The Speaker of the National Assembly,

The Chairperson of the National Council of Provinces;

Deputy Speaker of the National Assembly and Deputy Chairperson of the NCOP,

Deputy President Cyril Ramaphosa,

Former President Thabo Mbeki,

Chief Justice Mogoeng Mogoeng and all esteemed members of the judiciary,

The President of the Pan African Parliament, Mr Roger Nkodo Dang,

Ministers and Deputy Ministers,

Premiers and Speakers of Provincial Legislatures,

Chairperson of SALGA and all Executive Mayors present,

The Heads of Chapter 9 Institutions,

Chairperson of the National House of Traditional Leaders,

Leaders of faith based organisations,

The former Speaker of the National Assembly, Dr Frene Ginwala,

Invited guests,

Veterans of the struggle for liberation,

Members of the diplomatic corps,

Fellow South Africans,

Good evening, sanibonani, molweni, dumelang, goeie naand, lotshani, riperile,


Thank you for the opportunity to address Parliament and the nation.

Today marks the 26th anniversary of the release of President Nelson Mandela from

prison, which was one of the most remarkable episodes in the history of our country.

It is also the 50th anniversary of the declaration by the National Party regime that

District Six would be a whites only area, leading to the forced removals of more than

60 000 residents.

The year 2016 also marks the 20th anniversary of the signing into law by Madiba, of

the Constitution of the Republic. The signing took place in Sharpeville on 10

December 1996.

We are proud of our democracy and what we have achieved in a short space of time.

Our democracy is functional, solid and stable.


The Constitution, which has its foundation in the Freedom Charter, proclaims that

South Africa belongs to all who live in it. A lot has been done to promote inclusion

and a non-racial society.

However, the journey to a non-racial society has not yet been completed.

The nation was shaken last month when racism reared its ugly head on social and

electronic media, causing untold pain and anger.

There is a need to confront the demon of racism. Human Rights Day, March 21, will

be commemorated as the national day against racism this year. It will be used to lay

the foundation for a long-term programme of building a non-racial society.

Compatriots, I would like to remind you of a few other important anniversaries.

The year 2016 marks 60 years since the women’s march to the Union Buildings to

demand an end to the pass laws. We are happy to have in our midst Ms Sophie de

Bruyn, who was among the heroic leaders of that historic march.

We also acknowledge the former President of the Black Sash, Ms Mary Burton. We

acknowledge the organisation’s track record in fighting for human rights, justice and


This year also marks 40 years since the landmark June 16 student uprising in


We welcome the photographer who shot the famous photograph of Hector Peterson

carried by Mbuyisa Makhubu with his sister Antoinette, Mr Sam Nzima.

We also salute the class of 1976 for their bravery in standing up against the brutal

apartheid regime. We acknowledge one of the activists of that era, the Deputy

Secretary of Parliament, Ms Baby Tyawa, who is in our midst.

This year we also mark 30 years since the ambush and brutal killing of the

Gugulethu Seven by the apartheid police in March 1986.

The University of Fort Hare celebrates its centenary, which is a critical milestone in

the liberation history of not only our country but the continent. The national

celebrations will take place on the 20th of May.

Let me recognise uMntwana wakwaPhindangene, the leader of the IFP who is a

former student of the university.

The year 2016 also marks the centenary of the battle of Deville Woods in France,

which took place during the First World War.

Scores of Black soldiers fought in the war but were treated badly due to the colour of

their skin.

A memorial that will restore their dignity and humanity is scheduled to be unveiled in

July this year in France.

Compatriots, allow me as well to recognise three special guests who are also with us


? the chairperson of the National Church Leaders Forum and Archbishop of

Cape Town, Archbishop Thabo Makgoba.

? Archbishop Daniel Matebesi, the President of the National Interfaith Council of

South Africa and

? Bishop Zipho Siwa, the Presiding Bishop of the Methodist Church of Southern

Africa and the President of the South African Council of Churches.

Madam Speaker and Madam Chairperson,

A resilient and fast growing economy is at the heart of our radical economic

transformation agenda and our National Development Plan.

When the economy grows fast it delivers jobs. Workers earn wages and businesses

make profits.

