THE STATE CAPTURE PROJECT - SOUTH AFRICA - 2022

JOHANNESBURG 19 FEBRUARY 2022

 https://shadowworldinvestigations.org/projects-and-publications/the-state-capture-project/

https://shadowworldinvestigations.org/wp-content/uploads/2020/09/SWI_Zondo_Submission_Gupta_Enterprise_Transnet.pdf

GUPTA ENTERPRISE AND THE CAPTURE OF TRANSNET SUBMISSION TO THE COMMISSION OF INQUIRY INTO ALLEGATIONS OF STATE CAPTURE Large text The mission of Shadow World Investigations is to detail and expose the illicit and/or unethical corruption of government by corporate actors and their enablers. We do so by highlighting the impact of the blurred line between business and politics on democracy, human rights, the rule of law, the environment and just and equitable development. This exposure serves to hold the powerful to account, and to create momentum for progressive change. A submission by Shadow World Investigations to the Zondo Commission in September 2020. Editor and Researcher: Paul Holden Design: Gaelen Pinnock | www.polygram.co.za Copyright: Shadow World Investigations (2020) 7 Cavendish Square, Marylebone, London W1G 0PE www.shadowworldinvestigations.org 1 Executive Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 05 CNR, CSR, CRRC and ZPMC Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 05 The First Laundromat: The Worlds Window Group. . . . . . . . . . . . . . . . . . . . . . . . 06 The Second Laundromat: The Hong Kong Machine. . . . . . . . . . . . . . . . . . . . . . . . 07 The Third Laundromat: Habib Bank. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 08 Payments Made by Liebherr Cranes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 08 Conclusion and Recommendations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 List of Annexures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 About Shadow World Investigations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Sources and Admissibility. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 The Capture of Transnet and the Gupta enterprise. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 2.1. Racketeering and the Gupta Family ‘Enterprise’. . . . . . . . . . . . . . . . . . . . . . . 19 2.2. Understanding the Gupta enterprise. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 2.3. Companies and Individuals Receiving Funds from the HSBC/Hong Kong Network. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 2.4. The Connections between the Gupta enterprise and key Transnet contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Known Agency and/or Bribery/Kickback Agreements in Relation to ZPMC and China South Rail. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 3.1. ZPMC Agreement with JJ Trading FZE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 3.2. Exclusive Agency Agreement between CNR (Hong Kong) and Century General Trading: 14 April 2012. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 CONTENTS Section 1: Section 2: Section 3: 2 – SUBMISSION: GUPTA ENTERPRISE & THE CAPTURE OF TRANSNET 3.3. Exclusive Agency Agreement between CNR (Hong Kong) and Century General Trading: 8 July 2013. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 3.4. Exclusive Agency Agreement between CNR (Hong Kong) and Tequesta Group Limited: 20 May 2014. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 3.5. Exclusive Agency Agreement between CNR Dalian Locomotive and Rolling Stock Co. Ltd and Regiments Asia Limited: 20 May 2014/25 November 2014. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 3.6. Business Development Agreement between CSR and Regiments Asia Limited: 10th February 2015. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 3.7. Business Development Services Agreements between CNR Rolling Stock South Africa and Bex Structured Products, 8 March 2015 and 25 April 2015. 31 3.8. The CSR-Tequesta Agreement: 18 May 2015. . . . . . . . . . . . . . . . . . . . . . . . . . . 34 3.9. The CSR-Regiments Asia Payment Agreement: 10 June 2015. . . . . . . . . . . 35 3.10. The CSR Payment Schedule. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 3.11. Addendum to Agreements between CRRC, Regiments Asia and Tequesta Group: August 2016. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 3.12. Addendum to the Agreement between CRRC Zhuzhou Locomotive and Regiments Asia: August 2016. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 3.13. Summary Table of Agreements and Anticipated Fund Flows. . . . . . . . . . . 40 Payments Made to the Gupta Enterprise by Liebherr Cranes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 4.1. Payments Made to the Gupta Enterprise by Liebherr Cranes. . . . . . . . . . . 44 4.1.1. Source and Records from the #Guptaleaks Relating to Payments from Liebherr. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 4.1.2. Tracing the First Liebherr Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 4.1.2. Tracing the Second Liebherr Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 4.1.3. Tracing the Third Liebherr Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 4.1.4. Tracing the Fourth Liebherr Payment Tranche. . . . . . . . . . . . . . . . . . . . . . . 51 4.1.4. Tracing the Fifth Liebherr Payment Tranche. . . . . . . . . . . . . . . . . . . . . . . . . 54 4.2. The Relationship between Accurate Investments and Liebherr Cranes 55 Transnet, the Gupta Enterprise and the Worlds Window Network. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 5.1. The Worlds Window Network: Relevant Companies. . . . . . . . . . . . . . . . . . . . 59 5.2. The Worlds Window Network: Key Personnel. . . . . . . . . . . . . . . . . . . . . . . . . 61 5.3. The Worlds Window Front Companies: JJ Trading FZE and Century General Trading. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 5.3.1. JJ Trading FZE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 5.3.2. Century General Trading. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 5.4. The Nature and Development of the Relationship between Worlds Window and the Gupta enterprise. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 Section 4: Section 5: Contents – 3 5.4.1. Earliest Direct Mentions of Piyoosh Goyal and Worlds Window Group 66 5.4.2. The Relationship Between the Gupta Enterprise and the Worlds Window Network: Introducing the ‘hawala ledger.’. . . . . . . . . . . . . . . . . . . . . . . . 66 5.4.3. Investments Made by the Worlds Window Group into the Gupta Enterprise. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 5.4.4. Prima Facie Evidence of the Involvement of Worlds Window and the Gupta Enterprise in Money Laundering Activities: The Westdawn-Everest Loan-Back Scheme. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 5.4.5. Prima Facie Evidence of the Involvement of Worlds Window and the Gupta Enterprise in Money Laundering Activities: A Potential Arctos LoanBack Scheme?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 5.4.6. Prima Facie Evidence of the Involvement of Worlds Window and the Gupta Enterprise in Money Laundering Activities: Clean Laundry in Seven Days. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 5.4.7. Prima Facie Evidence of the Involvement of Worlds Window and the Gupta Enterprise in Money Laundering Activities: The South African Cycle 79 5.5. The Receipt of Funds by the Worlds Window Network from ZPMC. . . . . . 80 5.6. Deposits Received by the Worlds Window Network/Century General Trading from China South Rail Related to the 95 Locos Contract. . . . . . . . . . . 81 5.7. Circumstantial Evidence Regarding the Payment of Funds from CSR Related to the 359 and 100 Locomotive Contracts to the Gupta Enterprise via Worlds Window. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83 5.8. The Difficulty of Tracing ZPMC and CSR Funds. . . . . . . . . . . . . . . . . . . . . . . . 84 The Receipt and Dissipation of Funds from China South Rail and China North Rail to Tequesta and Regiments Asia via HSBC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85 6.1. Tequesta Group Limited and Regiments Asia. . . . . . . . . . . . . . . . . . . . . . . . . . 86 6.2. The Hong Kong Banking Records: Payments Made by CSR, CNR, Da Lian and CRRC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 6.3. Tracking Payments to Regiments Asia and Tequesta Group against Known Kickback Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89 6.4. The Hong Kong Banking Records: The Dissipation of Kickbacks by Tequesta Group and Regiments Asia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90 6.4.1. Payments to Individuals by Regiments Asia and Tequesta Group. . . . . . 90 6.4.2. Recipients of Over $1m from Tequesta Group or Regiments Asia. . . . . . 91 6.4.3. Companies Paid by Regiments Asia, Tequesta Group and Morningstar International. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92 6.4.4. The Use of Chinese Mainland Companies with Ties to South Africa. . . . 93 6.4.5. The Use of Hong Kong Shell Companies to Receive Payments from Tequesta Group and Regiments Asia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96 6.4.6. The Plethora of Money Laundering Red Flags and the Role of HSBC. . . 98 6.5. Concluding Remarks: The Hong Kong Laundromat. . . . . . . . . . . . . . . . . . . 100 6.6. The Continuation of the Transnet Bribery Scheme in Dubai. . . . . . . . . . . 101 

