Summit (GDS) by the Honourable Thobile Mhlahlo, MEC for Roads and Transport,
Safety and Liaison
29 March 2007
Honourable Executive Mayor Maphazi
Honourable MECs and MPLs
Honourable Councillors
Distinguished guests from business, labour, and civil society
Ladies and gentlemen
Comrades
This Growth and Development Summit provides a strategic opportunity for the
different spheres of government, business, labour and other stakeholders to
come together to chart out a development path for the Nelson Mandela Metro.
This will enable us to align the plans and budgets of the various spheres of
government around agreed priority projects and will ensure that the Integrated
Development Plan (IDP) of the metro is more strategic, credible and
representative of the needs and interests of all stakeholders in the
municipality.
I have examined the Socio-Economic Profile of the Metro that has been
developed by Eastern Cape Socio-Economic Consultative Council (ECSECC) and the
municipality and have noted the following.
It is clear that the Metro, which is home to some 1,3 million people,
remains the economic hub of the province, accounting for over 40% of provincial
value added.
The manufacturing sectors, particularly the automotive sector, remain the
largest sector of the metropolitan economy, both in terms of value added and
direct jobs. Gross Domestic Product (GDP) growth in the metro stood at 4,6% for
2005, with growth primarily driven by the automotive, finance, property,
construction and trade sectors. This growth trend is set to continue with the
new investments being leveraged through Coega, with some R20 billion secured
and another R21 billion of investments being finalised. Future challenges for
the metro are likely to revolve around managing this rapid economic growth, and
ensuring that we have the necessary skills, infrastructure, housing and
services to sustain growth and human development.
Linked to this trend of rapid economic growth, is the trend of urbanisation
as word spreads of new industries developing in the metro. While the metro has
made good progress with respect to service delivery, there are still currently
some 10% of the metro population who live in informal settlements, and there
are still some 40 000 households without basic sanitation and 26 000 households
without piped water. Accelerated service delivery of quality services to the
most vulnerable households, particularly those affected by HIV/AIDS, is
paramount. This requires proper forward planning to ensure that a growing
marginalised underclass does not become a permanent feature of the city. It is
critical that economic growth must hold out benefits for the poorest and most
marginalised communities in the metro. The intended outcome of our collective
development efforts must be to reduce poverty and inequality in our society and
restore dignity and a sense of self worth among all our people.
Government's economic development strategic intent is outlined in the
Accelerated and Shared Growth Initiative for South Africa (AsgiSA), which sets
a growth target of 4,5% until 2009 and 6% from 2010-2014. AsgiSA is premised on
the approach that the state needs to play a more interventionist role in
accelerating levels of economic growth, particularly through increased public
infrastructure in transport and logistics infrastructure as a means to crowd in
private investment and reduce the cost of doing business.
Aligned with AsgiSA are the National Industrial Policy Framework and the
Regional Industrial Development Strategy (RIDS). These initiatives represent
the renewed will of the state to play a more active role in economic
transformation. A number of customised support programmes have been packaged to
promote growth in targeted sectors. Both through Coega and your Vision 2020
projects, I have noted that you are well geared to leverage from these national
support measures.
Turning to provincial level, we are now in the 3rd year of the Provincial
Growth and Development Plan (PGDP). The PGDP is aimed at accelerating the pace
of socio-economic transformation in the Province and sets bold targets to halve
unemployment and poverty by 2014. The PGDP and the emerging provincial
industrial strategy is aimed at building a balanced and integrated provincial
economy through consolidating growth in the automotive sector and diversifying
into new growth sectors such as tourism, bio-fuels, timber processing, business
process outsourcing, the chemicals, metals processing and construction
sectors.
Key to realising the objectives of the PGDP will be to build transport and
logistics linkages between the rural hinterland and our two Industrial
Development Zones (IDZ)s. This will optimise value chain linkages between rural
enterprises and co-operatives and industries located in the IDZs. Our Kei Rail
project is key for this urban-rural integration. We have to ensure that the
metro does not become an isolated city state disembodied from the regional
economy in which it is located.
As provincial government, we are investing significantly in the metro. The
Department of Education will spend R136 million on education infrastructure
over the Medium Term Expenditure Framework (MTEF). The Department of Health
will spend R252 million on upgrading health facilities over the MTEF, while the
Department of Local Government, Housing and Traditional Affairs has allocated
more than R500 million for housing over the next two years. My department,
Roads and Transport, has allocated R326 million over the MTEF to upgrade road
and transport facilities to improve readiness for the 2010 Soccer World
Cup.
National departments and their state owned entities have committed funds of
more than R15 billion on economic infrastructure projects. This includes R2
billion for Coega, R3,2 billion for the deepwater port, R6 billion for harbour
development, R2 1 billion for power upgrade, R500 million for rail upgrade, and
R1,1 billion for the World Cup Stadium. This shows, as Government, that we are
committed to transforming the metro into a high growth world class city.
This Growth and Development Summit could not be coming at a better time. The
GDS process will begin articulating an economic development roadmap for the
metro and will identify priority projects around which the various spheres of
government and other role-players such as the private sector need to converge.
We need to ensure that your priority projects find expression in our updated
PGDP, and that we combine efforts to realise your developmental goals.
I wish you all well in your deliberations at this GDS and look forward to
seeing the outcomes captured in a strengthened IDP for the metro, that has the
buy-in of all key role-players.
I thank you
Issued by: Department of Roads and Transport, Safety and Liaison, Eastern
Cape Provincial Government
29 March 2007