The tax base expands and allows government to increase the social wage and

provide education, health, social grants, housing and free basic services - faster and

in a more sustainable manner.

Our economy has been facing difficulties since the financial crisis in 2008. We

embarked on an aggressive infrastructure development programme to stimulate


Our reality right now is that global growth still remains muted. Financial markets have

become volatile. Currencies of emerging markets have become weak and they

fluctuate widely.

The prices of gold, platinum, coal and other minerals that we sell to the rest of the

world have dropped significantly and continue to be low.

The economies of two of our partners in BRICS: Brazil and Russia - are expected to

contract this year. The third, China, will not register the kind of robust growth that it is

known for.

Because our economy is relatively small and open, it is affected by all of these


Our economy is also affected by domestic factors such as the electricity constraints

and industrial relations which are sometimes unstable.

The IMF and the World Bank predict that the South African economy will grow by

less than one per cent this year. The lower economic growth outcomes and outlook

suggest that revenue collection will be lower than previously expected.

Importantly, our country seems to be at risk of losing its investment grade status from

ratings agencies. If that happens, it will become more expensive for us to borrow

money from abroad to finance our programmes of building a better life for all

especially the poor.

The situation requires an effective turnaround plan from us.

It is about doing things differently and also acting on what may not have been acted

upon quickly before.

I will share a few points that we believe would make a difference.

First, our country remains an attractive investment destination. It may face

challenges, but its positive attributes far outweigh those challenges.

We must continue to market the country as a preferred destination for investments.

This requires a common narrative from all of us as business, labour and government.

If there are any disagreements or problems between us, we should solve them

before they escalate. This is necessary for the common good of our country.

We have had fruitful meetings with business, including the high level meeting with

CEOs on Tuesday this week.

We have heard the suggestions from business community on how we can turn the

situation around and put the economy back on a growth path.

We have heard the points about the need to create the correct investment support


Government is developing a One Stop Shop/Invest SA initiative to signal that South

Africa is truly open for business. We will fast-track the implementation of this service,

in partnership with the private sector.

Such an initiative requires that government removes the red tape and reviews any

legislative and regulatory blockages.

We have established an Inter-Ministerial Committee on Investment Promotion which

will ensure the success of investment promotion initiatives.

Compatriots, we have heard the concerns raised about the performance of state

owned enterprises and companies.

Many of our SOCs are performing well.

Sanral has built some of the best roads in Gauteng and in many parts of the country.

These make us the envy of many parts around the globe.

The Trans Caledon Tunnel Authority has constructed dams of varied capacities, thus

making it possible for our people to have access to safe drinking water.

Transnet has built rail infrastructure which has enabled our country’s mines to move

massive bulk of commodities through our ports to markets around the globe.

Eskom, in spite of the challenges, still manages to keep the economy going, against

all odds.

Our development finance institutions such as the Industrial Development Corporation

(IDC) or Development Bank of Southern Africa and others have provided finance for

infrastructure, various industries and agricultural businesses without fail, even in the

aftermath of the global financial crisis.

For the state owned companies to contribute to the successful implementation of the

National Development Plan, they must be financially sound.

They must be properly governed and managed. We will ensure the implementation

of the recommendations of the Presidential Review Commission on State Owned

Enterprises, which outlines how the institutions should be managed.

The Deputy President chairs the Inter-Ministerial Committee which is tasked with

ensuring the implementation of these recommendations.

We have to streamline and sharpen the mandates of the companies and ensure that

where there are overlaps in the mandates, there is immediate rationalization.

Those companies that are no longer relevant to our development agenda will be

phased out.

Government departments to which they report, will set the agenda and identify key

projects for the State owned companies to implement, over a defined period. Proper

monitoring and evaluation will be done.

These interventions are essential for growth and also for the reduction of national

debt levels.


We must take advantage of the exchange rate as well as the recent changes of visa

regulations, to boost inbound tourism.

SA Tourism will invest one hundred million rand a year to promote domestic tourism,

encouraging South Africans to tour their country.

We have heard concerns from companies about delays in obtaining visas for skilled

personnel from abroad. While we prefer that employers prioritise local workers, our

migration policy must also make it possible to import scarce skills.

The draft migration policy will be presented to Cabinet during the course of 2016.

