David Mahlobo – Minister of Energy, South Africa
Minister of Energy David Mahlobo shares his thoughts on the significance of the recently concluded Energy Indaba 2017, the role of the Department as a platform to manage the ‘inherent tensions’ between different energy sources – which must be seen as mutually complementary for South Africa’s national development – and his strong message to international investors that South Africa is open for business and has a good story to tell.
Minister Mahlobo, having been appointed on October 17, 2017, this Energy Indaba (conference) is one of your first major initiatives. What was the significance of organizing such an event?
“I do not want industry to help government. I want them to help humanity and our country move forward so that there can be peace, development and prosperity in the country.”
I am very pleased that within a very short span of time since my appointment, I have had the opportunity to interact with a number of key energy stakeholders, both domestically and internationally. For instance, I have had the opportunity to interact with the Generation IV International Forum (GIF), comprising experts and policymakers from countries like Russia, China, USA, France and South Korea on next-generation nuclear technology. My second exposure was opening the Africa Oil Week conference, which saw a number of high-level dignitaries attend, including the U.S. Secretary of Energy Rick Perry.
Within South Africa, I have also met with stakeholders such as the Energy Intensive Users Group, the South African Petroleum Industry Association (SAPIA), the Parliament Portfolio Committee on Energy, and non-governmental organizations (NGOs). What is heartening is that South Africans are beginning to show more interest in understanding the impact of energy on their daily lives, be it on issues of economy, politics or environment.
As highlighted by President Jacob Zuma on the first day of the Indaba, South Africans are beginning to understand that energy is not only important, it is the biggest contributor to the economic and social development of our country. It was against this backdrop that we as a government and a Department decided, let us convene under one roof to answer one question: despite the differing views and apparent contradictions on energy issues, what binds us together?
The one thing we thought that could help us pull in one direction was the question, what can we do differently to re-ignite economic growth, societal development and job creation? Everyone agrees that these are positive goals for the country. Yet at the same time, we cannot promote them without understanding the constraints we face. For instance, there must be policy certainty and clarity. Skills and human capital, as well as funding, are also critical elements. We must also consider factors like affordability and environmental impact. Another cross-cutting issue is the undeniable fact that we are living in the world of a Fourth Industrial Revolution. Technology, research and development are going to be the largest drivers not only of improving the efficiency and operations of current systems but also the development of new industrial and manufacturing systems!
Finally, one of the most important issues is that of transformation in South Africa. South Africa is a country with a history of structural inequalities. This must be acknowledged and combated through enterprise development, skills training and employment opportunities.
All of this is why we called the Energy Indaba and – you have firsthand experience of this – it has been an exciting opportunity! In his opening address, the President gave us clarity of vision and exhorted us to contribute in our own individual ways. Subsequently, experts and policymakers across various fields shared their expertise and experience. In the working groups, you can see that everyone is deeply engaged and sharing their views on how they want to help improve the economy through the use of energy as an important catalyst for growth. Everyone arrived with different expectations and diverse views but they are now all moving together in one unified direction.
On that note, throughout the conference, you have stressed that you are the Minister of Energy, an advocate for all energy sources, not any particular one. How do you act to balance the competing demands between the different energy sectors?
First and foremost, I commend everyone for the strong will and passion they exhibit within their own areas. I think this is excellent. However, as the Minister responsible for the Energy portfolio, my role is to remind them to open their eyes, and that there are other groups that believe very strongly in their own causes. Ultimately, all stakeholders have to appreciate that there is inevitably always going to be tension between them. I call it an ‘inherent tension’, much like the laws of nature. But moving in different directions also produces a kind of energy – that as Minister of Energy, I must be able to harness.