THE CAPTURE OF TRANSNET AND THE GUPTA ENTERPRISE 2.1. RACKETEERING AND THE GUPTA FAMILY ‘ENTERPRISE’ 1. In Section 2 of our first submission on the Estina/Vrede Dairy Project case, we set out our reading of the Gupta State Capture project as a form of racketeering undertaken by what we call the Gupta enterprise. We do not repeat that discussion here, but humbly refer the Commission to it so that this submission can be read in light of our arguments. 2.2. UNDERSTANDING THE GUPTA ENTERPRISE 2. In Section 2 of our first submission on the Estina/Vrede Dairy Project case, we outlined our understanding of the shape, nature and content of the Gupta enterprise in general terms. We do not repeat it in detail here. However, we humbly direct the Commission to the relevant section in that submission so that the below can be understood in context. 20 – SUBMISSION: GUPTA ENTERPRISE & THE CAPTURE OF TRANSNET 3. Nevertheless, it is useful to reiterate certain key features of the Gupta enterprise. In particular, we note that: a. The Gupta family enterprise exists de facto not de jure; b. The existence of the enterprise is inferred from observing a pattern of racketeering activity; c. The enterprise can (and does in this instance) engage in both legitimate business activity and criminal endeavours; d. The object of the enterprise was to generate the maximum benefit for the enterprise itself, the Gupta family and its employees and associates; e. The legitimate businesses included in the Gupta enterprise were used, inter alia, to facilitate racketeering activities, including disguising criminal activities behind a veneer of respectability or absorbing and distributing funds derived from criminal activity; f. The enterprise consists of a wide range of individuals, companies and other associations, some of which appear to be, on the surface, separate and distinct service providers but who were, instead, employees or associates of the racketeering enterprise ultimately taking de facto direction from the Gupta family or their representatives and associates; g. These employees and associates must, by logical inference, include those government officials and state employees we identify further below, who were instrumental in awarding the Gupta enterprise government contracts. 4. Based on the available evidence, we have identified a number of individuals and companies, all part of the Gupta family enterprise, that participated or were ‘activated’ in relation to the conceptualisation, initiation, and management of the Transnet capture project, including the process of laundering and integrating proceeds of crime. Short biographies of each party are given in the dramatis personae attached as an Annexure to this submission. We draw attention to them here, where we have additionally bolded ‘key players.’ a. Individuals: Gupta Family I. Gupta brothers (Ajay, Rajesh and Ashu) II. Gupta, Ashish III. Gupta, Amol IV. Singhala, Kamal b. Individuals: Gupta Enterprise Employees in South Africa I. Chawla, Ashu II. Essa, Salim III. Singh, Aashika c. Individuals: Gupta Enterprise Employees Based Abroad I. Grover, Sanjay d. Individuals: Transnet Officials I. Molefe, Brian II. Seleke, Mogokare Richard III. Sharma, Iqbal IV. Singh, Anoj e. Individuals: Worlds Window Network I. Agrawal, Amit II. Agrawal, Naveen III. Bansal, Rupesh IV. Bansal, Shuchi Section 2 – 21 V. Goyal, Piyoosh VI. Jagati, Ram Ratan VII. Puri, Pooja VIII. Tewari, Lalit f. Companies: South African Companies Controlled Directly or Through Factotums by the Gupta Enterprise I. Idwala Coal (South Africa) II. Islandsite (South Africa) III. Micawber 480 (South Africa) IV. Micawber 495 (South Africa) V. Oakbay Investments (South Africa) VI. Sahara Computers (South Africa) VII. Tegeta Exploration (South Africa) VIII. Westdawn Limited trading as JIC (South Africa) g. Companies: Overseas Companies Controlled Directly or Through Factotums by the Gupta Enterprise I. Accurate Investments (UAE) II. Brookfield Consultants (US) III. Fidelity Enterprises (UAE) IV. Gateway (UAE) V. Global Corporation LLC (UAE) VI. Regiments Asia (Hong Kong) VII. SES Technologies (India) VIII. Tequesta Group (Hong Kong) h. Companies: Companies Controlled by the Worlds Window Network Used to Launder Funds for the Gupta Enterprise I. Arctos SA (South Africa) II. Century General Trading (CGT) (UAE) III. Everest Global Metals PTY Ltd (South Africa) IV. Everest Metals FZE (UAE) V. Golden Coast FZE (UAE) VI. JJT Trading FZE (UAE) VII. RR Energy (India) VIII. Worlds Window Impex Private Limited including subsidiaries Worlds Window Exim Private Limited and Worlds Window Urja Private Limited (India) IX. Vasudhamaa Resources PTE (Singapore) 2.3. COMPANIES AND INDIVIDUALS RECEIVING FUNDS FROM THE HSBC/HONG KONG NETWORK 5. In Section 5 below we describe how Regiments Asia and Tequesta Group received hundreds of millions of dollars in payments from China South Rail into HSBC bank accounts. We have been granted access to HSBC banking documentation by the Organised Crime and Corruption Reporting Project (OCCRP)2 on condition of retaining the anonymity of the original source. These documents show hundreds of payments 2 https://www.occrp.org/en 22 – SUBMISSION: GUPTA ENTERPRISE & THE CAPTURE OF TRANSNET from the Regiments Asia and Tequesta accounts. It is possible that the majority of these payments formed the first step in an elaborate money laundering exercise. We cannot, however, confirm this without further documentation. Nevertheless, we provide, as Annexure QQ, a list of all recipients of payments from the Regiments Asia and Tequesta Group accounts, some of which may, upon further investigation, be considered part of, or beneficiaries of, the Gupta enterprise: 2.4. THE CONNECTIONS BETWEEN THE GUPTA ENTERPRISE AND KEY TRANSNET CONTRACTS 6. Extensive forensic investigations have been undertaken into a number of major contracts placed by Transnet, in particular the constituent contracts (and ancillary service contracts) that made up the 1064 locomotive contracts. Considerable evidence has also been led before the Commission about irregularities in the award of contracts by Transnet. We do not traverse that evidence here, suffice to note that there is incredibly strong prima facie evidence showing that certain individuals materially intervened in multiple Transnet contracts with the effect that contracts were bedevilled by irregularities and were directed to seemingly pre-chosen contractors. Moreover, these interventions were made to the obvious and substantial prejudice of Transnet and public finances in general, inflating costs and preventing a fair and honest assessment of which contractors offered best value to the state. 7. A number of characters and committees were repeatedly implicated in this process, including Anoj Singh, Brian Molefe, Siyabonga Gama, Malusi Gigaba, Thamsanqa Jiyane, Mogokare Richard Seleke, Lindiwe Mdletshe and Iqbal Sharma. The conduct of a number of these individuals and the recommended criminal or other disciplinary action appropriate to their behaviour is set out comprehensively in the MNS Report. 8. The conduct of the individuals dealt with in the MNS report must be read against the emails and documents emanating from the #Guptaleaks. Indeed, the #Guptaleaks shows that many of these individuals had close and material connections to, or engagements with, the broader Gupta enterprise. 9. Considering that it was the Gupta enterprise that benefited handsomely from kickbacks related to Transnet contracts, we submit that the most plausible explanation was that these individuals had developed relationships with the Gupta enterprise and, in so doing, abused their official functions to benefit the Gupta enterprise. Properly understood, these individuals were party to the broader racketeering activities of the Gupta enterprise and can, indeed, be considered de facto members, associates or partners of the Gupta enterprise. 10. The relationship between key Transnet employees and the Gupta enterprise has been exhaustively articulated by media articles and through investigations undertaken by the Public Protector and the private audit firms (Werkmans, Fundudzi, MNS) that have completed audits of the 1064 locomotive procurement. As such, we do not address Section 2 – 23 these relationships in detail here, as the Commission is already no doubt aware of them, and of the underlying material upon which the extensive reporting has been based to date. 11. In brief, however, it is useful to bear in mind, when considering the materials related the money laundering systems used by the Gupta enterprise, the following salient facts: a. Brian Molefe was a ‘good friend’ of the Gupta family and visited the Gupta’s Saxonwold compound on multiple occasions, and made and received large number of phone calls from Ajay Gupta, and exchanged small number of phone calls and texts with Ronica Ragavan, between August 2015 and April 2016; b. An extended chain of email correspondence shows that senior CSR employees were writing to Brian Molefe about tendering for Transnet contracts, and forwarding this correspondence to both Worlds Window and Gupta enterprise employees. One of the individuals copied into the email correspondence would later be involved in an email exchange in which a ledger of kickbacks to be paid by CSR related to three Transnet contracts was distributed; c. Molefe, subsequent to his period at Transnet, was appointed the CEO of Eskom, in which position he further intervened in internal processes to the benefit of the Gupta enterprise; d. Iqbal Sharma, who played a key role in managing and manipulating the award of Transnet contracts, had numerous direct and clear connections to the Gupta enterprise, including as the joint owner of Elgasolve Pty Ltd alongside Salim Essa, through which both held shares in numerous other companies such as VR Laser Services, which has also been implicated in the capture of Denel; e. Anoj Singh, who also played a key role in manipulating Transnet processes to the benefit of the Gupta enterprise, stayed at the Oberoi Hotel in Dubai on multiple occasions. The expenses were paid for by the Gupta enterprise. Singh frequently travelled at the same time as Tony Gupta and Salim Essa. #Guptaleaks records show that the Guptas opened a shell company in UAE, Venus Limited, which was transferred into Singh’s name by Vivek Sharma during a trip both made to Dubai. Internal Gupta enterprise accounting ledgers suggest that Singh was given AED200,000 by the Gupta enterprise during a trip to Dubai. f. Siyabonga Gama stayed at the Oberoi in Dubai for two nights between the 22nd and 24th of January 2016, which was paid with credits bought by Aakash Garg, an in-law to the Gupta family. During the trip, Gama met with Salim Essa; g. Mokgoro Richard Seleke served on the notorious Board Acquisitions and Disposal Committee (BADC) that played a major role in manipulating Transnet contracts to the benefit of the Gupta enterprise and CSR. Seleke was subsequently appointed the Deputy Director General at the Department of Public Enterprises after forwarding his CV to Duduzane Zuma. Seleke, who had previously held numerous civil service positions in the Free State, listed Peter Thabethe and Mosebenzi Zwane, both of whom were implicated in the Estina matter, as references on the CV he forwarded to Zuma.

