Keynote address by Premier of Gauteng, Ms Nomvula Mokonyane on the occasion of the Gauteng Funding Fair, Emperors Palace, City of Ekurhuleni
Members of the Executive Council,
Executives from Deloitte which is our project partner,
Senior officials from the three spheres of government,
Representatives of various funding institutions,
Business leaders and entrepreneurs,
Ladies and gentlemen.
Today marks the culmination of the journey that began three months ago when we announced that the Gauteng Provincial Government has entered into a partnership with Deloitte to host the inaugural Funding Fair for this province.
As part of that announcement, we made a clarion call for corporates and other project promoters to apply for funding and register to be part of this momentous occasion. We also mobilised funding institutions to work with us to facilitate a process that will ensure access to finance for various types of projects that are implemented by corporates and other project promoters.
The response to our call has been great. We have doubled the number of applications for funding required. We have surpassed the targeted number of delegates who are registered to attend this event over two days. Furthermore, we were able to mobilise funding institutions to be part of this initiative.
The total indicative value of the projects that have applied for funding through this leg of the Gauteng Funding Fair is more than R10 billion. The largest application that we received was for a project valued at R3.2 billion. This shows that corporate activity is very high in our province and we must tap into that in order to grow the economy and create jobs for our people.
Equally important is the fact that the projects submitted as part of the corporate leg of the Gauteng Funding Fair are spread across a wide variety of sectors from agriculture, education, property, information communications technology and media.
These sectors include those that the provincial government is focusing on as part of the Gauteng Employment Growth and Development Strategy.
All of the above is yet another indication that working together as government and the private sector, we can do more to contribute significantly to moving Gauteng and the rest of our country forward.
Programme Director,
It is a fact that small businesses are important to economic growth both in developed and developing countries such as South Africa.
SMME’s are credited for rejuvenating local economies, innovation and development of new products; and of course creating job opportunities where the majority of the workforce is employed. This sector is the backbone of the economy, which constitute the majority of companies operating in many countries globally. This is the case in both the developed and developing countries.
Analysts who have studied the growth trajectory of the economy of the United States tell a story of how thousands of army personnel returning from the Second World War borrowed money from families and started small businesses such as camera shops and food services. Then through government-led interventions, major initiatives were made to support this sector and create an enabling environment for small businesses.
This helped these businesses to grow, leading to the expansion of the economy of the country. Today the economy of the US is made up of mostly small companies, and they are responsible for creating jobs and inspiring innovation in the economy.
As South Africa, we can learn from experiences like that of the US and grow our economy in order to create jobs. That is why the Gauteng Funding Fair is an event whose time has come. Whose time has come to move South Africa forward, and in particular, Gauteng.
It is indeed our considered view that this is one of those key initiatives that will enable us to increase access to funding for entrepreneurs, which will in turn lead to small business development and inclusive economic growth in the province.
As government, we remain committed to making targeted investments that will have a direct impact on economic growth and job creation. We do this in the knowledge that it will assist us to lift our people out of poverty and also address inequality in our province.
Our approach in this regard is informed by the National Development Plan and the Gauteng Vision 2055. These key policy documents emphasise the importance of, amongst other things, building partnerships between the public sector, business and labour in order to facilitate, direct and promote investments that would create jobs and assist in confronting the challenges of poverty and inequality in our society.
Since 2009 the provincial government has spent R4.6 billion in targeted interventions aimed at stimulating the economy and creating job opportunities for our people. Over the next three years we have put aside a total of R 3.4 billion for this purpose.
These resources will be used to inspire innovation and build a knowledge-based economy that will drive competiveness and bring about growth in our province.
That is why we are currently building the Gauteng Information and Communication Technology Park to provide an institutional environment that enables enterprises, individuals and the government to interact for purposes of generating economic growth, while also delivering on the ICT Strategy of the province.
Through The Innovation Hub the province is working with the Emory University in the United States to implement the Gauteng Accelerator Programme.
This is an initiative that is aimed at transferring essential business and business related skills to researchers and entrepreneurs in the biosciences sector. Our ultimate goal as government is to establish viable bioscience start-up companies in line with our broader effort to stimulate entrepreneurship and business development in the province.
Investment attraction and promotion remains one of our key outputs of the provincial government because of its potential to boost entrepreneurship and enterprise development.
To this end we have established the Gauteng Investment Centre as a platform to stimulate investment and business development in the province. The Gauteng Investment Centre will host more than 50 inward missions over the next 12 months as part of our broader effort to attract business into our province and drive the growth of entrepreneurship.
Furthermore, the provincial government continues to facilitate access to export markets for entrepreneurs. In the 2014/15 financial year a total of 100 entrepreneurs will be supported to become export ready.
We understand the important role played by the small business and cooperative sector as an engine for economic growth and job creation. We are therefore intensifying our support programmes directed at this important sector of the economy with tailor made solutions developed specifically to address their unique needs.
The development of requisite skills is essential to ensuring that the economy reports high rates of output and creates jobs. It is for this reason that the province is investing in efforts to address the skills gaps and create jobs through partnerships with in particular labour-intensive sectors such as the automotive, furniture, fashion, metal fabrication and mineral beneficiation sectors. This will also serve as a strategic thrust toward the strengthening of the Gauteng as a competitive City Region and a gateway into the region.
Programme Director,
Infrastructure development is a key ingredient of the growth and development of the economy. It is against this backdrop that development matters related to infrastructure project financing in particular will be discussed in detail during the next leg of the Gauteng Funding Fair later this year.
However, we thought that it was important to briefly outline our approach in this regard to enable government and funding institutions present here to begin the process of discussing possible areas of collaboration. This will be carried out with a view to jointly contribute towards building inclusive economic growth in our province and beyond.
As the provincial government, our approach to public private partnerships is based on the understanding and appreciation of the fact that the usage of state funds will remain a regular feature of public sector project financing. However, we are of a firm view that we must also embrace diversity. Government cannot always be the sole financier of public sector projects, even taking the responsibility for implementation, operations and maintenance.
The reality is that factors such as macroeconomic instability have shown that public financing of infrastructure in particular is volatile and rarely meets crucial expenditure requirements in a timely and adequate manner.
The private sector on the other hand has a large pool of sources from which to seek funding. These range from equity investors to capital markets and banks. Therefore, collaboration between the public and private sectors is crucial in order to increase the resources of funding and reduce the pressure on the fiscus.
That is why we took a decision to establish the Gauteng Funding Agency. The primary focus of this Agency is project development and design of optimal funding solutions for projects in the province.
To this end, Gauteng Funding Agency continues to make its experience, skills and competencies available to sponsoring departments and municipalities in Gauteng to interface with prospective external funders. This is a mix bag of social and economic projects that are located across the province.
Furthermore, the provincial government has another project finance capacity in the form of the Gauteng Partnership Fund. This is an entity of the Gauteng Department of Human Settlements. Its primary focus is on mobilisation and optimisation of investment flows into integrated human settlement developments in our province.
The institutionalisation of alternative funding mechanisms through both Gauteng Funding Agency and the Gauteng Partnership Fund indicates that government is actively working to augment the funds available from the Provincial Revenue Fund to accelerate socio-economic development in the province.
The benefit that this approach brings to project sponsors like us in the current commercial liquidity environment is the ability to tap sources of alternative financing made available by external funding institutions, and also being able to use the requisite skills in the private sector to implement and manage public assets.
Programme Director,
Let me take this opportunity to wish all delegates well in the deliberations and project pitches. In the 20th year celebration of our democracy, let us continue to work together to move Gauteng and the rest of country forward.
Dankie, Ngiyabonga!
