Chief whip, Cllr N. Mpompoza,
Honourable Mayor, Z. Lwana,
Municipality Manager: S Tantsi,
Honourable Speaker Cllr V Mgoduka,
Introduction
It is a great honour for me to be given an opportunity to share with you the contribution of the Department of Economic Development on policy.
Just to remind you, 2013 marks 100 years since the promulgation of the Native Land Act of 1913 which saw blacks being forcefully removed to the outskirts away from commercial land of their birth.
The President of the Republic of South Africa, Mr JG Zuma, during his 2013 State of the Nation Address compelled the government to accelerate land reform so that the value and benefits that lie inherent in land as a factor of production can be derived. The land question is a highly emotive matter. We need to resolve it amicably within the framework of the Constitution and the law.
The President further challenged the sector to: “provide adequate resources, post-settlement to new land owners so that land continues to be productive...We also need to provide incentives for commercial farmers that are willing and capable of mentoring smallholder farmers”
It is heartening to say besides our legacy related challenges; agriculture remains one of the most reliable drivers of the economy.
Since this administration took office, there has been a concrete effort to uproot the triple challenges, which is the legacy of Apartheid Spatial Planning. Our triple challenges are poverty, inequality and unemployment. Our socio-economic challenges are well known: inequality, unemployment, low growth rates, levels of poverty in rural areas, malnutrition and skills deficits amongst others.
The million dollar question we need ask is: why have the economic opportunities present in our country not translated in the poverty eradication of our people.
Education
Programme Director; allow me to make a few observations: It was the first democratically elected President Nelson Mandela who made an observation that education is the weapon to change the world.
Turkey, Sri Lanka and many other Asian countries have grown their economies, curtailed job losses and reduced unemployment and ensured inclusion through SMMEs.
The desired economic participation for job creation requires a radical review of the training system to address shortfalls in the much needed artisans and other technical skills. The Human Resource Development Strategy for South Africa addresses the skills needs for years to come.
We have set ourselves a target of at least 30 000 additional engineers by 2014. This requires that we strengthen measures to ensure greater and more equitable access to science and maths education at secondary level and expand and bridging programmes to tertiary institutions.
Our goal is to have at least 50 000 additional artisans by 2015, with annual targets for state-owned enterprises. SETAs must agree to numerical targets for completed apprenticeships, with systems to track progress, particularly in construction, mining, manufacturing and new industries such as in the green economy. Apprenticeship systems must be reviewed to support broader access.
We are putting resources in place to improve skills in every job and target 1, 2 million workers for certified on-the-job skills improvement programmes annually from 2013. Every SETA should aim to facilitate and co-finance training for 10% of the workforce annually. Improve SETA performance by strengthening governance, accountability and administrative systems.
I would raise a few questions:
- Are our family, religious, cultural and early education system preparing us for innovation and engineering, emanating from the inculcated culture of reading? Are our families a hub of discipline, trust, cooperation, tolerance, respect and so on?
- Are our teachers on time, inspiring each and every child, preparing them to be competent, efficient and trustworthy citizens?
I am saying these things which might sound irrelevant for people who are aspiring to grow the economy but these constitute a solid foundation upon which to build our economy. Economics is about people.
The big debate is about our institutions of our higher learning. We need to constantly ask ourselves the question, how many of our institutions are hard at work trying to align their pursued academic certificates and degrees with the skills needed to grow the profits of the companies which are driving the economy in this neighbourhood. I am saying these things because we are having a conversation as a family of Ntabankulu Municipality.
3. What steps should be taken so as to ensure that our education is strategic and responsive to our economic needs?
The New Growth Path
At the inauguration of the Department the President of the Republic of South Africa Jacob Zuma, stated the following;
The New Growth Path is our vision to place jobs and decent work at the centre of economic policy. It sets a target of five million new jobs to be created by 2020. It sets out the key jobs drivers and the priority sectors that we will focus on over the next few years. It is based on strong and sustained, inclusive economic growth and the rebuilding of the productive sectors of the economy. Infrastructure development in particular is a foundation for more jobs and addressing rural under-development.
