Productivity SA Chief Executive Officer, Mr Mothunye Mothiba, Welcome Speech at the Productivity SA launch of the annual Productivity Statistics Report.

Programme Director; Acting Executive Manager: Research, Innovation & Statistics; Productivity SA: Ms Lalane Janse Van Rensburg

Board members, Ms. Bev Jack and Mr. Welile Nolingo

Members of the Workplace Challenge Expert Committee, Prof Barnes Sookdeo and Ms Joselyn Vass,

Director, Merchant Afrika: Advocate Lavan Gopaul

ILO colleagues both in The Pretoria Office and Geneva, Nii Moi; Monde Nyangintsimbi; Tendai Matika, Matilda Dahquist, Jens Dyring Christensen, Stephan Ulrich

The Deputy General Secretary of FEDUSA – Mr. Ashley Benjamin

Productivity SA Acting Chief Economist, Ms Juliet Mashabela

Representatives from BUSA: Tarryn Daniels; Beverly Jack (Board)

Representatives from COSATU – Gaven Mzamo; Louisa Nxumalo

Representatives from NACTU – Thembalakhe Silo; Lufuno Muvhali

Representatives from TREASURY- Megan Rose Bryer

Representatives from SECO – Shakespear Mudombi; Daniel Lauchenauer

Representatives of Organised Labour; Union Federations and Union Members

Representatives of Business and Members of the Business Community.

Representatives of Government and State-Owned Entities.

My fellow Productivity SA Board members.

The Executive Management and Productivity SA staff.

Members of the media.

All stakeholders

Ladies and gentlemen

Good morning

Dumelang

Programme Director, Ladies and gentlemen, it is a sad day in South Africa and the mining sector as we mourn the passing of over a dozen mineworkers and those injured at Implats 11 Shaft operation at Impala Rustenburg in the North West Province. Our deepest condolences to their families and friends for this tragic loss of life and speedy recovery for the injured.

It is with great pleasure that I welcome you productivity ambassadors and champions) to the launch of the 2023 Productivity Statistics Report, a comprehensive reflection of our nation’s economic landscape under the theme, “Productivity Indicators Mixed Amid a Stabilizing Economy.”

Today, we gather not only as representatives of diverse industries but as collaborators in understanding and shaping the narrative of productivity in our country. I extend a warm welcome to our distinguished guests, partners, stakeholders, members of the media, and, most importantly, to the dedicated individuals who form the backbone of Productivity SA.

This year’s theme “Productivity Indicators Mixed Amid a Stabilizing Economy” encapsulates the nuanced journey we have undertaken as a nation. The theme underscores the intricacies we face, acknowledging both challenges and triumphs as we navigate a path toward economic stability and growth.

I am proud to share that the formulation of this report has been a collaborative effort, drawing on the expertise of the Department of Employment and Labour, Statistics South Africa, The South African Reserve Bank, and our own Productivity SA team. Their collective insights and commitment have been integral in crafting a report that not only reflects our current reality but also guides us towards a more productive future.

The importance of this collaboration cannot be overstated. It underscores our commitment to accuracy, and a shared responsibility in understanding the dynamics that influence our productivity landscape. The collaboration with institutions such as the Department of Employment and Labour, Statistics South Africa, and The South African Reserve Bank ensures that the 2023 Productivity Statistics Report is grounded in robust data and analysis.

Productivity SA also has partnerships with organisations such as the ILO, IMD, and Universities which play a crucial role in enhancing the quality, relevance, and impact of productivity and competitiveness statistics. These collaborations contribute to the development of a robust and informed approach to measuring and evaluating productivity and competitiveness with implications for economic policy, business strategy, and overall national development.

South Africa’s long-term competitiveness and sustainable economic transformation requires accelerated and sustainable industrialisation, and without productivity growth, this will remain but a pipedream. Our investment across sectors like energy, agriculture, transportation, and manufacturing should be backed by value-adding information which also inform on the impact thereof on economic growth, job preservation and creation. This underscores the importance of Productivity and Competitiveness Measurement and Evaluation, which is one of Productivity SA’s mandate and key functions.

It is time for us as a country to address productivity holistically across all levels – at a macro (national), sector (meso), and micro (enterprise) levels if we are to succeed in industrializing our economy and take advantage of global integration of value chains. Added to this should be the understanding that productivity growth is essential to combat hunger, advance decent work and boost economic growth. Increasing productivity (generally accepted as a driver of long-term competitiveness and sustainable growth) is viewed by the ILO Constituents as a catalyst for creating decent work, inclusive growth and shared prosperity, and South Africa should not be an exception.

There is empirical evidence that a sustained decline in public investment has further jeopardized the achievement of higher labour productivity by reducing public spending on research and development, local infrastructure and physical and digital connectivity, new technology and innovation. The skills mismatch and the lack of access to quality education and health services are additional challenges, which we should address to increase productivity.

It is for this reason that the Parliament’s Portfolio Committee on Employment and Labour, recognising the critical role of measuring productivity and competitiveness in our national agenda, has recently endorsed the adoption of the Institute for Management Development (IMD) as our Country framework for measuring and evaluating competitiveness. This strategic decision signifies a harmonised approach towards benchmarking, ensuring that our methodologies align with global best practices and standards.

