Mr M Sogoni's Policy Speech, Eastern Cape Provincial Legislature
14 March 2007
Honourable Speaker
Honourable Premier
Honourable Members of the Executive Council and of the Provincial
Legislature
Distinguished guests
Ladies and gentlemen
I have the honour to present the Policy Speech for our department for the
2007/08 Financial Year. We derive the new name, Department of Economic
Development and Environmental Affairs, from the new budget and programme
structure as gazetted by National Treasury and will be effective from 1 April
2007.
My department joins with all of our Provincial and Local Government
colleagues to acknowledge the commitment made by the Honourable Minister of
Finance, Trevor Manuel, in the Budget Speech.
We affirm that "human life has equal worth."
We further note the commitment by our Premier in her State of the Province
Address to developing and strengthening the rural economy, driven by a series
of High-Impact Priority Programmes defined in the spirit of the Accelerated and
Shared Growth Initiative for South Africa (AsgiSA) and Provincial Growth and
Development Plan (PGDP). These include major infrastructure developments, the
Mzimvubu basin water resources development programme and integrated
agricultural beneficiation investments.
The Honourable Premier has further reminded us that all our endeavours have
to find expression in the context of the Freedom Charter.
The economic context
Madam Speaker, please allow me to dwell briefly on aspects of our economic
situation.
The provincial economy has performed well over the past three years;
provincial Gross Domestic Product (GDP) increased by an estimated 4,7% in 2006
(4,8% in 2005), compared to the national GDP growth of 5,0% in 2006 (5,1% in
2005). Prospects for further sustained growth trends from 2007/08 are extremely
favourable in both the Provincial and National economic systems.
The key growth sectors in the Eastern Cape (EC) province, compared to the
Republic of South Africa (RSA) growth performance in those sectors are
indicated below:
2004
Manufacturing (EC): 3.7
Manufacturing (RSA):4.7
Construction (EC): 8.8
Construction (RSA): 11.1
Whole/Retail Trade, Hotels and Rest (EC): 4.8
Whole/Retail Trade, Hotels and Rest (RSA): 5.9
Transport & Communication (EC): 2.8
Transport & Communication (RSA): 4.7
Finance, Property and Business Services (EC): 7.9
Finance, Property and Business Services (RSA): 7.9
GDPR (EC): 4.2
GDPR (RSA): 4.8
2005
Manufacturing (EC): 4.2
Manufacturing (RSA): 4.0
Construction (EC): 10.1
Construction (RSA): 11.9
Whole/Retail Trade, Hotels and Rest (EC): 5.2
Whole/Retail Trade, Hotels and Rest (RSA): 6.5
Transport and Communication (EC): 4.3
Transport and Communication (RSA): 5.5
Finance, Property and Business Services (EC): 5.4
Finance, Property and Business Services (RSA): 5.5
GDPR (EC): 4.8
GDPR (RSA): 5.1
Source: Statistics South Africa, 2007
Manufacturing sector growth in the province has kept pace with the national
trend since 2003/04, to reach an estimated 5,0% in 2006 (up from 4,2% in 2005).
This is largely attributable to the remarkable successes achieved by the Motor
and Motor Components sector in the province. Food processing, textiles and
clothing, chemicals and machinery products have also contributed towards this
growth performance.
Growth in the Provincial Construction Industry (PCI) was an astounding
estimated 11,3% in 2006; up from 10,1% in 2005 and 8,8% in 2004. This is a
clear reflection of the focused infrastructure investment that the province has
undertaken in recent years.
Through the PGDP and the Economic Growth and Infrastructure (EG&I)
Cabinet and Cluster committees, significant resources have been allocated to
the Eastern Cape Industrial Zones (IDZ) Programme (East London and Coega), to
road and rail construction and refurbishment, and to developing the Ngqura
Port.
In addition, a wide range of economic infrastructure investments were
undertaken by other state agencies such as Eskom, Telkom and Transnet.
The accumulation of a concentrated focus on economic infrastructure by all
key agencies of the state has provided a sound basis for private sector
investment, which is now being realised, as is evident in sustained productive
sector growth.
Note, too, that the national trend in the construction sector growth is as
spectacular as it is in the Eastern Cape, thus providing a broadly based
platform for sustained economic growth in the future.
Honourable Speaker, the retail and hospitality, transport and communication,
and financial, property and business services sectors have also shown
substantial growth in the national economy. We anticipate that these trends
will be sustained moving into the future.