This vision calls for joint commitments by all South Africans – investors and workers, government and civil society – to realise the common goals. We have set clear targets for national, provincial and local governments to make employment a central focus of their activities. We are now reorienting the work of state-owned enterprises and development finance institutions to be aligned with the jobs drivers in the New Growth Path.
We are engaged in social dialogue with organised labour, business and community organisations to forge a common vision and work together to achieve the jobs goals. I call on all South Africans to join us in this journey to a better life for all, founded on ensuring that the economy, in the private and public sectors, is able to create jobs for millions of unemployed persons and offer hope to young people, the rural poor and women.
The shift to a new growth path has required the creative and collective efforts of all sections of South African society. Leadership and strong governance is key for us to be successful. It takes account of the new opportunities that are available to us, the strengths we have and the constraints we face. We will have to develop a collective national will and embark on joint action to change the character of the South African economy and ensure that the benefits are shared more equitably by all our people, particularly the poor.
The establishment of the PICC talks to that vision of leadership, coordination and integrating efforts so as to partner to create new decent work opportunities. There is growing consensus that creating decent work, reducing inequality and defeating poverty can only happen through a rigorous transformation and restructuring of the South African economy. Impact of our interventions is measurable through improved rates of employability and employment, equity in society and an acceptable growth rate of our GDP.
PICC
The South African Government adopted a National Infrastructure Plan in 2012 that intends to transform our economic landscape while simultaneously creating significant numbers of new jobs, and to strengthen the delivery of basic services. The plan also supports the integration of African economies. Government will over the three years from 2013/14 invest R827 billion in the building of new and the upgrading of existing infrastructure.
18 key Strategic Integrated projects (SIPs) were identified, The SIPs cover social and economic infrastructure across all nine provinces (with an emphasis on lagging regions). The SIPs include catalytic projects that can fast-track development and growth. Work is being aligned with key cross-cutting areas, namely human settlement planning and skills development.
Key to this province, is the work of SIPs on:
SIP 3: South Eastern node & corridor development
This SIP aim to promote rural development through a new dam at Umzimvubu with irrigation systems and the N2- Wild coast Highway which improves access into KZN and national supply chains; strengthen economic development in PE through a manganese rail capacity from N Cape, a manganese sinter (NC) and smelter (EC); possible Mthombo refinery (Coega) and trans-shipment hub at Ngqura and port and rail upgrades to improve industrial capacity and performance of the automotive sector.
SIP 6: Integrated Municipal Infrastructure Project
Components of this SIP include:
- Reverse maintenance backlogs on bulk infrastructure for water and sanitation
- Upgrade and new builds of water and sanitation bulks and reticulation to accommodate changes in service demand and provision of services to un-serviced communities
- A specific bulk water supply project that deserves mentioning in Alfred Nzo District is Mbizana Regional Bulk Water Supply
- Electricity distribution network builds and upgrades
- Maintain and fix roads that service these areas, under the S’Hamba Sonke programme
- New road construction to areas that have limited access
- Boreholes in rural communities to provide access to water
- Revitalising clinics and hospitals
- Access to digital TVs
- Solar water heater providing hot water to rural communities
- Extensive programme to convert mud schools to fully serviced school with access to clinics and bridges over rivers, where necessary
SIP 11: Agri-logistics and rural infrastructure:
This SIP aims to build infrastructure for sustainable rural and agricultural development. It involves improving investment in infrastructure that supports expansion of agricultural production and employment, small-scale farming and rural development.
This SIP will be implemented in coordination with a number of SIPs, especially those focused on rural areas and those addressing bulk transport infrastructure. Increasing water supply in Mzimvubu has the potential to increase agricultural production & agro-processing in Eastern-Cape.
