trade. If informal trading isn’t well through ... [Inaudible.] ... economy proactive informal trading policies can be an important urban management tool.
South Africa’s informal economy plays an important role. Employment growth is a priority for this country and it is fundamental because of the limited employment and insufficient skills in the formal sector. Employment as an important part of the informal economy must have a symbiotic relationship with the formal economy. And opposed from punishing and forcibly removing individuals who are struggling to escape the worst ravages of poverty, we should be taking steps to create open spaces for development and a thriving informal economy.
After the complexities of informal trading, one of the complexities of informal trading is the illicit activity that brings substantial risk. Illicit trading is one of the biggest threats to the sustainability of the economic growth for South Africa. For example, illicit cigarette sales increased to at least 54% in 2008 from 34%. Transnet has reported 177% increase in copper cable theft and in the last five years alone, abalone poaching has increased significantly. It is estimated that this illicit trade costs South African economy R100 billion every year. The South African economy ranks as one of the largest and most diverse in Africa. However, we are faced with multiple challenges from illicit trade as a result of this diversity.
The counterfeit goods market is an epidemic in South Africa and presents unfair trade to almost all consumer sectors. This contributes to the trapping of employment in the informal sector, robs the government of tax revenue and exposes consumers to poor quality goods and health and safety risks.
The government should be well placed to find solutions to change that and prevents us from the estimated crime.
In order to improve this ability to defend against illicit trade, the government can implement a number of measures,
first of which should be to address the informal cross-border trade. We must prioritise strengthening the co-operation between neighbouring countries to establish an interagency anti-illicit trade co-ordinator can also go a long way.
However, it would require a concerted, sustainable and joint effort between all responsible government bodies, in particular customs, law enforcement and the judiciary must be held accountable to prevent illicit trade. While South Africa’s war on corruption introduces valuable measures that can help reduce the illicit trade, any attempts to strengthen border control and policy will be limited, as long as corruption persists within agencies. A balance needs to be struck between formal and informal trade, all underpinned by the rule of law. Thank you, Chair.
Ms V S SIWELA: Chairperson, the debate on the informal sector has once more gained ascendancy in our Parliament. Perhaps more controversial in this debate is the ATM’s elite-centric, much less flawed, basic intuition that workers, self-employed entrepreneurs and enterprises in the informal sector must be treated as criminals subject to evictions, confiscations and harassments as the informal sector is misconstrued as illegal and or underground production. This is a racist stereotype of thriving black businesses in the informal sector. But the
ATM’s irresistible temptation to adopt violent removals, confiscations and everyday harassments as apt responses to the challenges that beset South Africa’s informal sector, is not without problems.
Equally, problematic is the undertone of the ATM’s basic intuition that the informal sector is an antithesis to capitalist development since it contributes little to the country’s GDP, and thus incapable of self-generated growth and development. It is based on this distorted recollection of reality that the ATM presumes that the formal and informal sectors are diametrically opposed and that the informal sector hinders the material basis necessary for rapid economic growth and sustainable development.
Ironically, cracks have begun to emerge in the presumption that no connection, whatsoever, exists between the formal and informal sectors. In particular, there is increased recognition that much of the informal sector today is integrally linked to the formal sector and therefore contributes to the overall GDP. Supporting the workers, self- employed entrepreneurs and enterprises in the informal sector is a key pathway to reducing poverty and inequality, which is very, very important and I want to reiterate this – poverty
and inequality. For example, most self-employed entrepreneurs and enterprises in the informal sector source key inputs from and or supply finished goods to formal firms either directly or through intermediate firms.
Just to illustrate, 82 per cent of the SA Breweries’ final point of distribution for its products is the informal sector, particularly shebeens and taverns whereas Unilever supplies between 145 000 to 175 000 informal traders with its products.
In the same vein, Gold Leaf Tobacco uses the informal sector as the final point of sale for products such as Voyager, Sharp, Sahawi and RG cigarettes. Similarly, the practice by Coca-Cola of offering refrigerators to informal traders such as spazas, shebeens and taverns for exclusive brand use highlights the benefits of the informal sector to overall economic growth in the country. To be sure, sourcing key inputs from, or supplying into or even being the final point of distribution for the formal sector ensures that the informal sector contributes at least 6% to the country’s GDP. This poses the possibility that the informal sector might reset the endemic flaws that our democracy was born with. For instance, South Africa’s high level of informalisation of the economy is the direct consequence of apartheid regime’s
discriminatory practices that, among other things, criminalised business activities by black people, blocked alternative sources of income for black people and raised barriers to entry to prohibit black people from entering the mainstream economy. As such, most of the workers, self- employed entrepreneurs and enterprises do not choose to work in the informal sector but do so out of necessity and socioeconomic conditioning inextricably linked to the apartheid regime.
Statistics South Africa is more clear-eyed about the lingering legacy of apartheid regime’s socioeconomic conditions as it has reported that more than 4,5 million people are in informal employment.
IsiZulu:
Labo ke amaspaza, abashayeli bamatekisi, abasebenzi abakhayo, abahlinzeki bokufundisa[educare providers], abathungi, ukusebenzisa kabusha [recircling] le nto yokukhuluma ngabezizwe ...
Xitsonga:
... ku nga vulavuriwi hi Maafrika-Dzonga, swi hoxekile.