We have heard the appeals for policy certainty in the mining sector, especially with

regards to the Mineral and Petroleum Resources Development Bill.

The Bill was referred back to Parliament last year. We await Parliament to conclude

the processing, which we trust will be done expeditiously.


We need to empower SMMEs to accelerate their growth. Access to high-quality,

innovative business support can dramatically improve the success rate of new


The department of small business development was established to provide such

targeted support to small business.

Economic transformation and black empowerment remain a key part of all economic

programmes of government. One of our new interventions is the Black Industrialists

Scheme which has been launched to promote the participation of black

entrepreneurs in manufacturing.

We urge big business to partner the new manufacturers including businesses owned

by women and the youth, as part of broadening the ownership and control of the



We are proud of our Top 10 ranking in the World Economic Forum competitiveness

report with respect to financial services.

Maintaining and indeed improving our ranking is important to our competitiveness as

a country.

It is also fundamental to our ambition to become a financial centre for Africa.

The banks, through the Banking Association of South Africa, are to launch a project

aimed at establishing a centre of excellence for financial services and leadership


This will ensure that as a country we can attract, nurture, develop and retain the best

talent in financial services in our country and across our continent.

They will work with the Minister of Finance and the National Treasury to get this

done. We believe that this will over time ensure that we can expand the pool of

financial skills and broaden the job opportunities for many young people.

This strategic project from the banking sector is a positive and encouraging outcome

of our engagement with business this week.

Together we move South Africa Forward!


We have made an undertaking to spend public funds wisely and to cut wasteful

expenditure, but without compromising on the core business of government and the

provision of services to our people.

In 2013, the Minister of Finance announced a number of cost containment


Excessive and wasteful expenditure has been reduced, but there is still more to be

done to cut wastage.

I would like to announce some measures this evening.

Overseas trips will be curtailed and those requesting permission will have to motivate

strongly and prove the benefit to the country.

The sizes of delegations will be greatly reduced and standardised.

Further restrictions on conferences, catering, entertainment and social functions will

be instituted.

The budget vote dinners for stakeholders hosted by government departments in

Parliament, after the delivery of budget speeches will no longer take place.

The Minister of Finance will announce more measures and further details in the

budget vote speech on the 24th of February.

The executive management and boards of public agencies and state owned

companies must undertake similar measures.

I also invite Premiers of all nine provinces as well as mayors to join us as we begin

eliminating wasteful expenditure within government.

I trust that Parliament and the Judiciary will also be persuaded to consider the

implementation of similar measures.


A big expenditure item, that we would like to persuade Parliament to consider, is the

maintenance of two capitals, Pretoria as the administrative one and Cape Town as

the legislative capital.

We believe that the matter requires the attention of Parliament soon.


We all have a lot to do to turn the economy around and to cut wastage. We will go

through a difficult period for a while, but when the economy recovers, we will be

proud of ourselves for having done the right thing.


I would now like to report back on the undertakings made last year.

During the State of the Nation Address in February 2015

I announced the Nine Point Plan to respond to sluggish growth.

The nine point plan consists of:

a. Revitalisation of the agriculture and agro-processing value-chain;

b. Advancing beneficiation adding value to our mineral wealth;

c. More effective implementation of a higher impact Industrial Policy

Action Plan;

d. Unlocking the potential of SMME, co-operativess, township and rural


e. Resolving the energy challenge;

f. Stabilising the labour market;

g. Scaling-up private-sector investment;

h. Growing the Ocean Economy;

i. Cross-cutting Areas to Reform, Boost and Diversify the Economy;

i. Science, technology and innovation

ii. Water and sanitation

iii. Transport infrastructure

iv. Broadband rollout

v. State owned companies.

We have made significant progress in the implementation of the plan.

Progress has been made to stabilise the electricity supply. There has been no load

shedding since August last year which has brought relief for both households and

industry alike.

Government has invested eighty three billion rand (R83 billion) in Eskom which has

enabled the utility to continue investing in Medupi and Kusile, while continuing with a

diligent maintenance programme.

Additional units from Ingula power station will be connected in 2017, even though

some of them will begin synchronisation this year.

