Chairperson of the Board, Ms Jeanne Esterhuizen

Deputy Chairperson, Cde Xolani Tshayana

CEO of Merseta, Dr. Patel

Leadership of SEIFSA,

Leadership of Organised Labour,

Honourable Members of the Board,

Ladies and Gentlemen:

I greet you all.


Allow me to thank the leadership of MERSETA for inviting me, a leader of a trade union to come and address these important 2009/2010 Annual General Meeting. Brace yourselves for rhetoric, rhetoric and more rhetoric!

This AGM takes place few days after the World Economic Forum Competitiveness Report was published which revealed that our country South Africa has lost a few places to become number 54 in the competitiveness scale.

I wish to use this report and our country choices in the last 16 years to answer the famous rhetoric question: what is to be done?…….to forge the future!

Wise people have always advised that you cannot forge the future without looking at your history.


Cde Tito Mboweni, the then Minister of Labour called the for a skills revolution when he introduced the White Paper on Skills Development Act in 1994. Here we are today as a country, ranked number 54 in the world in terms of competitiveness.

The WEF identifies twelve pillars as determinants of competitiveness. I will focus on four of them for my input: institutions, higher education and training, health and primary education and innovation.

It is important though to stress that all twelve pillars are interrelated; a weakness in one area has a negative impact on other areas.

MERSETA is an important institution for the delivery of skills in our sector, but why are still talking about the shortage of skills in our sector?

I want to refer you to the rhetoric by Mr. Nic Segal who was a Deputy Chair, Business South Africa in 1994, he said; “Business recognizes the critical need to upgrade skills.

It is a crucial element in our drive for international competitiveness. South Africa has a poorly developed skills base partly because the economy itself did not demand skills. This must change dramatically”

Brilliant statement from Business South Africa! The question is was there a dramatic change? I want to put it to SEIFSA, the biggest employer in our industry, that there was no dramatic change.

For strange reasons, companies decided to contribute the 1 percent of the levy to the skills development levy and pulled back from playing any meaningful role in ensuring that the country continued to produce the skills for the country.

Coming from a sad history of apartheid where there was skills reservation for particular groups in our country, I cannot comprehend why companies, members of SEISFA in these case did not ensure that we increase the numbers of apprenticeship contracts to prepare for competition from other markets.

I would have expected that clever business people would appreciate the opening of South Africa’s economy to the world and prepare the country accordingly.

I tend to think that it was a deliberate act by South African business to see if this ANC government will succeed. We are here now; it is our economy that suffers.

Am I accusing wrong people, have others left for Australia? Mr. Brian Angus, a senior executive of SEIFSA complained about the lack of skills in the industry on his retirement but I challenge him and his colleagues that they had a role in that lack of skills in the industry for reasons which I am still failing to comprehend.

The 2007 Centre for Development and Enterprise study reveals this about some big SETAs:

“A review of five SETAs in three sectors (finance, chemicals and electricity, gas and
water supply) against three criteria (percentage of employees reached, addressing scarce skills and addressing equity issues) produced the following key findings:

Only a small percentage of employees – around 2 per cent in each case – in
each sector directly benefited from training supported by SETAs.

In two of the three sectors training appeared to address scarce skills. However, closer investigation suggested that, as SETAs themselves define what is ‘scarce’, there is a tendency to inflate the category by nominating skills as scarce because they are within SETAs’ capacity to address as priorities rather than because they are in fact scarce skills.

In the case of equity considerations, ‘one size fits all’ percentage target setting may similarly be distorting training by giving SETAs the incentive to provide low-level training driven by the ease of reaching targets rather than strategically shifting the equity profile of the sector.”

The question to Board Members, including those from my union: Have you looked at this study and how have you changed your ways of doing things influenced by these report. Is it business as usual, do we come to meetings without thorough preparation and go back home without making an impact?

I now want to turn my criticism to our government. The GEAR policy played a major role in the shortage of skills.