It will entail the:
- expansion of facilities for storage (silos, fresh-produce facilities, packing houses)
- transport links to main networks (rural roads, branch train-line, ports)
- fencing of farms
- irrigation schemes to poor areas
- improved R&D on rural issues (including expansion of agricultural colleges)
- processing facilities (abattoirs, dairy infrastructure)
- aquaculture incubation schemes and rural tourism infrastructure
- The Provincial Department of Economic Development here in the Eastern Cape is also undertaking projects involving renewable energy initiatives and micro-hydro initiatives linked to Umzimvubu catchment including biomass linked forestry Electrification Mini Grid Opportunities
Industrial Policy Action Plan
Government has deployed a range of complementary and integrated measures to grow the economy and create jobs. The up scaled Industrial Policy Action Plan (IPAP) 2012/13 - 2014/15, which was released by the Department of Trade and Industry (the dti) in April 2012, is one of the key pillars of this broader approach. It builds on the National Industrial Policy Framework (NIPF) and represents the fourth annual iteration of the first IPAP launched in the 2007/08 financial year.
Small Medium Entities
South Africa was privileged to be the first African country to host a critical 37th International Small Businesses Congress, which was held in Johannesburg last year. The aim of the Congress was to share the best ideas, strategies and policies that would strengthen the role of small and medium businesses in bolstering our economies.
In this regard, the role of the Department of Economic Development continues to be that first and foremost of chanting policy integration, coordinating and implementation.
Credit Access
The second area of our support is through improving access to finance for micro-enterprises. There are a number of actions that are taking place in this area including the work done by the Small Enterprise Finance Agency (Sefa) to improve their approach to lending to the Micro Finance Intermediaries Again it requires a collaborative approach to expanding access to finance for micro-enterprises and here the contribution of National Treasury is critical.
The IDZ-Programme
The IDZ programme in South Africa (SA) was established in September 2000 essentially to augment the country’s manufacturing sector through encouraging investment in export oriented manufacturing industries, with emphasis on beneficiation or value adding of the country’s natural resources. The proliferation of the free trade zone has circuitously led to this concept earning multiple descriptions.
Nevertheless, the most common definition of a free trade zone, also applicable to the IDZ, is that of a clearly delineated industrial estate which constitutes a free trade enclave in the customs and trade regime of a country, and where foreign manufacturing firms produce mainly for export, benefit from a certain number of fiscal and financial incentives.
The rationale behind the free trade zones’ is to attract export-oriented manufacturing investment by setting aside a physical area where investors will be given a range of incentives. These include benefits such as tax breaks, waivers of industry regulations, exemptions from import and export duties, suspension of rules requiring foreign investors to make investments in conjunction with local partners, strict guarantees against expropriation, assurances of physical security and access to efficient communications and transportation networks.
IDZ: SMME’s-Value Proposition
Various downstream opportunities for SMME’s in IDZ. There are supply side opportunities for coops relative to value chains, pertaining to components and raw materials, especially pertaining to beneficiation process. Opportunities exist for the formation of business cooperatives amongst SMME’s to take advantage of government incentives. Incentives specific to IDZs are “the availability of preferential electricity rates for qualifying industries, duty-free imports for all inputs used in the manufacture of exports and a zero VAT rating on inputs procured in South Africa destined for exports.
IDZ: Community-Value Proposition
1. Improved Quality of lifestyle in respect of housing, medical and educational infrastructure within the surrounding vicinity of the IDZ. .
2. The treasury has stated that one of the requirements of the IDZ programme is that companies in these zones have to employ a minimum number of people, job opportunities for the surrounding community. As manufacturing hubs these are inherently Labour intensive zones with an ability to create numerous jobs during the 2011/2012 financial year, about 8 898 jobs were created in these zones
3. Skills Development in communities- during the 2011/2012 financial year, about 8 898 jobs were created and 25 586 people were trained as part of the skills development programme of the IDZs
Youth
Youth economic inclusion is a critical aspect of the sustainability of our economy. As we are talking today, the long awaited for Youth Accord has been launched by the President. Government has embarked on an intense consultation with all the partners. We have found a way of packaging youth economic inclusion from education, job placement and on-going entrepreneurial skills development.
Conclusion
You have a rich heritage preserved over years by our ancestors. We owe our future generations the benefits out of the value of our soil.
Ours as planners is to think about the complete solution all the time. What I am saying is that whenever we think of agriculture and agro-processing, we should also think of alternative forms of energy, access to clean and safe water, labourer’s settlement, community beneficiation storage and transportation of goods.
Our SMMEs should at all times be positioned in such a way that the complement and strengthen each other’s capacity.
I thank you!