The multiple bid windows of the Renewable Independent Power Producer

Programme have attracted an investment of one hundred and ninety four billion


This initiative is a concrete example of how government can partner with the private

sector to provide practical solutions to an immediate challenge that faces our


In 2016, government will select the preferred bidders for the coal independent power


Request for Proposals will also be issued for the first windows of gas to power bids.

The nuclear energy expansion programme remains part of the future energy mix.

Our plan is to introduce nine thousand six hundred megawatts of nuclear energy in

the next decade, in addition to running Koeberg Nuclear Power Plant.

We will test the market to ascertain the true cost of building modern nuclear plants.

Let me emphasise that we will only procure nuclear on a scale and pace that our

country can afford.


Our government through the Department of Trade and Industry introduced a number

of incentives in the past few years to boost investments in the manufacturing sectors

especially textiles, leather and the automotive sectors.

Progress has been made in these sectors.

The incentives for the automotive sector have attracted investments of over twenty

five billion rand over the last five years. We welcome key investments from

Mercedes, General Motors, Ford, Beijing Auto Works, the Metair group, BMW,

Goodyear and VW.

The clothing and textile sector has also been successfully stabilised after a difficult

few years.

Multinational companies such as Nestle, Unilever Samsung and Hisense have also

affirmed South Africa as a regional manufacturing hub.

They have retained and expanded their investments in new plants.

Indeed the progress made in manufacturing has certainly demonstrated that the

incentive programmes are effective and attractive to investors.


I announced programmes for the revitalisation of agriculture last year. We introduced

the Agri-Parks programme, aimed at increasing the participation of small holder

farmers in agricultural activities.

Construction has begun in at least five agriparks, which are: Westrand in Gauteng,

Springbokpan in North West, Witzenberg in Western Cape, Ncora in the Eastern

Cape and Enkangala in Mpumalanga.

The agricultural programmes must empower women farmers as well. Allow me to

introduce the winner of the Female Entrepreneur of the Year 2015, Ms Julia

Shungube, from Nkomazi municipality in Mpumalanga.

Honourable Speaker and Chairperson,

Land reform remains an important factor as we pursue transformation.

I spoke about the fifty/fifty policy framework last year, which proposes relative rights

for people who live and work on farms.

Twenty seven proposals have been received from commercial farmers and four are

being implemented in the Eastern Cape and the Free State.

I also announced the Regulation of Land Holdings Bill which would place a ceiling on

land ownership at a maximum of 12 000 hectares and would prohibit foreign

nationals from owning land. They would be eligible for long term leases. The draft Bill

will be presented to Cabinet in the first semester of the year.

We also announced the re-opening of land claims for people who had missed the

1998 deadline. The number of new land claims that have been lodged stood at close

to one hundred and twenty thousand as of December last year.


As we are aware, five provinces have been seriously affected by drought, namely

North-West, KwaZulu-Natal, Free State, Limpopo and Mpumalanga.

Government provides relief to affected communities. Isomiso sixakile impela

ezifundazweni eziningi. Imfuyo iyafa kanti nezolimo zisele emuva. Isikhathi esinzima


Uhulumeni uzoqhubeka nokuxhasa abalimi kanye nokusiza imiphakathi ngezimoto

ezithwala zamanzi.

Let me take this opportunity to commend the civil society initiative, Operation

Hydrate and others for the provision of water relief to many communities in distress.

The building of water infrastructure remains critical so that we can expand access to

our people and industry.

The first phase of the Mokolo and Crocodile Water Augmentation project in Lephalale

area in Limpopo is fully operational. It will provide 30 million cubic meters of water

per annum.

The raising of the Clan William Dam wall in the Western Cape entails raising the

existing dam level by 13 metres to provide additional water supply.

To curb water wastage, the Department of Water and Sanitation has begun its

programme of training fifteen thousand young people as artisans.

Madam Speaker

Madam Chairperson,

On improving labour relations, we welcome the agreement reached by social

partners at NEDLAC on the principle of a national minimum wage.

Deliberations continue on the level at which the minimum wage must be placed.

It is important to emphasise that the national minimum wage should be implemented

in a manner that does not undermine employment creation, the thriving of small

businesses or sustained economic growth.

We are also encouraged by reports from NEDLAC that a framework to stabilize the

labour market by reducing the length of strikes and eliminating violence during strike

action is being finalized.