It is the GEAR policy that tried to compel state owned enterprises to prioritize profitability for themselves versus the profitability and productivity for the whole economy, thus cutting down on massive apprenticeship training.

It is the GEAR policy that called for foreign direct investment with no conditions in terms of transfer of skills, just like China is demanding from foreign direct investments.

It is the GEAR policy that compromised the intellectual property of South African products. It is the GEAR policy that cut the tariffs even lower that the WTO standards for sensitive products.

The neo-liberal approach to economic development has affected the country, including on the issue of skills.

The developed countries have continued to steal our skills in health, engineering and other critical skills.

This exodus of skills to Europe and of late to Asia, coupled with less and less skills development meant that we continue to be a destination for investment with a strange endowment called cheap and unskilled labour.
Singapore is ranked third in WEF report and the reports say the following about their rank amongst other things;

“In addition, the country’s competitiveness is buttressed by a strong focus on education, providing individuals with the skills needed for a rapidly changing global economy”

Have we provided South Africans with skills needed for a rapidly changing global economy? Why are we exporting specialist welders from Asia for big projects like Sasol and Medupi? This must change if we are move up the ranks from a disappointing number 54.

All South Africans were so happy when JIPSA was introduced. It meant that our government, in particular the Presidency was taking responsibility for a failed skills revolution of 1994.

Why is it that when a new administration of the same political party comes to power, there are unnecessary changes even on key priorities for the country?

I still want to see a person from our government who will tell me what happened to all the good work done by JIPSA.

I also want a person from the Ministry of Higher Education and Training, who will tell me what is wrong with MERSETA’s current chambers and why do we need a Manufacturing Sector when MERSETA is in Manufacturing?

Stable institutions are important for competitiveness of the country.

The 15 percent university enrolment for South Africa does not augur well for the country. The thousands of kids who drop out of the primary education are a serious problem for competitiveness.

It is a sad reality that two provinces, Mpumalanga and Northern Cape, do not have a university infrastructure. It is an indictment to the “skills revolution” that we spoke about in 1994.

The games that we played with the health of the nation will haunt us for many years. We allowed too many young people to be born with HIV, when they could have been born HIV negative.

We now complain that we have an ageing skilled workforce.

The intransigence of companies to agree with NUMSA to provide ARVs to affected workers will also haunt and hurt the country.

NUMSA was brave to come forward and accept that we have a challenge of people dying at the prime of their careers.


I now come back to the rhetoric question: what is to be done?

If I bring NUMSA resolutions as a solution, Employers will reject all of them in their usual stance of dealing with NUMSA and the trade unions.

Let me appeal to you as fellow South Africans that out of the 12 pillars for competitiveness as identified by the World Economic Forum, to choose and prioritize some of them.

I think that the next four that I have mentioned can be considered by all of you.

• Institutions

• Higher Education and Training

• Health and Primary Education

• Innovation


MERSETA must defend it’s capacity and design as a SETA of choice in South Africa.

The unity displayed during the submission to the Portfolio Committee of Higher Education must be spread to all the discussions of the Board. As early as yesterday, the Parliament discussed amongst others your submissions to them.

Can we fail to ensure that we strengthen all other of institutions that we are related to and work with, in pursuit of the skills revolution in forging the future?

We will support progressive contributions of MERSETA in designing the path to competitiveness through the skills revolution. We will stop at nothing at condemning what we will think is not progressive as the labour movement.


Our country must change the mindset that real education is the one from university.

University education is very important but further education and training institutions are even more important for the developing countries.

MERSETA must welcome the renewed focus on the revival of further education and training institutions. We need a revolution.

All factories in our country must become learning centres not just for the industry but for the whole economy.

The SEIFSA approach of training for the sector has proved to be shortsighted and inefficient. To support nine students through scholarships and four bursaries in 2009 is bad.

To pride yourselves with increasing the capacity of Fundi Centre in Benoni to 250 trainees in a province of Gauteng that utilizes 73 percent of all available artisans in the country is not adequate.