Honourable members, given the significant investments that are expected to
result from the 2010 initiatives, the AsgiSA (EC) (Pty) Ltd undertakings,
tourism and related infrastructure development, further road, rail, port and
airport expansion, and expected improvements in telecommunication networks in
the province, it appears likely that the provincial economy will continue to
grow towards our PGDP target of five percent to eight percent growth by 2014.
The challenge is to ensure that this growth is sustainable and is maintained at
those levels for a substantial period of time.
On the other hand, Honourable Speaker, although we registered positive
growth over the same period (2004 and 2005) in the Primary Production Sector,
as shown in the table below, the climatic conditions have not been that
favourable in the past year. It may be expected that GDP figures for this
sector may be slightly lower than the preceding period.
Primary production
2004
Agriculture, Forestry & Fishing (EC): 1.2
Agriculture, Forestry & Fishing (RSA):1.4
2005
Agriculture, Forestry & Fishing (EC): 5.2
Agriculture, Forestry & Fishing (RSA): 4.1
To maximise sustainable benefits from agriculture as a component of the
primary production sector, we need to undertake major irrigation programmes,
water redistribution programmes to sustain crop and livestock farming. Although
benefits may not be immediately evident in the short term, it has become
imperative that we begin the process now.
Forestry and fishing are also significant potential growth sectors in the
province and these will also be pursued through our current planning and
development initiatives.
The point of departure in the primary production sector is to ensure that
value-adding beneficiation of crops, livestock, forest products, marine
production and other forms of commodity output takes place in the Province,
wherever possible.
Strategic positioning of the provincial economy
We are happy to announce that the Department of Trade and Industry has
developed the National Industrial Development Framework. Using that as our
point of reference, we have in the current financial year been co-operating
with Eastern Cape Socio-Economic Consultative Council (ECSECC) to develop a
provincial industrial strategy / policy which is in its final phases of
drafting. Once all economic stakeholders have been consulted and the provincial
industrial strategy finalised, we will use this to anchor the development of
our investment strategy for the province.
However, the draft provincial industrial development strategy already gives
us an indication of such sectors that will need to be prioritised as part of
our strategic positioning of the economy. And that includes consolidating our
work on the sectors that are performing well such as the automotive,
construction, etc, and sectors that are static and/or struggling such as
clothing and textiles.
Our geographic location lands itself to gravitation of export-oriented
industries to the province. Both industrial development zones at Coega and East
London have taken advantage of this and to date there is general consensus that
they provide ideal infrastructure platforms for export-oriented industries.
Coega in itself could quite conceivably develop into a major trans-shipment
hub for the southern hemisphere given its strategic location and deep-water
capacity.
A variety of economic forces are at work that re-enforce the success of our
general strategic direction as a province. The increasing relevance of China
and India as industrial giants in the global economy has shifted the focus of
trade patterns between South Africa and the rest of the world. Much of our
trade in the past has been with the European Union whereas our trade figures
with both China and India are growing in leaps and bounds. In addition to this
South Africa has moved from an inward import substitution economy to more of an
externalised economy.
Our strategic positioning is further enhanced by the shipping sector's
development of deep-water vessels. It is no wonder that more and more
industries will migrate to the eastern seaboard of South Africa to eliminate
overland transport costs while securing harbour facilities with deep-water
capacity.
Honourable members, it will be important to mention the critical role that
the auto sector has played over the last few decades in the economy of the
Eastern Cape. Although it is our intention to diversify our economy we remain
committed to partnering with and strengthening this sector. To this end we
continue to resource the Automotive Industrial Development Centre (AIDC) in
terms of supply chain development and skills development. The AIDC currently
assists over 500 learners in the province.
In addition, the province has also provided the necessary funding for two
key supplier parks in the Nelson Mandela Metro (the logistics park) and in the
East London Industrial Development Zone (ELIDZ). The Motor Industry Development
Programme (MIDP) is currently under review and our department will continue to
engage with national government on expediting this important process with a
view to strengthening the programme thereby providing certainty to the
automotive sector.
The growing prosperity in our two major urban nodes in Nelson Mandela Metro
and Buffalo City, has increased our global competitiveness and placed us on an
equal, if not a better footing, with KwaZulu-Natal and the Western Cape in
terms of infrastructural and logistical readiness. This level of improvement
should not cause a sense of complacency as the levels of uneven development
pertaining to rural/urban, east/west and the racial divide in the province
remain a pervasive factor. It will require a sustained effort from all
stakeholders to reverse this unacceptable phenomenon.