This submission sets out how the Gupta enterprise secured billions of Rand in illicit and unearned fees and payments through large Transnet contracts; and, most importantly, the various elaborate money laundering systems that they employed to hide their money aided by major international enablers.

Summary – 11 Confirm the extent of the Bank of Baroda’s complicity in the extensive money laundering networks established by the Gupta enterprise and the Worlds Window network; Question HSBC to seek clarity on whether HSBC informed any authorities as to the nature of payments made into and out of Tequesta and Regiments Asia’s HSBC accounts in Hong Kong, all of which should have raised major red flags; Urgently request that HSBC trace any and all payments made by Tequesta and Regiments Asia into any other accounts held with HSBC; Further investigate payments made by Liebherr Cranes to the Gupta enterprise, and, in particular, question why Liebherr Cranes thought it fit to make payments to a corporate shell in Dubai with no infrastructure, no online presence, a sole Indian director, and no notable connections to South Africa.

9 24. In tranche 2, Liebherr paid $212 006.01 to Accurate Investments on the 17th of February 2014. This was ultimately paid out to: a. Linkway Trading, a Gupta enterprise company based in South Africa, which was paid $599 327, made up of the $212 006 from Liebherr commingled with other money flows; 25. In tranche 3, Liebherr paid $371 105.83 to Accurate Investments on the 15th of April 2014, which was ultimately paid out to: a. Oakbay Resources, which was paid $400 000 on the 29th of April 2014, made up of $371 105.83 from Liebherr commingled with other money flows; 26. In tranche 4, Liebherr paid $1 105 368.16 to Accurate Investments in three payments made in May 2014. This was ultimately paid out to: a. Brookfield Consultants, who were paid $5m on the 28th of May 2014, made up of $1 105 368.16 from Liebherr commingled with other funds, including money from JJ Trading. Brookfield Consultants was a US-based company controlled by relatives of the Gupta family. 27. In tranche 5, Liebherr paid $638 950 to Accurate Investments in two payments in October and December 2014. The accounting records revealed in the #Guptaleaks ended shortly after these payments were made. Tracing the ultimate disposition of these payments is therefore not possible based on documents in our possession. 28. In July 2017, after the payments from Liebherr to Accurate Investments was disclosed, Liebherr announced that it was to appoint an internal investigation into the matter. In October 2017, Liebherr announced that it was satisfied, based on its internal investigation, that the transactions were ‘legally sound’ and did not violate any applicable laws, although it admitted that the company’s ‘due diligence process might have been implemented in a more stringent manner.’ Liebherr further noted that the use of agents such as Accurate Investments was ‘common in the sales process for expenditure projects.’ 29. Based on the information at our disposal, this explanation does not seem sufficient. We urge the Commission to investigate this matter further. In particular, we urge the Commission to seek Liebherr’s explanation for the payments to Accurate in light of the fact that: a. Liebherr was bidding for a large capital project from a State-owned entity based on an open tender; b. Accurate Investments was little more than a corporate shell based in Dubai with a single Indian director, which had little to no infrastructure, online presence or any obvious connections to South Africa; c. Accurate Investments was, at all times, ultimately controlled by the Gupta enterprise; d. The only payments recorded into Accurate Investments accounts for the period under consideration were made by Liebherr Cranes and an unknown company called VK Trading Hong Kong; e. The only payments made out of Accurate Investments were made to Gupta enterprise entities.

THE FIRST LAUNDROMAT: THE WORLDS WINDOW GROUP 7. The Gupta enterprise entered into a number of contractual agreements with CSR, CNR, CRRC and ZPMCC through which it was paid billions of Rand, for which it performed no services beyond exerting its political influence to ensure that CSR and CNR were awarded lucrative contracts. 8. The Gupta enterprise entered into these contracts through front companies and nominees across two phases of the scheme. In the first phase, the Gupta enterprise teamed up with the Worlds Window Group of companies, based in India. The ‘flagship’ of the Worlds Window Group was majority controlled by the group Chairman, Piyoosh Goyal, while International Metal and Steel BV (IMSBV) owned the remaining 49%. IMSBV is a wholly-owned subsidiary of European Metals Recycling based in Liverpool. 9. The #Guptaleaks show that from at least 2010, the Worlds Window network of companies entered into a series of complex financial and criminal arrangements with the Gupta enterprise. This included engaging in numerous money laundering loan-back schemes, utilising a company by the name of Arctos it formed in South Africa. Our research shows that the South African branch of the Bank of Baroda had full insight into the reality of certain loan-back schemes, and was totally complicit in how it operated. 10. Our research shows that one of the companies that participated in the Gupta enterprise-Worlds Window money laundering network was Estina, which was used to funnel funds as part of a loan-back scheme. Estina was famously used by the Gupta enterprise to steal government funds from the Vrede Dairy Project. Estina was used in the Gupta enterprise-Worlds Window Group money laundering scheme in 2011, a year before it participated in the Vrede Dairy Project. This provides even further proof that Estina was merely a front company controlled by the Gupta enterprise that was used in multiple criminal endeavours.

