Economic, Investment and Employment Clusterâs Programme of
Action briefing by the Honourable Minister of Public Enterprises,
Alec Erwin, Cape Town
9 May 2006
Introduction
Combined efforts and synergies between departments will ensure that
Government is able to reach its economic and developmental targets. The
Economic Cluster prioritised those projects of the Accelerated and Shared
Growth Initiative for South Africa (AsgiSA) that require co-ordinated effort of
departments or are of strategic importance to the achievement of these goals,
while continuing to exercise oversight of implementation of all the activities
in the economic section of the Programme of Action.
This briefing on the process initiated at the January 2006 Cabinet Lekgotla
highlights progress along this path.
The January 2006 Cabinet Lekgotla provided an agenda for the Economic
Cluster that emphasised the implementation of key projects within AsgiSA. The
intervening months have seen the Cluster Departments focusing on finalising
planning and implementation of the projects. This has been an intensive and
inclusive process, with involvement of all key Cluster departments.
Strategic Focus
The five focus groups of the Cluster meet once a month to discuss project
implementation. These Focus Groups not only assist in developing synergies in
projects but also assist in the identification of blockages and other critical
issues for intervention, where necessary strategic issues are elevated for
discussion at Cluster plenary meetings.
The Cluster is currently developing a Management Information System
(dashboard) to support implementation monitoring.
The Cluster focus groups are as follows (with lead departments in
brackets):
* Ensuring aligned and supportive macro-economic approaches (NT/PCAS);
* Building a competitive and labour-absorbing economy (DTI/DST);
* Massively increase public investment (DWAF/DOT);
* Equity and development (DPE/DPLG);
* Ensure priority skills for the economy (DOL/DOE);
The implementation of key AsgiSA projects for which the Cluster has assumed
responsibility will be greatly enhanced by the structured synergies that have
been initiated by this approach. Initial progress is reported below.
Key issues from the Cluster focus groups
At the core of the macroeconomic focus groupâs work is a modelling exercise
focusing on analysing the six binding constraints to growth and strengthening a
positive relationship between micro- and macro-economic approaches. Together
with relevant Government departments, a team of international and local experts
(academics and private sector economists) is being utilised to undertake
detailed research, identify policy gaps and policy options. The modelling and
scenario planning will be a two year programme starting from January 2006,
ending in the middle of 2008. The first growth workshop took place between 16
and 20 January 2006.
The task team on bio-fuels has been established and work has begun. Areas
that the task team are focusing on include crop suitability, establishing
support for developing small-scale farmers, the technical standards for
bio-fuels, an analysis of the viability of crops, and economic feasibility. The
project is ensuring it takes on other important issues such as the potential
impact of its roll out on the environment, food security and land use. The task
team will prepare a bio-fuel strategy in time for the July Lekgotla.
In terms of the industrial policy framework, the Cluster is focusing its
attention on how departments can achieve synergies within the framework. The
Department of Trade and Industry (dti) is to take the framework to Cabinet
within the next two months. The framework will emphasise an integrated and
coordinated government approach for the Cluster.
In terms of bringing down the costs of Information Communication Technology
(ICT) connectivity, the Electronic Communications Act, in terms of which the
Minister of Communications will be announcing new policy directives targeted at
reducing the cost of communications has now been signed by the President making
it possible for these the directives to be issued on schedule, by the end of
June 2006. Substantial progress has been made with respect to creating an
environment for reducing the cost of international connectivity. A meeting of
Ministers of the twenty-two countries participating in the New Partnership for
Africa Development (NEPAD) terrestrial and sub-marine broadband network project
will be taking place in the first week of June to consider the recommendations
of officials regarding the main principles in terms of which the East African
Submarine Cable System (EASSy) will be built, namely, open, non-discriminatory
and affordable access. The sub-marine cable is scheduled to be operational by
2008.
Also in terms of ICT, the plan for the roll-out of Sentechâs wireless
broadband network is in the final stages of completion and discussions on the
funding of this project are equally advanced.
An initial incentives package has been developed for Business Process
Outsourcing and Off-shoring, one of the immediate priority sectors of AsgiSA.
