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Remarks by Honourable Premier RM Mtshweni-Tsipane on the occasion of the meeting of the Presidential Climate Commission (PCC)

09 June 2023

Programme Director,
Leadership of the Presidential Climate Commission (PCC),
Commissioners from different stakeholders,
The PCC Chief Executive Director, Dr Crispian Olver and his team comprising a formidable “Secretariat”,
Ladies and Gentlemen
Good Morning;
Programme Director
  1. Thank you for this opportunity for me to address this meeting of the Presidential Climate Commission (PCC).

  2. On behalf of the Mpumalanga Provincial Government, I wish to express gratitude for the mutually beneficial partnership with the PCC and for your consideration of our views on such an important assignment that you have been given by the President of our country, His Excellency Matamela Ramaphosa.

  3. Upon assumption of our responsibilities we would never have imagined the considerable work before us on the “Just Transition”.

  4. We have benefited from the warm embrace and partnership with the PCC. We remain hopeful that through your hard work these provincial efforts on ‘climate change’ and the ‘just transition’ will gain greater momentum for the sake of our children and future generations.

  5. In my remarks today, I wish to draw your attention to the many steps we have taken as a province in addressing “climate change” adaptation and the implementation of programmes on “just transition”.

  6. t the same time, I will highlight challenges we face and how through “partnership” we will do more and will certainly do our country proud as a ‘pilot’ for many others who are set on this trajectory towards an inclusive, just, but “low-carbon” economy.

    7. THE CONTEXT: AN OVERVIEW OF MPUMALANGA AND ITS CHALLENGES

  7. Mpumalanga is the home of more than 4.68-million residents (7.8% of the national population), and is the fifth-biggest regional economy in South Africa.

  8. It has a diverse and resource-rich economy that makes it one of the most attractive trade and investment destinations in South-East Africa.

  9. However, our province faces many challenges particularly the trifecta of ‘unemployment’, ‘poverty’ and ‘inequality’.

  10. In Quarter 1 2023, our official unemployment rate was 38.5% (49.7% unofficial unemployment rate or including those ‘not looking for work’).

  11. As we celebrate this “youth month”, we must also reflect on the lack of opportunities for many young people in the province.

  12. We have a youthful population in Mpumalanga, where 62.9% of us are below the age of 35. It is then hardly a surprise and remains a major challenge that youth unemployment is double that of the adults in the labour force.

  13. In 2021, 50.3% or approximately 2.3 million of Mpumalanga population lived below the lower-bound poverty line of R890 per capita per month.

  14. The poorest 40% of households in Mpumalanga earned 7.4% of income in 2021, which was higher (better) than the national figure of 6.6% for 2021, but lower/worse than the 8.6% share the province achieved in 1996.

  15. We are quite concerned when these developmental challenges have been compounded by the COVID-19 pandemic and recent negative national and global economic outlook.

    16. MPUMALANGA’S JUST TRANSITION JOURNEY THUS FAR

  16. Climate change and the “Just Transition” have become elevated in the provincial development discourse and strategies. This is hardly surprising because as the hub of coal fired electricity generation in South Africa, Mpumalanga is faced with socio- economic and environmental challenges arising from resource-intensive economic activities.

  17. As we are all aware, Mpumalanga is home to over 80 percent of the country's coal production by volume and hosts 12 out of 15 large Eskom coal-fired power stations. As various research reports have noted, this has resulted in huge dependency on the exploitation of coal in the Mpumalanga regional economy and the municipalities of eMalahleni (Witbank), Steve Tshwete (Middelburg), Govan Mbeki (Secunda), and Msukaligwa (Ermelo). Recent estimates suggest that coal provides 74 percent of South Africa’s primary energy needs.

  18. In the past two State of the Province addresses I have announced our proposals for the institutional architecture of our response to the imperatives of the “Just Transition” as a province.

  19. For example, we are moving speedily on the establishment of a Just Transition and Climate Change Provincial Stakeholder Forum and a related Technical Working Group under the leadership of the Director General within the Office of the Premier,

  20. This effort has been further supported by your appointment of a resource through the Secretariat to support the Province as the Head Just Transition for the Province, adding more momentum to our efforts and strengthening our partnership and alignment.

  21. To this effect, our collaboration with the World Bank to do a proper assessment of what needs to be in place will take the work forward in creating the necessary institutional mechanisms to deliver on the mandate.

  22. It pleases me to note the many steps we have taken as a province in laying the foundation for a ‘Just Transition’ in our province 1 See, for example, Climate Investment Fund (2022), “Accelerating Coal Transition (ACT) Investment Plan for South Africa”.