THE SECOND LAUNDROMAT: THE HONG KONG MACHINE 12. For reasons unknown, the Gupta enterprise and Worlds Window Group ceased collaborating on the Transnet kickbacks by 2015. As a result, CNR, CSR and CRRC entered into new agreements with two Gupta enterprise front companies, Regiments Asia and Tequesta Group based in Hong Kong. Hong Kong records show that both of these companies were formed in March 2015, and Gupta ally and partner, Salim Essa, was the sole director. In November 2016, Salim Essa stepped down as director to be replaced by Aashika Singh, who the #Guptaleaks show had a financial relationship with the Gupta enterprise. 13. Banking documents show that Regiments Asia and Tequesta operated bank accounts with HSBC in Hong Kong, into which over a hundred million dollars were paid by CSR, CNR and CRRC. Our analysis of the banking documents shows that Tequesta Group received funds totalling $62 416 299, of which: a. $11 288 092.75 was paid by CNR; b. $2 704 159 was paid by CRRC; c. $43 456 242 was paid by CSR; and d. $1 021 650 was paid by unknown sources 14. Our analysis shows that Regiments Asia’s HSBC Hong Kong account received a total of $83 783 437.41, of which: a. $8 622 906 was paid by CNR b. $14 757 788.75 was paid by CRRC; and c. $45 750 456.75 was paid by CSR d. $18 120 982.50 was paid by Da Lian [a China North Rail subsidiary] 15. Calculations by amaBhungane have shown that these amounts accorded exactly with what was expected to be paid to the Gupta enterprise through contracts it entered into with CSR, CNR and CRRC. 16. The payments made into the Tequesta Group and Regiments Asia accounts were almost immediately dissipated in a huge flurry of transactions to over 190 identifiable recipients and companies. 17. Our analysis shows that the majority of the funds were dissipated into two different money laundering streams. In the first, the funds were transferred to Hong Kong front companies that had been formed by company formation agents in Hong Kong. In the second, funds were paid to a range of textile, garment, furniture and other manufacturers in mainland China. Customs records show that some of these companies had reported exports to South Africa. 08 – SUBMISSION: GUPTA ENTERPRISE & THE CAPTURE OF TRANSNET 18. The way in which Tequesta and Regiments Asia operated their Hong Kong accounts should have raised serious red flags with HSBC, who provided bank services to the companies. HSBC should have enquired why two newly formed companies, with a sole politically exposed director based in South Africa, and who had been publicly linked to the Gupta enterprise, was receiving over a hundred million dollars from two state-owned Chinese rail companies over a period of just under two years. In addition, the way in which the payments were received and dissipated almost immediately, many of them to Hong Kong front companies with no known infrastructure or business history was clearly indicative of money laundering. THE THIRD LAUNDROMAT: HABIB BANK 19. Documents published by amaBhungane show that in 2016, the Gupta enterprise ceased using its Hong Kong money laundering network. From late 2016 onwards, Tequesta and Regiments Asia received funds from CRRC through accounts held with Habib Bank in the UAE. PAYMENTS MADE BY LIEBHERR CRANES 20. Documents emanating from the #Guptaleaks show that the Irish subsidiary of the Swiss company Liebherr Cranes paid millions of dollars directly to the Gupta enterprise. The payments related to contracts Liehberr was awarded by Transnet in February 2014 for the supply of cranes 22 cranes to Transnet. 21. Our analysis of the #Guptaleaks reveals that Liebherr Cranes paid $3 232 430.88 in five tranches directly into the account of Accurate Investments based in Dubai between the 22nd of July 2013 and the 1st of December 2014, after which the accounts revealed by the #Guptaleaks go dark. Accurate Investments was controlled by the Gupta enterprise through the Dubai-based director, Sanjay Grover. 22. Using the internal accounting records revealed by the #Guptaleaks, our analysis can now reveal how these funds were subject to further internal laundering through the Gupta enterprise, before being paid out to various beneficiaries. 23. In tranche 1, Liebherr paid $905 000.88 to Accurate Investments on the 22nd of July 2013. This was ultimately paid out to: a. Sahara Computers, who received $499 500; b. Star Engineering, who received $93 378.61. Star Engineering were being paid for dairy processing equipment that was being purchased by Estina for use in the Vrede Diary Project; c. Wizcraft, who received AED475 620. Wizcraft was hired by the Gupta family to provide entertainment services for the infamous Sun City wedding of Aakash Jahajgarhia and Vega Gupta; d. Vikas Chaturvedi, who was paid AED616 500. Vikas Chaturvedi was an employee of the Gupta enterprise based in India and responsible for day-to-day logistics for the enterprise. E xecutive Summary – 09 24. In tranche 2, Liebherr paid $212 006.01 to Accurate Investments on the 17th of February 2014. This was ultimately paid out to: a. Linkway Trading, a Gupta enterprise company based in South Africa, which was paid $599 327, made up of the $212 006 from Liebherr commingled with other money flows; 25. In tranche 3, Liebherr paid $371 105.83 to Accurate Investments on the 15th of April 2014, which was ultimately paid out to: a. Oakbay Resources, which was paid $400 000 on the 29th of April 2014, made up of $371 105.83 from Liebherr commingled with other money flows; 26. In tranche 4, Liebherr paid $1 105 368.16 to Accurate Investments in three payments made in May 2014. This was ultimately paid out to: a. Brookfield Consultants, who were paid $5m on the 28th of May 2014, made up of $1 105 368.16 from Liebherr commingled with other funds, including money from JJ Trading. Brookfield Consultants was a US-based company controlled by relatives of the Gupta family. 27. In tranche 5, Liebherr paid $638 950 to Accurate Investments in two payments in October and December 2014. The accounting records revealed in the #Guptaleaks ended shortly after these payments were made. Tracing the ultimate disposition of these payments is therefore not possible based on documents in our possession. 28. In July 2017, after the payments from Liebherr to Accurate Investments was disclosed, Liebherr announced that it was to appoint an internal investigation into the matter. In October 2017, Liebherr announced that it was satisfied, based on its internal investigation, that the transactions were ‘legally sound’ and did not violate any applicable laws, although it admitted that the company’s ‘due diligence process might have been implemented in a more stringent manner.’ Liebherr further noted that the use of agents such as Accurate Investments was ‘common in the sales process for expenditure projects.’ 29. Based on the information at our disposal, this explanation does not seem sufficient. We urge the Commission to investigate this matter further. In particular, we urge the Commission to seek Liebherr’s explanation for the payments to Accurate in light of the fact that: a. Liebherr was bidding for a large capital project from a State-owned entity based on an open tender; b. Accurate Investments was little more than a corporate shell based in Dubai with a single Indian director, which had little to no infrastructure, online presence or any obvious connections to South Africa; c. Accurate Investments was, at all times, ultimately controlled by the Gupta enterprise; d. The only payments recorded into Accurate Investments accounts for the period under consideration were made by Liebherr Cranes and an unknown company called VK Trading Hong Kong; e. The only payments made out of Accurate Investments were made to Gupta enterprise entities. 10 – SUBMISSION: GUPTA ENTERPRISE & THE CAPTURE OF TRANSNET CONCLUSION AND RECOMMENDATIONS 30. Transnet was aggressively captured by the Gupta enterprise, which used its political connectivity to ensure that tens of billions of Rands worth of capital projects were awarded to CSR, CNR, CRRC, ZPMCC and Liebherr Cranes. 31. The Gupta enterprise, as a result of this capture, was due to be paid R7 763bn and a further $18.2m by CSR, CNR, CRRC and ZMPC. 32. The Gupta enterprise was also paid a further $3 232 430.88 by Liebherr Cranes between 2013 and 2014 in relation to Transnet crane contracts. These amounts were laundered out of Gupta enterprise accounts to be used for expenses such as entertainment for the infamous Sun City wedding, and to pay for dilapidated dairy equipment to be used on the Vrede Dairy Project. 33. The Gupta enterprise made use of three extensive money laundering networks to receive and pay out the funds from CSR, CNR, CRRC and ZMPC. The first money laundering network was run with the help of the Worlds Window group based in India. The second money laundering network was based in Hong Kong, and was implemented through payments to dozens of front companies based in Hong Kong and many more garment, textile and furniture manufacturers based in mainline China. The third money laundering network was based in the UAE, in which Gupta enterprise companies controlled bank accounts at Habib Bank. 34. The laundering of funds by the Gupta enterprise from Transnet contracts was enabled by some of the world’s biggest banks, including the Bank of Baroda and HSBC. 35. The scale of the theft from Transnet is staggering, and must rank as one of the largest corruption scandals to have ever been inflicted on the South African tax payers. 

CONCLUSION AND RECOMMENDATIONS 30. Transnet was aggressively captured by the Gupta enterprise, which used its political connectivity to ensure that tens of billions of Rands worth of capital projects were awarded to CSR, CNR, CRRC, ZPMCC and Liebherr Cranes. 31. The Gupta enterprise, as a result of this capture, was due to be paid R7 763bn and a further $18.2m by CSR, CNR, CRRC and ZMPC. 32. The Gupta enterprise was also paid a further $3 232 430.88 by Liebherr Cranes between 2013 and 2014 in relation to Transnet crane contracts. These amounts were laundered out of Gupta enterprise accounts to be used for expenses such as entertainment for the infamous Sun City wedding, and to pay for dilapidated dairy equipment to be used on the Vrede Dairy Project. 33. The Gupta enterprise made use of three extensive money laundering networks to receive and pay out the funds from CSR, CNR, CRRC and ZMPC. The first money laundering network was run with the help of the Worlds Window group based in India. The second money laundering network was based in Hong Kong, and was implemented through payments to dozens of front companies based in Hong Kong and many more garment, textile and furniture manufacturers based in mainline China. The third money laundering network was based in the UAE, in which Gupta enterprise companies controlled bank accounts at Habib Bank. 34. The laundering of funds by the Gupta enterprise from Transnet contracts was enabled by some of the world’s biggest banks, including the Bank of Baroda and HSBC. 35. The scale of the theft from Transnet is staggering, and must rank as one of the largest corruption scandals to have ever been inflicted on the South African tax payers.

Comments by Sonny

This is just a brief summary of the corruption by Jacob Zuma and his Gupta cronies who together ruined the economy of the whole SOUTH AFRICA.

ZUMA IS AVOIDING JUSTICE AND BELONGS IN PRISON FOR LIFE!

THE NEW REGIME UNDER CYRIL RAMAPHOSA IS JUST AS CORRUPT BUT DOES NOT WANT TO ACCEPT ACCOUNTABILITY!

THE PEOPLE OF SOUTH AFRICA MUST RULE IN THE END!

President Cyril Ramaphosa: 2022 State of the Nation Address

 10 Feb 2022

State of the Nation Address (SoNA) by President Cyril Ramaphosa, Cape Town City Hall, Thursday, 10 February 2022

Speaker of the National Assembly, Ms Nosiviwe Mapisa-Nqakula,
Chairperson of the National Council of Provinces, Mr Amos Masondo,
Deputy President David Mabuza,
Former President Thabo Mbeki,
Former Deputy President Phumzile Mlambo-Ngcuka,
Former Deputy President Baleka Mbete,
Former Speaker of the National Assembly, Mr Max Sisulu,
Acting Chief Justice Raymond Zondo,
Mayor of the City of Cape Town, Mr Geordin Hill-Lewis,
Dean of the Diplomatic Corps, Mr Bene M'Poko,
Members of the Judiciary,
Heads of Institutions Supporting Democracy,
Members of Parliament,
Fellow South Africans,

This year, for the first time since the dawn of our democracy, the SoNA is not being delivered in the Chamber of the National Assembly.

As we entered this new year, a huge fire engulfed the seat of our democracy.

We all watched in outrage and sadness as the flames devoured the buildings in which our democratic Constitution was born, in which laws of transformation and progress have been passed, in which the freely-chosen representatives of the people have shaped our young nation.

For many, what happened in Parliament speaks to a broader devastation in our land.

For many, the fire was symbolic of the devastation caused by the COVID-19 pandemic, by rising unemployment and deepening poverty.

It spoke to the devastation of a pandemic that over the past two years has taken the lives of tens of thousands of South Africans, put two million people out of work and brought misery to families.

The fire in Parliament reminded us of the destruction, violence and looting that we witnessed in parts of the country in July last year, of the more than 300 lives lost and many more livelihoods ruined.

As we reflect on the past year, we recall the words of President Thabo Mbeki who reminded us that: “Trying times need courage and resilience. Our strength as a people is not tested during the best of times”.

That we are gathered together in the Cape Town City Hall instead of the National Assembly Chamber reflects the extraordinary circumstances of this time.

It reflects the determination of the Presiding Officers of Parliament and indeed all the members of our two houses that the work of this democratic institution should continue without interruption.

There are moments in the life of a nation when old certainties are unsettled and new possibilities emerge.

In these moments, there is both the prospect of great progress and the risk of reversal.

Today, we are faced with such a moment.

The path we choose now will determine the course for future generations.

That is why we are taking steps to strengthen our democracy and reaffirm our commitment to a Constitution that protects us all.

We are working together to revitalise our economy and end the inequality and injustice that impedes our progress.