Government is in the process of marketing the initiative to international
investors and eleven investors of at least 1000-seat operations focussed on
offshore business have already been short-listed. Progress on the development
of call centres in five poor communities has advanced with the identification
of FET facilities for utilisation as Call Centres (maximum 100 seats).
Progress continues on the other immediate priority sector of AsgiSA,
tourism. Public comment has been received on the draft Tourism Customised
Sector Programme. Departments are formulating a tourist airlift strategy that
will form part of an overall aviation strategy. Government is also making
progress on enhancing the marketing of South Africa as a tourist
destination.
The Cluster is reviewing capital expenditure procurement of State Owned
Enterprise (SOE), presently assessing how existing government policies are
affecting the ability to optimise the development impact of the SOE Capex
procurement. A Local Content Procurement Policy will be ready for Cabinet
consideration in July 2006. This project will be enhanced by the development of
system to monitor infrastructure implementation and impact utilising accessible
electronic access.
The Cluster is also finalising the identification of the set-aside products
and services for small, medium and micro enterprises (SMMEs). In terms of
finance for SMMEs, the Apex fund was launched on 1 April 2006. Khula and
Business Partners have launched the Start-up Fund with initial capitalisation
of R150 million as part of efforts to address the financing gap for SMMEs and
consolidating SMME finance. Disbursements have already begun.
The Cluster is monitoring progress on the authorisation appeal for the
development of the Olifants River System. In future, we envisage environmental
impact assessments to be enhanced through the adoption of the New Environmental
Management Act environmental impact assessment (EIA) process. Government is
also giving urgent attention to addressing the backlog of environmental impact
assessments.
Progress continues on the City Deep supply chain and the development of a
freight logistics plan for Durban as part of the development of a
Durban-Gauteng Corridor. This project is subject to capacity assessments as
part of the Department of Public Service and Administrationâs work on
strengthening government capacity.
Four sites have been identified for street trading infrastructure, namely
Alexandra, Khayelitsha, Mdantsane and Motherwell. Funding for the
infrastructure will be secured from the Municipal Infrastructure Grant. A
process for the review of by-laws to accommodate street trading infrastructure
has been set in motion.
One of the key constraints identified in AsgiSA is a lack of skills that are
required for economic growth. In our efforts to achieve our 2006/7 annual
targets for National Skills Development Strategy all Sectoral Education and
Training Authorities (SETAs) have submitted Sector Skills Plans (SSP), which
are being evaluated to identify scarce and critical skills. The SSP analysis
will be aligned to the Joint Initiative on Priority Skills Acquisition (JIPSA).
A report on scarce skills has been released.
In its efforts to improve labour market information, Government is in the
process of creating an Employment Services System; a comprehensive and
integrated database for all employment services related systems is being
development. Broad public access will be facilitated through labour centres and
other platforms such as the internet.
Four hundred schools have been identified for intensive support to improve
maths and science. The number of schools will grow to 529 in 2007. As part of
the Quality of Education (QUIDS UP) Programme the provision of a basic basket
of items such as books, equipment, supplies, infrastructure and personnel to
the poorest primary schools in South Africa. The primary schools in the nodal
zones have been targeted for the first year of intervention. The financial year
2006/07 will be used to research and plan for the appropriate delivery of
equipment and books to schools.
In support of JIPSA, the Cluster is developing a consolidated scarce skills
database. This will form the basis of a discussion between the Economic Cluster
and the JIPSA implementation team to clearly define critical and scarce skills
needs and agree on a common approach to address these.
Following consultations between the Departments of DOHA, DTI and DOL, the
quotas for work permits for scarce skills have been gazetted in the following
fields and amounts: Science and Engineering (1500), Education professionals
(1000), Information Technology Specialists (3500), Health and Medical Science
Professionals (5450), and Agricultural Science Professionals (1500). An updated
gazette is planned for August / September 2006.
Conclusion
There is no doubt that much progress has been achieved in recent years,
particularly in terms of raising the rate of economic growth and creating the
basis for a more competitive economy. Enhancing this trajectory, whilst
massively increasing employment and ensuring that the benefits of sustainable
growth are shared, is a focus of AsgiSA and the Economic Cluster.
The Government Communication and Information Systems will be publishing a
project by project report of the Economic Clusterâs Programme of Action on the
Government website.
Issued by: Department of Public Enterprises
9 May 2006