  23. As appropriately confirmed in the Just Transition Alignment Workshop Report, (“and I quote”).....”The province of Mpumalanga is proactively grappling with the challenges and opportunities presented by the Just Transition framework, aimed at transforming its economy into one that is sustainable, inclusive, and environmentally responsible.

  24. Substantial groundwork has already been done in the province, as evidenced by several strategic initiatives such as the provincial economic development strategy, green growth strategy, infrastructure masterplan, and the climate mitigation and adaptation strategy”.

  25. The Report goes into some detail about our activities. I would merely want to highlight a few issues covered in the Workshop.

  26. We adopted a Climate Change Adaptation Strategy in 2017 which laid out how climate change is expected to impact water availability, agriculture, human health, disaster management, biodiversity, ecosystems, human settlements, livelihoods, mining, and forestry.

  27. This comprehensive analysis was crucial for framing subsequent steps towards a Just Transition.

  28. Secondly, to support the Just Transition, the Mpumalanga Infrastructure Master Plan (MIMP 2060) is also pivotal. The purpose of the MIMP is to promote comprehensive planning and implementation of infrastructure development in the province, acting as a catalyst for socio-economic development and guiding infrastructure projects up to 2060. This master plan covers various sectors such as transport, economic and social infrastructure, along with social services, amenities, climate change, and immovable asset management.

  29. Thirdly as a province, we developed a Mpumalanga Green Economy Development Plan (MGEDP), which aims to transition the province's economy from coal-based energy to renewable energy (including biomass), sustainable agriculture, tourism, and eco-conscious towns by 2030. The MGEDP was designed around four pillars: Circular Economy, Smart Agriculture, Water, and Energy.

  30. Last year, at the provincial Energy Summit we announced the launch of the Mpumalanga Green Cluster Agency (MGCA), which will drive this MEGDP with the support of relevant stakeholders.

  31. Lastly, let me hasten to add that Mpumalanga's journey toward a Just Transition is enriched by the support and involvement of a number of national and international stakeholders.

  32. I have been happy with the contribution of the World Bank and other multilateral organizations under the umbrella of the ‘Climate Investment Fund”.

  33. At the same time let me also acknowledge, the GIZ led “JUST SA” consortium, which includes our own Green Cluster Agency, and other local implementing partners such as Green Cape, Trade & Industrial Policy Strategies (TIPS), the National Business Initiative (NBI), and Yes4Youth.

  34. As the Mpumalanga Provincial Government we appreciate the contribution of the various local and international stakeholders on our mission to transition to a ‘low-carbon future”.

  35. Last year we participated in the launch of the Mpumalanga chapter of the “Impact Catalysts”, a grouping of some of our largest corporates in the province, including the Minerals Council, Anglo- American, Exxaro, Sasol and others, who intend to play a bigger role in the socio-economic development of our province.

  36. We hope that our insistence on transparency, accountability and less duplication does not intimidate or chase anyone away. Let us all work together on these tasks and put our people first.

    37. THE ISSUE OF FUNDING IS UPPERMOST IN OUR MINDS

  37. As you will all know , the quantum of funding needed for the “Just Transition” has been estimated to be in the trillions of Rands by 2050.

  38. To this effect we eagerly await the funding approval and roll out of the provincial projects under the ESKOM JUST ENERGY TRANSITION PROJECT (KOMATI) and the ACCELERATING COAL TRANSITION INVESTMENT PLAN, as these projects will impact the transition landscape.

  39. We appreciate that given the existing pressures on the fiscus, it may not always be possible to look to the South African government alone to provide the funds.

  40. As such we need to be proactive and develop innovative funding mechanisms with Treasury. This could as an example allow us to fund renewable energy projects for all our hospitals and schools against future savings in energy costs. The jobs and savings these projects can bring will have a significant effect on our provincial budgets increasing our capacity to deliver capital projects in the medium and long term.

  41. Therefore, we shall continue to work closely with both local and international partners to make the necessary funding commitments and fulfil them timeously to ensure that the “Just Transition” is a reality in our country and the Mpumalanga Province.

    42. REFLECTIONS ON THE RECENT MPUMALANGA JUST TRANSITION ALIGNMENT WORKSHOP

    Programme Director,

  42. This then leads me to reflect on the recent Just Transition Alignment Workshop held in Secunda, on May12-13 2023.

  43. Let me begin by thanking the organizers of the Workshop who included representatives of the Mpumalanga Provincial Government, the Presidential Climate Commission (PCC) and the World Bank.