We are standing together against corruption and to ensure that those who are responsible for state capture are punished for their crimes.

We are rebuilding the State and restoring trust and pride in public institutions.

If there is one thing we all agree on, it is that the present situation – of deep poverty, unemployment and inequality – is unacceptable and unsustainable.

There is agreement among a broad and diverse range of South Africans that fundamental reforms are needed to revive economic growth.

There is a need both to address the immediate crisis and to create conditions for long-lasting stability and development.

To achieve this, South Africa needs a new consensus.

A consensus that is born out of a common understanding of our current challenging situation and a recognition of the need to address the challenges of unemployment, poverty and inequality.

This should be a new consensus which recognises that the State must create an environment in which the private sector can invest and unleash the dynamism of the economy.

But equally, an environment in which South Africans can live a better life and unleash the energy of their capabilities.

This should also be a new consensus which embraces our shared responsibility to one another, and acknowledges that we are all in this together.

As the social partners – government, labour, business and communities – we are working to determine the actions we will take together to build such a consensus.

We have begun discussions on what trade-offs are needed and what contribution we will each need to make.

We have given ourselves 100 days to finalise a comprehensive social compact to grow our economy, create jobs and combat hunger.

This work will build on the foundation of the Economic Reconstruction and Recovery Plan (ERRP), which remains our common programme to rebuild the economy,

We remain focused on the priorities we identified in the SoNA last year:

• overcoming the COVID-19 pandemic,
• a massive rollout of infrastructure,
• a substantial increase in local production,
• an employment stimulus to create jobs and support livelihoods,
• the rapid expansion of our energy generation capacity.
   

To be effective, this social compact needs to include every South African and every part of our society.

No one must be left behind.

Fellow South Africans,

When I last addressed the state of our nation, we were deep in the throes of the worst pandemic in more than a century.

Since COVID-19 reached our shores, we have endured successive waves of infection, the emergence of new variants and the devastating cost of nearly 100 000 recorded COVID-19 deaths.

South Africans have responded to this grave threat with courage and resilience, with compassion and restraint.

Over the past two years, we have taken unprecedented actions to strengthen our health system, build laboratory capacity and prevent infections.

The nation owes a great debt of gratitude to the dedicated healthcare workers and other frontline staff who put their health and their lives at risk to care for the ill and vulnerable during this pandemic.

Within weeks of the first reported infection in our country, I announced the establishment of the Solidarity Fund, with the goal of uniting the country in the fight against the pandemic.

In a wave of generosity that swept the country, the fund raised R3.4 billion from more than 300 000 individuals and 3 000 companies and foundations. More than 400 individuals and 100 companies volunteered their time and services.

The fund has played a pivotal role in supporting the national health response and alleviating the humanitarian crisis.

I would like to thank everyone who contributed to the Solidarity Fund and the great many who came together in countless other initiatives to support those affected by the pandemic.

As the trajectory of the pandemic has continued to change, we have had to adapt and evolve.

Our approach has been informed throughout by the best available scientific evidence, and we have stood out both for the quality of our scientists and for their involvement in every step of our response.

During the past year, we have focused on accelerating our vaccine rollout.

So far, we have administered 30 million doses of COVID-19 vaccines. Consequently, nearly 42% of all adults and 60% of everyone over 50 is fully vaccinated.

We are now ready to enter a new phase in our management of the pandemic.

It is our intention to end the national state of disaster as soon as we have finalised other measures under the National Health Act, 2003 (Act 61 0f 2003) and other legislation to contain the pandemic.

Nearly all restrictions on economic and social activity have already been lifted.

Vaccines have proven to be the best defence we have against illness and death from COVID-19.

If we all get vaccinated, continue to observe basic health measures and remain ever vigilant, we will be able to get on with our lives even with the virus in our midst.

The state of the nation is linked inextricably to the state of our economy.

In addition to the divides of race, geography and education, COVID-19 has exacerbated the divide between those who are employed and unemployed.

Last year, our unemployment rate reached its highest recorded level.

Unemployment has been caused by low growth, which has in turn resulted from a long-term decline in investment.

In the last year, we have benefited from a clear and stable macroeconomic framework, strong commodity prices and a better-than-expected recovery.

However, we have been held back by an unreliable electricity supply, inefficient network industries and the high cost of doing business.

We have been taking extraordinary measures to enable businesses to grow and create jobs alongside expanded public employment and social protection.

We all know that government does not create jobs. Business creates jobs.

Around 80% of all the people employed in South Africa are employed in the private sector.

The key task of government is to create the conditions that will enable the private sector – both big and small – to emerge, to grow, to access new markets, to create new products, and to hire more employees.

The problems in the South African economy are deep and they are structural.

When electricity supply cannot be guaranteed, when railways and ports are inefficient, when innovation is held back by a scarcity of broadband spectrum, when water quality deteriorates, companies are reluctant to invest and the economy cannot function properly.

With a view to addressing these challenges we are accelerating the implementation of far-reaching structural reforms to modernise and transform these industries, unlock investment, reduce costs and increase competitiveness and growth.

The electricity crisis is one of the greatest threats to economic and social progress.

In the last few days, we have once again been reminded of the fragility of our electricity system.

Load shedding continues to have a huge impact on the lives of all South Africans, disrupting business activities, and placing additional strains on families and communities.

Due to our aging power stations, poor maintenance, policy missteps and the ruinous effects of state capture, our country has a shortfall of around 4000 MW of electricity.

During the past year, we have taken firm steps to bring additional generation capacity online as quickly as possible to close the shortfall.

As a result, several new energy generation projects will be coming online over the next few years. This includes:

• Over 500 MW from the remaining projects in Bid Window 4 of the renewable energy programme, which are at advanced stages of construction.
• 2 600 MW from Bid Window 5 of the renewable energy programme, for which the preferred bidders were announced last year,
• up to 800 MW from those risk mitigation power projects that are ready to proceed,
• 2 600 MW from Bid Window 6 of the renewal energy programme, which will soon be opened,
• 3,000 MW of gas power and 500 MW of battery storage, for which requests for proposals will be released later this year,
• an estimated 4 000 MW from embedded generation projects in the mining sector,
• approximately 1 400 MW currently in the process of being secured by various municipalities.
   

In addition to closing the energy supply shortfall, we are implementing fundamental changes to the structure of the electricity sector.

Eskom has established a separate transmission subsidiary, and is on track to complete its unbundling by December 2022.

The utility has continued with its intensive maintenance programme, to reverse many years of neglected maintenance and underperformance of existing plants.

To regulate all of these reforms, Cabinet yesterday approved amendments to the Electricity Regulation Act, 2006 (Act of 2006) for public comment.

These far-reaching amendments will enable a competitive market for electricity generation and the establishment of an independent state-owned transmission company.

Our economy cannot grow without efficient ports and railways.

Over several years, the functioning of our ports has declined relative to ports in other parts of the world and on the African continent. This constrains economic activity.

The agricultural sector, for example, relies heavily on efficient, well-run ports to export their produce to overseas markets.

Fresh produce cannot wait for days and even weeks stuck in a terminal.

This hurts businesses and compromises our country’s reputation as an exporter of quality fresh produce.

Transnet is addressing these challenges and is currently focused on improving operational efficiencies at the ports through procuring additional equipment and implementing new systems to reduce congestion.

Transnet will ask for proposals from private partners for the Durban and Ngqura Container Terminals within the next few months, which will enable partnerships to be in place at both terminals by October 2022.

Transnet will start the process of providing third-party access to its freight rail network from April 2022 by making slots available on the container corridor between Durban and City Deep in Gauteng.

Transnet has developed partnerships with the private sector to address cable theft and vandalism on the freight rail network through advanced technologies and additional security personnel.

This collaborative effort is already showing results in reduced disruptions to rail operations.

The poor state of passenger rail in South Africa has a direct and detrimental impact on the lives of our people.

We are therefore working hard to rehabilitate the passenger rail network in 10 priority corridors.

The Southern Line in Cape Town and the Mabopane Line in Pretoria have been re-opened to be followed by the remaining lines in the next year.

One of the greatest constraints on the technological development of our economy has been the unacceptable delay in the migration of broadcasting from analogue to digital.

The switch-off of analogue transmission has been completed in a number of provinces.

As I announced in the SoNA last year, the other provinces will move to digital signal by the end of March 2022.

As part of this process, government will continue to subsidise low-income households so that they can access a set-top box and make the switch to digital TV.

Our communications regulator, ICASA, will commence with the auctioning of the high frequency communications spectrum in about three weeks from now.

This will unlock new spectrum for mobile telecommunications for the first time in over a decade.

In addition, we will facilitate the rapid deployment of broadband infrastructure across all municipalities by establishing a standard model for the granting of municipal permissions.

These reforms will revolutionise the country’s technological development, making faster broadband accesible to more people and reducing the costs of digital communications.

The world over, the ability to attract skilled immigrants is the hallmark of a modern, thriving economy.

We are therefore streamlining and modernising the visa application process to make it easier to travel to South Africa for tourism, business and work.

As we committed last year, the eVisa system has now been launched in 14 countries, including China, India, Kenya and Nigeria.