To this end, Executive Committee (Exco) has registered and prepared the
institutional foundations for a Special Purpose Vehicle (SPV) namely, AsgiSA
Eastern Cape (Pty) Ltd., which will be tasked with two mega projects in the
eastern part of our province in order to focus on the challenges of the second
economy through the envisaged catalytic impacts of two major state led economic
interventions.
This initiative deals with accelerated growth in labour intensive sectors
through state led and private partnered projects, which maximise the principle
of "people centred development". As government, we are well advanced in terms
of the necessary institutional arrangements including the process of appointing
a board, selecting a Chief Executive Officer (CEO) and procuring a project
management service provider. We are also pleased that through the 2006/07
Adjustment Appropriation Act, the requisite funding has become available to
carry on with this important programme.
Public Entities such as the Development Bank of South Africa's (DBSA),
Industrial Development Corporation (IDC), National Empowerment Fund (NEF),
Eskom and the Eastern Cape Development Corporation (ECDC) will also be engaged
to mobilise their resources behind this mammoth task.
In addition, we are of the view that the private sector will respond
willingly as our project partners across a spectrum of lucrative investment
opportunities within the designated AsgiSA project areas.
Honourable Members, as you may be aware, the two mega projects that have
been approved by national government are the Mzimvubu Development Zone and the
Forestry and Timber Expansion Project. Their development phase is expected to
cover a period of 10 to 15 years.
The Mzimvubu Development Zone intends to maximise the massive water
resources of the Mzimvubu River and its tributaries through the construction of
a dam, hydro power unit and a water transfer system to the Xhariep Dam on the
Orange River. In addition, it is planned to take advantage of the area's high
rainfall by placing over 300 000 (three hundred thousand) hectares of land
under cultivation for food and bio fuel crops. This will also require the
consequent downstream infrastructure and manufacturing investments for storage
and warehousing, processing, marketing and distribution.
As part of this catalytic thrust, the Mthatha, Lusikisiki and Port St Johns
axis will require considerable urban planning and development to service and
cope with the extent of the economic growth and activity brought about by these
interventions in the region.
The Kei Rail Corridor Project (stretching from East London to Mthatha) will
provide a vital transport link for new investors to the ELIDZ. The planned N2
toll road from Durban to East London will further reinforce trade links across
the province. We are also aware that the Department of Roads Transport (DoRT)
is also intending to toll the R72 between East London and Port Elizabeth so as
to improve this important trade and tourism route for investors, developers and
tourists.
The Forestry and Timber Expansion Project, has a target of developing 100
000 hectares of new forests in the eastern region of the province. The Elundini
Municipal area of Ugie/Maclear is already experiencing a development boom with
the R1,3 billion Steinhoff particle board plant construction. In the current
financial year, provincial government made available additional funding for
bulk public infrastructure and power supply needed to anchor the investment.
Housing, hotel, estate living and commercial developments are all underway.
Existing hotels and accommodation outfits in the area are fully booked for the
next 12 months as a result of the construction phase of the Steinhoff
development. Needless to say, property prices are rocketing in the area.
Our provincial government had the vision and foresight to begin the
construction of two major roads between Ugie/Mthatha and Maclear/Mount Fletcher
for critical transport links for processed goods emanating from the area.
Honourable Speaker, Premier and Members, all these interventions have as
their core intent the acceleration of the removal of the poverty burden on the
people within the second economy regions and bringing about better living
conditions associated with the first economy regions. We submit this as
evidence that the Accelerated and Shared Growth Initiative is practical and
already on the move in the Eastern Cape.
Overall status of the department
The department's Budget for 2007/08 amounts to R620 973 000; compared to
R700 522 000 in the 2006/07 financial year.
This reduction in the budget allocation to the department is attributable to
a once-off adjustment to fund the ELIDZ, even though R113 million is made
available to support the East London IDZ in the 2007/08. Also included in this
budget is an amount of R51 million to fund priority programmes that include
trade and investment promotion, revitalisation of provincial parks,
facilitating the ECDC restructuring process, and the National Business
Initiative (NBI), Provincial Government Joint Skills Development Project and
improving budgetary support to all Public Entities.
The allocation of the resources for 2007/08 among the department's
programmes and public entities is indicated the attached Annexure one.
On-going strategic planning and alignment formed a crucial part of the
Department's activities during 2006/07, and these have provided a sound basis
for further improvements and fine-tuning during 2007/08 and the outer years of
the Medium Term Expenditure Framework (MTEF).