We have heard the concerns of labour about the Tax Amendment Act that I signed

into law in December, following its passing by Parliament.

Government is in discussion with COSATU about the matter and a solution is being


Discussions are also on-going within government, led by the Department of Social

Development and National Treasury, with regards to finalising the comprehensive

social security policy.


Only a few years ago, our mining sector was in turmoil especially on the platinum


The situation has improved and we commend business and labour for the progress


Another positive development in the mining sector was the Leaders’ Declaration to

Save Jobs which was signed by mining industry stakeholders in August 2015.

We urge the parties to implement the agreement and to continue seeking ways of

saving jobs.

We appeal to business again that retrenchments should not be the first resort when

they face difficulties.


In 2014 we launched the popular operation Phakisa Big Fast results methodology

and implemented it in the ocean economy, health, education and mining sectors.

Seven billion rand has been committed in new port facilities, following the adoption of

a Public- Private-Partnership model for port infrastructure development by Transnet

National Ports Authority.

Compatriots, we were concerned that South Africa did not own vessels while we are

surrounded by about three thousand kilometres of a coastline.

Through the oceans economy segment of Operation Phakisa, we are trying to solve

this challenge.

I am pleased that two bulk carrier vessels have been registered in Port Elizabeth,

and a third tanker in Cape Town under the South African flag.

Another positive Operation Phakisa development has been the launch of a fuel

storage facility here in Cape Town, bringing an investment of six hundred and sixty

million rand.

Aquaculture appears to be an important growth area within the oceans economy

segment of Operation Phakisa.

Close to three hundred and fifty thousand rand private sector investment has thus far

been committed in the Aquaculture sector. Nine aquaculture farms are already in

production. These farms are located within the Eastern Cape, KwaZulu-Natal,

Western Cape and Northern Cape.

We continue to promote innovation within the Nine Point Plan programme.

The Department of Science and Technology will finalise the Sovereign Innovation

fund, a Public private funding partnership aimed at commercialising innovations that

are from ideas from the public and the private sectors.

Government will fast track the implementation of the first phase of broadband roll-out

to connect more than five thousand government facilities in eight district

municipalities over a three year period.

Funding to the tune of 740 million rand over a three year period has been allocated

in this regard.


A lot of work was done in the social sector as well in the past year.

Government has responded to the financial shortfall arising from the zero per cent

university fee increase, as agreed in meeting with students and vice-chancellors last


The Minister of Finance will provide the details of education shortfall funding in the

Budget speech.

I have appointed a Judicial Commission of Inquiry into higher education. We urge all

stakeholders to cooperate with the Commission and help ensure its success.

On the health front, the life expectancy of South Africans for both males and females

has significantly improved and is currently 62 years across genders, which is an

increase of eight and a half years since 2005.

The HIV policy turnaround in 2009 led to a massive rollout of HIV testing and

treatment for 3.2 million people living with the virus.

This has contributed immensely to healthier and longer lives for those infected.

We acknowledge the contribution of partners in the South African National Aids

Council which is chaired by the Deputy President.

Our next step is to revive prevention campaigns especially amongst the youth. The

Minister of Health will soon announce a major campaign in this regard.

I am also happy to announce that the state-owned pharmaceutical company,

Ketlaphela, has been established. The company will participate in the supply of antiretroviral

drug to the Department of Health from the 2016/17 financial year.

Meanwhile, the White Paper on National Health Insurance was released in

December aimed at improving health care for everyone in South Africa.


Local government elections will be held within three months after the 18th of May, the

date of the last elections.

We urge all citizens who are over the age of 18 to register to vote during the first

registration weekend, 5 and 6 March 2016.

We urge the youth in particular who are turning 18 years of age this year, to register

in their numbers for this first ever opportunity to cast their votes.

Our Back to Basics local government revitalisation plan was launched in September

2014 and 2015 has been the year of intensive implementation.

In this second phase of implementation, national government will engage in more

active monitoring and accountability measures.

This includes unannounced municipal visits, spot checks of supply chain

management processes, the implementation of recommendations of forensic reports,

site visits of Municipal Infrastructure Grant funded projects, and increased

interventions to assist struggling municipalities.