The revised Critical Skills List has been published for the first time since 2014, following detailed technical work and extensive consultations with business and labour. The updated list reflects the skills that are in shortage today, to ensure that our immigration policy matches the demands of our economy.

A comprehensive review of the work visa system is currently underway, led by a former Director-General of Home Affairs, Mr Mavuso Msimang.

This review is exploring the possibility of new visa categories that could enable economic growth, such as a start-up Visa and a remote working visa.

Water is the country’s most precious natural resource.

It is vital to life, to development and to economic growth.

That is why we have prioritised institutional reforms in this area to ensure future water security, investment in water resources and maintenance of existing assets.

We have embarked on the process of institutional reform in capacitating the Department of Water and Sanitation (DWS) and reviewing water boards in as far as their mandates are concerned and ensuring that they serve municipalities in terms of the District Development Model (DDM).

These reforms are being championed by the Minister of Water and Sanitation, who has visited every water source in the country.

A comprehensive turnaround plan is being implemented to streamline the process for water use license applications. The target is to clear the backlog of applications by June 2022 and to process 80% of all applications within 90 days during the next financial year.

Legislation has been prepared for the establishment of the National Water Resources Infrastructure Agency, and will be published for public comment within the next month.

The water quality monitoring system has been reinstated to improve enforcement of water standards at municipal level, and enable the DWS to intervene where water and sanitation services are failing.

We will review the policy and regulatory framework for industrial hemp and cannabis to realise the huge potential for investment and job creation.

While structural reforms are necessary for us to revive economic growth, they are not enough on their own.

This year, we are undertaking far-reaching measures to unleash the potential of small businesses, micro businesses and informal businesses.

These are the businesses that create the most jobs and provide the most opportunities for poor people to earn a living.

We have started discussions with social partners as part of the social compact process to review labour market regulations for smaller businesses to enable them to hire more people, while continuing to protect workers’ rights.

A new, redesigned loan guarantee scheme is being introduced to enable small businesses to bounce back from the pandemic and civic unrest.

This new bounce-back scheme incorporates the lessons from the previous loan guarantee scheme.

It will involve development finance institutions and non-bank SME providers in offering finance, expand the types of financing available and adjust eligibility criteria to encourage greater uptake.

The National Treasury is working with industry stakeholders to finalise the scheme and will provide details soon.

We are reviewing the Business Act, 1991 (Act 71 of 1991) – alongside a broader review of legislation that affects small, medium and small-enterprises (SMMEs) – to reduce the regulatory burden on informal businesses.

There are too many regulations in this country that are unduly complicated, costly and difficult to comply with. This prevents companies from growing and creating jobs.

We are, therefore, working to improve the business environment for companies of all sizes through a dedicated capacity in The Presidency to reduce red tape.

If we are to make progress in cutting unnecessary bureaucratic delays for businesses, we need dedicated capacity with the means to make changes.

I have therefore appointed Mr Sipho Nkosi to head up a team in my office to cut red tape across government.

Mr Nkosi has extensive experience in business, including as the CEO of Exxaro Resources, and is currently the chairperson of the Small Business Institute.

The red tape team will identify priority reforms for the year ahead, including mechanisms to ensure government departments pay suppliers within the required 30 days.

The team will also work with other departments and agencies to unblock specific obstacles to investment and business growth. It will support current initiatives to simplify processes relating to property registration, cross-border trade and construction permits.

Infrastructure is central to our economic reconstruction and recovery.

Through innovative funding and improved technical capabilities, we have prioritised infrastructure projects to support economic growth and better livelihoods, especially in energy, roads and water management.

The Infrastructure Fund is at the centre of this effort, with a R100 billion allocation from the fiscus over 10 years.

The fund is now working with state entities to prepare a pipeline of projects with an investment value of approximately R96 billion in student accommodation, social housing, telecommunications, water and sanitation and transport.

Several catalytic projects to the value of R21 billion are expected to start construction this year. Of this, R2.6 billion is contributed by government and the balance from the private sector and developmental finance institutions.

Government will make an initial investment of R1.8 billion in bulk infrastructure, which will unlock seven private sector projects to the value of R133 billion.

For millions of South Africans in rural areas, roads and bridges provide access to markets, employment opportunities and social services.

Yet, many children still have to brave overflowing rivers to reach schools and motorists have to battle impassable roads to reach the next town.

We are therefore upscaling the Welisizwe Rural Bridges Programme to deliver 95 bridges a year from the current 14.

Our South African National Defence Force (SANDF) is the implementing agent of the Welisizwe programme, and has demonstrated the expertise of SANDF engineers in bridge construction.

Earlier this week, I was in Thakgalane village Limpopo to launch a new road that is going to make a huge difference in the lives of neighbouring communities. This road was constructed using block paving and other materials, which is a method that enables us to build durable roads faster and more cost-effectively.

The rural roads programme will use labour intensive methods to construct or upgrade 685 kilometres of rural road over the next three years. This social enterprise programme includes access roads in Limpopo and Eastern Cape, gravel to surface upgrades in the Free State and North West, and capacity and connectivity improvements in the Western Cape.

Government has initiated the process of delivering the uMzimvubu Water Project.

The project is made of the Ntabelanga Dam and Lalini Dam, irrigation infrastructure and hydo-electric plant, Ntabelanga water treatment works and bulk distribution infrastructure to reticulate to the neighboring communities.

The closing date for the first of the two-stage procurement process is scheduled to close later this month, with the preferred bidder likely to be announced in September 2022.

Government is introducing an innovative social infrastructure delivery mechanism to address issues that afflict the delivery of school infrastructure.

The mechanism will address the speed, financing and funding, quality of delivery, mass employment and maintenance.

The new delivery mechanism will introduce a Special Purpose Vehicle, working with prominent Development Finance Institutions and the private sector, to deliver school education infrastructure.

This approach is being piloted in schools in the Northern Cape and Eastern Cape.

Over the past year, government has built on its successful Hydrogen SA strategy to make major strides in positioning South Africa as a global leader in this new market.

This includes the development of a Hydrogen Society Roadmap for the next 10 years as well as a Green Hydrogen Strategy for the Northern Cape, supporting the development of a green hydrogen pipeline worth around R270 billion.

The damage caused by the theft of scrap metal and cable on our infrastructure like electricity, trains and other vital services is enormous. We will take decisive steps this year both through improved law enforcement and by considering further measures to address the sale or export of such scrap metal.

An important pillar of our ERRP is to revitalise our manufacturing base and create globally competitive export industries.

In the past year, we launched new master plans in the steel industry, furniture and global business services.

Through these plans, business, government and labour are working together to increase production and create more jobs in the sector.

In the clothing industry, a number of retailers have announced ambitious localisation sourcing plans.

One of these retailers, Foschini, kindly made the suit that I am wearing today at its new formal wear factory, Prestige Epping.

Five years ago, more than 80% of all Foschini Group merchandise came from the East. Today, nearly half of the merchandise is locally made.

The genuine leather shoes I am wearing were made by members of the National Union of Leather and Allied Workers from Bolton Footwear in Cape Town and Dick Whittington Shoes in Pietermaritzburg.

Nearly four years ago, we set ourselves a target of mobilising R1.2 trillion in new investment over five years.

By the time of the third South Africa Investment Conference in November 2020, we had reached R776 billion in investment commitments.

Next month, on the 24th of March, we will be holding the fourth South Africa Investment Conference in Johannesburg.

We will showcase the many investment opportunities available as South Africa continues its recovery from the COVID-19 pandemic, and report back on the progress of previous commitments.

Following the resolutions of the African Union Summit over the past weekend, trading can now begin under the African Continental Free Trade Area agreement

South African companies are poised to play a key role in taking up the opportunities that this presents for preferential access to other African markets.

The Free Trade agreement is about Africa taking charge of its destiny and growing its economies faster.

We will continue to pursue Africa’s health sovereignty, working with other African countries and international partners to support the strengthening of the continent’s capacity to respond to pandemics.

We will increase our efforts to develop Africa’s ability to manufacture vaccines.

We have made significant progress here in South Africa.

We now have two South African companies – Aspen and Biovac – with contracts to produce COVID-19 vaccines. Two additional vaccine projects have also been announced.

In addition, we have full local production capability for ventilators, hand sanitisers, medical-grade face masks and gloves and therapeutic drugs and anaesthetics.

This production capability worth many billions of rand of production annually, has been put in place in less than two years.

South African products have been exported to other African countries, securing them vital supplies and expanding jobs for young South Africans.

While we help existing industries to grow, we are also nurturing new opportunities for growth and jobs.

Government and the private sector have worked closely together to grow the global business services sector from a small group of companies to one of the world’s leading players.

The global business services sector is on track to create 500 000 new jobs over the next few years.

The hemp and cannabis sector has the potential to create more than 130 000 new jobs.

We are therefore streamlining the regulatory processes so that the hemp and cannabis sector can thrive like it is in other countries such as Lesotho.

Our people in the Eastern Cape, KwaZulu-Natal and elsewhere are ready to farm with this age-old commodity and bring it to market in new and innovative forms.

The social economy, including early childhood development, nursing, social work and community services, has significant potential not only to create jobs, but to provide vital services that communities need.