  44. The overall objectives of the workshop were to: (i) take stock of ongoing and planned Just Transition (JT) related initiatives in the province; (ii) inform the preparation of an integrated, collaborative, just transition plan for the province, including preparation of a regional economic diversification and industrialization strategy for the province; and (iii) create a coordination and collaboration mechanism to facilitate synergy and streamline the efforts of various stakeholders.

  45. I have received the Draft Final Report on the Workshop and I am happy at the robust discussions and substantial recommendations prepared for the province and her partners in this important work.

  46. Amongst others, the recommendations are to be welcomed for the comprehensive discussions on;

    47. GOVERNANCE AND INSTITUTIONS;

  47. We welcome the recommendations around an ‘inclusive’ approach to the Just Transition in the province. The involvement of all ‘spheres’ of government is paramount, together with all sectors of civil society, including business, labour and community groups. No one must be left behind.

    48. AN INTEGRATED ECONOMIC DIVERSIFICATION AND INDUSTRIALIZATION STRATEGY

  48. It is well accepted that there will be economic losses for coal industry dependent communities. We need to prepare strategies that grow other sectors of local and region economies in order to create many new jobs for our people. We accept that agriculture, tourism and manufacturing will need to step up and play an even more important role in our province alongside the new focus on renewables.

    49. THE NEXT STEPS ON OUR JOURNEY TO A LOW-CARBON MPUMALANGA ECONOMY

  49. Leaving no one behind is important for me and I wish to request the support of the PCC and other partners in improving communication and awareness of climate change and the imperative of the “just transition” in our province.

  50. We need to reopen the initiative to appoint a Commissioner representing the Province as one more informed voice to support the effort.

  51. We cannot rest until all stakeholders are embracing the journey we have embarked upon.

  52. The constant refrain as I travel across the province, especially in the coal belt, is that the transition cannot be “just” if they are left behind.

  53. I will leave the debates to the experts, but it is worth noting that many in the province are concerned about the pace of the planned “decommissioning” and “repurposing” of our coal fired power plants.

  54. Let us move on this in an “informed” and “consultative” manner- bringing along our communities and stakeholders.

  55. As a province we also need support to ensure that the negative economic impacts of the move away from fossil fuels, especially coal, do not have a severe impact on the welfare of our communities

  56. We must recall that Mpumalanga is a province already with serious ‘developmental deficits’ that any sudden economic shocks will only worsen.

  57. This then brings me to the importance of an industrialization and economic diversification plan that will work and bring prosperity to our region in new ways and activities, including across the ‘renewables’ value chain

  58. As a province we are still exploring the possibility of a Special Economic Zone (SEZ) that will focus on renewable energy.

  59. We agree with the Workshop’s Report’s observation that “Given Mpumalanga's rich biodiversity, cultural heritage, and natural beauty, developing eco-tourism could be a driving force for the local economy”.

  60. Furthermore, ”the creation of jobs in this sector, along with the promotion of environmental preservation and cultural heritage, would pay significant dividends”.

  61. As we embrace new economic sectors and productive activities we need to empower our people with the ‘skills’ needed to participate in transformed labour markets

  62. We need to be mindful of the necessity to develop a supportive ecosystem for promoting entrepreneurship, especially small businesses, in both the formal and informal sectors of our regions.

  63. The voice of our communities and the informal sector came through quite clear during the workshop and we need to change the narrative.

  64. Not talk about reskilling – rather empowerment – (reskilling means nothing without a job) - We are not implementing just projects – we are building economies, livelihoods and communities.

  65. As a province we must also challenge and question our thinking...

  66. We know the strength of our people – our communities – they are our true wealth - how do we shift and use the inherent strength and knowledge in our communities to catapult our economy? ‘CrowdSourcing and CrowdFunding’ - do this with our communities and not for them.

  67. How do we em'power’ (emphasis on power) our communities and create economies and not just implement projects?

  68. We know social ownership of electricity assets is critical to energy access and livelihood generation.

  69. It might be worth not to ask communities what they need or what we can do for them but to rather ask them for their catalytic plans for a just transition? What jobs do they identify in their communities, their growth areas, opportunities? Support the youth and women entrepreneurs with business plan preparation and with seed funding. Build and expand exiting provincial initiatives.

  70. We need to use the inherent power of our communities to power this change ... With them not for them...

    71. Programme Director,

  71. With these remarks, I wish to again thank the PCC for reaching out and collaborating with the Mpumalanga Provincial Government on a “Just Transition” for our province.

  72. In the past, the province benefitted from what analysts refer to as a “Minerals Energy Complex” (MEC). We do believe that a time has now come to reconsider our economic growth path and adopt new strategies that promote a sustainable and inclusive regional economy.

  73. I wish you well in your deliberations.

  74. I thank you.
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