The IMD, renowned for its expertise in assessing global competitiveness and management practices, now stands as a beacon guiding our nation’s journey toward enhanced competitiveness. This endorsement is not just an acknowledgment of the methodology’s credibility but also a testament to our commitment to adopting the latest advancements in the field.

As we delve into the contents of this Productivity Statistics report, we are reminded of a fundamental truth – productivity growth is the driver of long-term sustainability. This perspective is not only recognized by us but echoes globally, acknowledged by institutions such as the International Labour Organization (ILO), the Organisation for Economic Co-operation and Development (OECD), and exemplified by Scandinavian countries.

The ILO and OECD countries have long understood that low productivity growth breeds decent work deficit. In other words, the path to meaningful employment and a prosperous society is intricately tied to our ability to enhance productivity across sectors. This report, with its mixed indicators, provides us with valuable insights into the areas where our collective efforts are needed most.

At the heart of our endeavours lies a commitment to driving a productivity-driven agenda for the long-term competitiveness and sustainability of South Africa, reaching towards the ambitious horizon of 2030. We address productivity holistically, recognising that it is not just a metric but a transformative force that touches every aspect of our economy and society. Through our collaborative efforts, we envision the development of a National Productivity and Competitiveness Policy by 2026, laying the groundwork for a strategic framework that propels our nation to new heights.

Our commitment extends further with the development of a National Productivity Strategy intricately linked to Sector Master Plans, a visionary initiative slated for realization by March 2027. This strategy is not merely a document; it is a roadmap that aligns our collective aspirations with sector-specific objectives, ensuring that the benefits of enhanced productivity permeate every corner of our diverse economy.

In compiling the statistics report, Productivity SA collects data from official sources, namely, Statistics South Africa and the South African Reserve Bank. The productivity indices are then calculated using this data. These indices comprise Capital labour ratio, Labour productivity, Capital productivity, Multifactor productivity, Compensation per employee as well as Unit labour cost. The indices are calculated for the total economy, the 3 main sectors of the economy, the 10 main industries as well as the 8 selected manufacturing sub sectors organised according to the Statistics South Africa’s Standard Industrial Classification (SIC) of all Economic Activities (2013). The methodology used in the calculation of the indices is in line with that recommended by the Organisation for Economic Cooperation and Development’s (OECD) Manual: Measuring Productivity (2017)

Productivity SA plays a pivotal role in ensuring that the economic revival of the country is premised on availability of key information and targets are set taking into consideration the areas of low and high performance. Productivity measures the ability of the economy to produce output, i.e., goods and services, using inputs, i.e., Labour input and Capital input.

An increase in productivity means that, among others, more output is produced using similar amounts of inputs. The increase in Productivity that is not due to Labour and Capital inputs arises from technological progress and innovation, or multi-factor productivity. The Productivity measures of interest were primarily Labour productivity, Capital productivity, Multi-factor productivity, Capital Labour ratio as well as Unit labour cost as mentioned earlier.

Productivity SA aims to enable South Africa to achieve its National Development Plan objectives by 2030 and deliver on its Economic Reconstruction and Recovery Plan. Through the provision of productivity statistics, Productivity SA aims to ensure government, business, labour, and academia receives information that will create an enabling environment conducive for entrepreneurship and sustainable enterprises by supporting SMMEs, targeting those in the productive sectors to improve their competitiveness and sustainability to pre-serve existing jobs and create more productive jobs (over 11 million by 2030).

This is achievable through an Integrated Enterprise Development and Support Eco-system and deployment of resources for maximum value creation and building economic linkages between the productive sector and other value-added sectors including services sectors of the economy. We have the plans and capability, and all that remains is execution in rebuilding a faster and sustained inclusive growth, with productivity growth and transformative innovation.

The importance of productivity measurement in fostering a productive and competitive economy cannot be ignored. Productivity is at the centre of national output growth, bargaining councils’ discussions and imperative national objectives. Consequently, the main challenge for any economy is to create conducive conditions in which companies and employees can function more productively, thereby increasing competitiveness. Some of the important drivers of growth, include the need for an improvement in productivity. To facilitate the implementation of sound macroeconomic policies and micro economic reforms, capable and efficient government departments that offer quality support to businesses is a prerequisite.

The Productivity Statistics report therefore provides an assessment by Productivity SA of national productivity issues, as reflected by the performances of the various industrial sectors. The detailed productivity measurement reports also highlight the overall impact of productivity changes on sustainability and competitiveness of companies within all the economic sectors of South Africa.

As we move forward, our commitment to fostering productivity growth remains unwavering. We have the plans, capability, and now, the imperative to execute in rebuilding a faster and sustained inclusive growth, marked by productivity and transformative innovation.

To achieve this, we must harness the power of education and training, improve product quality, invest in Information and Communications Technology (ICT), enhance energy efficiency, benchmark effectively, allocate resources efficiently, broaden the knowledge-based sector, and improve public sector efficiency.

In conclusion, the Productivity Statistics report serves not only as an assessment but as a guidepost for progress, informing interventions and fostering a culture of continuous improvement.

Thank you for joining us on this journey towards a more productive and prosperous South Africa.