English:
In addition to this, Statistics South Africa also reported that approximately one million people work in informal retail, which is an intrinsic source of food for destitute households in general and food insecure households in particular. Because what is important is to make sure that jobs are being created.
Isizulu:
Abantu bayadla ...
Xitsonga:
... vanhu va dya naswona va kuma swin’wana kutlula leswaku va famba va yiva.
English:
While criminality is endemic in both the formal and informal sectors as evidenced by illegal profits estimated at the value of R700 billion through the sale of counterfeit goods, we cannot turn a blind eye to the critical role that the informal sector plays in generating rapid economic growth and massive employment creation in a country like South Africa which is desperate to reduce unemployment, especially youth unemployment.
In light of this, efforts must be made to increase the productivity of informal entrepreneurs and enterprises and the incomes of the informal workforce, especially the working poor. In sum, what is required is a new economic paradigm or rather a new hybrid economic model that embraces formal and informal sectors, including the small-scale and large-scale enterprises. Perhaps important to this debate, this new economic paradigm must be designed to address the specific constraints, needs and risks of different stakeholders within the informal sector. Put differently, this new economic paradigm must value the contributions of different stakeholders within the informal sector and integrate them into economic planning and legal frameworks as the Deputy Minister, DM, has indicated.
To this end, think tanks such as the Women in Informal Employment: Globalising and Organising and the Institute for Economic Justice, for example, have proposed broad goals to address informality in South Africa. Among other things, lack of access to credit to entrepreneurs and enterprises in the informal sector has been identified as a growing concern that must be addressed as a matter of urgency. Further, the current regulatory regime is not ideal for the informal sector as its stance is punitive measures that are costly to the vulnerable
stakeholders in the informal sector. Just to illustrate, the DA’s approach to the informal sector in the Western Cape in general, and the City of Cape Town in particular, is an attempt to eliminate the informal sector as evidenced by the impounding of minibuses and taxis which is biased in the interests of white affluent motorists who are the natural constituents of the conservative DA. It is therefore important for municipalities to create a legal space for the informal sector.
Xitsonga:
Van’wana va vulavula hi milawutsongo. A yi sunguli eKapa- Vupeladyambu Kutani endzhaku na hina hi ta landzela leswaku milawu yi va kona ku endla leswaku vanhu va ka hina va pfuneka.
English:
Clearly, access to basic infrastructure is an impetus to the resilience and productivity of the workers, self-employed entrepreneurs and enterprises in the informal sector. And more importantly, there is a need for the extension of legal protection, universal pensions and health coverage to the informal sector.
As regards access to credit and basic infrastructure, as well as a conducive regulatory regime, the ANC-led government is already making massive inroads in the informal sector. In particular, the Department of Small Business Development through its Township and Rural Entrepreneurship Programme seeks to create platforms that provide support to enterprises in rural and township areas. Such support includes access to credit and basic infrastructure as well as a conducive regulatory environment. As regards the extension of legal protection, universal pensions and health coverage, efforts put in place by the ANC-led government have resulted in mixed results. This is not a matter of policy impasse, but little enforcement oversight. Just to illustrate, labour rights have been transformed to extend worker benefits and decent working conditions to the informal sector, but the Department of Labour’s enforcement capacity rarely encourages progressive compliance by employers in the informal sector, and thus should be enhanced.
Similarly, there are multiple policy processes underway to bring the informal sector under protections from which it is currently excluded. For example ... [Time expired.]
Xitsonga:
ANC, yi ri n’wina va ATM fambani mi ya ehleketa swin’wana ku nga ri swona leswi.
Ms O M C MAOTWE: Your time is up. We don’t even hear what you are saying.
THE HOUSE CHAIRPERSON (Mr M G Mahlaule): Hon Maotwe, rest assured I am a Xitsonga speaker I can hear what she is saying. It is still in order.
An HON MEMBER: Chair, she was speaking English in most of her speech.
Mr V ZUNGULA: Chair, like I stated in the beginning of the debate the laws are there, but what lacks is enforcement of the laws and that is the cause of the displacement of the locals in the economy, the circulations of counterfeit products and illicit financial flaws. Go to Marabastad, Belleville and Small Street, non-South African traders are making millions of rands a day and pay no taxes yet when a black South African fails to pay a few thousands of tax, they are investigated and charged. Illicit financial flows affect all sectors especially the banking and mining industry. But in the informal sector because of the cash transactions it is more difficult to prevent.
South Africans are forced to compete with non-South Africans who are funded to open businesses here, even business cartels that remove locals from the economy. Unfair competition has devastated the participation of locals in the economy. That is why when you go to almost all townships, villages and small towns, South Africans are not active participants in the economy. The crux of the matter is that it is predominately black South Africans that are displaced from the economy.
Maybe if these non-South Africans were displacing white South Africans from the economy government would have long taken action.
Every week people are caught being trafficked to South Africa, marriages of inconvenience are being exposed and all of these is because there is no appetite to address these criminalities. South Africa is a preferred destination of such criminals.
The report of Al Qaeda and the Islamic State of Iraq and Syria, ISIS, are being funded by spazas operating in South Africa need to be taken very seriously. The government must not be reactive with the lives of South Africans.
Again, it is poor black South Africans that are negatively affected. That is why the DA-led ANC government does not care to address such problems. I thank you.
Debate concluded.
The mini-plenary session rose at 16:03.
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