Some of the country’s mature industries also have a lot to offer in revamping the industrial and manufacturing potential of our country.

The agriculture sector has significant potential for job creation in crops such as citrus, table and dried grapes, subtropical fruit, avocadoes, berries and nuts.

Masterplans in the sugar and poultry industries are contributing significantly to increased investment, improved production and transformation.

To attract investors into the mining minerals needed in the new global economy, we will soon be finalising our mining exploration strategy.

We will continue to support the development of the upstream gas industry, as it holds huge potential for job creation and broader economic development.

We will ensure that this is done in strict accordance with the environmental and other laws of our country, and that where there are differences, we work together to resolve them in the interest of our country and its people.

We live in one of the regions of the world that is most affected by climate change.

We frequently experience droughts, floods and other extreme weather events associated with global warming. Recently floods have affected a number of provinces, including KwaZulu-Natal, Gauteng and the Eastern Cape.

These have already caused enormous damage to infrastructure and livelihoods.

In the last year, we have made important strides in the fight against climate change, and, at the same time, securing our economic competitiveness.

For the first time, our climate targets are compatible with limiting warming to 1.5°C.

This is the goal that all countries agreed to as part of the Paris Climate Agreement, and is essential to prevent the worst effects of climate change.

Since I established the Presidential Climate Commission a little more than a year ago, it has done much work to support a just transition to a sustainable, inclusive, resilient and low-carbon economy.

At the international climate conference in Glasgow last November, South Africa struck a historic R131 billion deal with the European Union, France, Germany, United Kingdom and the United States.

This first-of-its-kind partnership will involve repurposing and repowering some of the coal plants that are reaching the end of their lives, and creating new livelihoods for workers and communities most impacted by this change.

To ensure that South Africa is able to derive the full benefit of this and other partnerships, I have appointed Mr Daniel Mminele, a former Deputy Governor of the Reserve Bank, as Head of the Presidential Climate Finance Task Team to lead the mobilisation of funds for our just transition.

Properly managed, the energy transition will benefit all.

Renewable energy production will make electricity cheaper and more dependable, and will allow our industries to remain globally competitive.

Investments in electric vehicles and hydrogen will equip South Africa to meet the global clean energy future.

We will be able to expand our mining industry in strategic minerals that are crucial for clean energy, like platinum, vanadium, cobalt, copper, manganese and lithium.

We also have a unique opportunity in green hydrogen, given our world-class solar and wind resources and local technology and expertise.

All of these measures – from structural reforms to support for SMMEs, investments in infrastructure and the emergence of new sectors – will drive a turnaround in economic growth driven by the private sector growth over the coming years.

We know, however, that even with the best business environment and much faster rates of economic growth, it will take time for the private sector to create enough jobs for the millions of South Africans who need them.

Our intent is to leave no one behind.

That is why we are expanding public and social employment.

The first two phases of the Presidential Employment Stimulus programmes, which we launched in October 2020 have supported over 850 000 opportunities.

More than 80 per cent of participants were young people, and over 60% were women.

It has supported young women like Tracy Nkosi from Springs, who was employed as an education assistant at Welgedag Primary School, and who says this opportunity has motivated her to further her studies in the educational sphere.

It has also supported Mama Nosipho Cekwana from Impendle in KwaZulu-Natal who used her farming input voucher to buy maize, manure and supplements for her livestock.

 

The total number of direct beneficiaries will soon rise to over one million South Africans.

This includes over half a million young people appointed as education assistants, making it the largest youth employment programme ever undertaken in our history.

The employment stimulus will also enable the Department of Home Affairs to recruit 10 000 unemployed young people for the digitisation of paper records, enhancing their skills and contributing to the modernisation of citizen services.

The Social Employment Fund will create a further 50 000 work opportunities using the capability of organisations beyond government, in areas such as urban agriculture, early childhood development, public art and tackling gender-based violence.

In addition to expanding public employment, we are providing support to young people to prepare them for work and link them to opportunities.

To encourage hiring by smaller businesses, we will be increasing the value and expanding the criteria for participation in the Employment Tax Incentive.

For several years, this has been an effective way to encourage companies to hire new work seekers. The changes to the incentive will make it easier for small businesses in particular to hire young people.

The Minister of Finance will announce the details of these changes in the budget.

We call on companies to support this effort, take up the incentive and give young people a place in the world of work.

The SAYouth.mobi platform for young work seekers to access opportunities and support now has more than 2.3 million young South Africans registered.

Of these over 600 000 have been placed into employment opportunities.

A revitalised National Youth Service will recruit its first cohort of 50 000 young people during the next year, creating opportunities for young people to contribute to their communities, develop their skills and grow their employability.

The Department of Higher Education and Training will place 10,000 unemployed TVET graduates in workplaces from April 2022.

In preparing this SoNA, I was assisted by two young South Africans who are working as interns in The Presidency, Ms Naledi Malatji and Ms Kearabetswe Mabatle.

They told me about the pain felt by young people who find themselves with a qualification, but are unemployed because of lack of experience.

This forces many into jobs that have little or nothing to do with what they studied.

All of the measures I have outlined are essential to provide young people with the work experience that they need to take their first step into the labour market.

We are calling on the private sector to support these measures – and, wherever possible, to drop experience as a hiring requirement – to give as many young people as possible their first job.

As we work to grow the economy and create jobs, we will expand support to poor families to ensure that no person in this country has to endure the pain and indignity of hunger.

Our social protection system is among the greatest achievements of the democratic government, reaching more than 18 million people every month.

Without this support, millions more people would live in dire poverty.

Since the onset of COVID-19, the Social Relief of Distress Grant has provided support to more than 10 million unemployed people who were most vulnerable to the impact of the pandemic.

Some people used that money to start businesses.

Mr Thando Makhubu from Soweto received the R350 grant for seven months last year, and saved it to open an ice-cream store that now employs four people.

Mr Lindokuhle Msomi, an unemployed TV producer from KwaMashu Hostel, saved the R350 grant he received for nine months to start a fast food stall and to support his family.

As much as it has had a substantial impact, we must recognise that we face extreme fiscal constraints.

A fiscal crisis would hurt the poor worst of all through the deterioration of the basic services on which they rely.

Mindful of the proven benefits of the grant, we will extend the R350 grant for one further year, to the end of March 2023.

During this time, we will engage in broad consultations and detailed technical work to identify the best options to replace this grant.

Any future support must pass the test of affordability, and must not come at the expense of basic services or at the risk of unsustainable spending.

It remains our ambition to establish a minimum level of support for those in greatest need.

Expanding access to land is vital for our efforts to reduce hunger and provide people with meaningful livelihoods.

We are moving ahead with land reform in terms of the Constitution, and anticipate the approval of the Expropriation Bill during this year.

The establishment of the Agriculture and Land Reform Development Agency will be finalised this year.

The Department of Public Works and Infrastructure will finalise the transfer of 14 000 hectares of state land to the Housing Development Agency.

We have enough arable land to support millions of thriving small-scale farmers in poultry, livestock, fruit and vegetables.

Through the Presidential Employment Stimulus and the Solidarity Fund, over 100 000 farmers have already received input vouchers to expand their production.

This scheme has proven to be effective and impactful.

The agriculture sector has also recognised the importance of supporting small-scale farmers and integrating them into value chains.

Through the sugar master plan, the industry has provided R225 million to over 12 000 small-scale sugar cane growers as part of a R1 billion commitment to support black farmers.

We will be expanding the provision of input vouchers and calling on other sectors to join this effort, so that we can collectively reach up to 250 000 small-scale farmers this year.

None of our efforts to revive our economy will succeed if we do not tackle the scourge of corruption once and for all.

Since the beginning of the year, I have been provided with the first two parts of the report of the Commission of Inquiry into State Capture headed by Acting Chief Justice Raymond Zondo.

While the definitive conclusion has yet to be delivered at the end of this month, the first two parts of the report make it plain that there was indeed ‘state capture’.

This means that public institutions and state-owned enterprises (SOEs) were infiltrated by a criminal network intent on looting public money for private gain.

The reports have detailed the devastating effects of this criminal activity on South African Airways, Transnet, Denel, South African Revenue Service (SARS) and Government Communications.

State capture had a direct and very concrete negative impact on the lives of all South Africans, but especially the poorest and most vulnerable members of our society.

It has weakened the ability of the State to deliver services and to meet the expectations and constitutional rights of people.

We must now do everything in our power to ensure that it never happens again.

My responsibility is to ensure that the commission report is properly and carefully considered and then acted upon.

By no later than 30 June, I will present a plan of action in response to the commission’s recommendations.

We will, as the commission’s first report recommends, strengthen the system to protect whistle-blowers, who are a vital safeguard in the fight against corruption and who take huge personal risk in reporting wrongdoing.

We are doing a detailed review of all applicable legislation and a comparative study of other jurisdictions to strengthen whistle-blower protection.

The relevant law enforcement agencies are taking the necessary steps to address the immediate concern about the safety of whistle blowers.

Many individuals and companies that the commission has found were responsible for state capture must now be held to account.

I have every confidence that the National Prosecuting Authority (NPA) will carry out the further investigations that the commission has recommended, and that it will bring the members of the criminal network that infiltrated government and captured the State swiftly to justice.