As the Indaba has progressed, I can see that attendees are beginning to appreciate the nature of this inherent tension. The conventional view used to be that these sources of energy are mutually exclusive, but for the first time, it seems that they are understanding that in fact, they are mutually dependent. There is a need for coexistence. They all share a few fundamentals: energy can be seen as a matter of life or death, economic gain, or profits. But economic growth is not about profits, it is about prosperity. For South Africa, this is also achieved through radical socioeconomic transformation, which means changing the structures, systems, patterns of ownership and institutions of historical injustice. Energy can also be thought about in terms of sovereignty: your identity and national interest as a country. Having a sustainable energy source provides you with security of supply. As we can see in the world, some countries have faced security issues as a result of energy scarcity. We have seen conflicts rooted in oil and gas resources, among others. Then there are also issues of politics related to energy. Countries blessed with mineral endowments naturally seek to maximize their fiscal benefits. They carry clout in the world – and these without such clout are vulnerable. When these countries sneeze, we – as importers – will all catch flu, so to speak.
Finally, there is the environmental element. Environmentalists believe – rightly so – that this earth we inherited must be passed on to the next generation in a pristine condition. But they lose a point when they believe that environment is more important than development. Environment and development are not mutually exclusive, they are mutually dependent. Environmentalists and developers must work together to promote prosperity for all.
Everyone in this sector needs to remember that all energy sources have their strengths and weaknesses. This is precisely why the government must create the enabling environment and the platform for these different interests to coexist, so that the rules of the game are fair. The dynamic relationships between the various sectors must be managed so that the country, the region and the world can move forward productively.
A refrain we have heard during this Energy Indaba and over the past few months, if not years, has been the need for policy certainty. But speaking to industry, what would you like to see from them?
I do not agree with the view that there is no policy certainty. When policy has been consulted and agreed, it means we must move ahead. There are those – for various reasons – that do not like a certain policy, but that does not mean the policy is wrong. There is no confusion when it comes to South Africa’s energy or endowment. We have chosen a mixed energy policy because it is informed by what we have the sun, wind, water, uranium, and fossil fuels in the form of coal and some gas deposits. We have not found the gift of oil yet, unfortunately! There is nothing new about our policy. Some people seem to continuously question which one we should use. The answer is that we do not have an option, we must use all of them.
I do not want industry to help government. I want them to help humanity and our country move forward so that there can be peace, development and prosperity in the country. Through our collective efforts, we have the power to change humanity for the better.
South Africans must also know that we do not live in a vacuum. We live in Africa so we are joined by the peoples of this region and this continent. The various Presidents and Heads of States have decided that energy is a critical issue for the region and there have already been agreements made towards regional economic and energy integration. We are not only working together as Africa but also as part of the global village.
This is how we like to see ourselves. We may be at the southern tip of sub-Saharan Africa but we can learn from others – and others can also learn from us.
This is an important thing to highlight because the international image of South Africa is not always positive, especially in light of recent circumstances. What final message would you like to send to our international audience?
What is very unfortunate is that there are those in South Africa that have chosen – for various reasons – to tell the world how ugly we look, even when they live here. While the majority of South Africans do not share these negative sentiments, those that do often have the loudest voices. Objective and fair criticism is always appreciated for improvement but we must avoid criticism meant to undermine the country, change our traditional friends, and erase who we are and what we stand for, because that will not take us forward.
I am very optimistic. South Africa has a very good story to tell. We are an elite country with some of the best research, development and innovation in the world, across issues like nuclear disarmament, nuclear medicine, military technology and as you have already heard at the Indaba, energy innovations. We are a leader in our own right. We do have our own challenges but we must not let that obscure our achievements. Let us channel our energies in a more positive way!
South Africa remains the destination for investors. Many countries on the continent look up to South Africa even if we are the last country to receive our democracy. For both domestic and foreign investors, Africa is the next growth frontier. We have rich mineral endowments and a strong democratic dividend because we have the youngest population in the world. My conviction is that this time around, the new industrial revolution will benefit our people instead of what happened in the past, where despite being the richest continent, we remained the poorest people. Africa has an Agenda 2063 and each region has a plan. South Africa as a country has a plan too, the National Development Plan 2030.
We do not want to be consumers. We want to play a part in global development and innovation, so we invite everyone to come and invest in skills, development, research and infrastructure in South Africa.