Address by President Nelson Mandela at Euromoney Conference

14 November 1994

Mr Chairperson;
Minister of Finance;
Sir Patrick Sergeant
Distinguished Guests;
Ladies and Gentlemen.

This conference is most timely. It brings those charged with managing our country's finances - both public and private - together with those who manage a large part of the world's investment resources. Our newly-established democratic government has now staked out the economic framework within which it will be pursuing its central task, that of bringing a better life for all South Africans. I therefore appreciate most warmly the opportunity to be with you, and it is a privilege to welcome such distinguished guests.

There is at present an exceptionally favourable environment prevailing, domestically and internationally, for South Africa's transition. It is an environment of which we intend to make the best use.

We have established a number of benchmarks which set the pace for our successful transformation into a politically stable, economically prosperous and socially equitable democracy and against which our progress will be measured.

Our primary objective is to address the basic needs of especially the poor. We have to reconcile this with South Africa's resource constraints. We must consequently shift our priorities, accept financial discipline and create a climate conducive to sustained economic growth. Success in these objectives requires a partnership of all social structures, because the aims which we have set ourselves in the Reconstruction and Development Programme are achievable only with a thoroughgoing transformation of our society.

This economic perspective has been developed in the budgetary process; in our plan for the restructuring of government finances; and in the development of international trade and financial relations.

This year's Budget combined a commitment to fiscal discipline with initial steps to promote the re-allocation of public finance towards achieving the goals of reconstruction and development. There were measures contributing to an environment favourable to growth and the flourishing of business, including improvements in the corporate tax structure. The 1995 Budget is being prepared on the basis of a target of no real increase in recurrent expenditure, leaving aside interest costs. A steady annual decrease in the budget deficit is envisaged.

The prudent and optimal use of our limited resources will be advanced by the recently announced plan to restructure public sector finances. A belt-tightening exercise, including salary cuts for political office bearers, to make government more efficient and cost-effective is combined with measures to accelerate the re-prioritising of state expenditure to reflect RDP objectives. The public service will be restructured through measures such as redeployment of personnel. Public enterprises will be reformed by steps including the sale or restructuring of state assets to improve efficiency. The achievement of these objectives will be ensured through an effective internal monitoring capacity.

This programme should set a precedent for every institution which manages our nation's resources, under whatever form of ownership.

Increased foreign investment and trade, while not solving our economic problems, can make a critical contribution to the sustained economic growth which is essential to a successful transition.

As the international trade arena opens up, South Africa is systematically managing tariffs down to comply with international norms an to become more competitive. This will necessitate major restructuring of the economy. It should eventually boost exports and result in an efficient and competitive manufacturing sector.

With the opening of international financial markets, we have obtained credit ratings which will enable South Africa to return to the international bond market at an opportune time.

We are committed to the abolition on the dual exchange rate and other exchange control measures. This will in time further normalise South Africa's international financial relations.

The measures I have outlined, important as they are, would achieve little without the commitment and co-operation of all sectors of our society.

The developing relation between government, business and organised labour exemplifies the partnership upon which our success depends. It will work through the National Economic, Development and Labour Council, a forum for the development of co-operation and consensus around a dynamic strategy for sustained economic growth.

There are high expectations of our government's capacity to bring about changes in people's lives. At the same time there is an understanding that lasting and sustainable change needs careful preparation, and that one of the conditions of lasting change is stability. Reconstruction and reconciliation, development and nation-building, are mutually re-enforcing, inseparable aspects of the national consensus on which the unprecedented legitimacy of the Government of National Unity is founded.

The establishment of democratic local authorities through the holding of local government elections next year will, by opening the way for the involvement of communities in the development and implementation of reconstruction programmes, consolidate our democracy. It will thereby further secure the political stability which our country now enjoys.

This political environment and the economic growth engendered by the reconstruction of our country create exceptionally favourable conditions for investment. It is perhaps understandable that South Africa's long history of conflict and instability left a certain scepticism about the prospects for successful transition. But at each stage South Africans have succeeded where failure was predicted. Although what has happened is often spoken of as a miracle, it is in fact built on a solid and lasting foundation.

Ladies and Gentlemen.

There is no simple solution to our country's problems. But I am confident that South Africans from every walk of life are determined to work together to find solutions and have the capacity to succeed.

The international community has shown its concern for the well-being of South Africans, in its actions to help end apartheid. The basis now exists for a partnership of mutual benefit to South Africa and the international community. The time is ripe for the planning and preparations, the assessment and analysis, to be translated into practical action in the form of productive investments which help build our country.

I wish you well in your deliberations during the next two days, as you seek ways of building and strengthening that partnership through increased investment.

I thank you.

Source: Nelson Mandela Foundation