The Investigating Directorate in the NPA is now poised to deliver on its crucial mandate, and a dedicated team has been established to pursue these cases.

We will be appointing a new head of the Investigating Directorate following the departure of Adv Hermione Cronje from that position.

An amendment to the State Capture Commission regulations in June 2020, empowered the sharing of information between the Commission and law enforcement agencies.

This amendment also permitted the employment of the State Capture Commission personnel by law enforcement agencies.

These empowering provisions has geared the Investigating Directorate to more effectively pursue the investigations emanating from the commission.

We have gratefully acknowledged the offer of support from the private sector to assist in providing those skills which we lack in government to enable investigation and prosecution of crime.

To ensure that the prosecuting authority remains true to its constitutional obligation and to ensure transparency, we are developing a framework for private sector cooperation that will be managed through National Treasury.

There are also discussions underway with the Judiciary for the creation of special court rolls for state capture and corruption cases.

While we have taken decisive steps to end the era of state capture, we know that the fight against corruption is far from over.

Even as the country was suffering the devastation of the COVID-19 pandemic, companies and individuals were conspiring with public officials to defraud the government of billions of rand in COVID-related contracts.

As soon as evidence emerged of this corruption we acted.

We withdrew certain emergency procurement regulations, set up a fusion centre that brought together various law enforcement agencies, published the details of all COVID-related contracts online and instituted the most extensive investigation that the Special Investigating Unit (SIU) has undertaken since its formation.

In December, the SIU submitted its final report on its investigation into COVID-related contracts.

As a result, 45 matters, with a combined value of R2.1 billion, have been enrolled with the Special Tribunal.

The SIU has referred 224 government officials for disciplinary action and referred 386 cases for possible prosecution to the NPA.

The Presidency has set up mechanisms to monitor implementation of the recommendations of the SIU and ensure that government departments and entities act against those who have violated regulations and broken the law.

The fight against corruption will take on a new intensity thanks to the outcomes of the State Capture Commission, the strengthening of law enforcement agencies and the implementation of new anti-corruption practices in the public service.

SOEs play a vital role in our economy.

From water and roads, to energy and ports, to defence and aviation, these strategic assets are necessary to keep our country running.

It is essential that we reverse their decline, and position them to contribute positively.

We have therefore embarked on several immediate measures to restore these companies to health, at the same time as we undertake far-reaching reforms that will make our SOEs more efficient, competitive, accountable and sustainable.

The Presidential SOE Council, which I appointed in 2020, has recommended that government adopt a centralised shareholder model for its key commercial state-owned companies. This would separate the State’s ownership functions from its policy-making and regulatory functions, minimise the scope for political interference, introduce greater professionalism and manage state assets in a way that protects shareholder value.

As part of this, preparatory work has begun for the establishment of a state-owned holding company to house strategic SOEs and to exercise coordinated shareholder oversight.

To ensure that SOEs are effectively fulfilling their responsibilities, the Presidential SOE Council is preparing recommendations on SOEs to be retained, consolidated or disposed of.

Any recommendations would be subject to extensive consultation with all stakeholders.

We are taking steps to safeguard our democracy, protect our economic infrastructure and build safer communities for all.

Earlier this week, we released the report of the expert panel into the civil unrest in July last year.

The report paints a deeply disturbing picture of the capabilities of our security services and the structures that exist to coordinate their work.

The report concludes that government’s initial handling of the July 2021 events was inept, police operational planning was poor, there was poor coordination between the state security and intelligence services, and police are not always embedded in the communities they serve.

The expert panel said that if the violence has exposed anything it was the poverty and inequality that is the root cause of the desperation of the people of South Africa.

The expert panel found that Cabinet must take overall responsibility for the events of July 2021.

This is a responsibility that we acknowledge and accept.

We will, as recommended by the panel, develop and drive a national response plan to address the weaknesses that the panel has identified.

We will begin immediately by filling critical vacancies and addressing positions affected by suspensions in the State Security Agency and Crime Intelligence.

We will soon be announcing leadership changes in a number of security agencies to strengthen our security structures.

The staffing of the public order policing unit of the South African Police Service will be brought to an appropriate level, with appropriate training courses in place.

The ongoing damage to and theft of economic infrastructure has damaged confidence and severely constrained economic growth, investment and job creation.

At the same time, we need to confront the criminal gangs that invade construction sites and other business places to extort money from companies.

This requires a focused and coordinated response.

Government has therefore established specialise multi-disciplinary units to address economic sabotage, extortion at construction sites and vandalism of infrastructure.

We will make resources available to recruit and train an additional 12 000 new police personnel to ensure that the South African Police Service urgently gets the capacity it needs.

Another area of immediate attention will be the re-establishment of community policing forums to improve relations and coordination between local police and residents of the areas they serve.

It is clear from the observations of the expert panel that we need to take a more inclusive approach to assessing the threats to our country’s security and determining the necessary responses.

I am calling on all South Africans through their various formations to participate in developing our National Security Strategy.

I will be approaching Parliament’s presiding officers to request that Parliament plays a key role in facilitating inclusive processes of consultation.

The security services have been tasked by the National Security Council to urgently develop implementation plans that address the range of recommendations made by the expert panel.

These measures will go a long way to address the serious concerns about the breakdown of law and order in society.

This year, we are intensifying the fight against gender-based violence and femicide through implementation of the National Strategic Plan on Gender-Based Violence and Femicide, and other measures to promote the empowerment of women.

Earlier this month, I signed into law three new pieces of legislation, which has strengthened the criminal justice system, promoting accountability across the State and supporting survivors.

The implementation of this legislation will go a long way to ensuring that cases are successfully prosecuted, that survivors are protected and that there are more effective deterrents in place.

We have made significant progress in reducing the backlog in DNA processing, reducing it from 210 000 exhibits in April 2021 to around 58 000 at present.

However, the fight against gender-based violence will never be won unless, as society, we mobilise all formations and all citizens behind a sustained programme of social action.

As the COVID-19 pandemic has starkly demonstrated, a nation’s health is inextricably linked with its economic progress and social development.

We will therefore continue with the work underway to ensure universal health coverage for everyone in South Africa, regardless of their ability to pay.

While public hearings on the National Health  (NHI) Bill are continuing in Parliament, much progress is being made in preparing for the introduction of NHI.

More than 59 million people are registered in the Health Patient Registration System.

By September 2021, more than 56 000 additional health workers had been recruited and more than 46 000 community health workers integrated into the public health system.

For the last two years, the education of our children and young people has been severely disrupted.

As we return to normal educational activity, we will work harder to ensure that all learners and students get the quality education they need and deserve.

Fellow South Africans,

Government must work for the people.

That is why our foremost priority is to build a capable, ethical and developmental state.

We will soon be finalising a framework for the professionalisation of the public service.

This will include tighter measures for recruitment of public servants, continuous professional development through the National School of Government and partnerships between state bodies, professional associations and universities.

Lifestyle audits are already being implemented across the Public Service.

This year, we will continue with the implementation of the DDM.

This model brings all three spheres of government together with other social partners in every district to grow inclusive local economies and improve the lives of citizens.

In particular, the DDM facilitates integrated planning and budgeting across spheres of government and improves integration of national projects at a district level.

While there are many parts of the state that require much work, there are institutions that continue to serve the people of this country effectively and efficiently.

One such institution is the SARS, which will be 25 years old this year.

While SARS was badly damaged by state capture, it has made remarkable progress in restoring its integrity, credibility and performance.

Since its formation, SARS has collected some R16 trillion for the country’s social and economic development. This revenue has enabled government to improve the lives of millions through the provision of healthcare, education, social grants and other basic services.

A capable state is not only about the quality of public servants and the efficiency of institutions.

It is also, fundamentally, about how citizens are empowered to participate.

We must work together to ensure that platforms like schools governing bodies and community policing forums are more active and inclusive.

A vibrant civil society is crucial for a capable state and for development.

We will therefore be working with social partners to convene the long-awaited social sector summit.

This summit will seek to improve the interface between the state and civil society and address the challenges that non-governmental organisations and community-based organisations face.

Our country has suffered several damaging blows in recent times.

A confluence of forces, many of them outside of our control, has brought us to where we are now.

We face steep and daunting challenges.

Indeed, we are engaged in a battle for the soul of this country.

But there can be no doubt that we will win.

I ask every South African to rally together in our fight against corruption, in our fight to create jobs, in our fight to achieve a more just and equal society.

We have faced many crises in our past, and we have overcome them.

We have been confronted with difficult choices, and we have made them.

In trying times, we have shown courage and resilience

Time and time again, we have pulled ourselves back from the brink of despair and inspired hope, renewal and progress.

Now, we must do so again.

Let us forge a new consensus to confront a new reality, a consensus that unites us behind our shared determination to reform our economy and rebuild our institutions.

Let us get to work.

Let us rebuild our country.

And let us leave no one behind.

I thank you.

COMMENTS BY SONNY

IF ALL THE CADRES THAT BROKE THE LAWS OF THE LAND DON'T GET PROSECUTED, THEN PRESIDENT RAMAPHOSA WILL BE OBLIGED TO FALL ON HIS OWN SWORD!

THIS MUST HAPPEN IMMEDIATELY!