A 10 point plan of Back to Basics priority actions has been developed to guide this

next phase.

The plan includes the promotion of community engagement, which is absolutely

critical to enable communities to provide feedback on their experience of local


I already undertook a walkabout at Marabastad taxi and bus rank in Pretoria on

Monday to speak to informal traders and commuters.

The majority of complaints and issues raised related to municipal services.

They would like the Tshwane municipality to clean the area and also to fix some

broken sewerage pipes. Traders said they needed and were prepared to pay.

They alerted me that many people in Elandspoort receive RDP houses but instead of

occupying them, they either sell them or rent them out other people.

Mrs Baloyi who runs a stall complained about nyaope drug addicts who steal goods

from traders.

Other commuters said I must visit Kwaggafontein in the former KwaNdebele and see

the lack of service delivery. I will visit the area soon.

I was also able to speak to foreign nationals who said they queue daily to apply for

documentation from the Department of Home Affairs. We will continue to visit

communities to hear their concerns and suggestions. Issues raised during the visit

will be followed up by the respective departments.


The South African Police Service is undergoing a turnaround and has adopted the

Back to Basics approach to management to rebuild the organisation and to improve

performance at all under-performing police stations.

We note sadly, as well that fifty seven police officers have been murdered to date

during the 2015/16 financial year. We condemn this criminality strongly.

We urge the police to defend themselves when attacked, within the confines of the



The African continent remains central to our foreign policy engagements.

South Africa continued to support peace and security and regional economic

integration through participation in the African Union and the Southern African

Development Community initiatives.

We continued to assist sister countries in resolving their issues for example in

Lesotho and South Sudan.

The South African National Defence Force represented the country bravely and

remarkably well in peacekeeping missions on the continent. We are truly proud of

our soldiers. They will be showcasing their capability in Port Elizabeth from the 13th

to the 21st of February, the celebration of Armed Forces Day.

The Agreement by BRICS nations on the New Development Bank or BRICS Bank

came into force and the bank is envisaged to approve its inaugural projects in April

this year.

We participated in the India-Africa Summit as well as the Forum on Cooperation

between Africa and China as we strengthened these important partnerships.

China announced investments of fifty billion US dollars of which South Africa will

receive ten billion US dollars for infrastructure, industrialisation and skills


On North-South cooperation, we continued our engagements with the European

Union as a bloc which is our largest trading partner and foreign investor.

Over 2000 EU companies operate within South Africa creating over three hundred

and fifty thousand jobs.

South Africa’s relations with the USA and Canada continue to strengthen, especially

in the areas of economy, health, education, energy, water, safety and security,

capacity building and the empowerment of women.

The renewal and expansion of the African Growth and Opportunity Act (AGOA)

provides a platform for the enhancement of industrialisation and regional integration.

All outstanding issues around AGOA are being attended to.


We extend good wishes to all athletes who have qualified for the Olympic Games to

be held in Rio de Janeiro.

We encourage participation in several programmes aimed at promoting healthy

lifestyles and nation building.

These include the National Recreation Day, the Nelson Mandela Sports and Culture

Day; the World Move for Health Day, the Golden Games and the Andrew Mlangeni

Golf Development Day.


A committee has been established to coordinate the participation of our performing

arts legends in nation building activities in the country.

The Living Legends committee is chaired by playwright Mr Welcome Msomi working

with music icon, Ms Letta Mbulu, as deputy chairperson.

We are also happy that musicians and actors amongst others heeded our call to

unite and have formed the Creative Industries Federation of South Africa. The

Presidency has established the Presidential Creative Industries Task Team to

support our artists.


To achieve our objectives of creating jobs, reducing inequality and pushing back the

frontiers of poverty we need faster growth.

In the National Development Plan, we set our aspirational target growth of five per

cent per year, which we had hoped to achieve by 2019.

Given the economic conditions I have painted earlier on, it is clear that we will not

achieve that growth target at the time we had hoped to achieve it.

The tough global and domestic conditions should propel us to redouble our efforts,

working together as all sectors. In this regard, it is important to act decisively to

remove domestic constraints to growth.

We cannot change the global economic conditions, but we can do a lot to change the

local conditions.

Let us work together to turn the situation around. It can be done.

I thank you.