Numsa, a non- profit organization supported 80 students through university last year.

I know that Solidarity Union is also doing a lot for the poor Afrikaner communities in the field of education.

What I am arguing here is that without an increased contribution to the levies, we will continue to celebrate a mere 5000 take up of apprentices in the industry when we had more 12000 apprentices in 1982 during an apartheid economy that was not a global player.

The statistics used by CEO of SEIFSA in his 2009 report reveals that the industry went on a protracted strike on producing required numbers of skilled artisans from 1982 to 2003 when the industry only had less than 2000 apprentices.

This must be the longest strike ever in the history of South Africa.

We must aspire to move up the competitive ranking of 54 as a country and you have a big role to play. Employers must now show leadership and call off their strike.

The skills revolution needs more and more funding and government cannot do it alone.

I know that many of you like to use the so called inflexibility labour market for lack of competitiveness.

I want to tell you that Sweden has surpassed the United States of America as a second competitive country in the world despite the so called inflexible labour market in their country.
This is a country with more than 90 percent unionization in the all industries.

The lie that we are not competitive and productive because of the rigid labour market has been exposed by none other than the World Economic Forum.


I have stated that we have made mistakes on the health of the nation, both as government and business.

It is good that many companies are already providing improved health care for their workers but the mortality rate and the ageing artisan core will haunt us.

Can you not discuss this matter in the MERSETA meetings rather than where it is clouded by tensions of collective bargaining.

We all tend to make a mistake of neglecting early childhood education and primary education.

As NUMSA, we have called for childcare centre closer to the workplace and employers have refused, there was a pilot in MEIBC which is still a pilot even today.

Research will reveal that in companies that provided this facility, their children have gone on to do well in their primary education because of parental guidance received during Early Childhood Centre situated next to the workplace.

Do you have an appetite to discuss these as MERSETA?

There are shocking statistics about drop outs in our primary schooling system.

I firmly believe that MERSETA can discuss this matter and come up with innovative ideas in terms of directing these kids to skills that are important for the manufacturing sector.

MERSETA can have strategic partnerships with Community Based Organizations to help these kids and in the process contribute the reduction of crime and other societal ills.


Vuvuzela has blown the world. From humble beginnings of a football supporter in South Africa to a world’s popular instrument for football supporters and other sports fanatics across the globe.

Our country has not used the potential and institutions it has, to innovate for global competitiveness.

We have research institutions that do not work very well with industrial goals of the country.

This is partly due to the absence of a coherent strategy for industrialization. We applaud the IPAP2 document but it needs institutions like MERSETA to discuss what will be their contribution to the successful implementation of the policy proposal for the country, not for selfish needs of the industry.

MERSETA can call on CSIR and other under-utilized research bodies to work for innovation for the benefit of the manufacturing sector and the economy at large.

Our universities have a dearth of PhD students, what are we doing a MERSETA. Dr Patel, we need more Doctors of Education, Doctors of Physics, Doctors of Engineering etc. Please start thinking big about this industry.

We called for government to procure products locally. We support that call together with the manufacturing sector but the investment in innovation will drastically reduce the importation of inputs into our manufacturing supply chain.

Whilst we blame government for wrong decisions on procurement, we must also ask ourselves if we have been able to supply new products that are required by the economy.


It is my considered view that some of the issues I have raised here have never been discussed in the MERSETA meetings.

I challenge you to begin to discuss them because they can go a long way in creating new jobs in our industries.

I also invite you to look at other pillars of the competitiveness as espoused in WEF report. I believe you can continue to be a model SETA in forging the future.

I congratulate you for the achievements you have made in the last few years and may you continue to be trendsetters in the SETA landscape.

You might not advertise yourselves like the Services SETA CEO but we notice a lot of improvements in the work that you do but we say you can do more, working together with all the stakeholders.

May the Board continue to grow from strength to strength.

Thank you

Cedric Gina.

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