Through our participation in the deliberations and activities of the
EG&I Cabinet and Cluster Committees, we have maintained a close interaction
with the on-going planning, refinement and implementation of the Provincial
Growth and Development Plan (PGDP). In this way, the department made its
contributions towards the identification of the High Impact Priority Programmes
(HIPPs) as determined by the Cluster and endorsed at the recent Provincial
Executive Council Lekgotla.
Honourable Members, over the MTEF period, we will endeavour to champion the
work of our department in pursuit of the following strategic imperatives.
Institutional development and consolidation
In the current financial year, we devoted time on efforts to develop and
implement the new organogram for the department. Further alignment will still
be necessary taking into account the new budget and programme structure as
gazetted by the National Treasury.
In the next financial year, we will complete the work of aligning the
operational boundaries of our regional offices with those of the six district
municipalities in the province. Parallel to this process, we will continue with
our efforts to improve the accessibility of our public entities throughout the
province. The establishment of the sixth regional office in the Ukhahlamba
district will be finalised in the 2007/08 financial year. This will facilitate
the speedy implementation of our comprehensive Service Delivery Improvement
Plan (SDIP), particularly working in close collaboration with the local sphere
of government.
Honourable members, we are pleased to report that we have finalised plans
for the implementation of the mentoring and coaching services programme that
the department will undertake in collaboration with the private sector in the
form of the National Business Initiative (NBI). Through this initiative,
government and big business have pulled together resources to enhance and
strengthen our capacity to deliver on the programmes of the department. Areas
identified for the next financial year include project management, supply chain
management, and local economic development.
In the 2007/08 financial year, approximately 73% of our budget is allocated
as transfer payments to Public Entities; and this amounts to R453,355 million.
For the first time, in preparation for the next financial year, the department
has put in place appropriate procedures and arrangements to ensure
accountability by boards and management of our public entities. Shareholder
compacts between the Executing Authority and the Boards of Public Entities will
be entered into to make provision for establishing more appropriate reporting
and funding Protocols. Such Protocols include detailed Service Level Agreements
(SLAs) based on clear performance requirements and indicators. It is clear that
we need to know not only whether transferred funds were expended, but, more
importantly, how they were expended and what impacts and outcomes can be
expected from such expenditure.
Whilst we continue with the work that we started in the current financial
year of rationalising the boards of our public entities to become more
representative, in the next financial year we will also undertake the following
initiatives:
1. The review of the legislative environment establishing our public
entities to make sure that it conforms to the current developmental, compliance
and enforcement challenges.
2. The Industrial Development Zone (IDZ) programme will be consolidated in
terms of ownership and funding arrangements, and work to overcome the reporting
challenges.
3. Following an in-depth study on the feasibility and benefits of a
consolidated parks and tourism function under one authority that we conducted
in the current financial year, we will implement the yearlong programme of
merging the Eastern Cape Tourism Board and the Eastern Cape Parks Board in the
2007/08 financial year. We are mindful that this will require the provision of
new enabling legislation, regulations and strategic plans in order to build a
better and more appropriate institutional form that will maximise
tourism-related benefits and investment opportunities for the province.
Support to local government
We acknowledge the fundamental responsibility to support and strengthen the
capacity of Local Government, particularly in the context of growing local
economies and providing linkages between the Integrated Development Plans
(IDPs) and the PGDP.
We have been enriched by the lessons that as provincial government we learn
from the Growth and Development Summits (GDSs) that are currently being
undertaken by District municipalities and the Metro. In all the four GDSs
(Chris Hani, OR Tambo, Ukhahlamba and Amathole) that have taken place thus far,
our department has participated to ensure that the outcomes of these summits
are not only in keeping with the spirit of the provincial jobs summit held in
February 2006, but also that we play our part in the implementation of the
Agreements.
In this context, and in anticipation of vibrancy in the labour market
arising from all these initiatives, we have tasked ECSECC to assist with the
establishment of a job monitoring facility / barometer to enable the province
to keep a pulse on the performance of the various economic sectors in creating
jobs.
The Local Economic Development (LED) is another area that our department is
utilising to provide support to local government. In the 2007/08 financial
year, the department will spend R30 million on LED (compared to R20 million in
the 2006/07 financial year). Having taken note of slow spending patterns in the
previous financial years, planning processes in terms of business planning and
project identification, would be completed before the end of the current
financial year. Through the Provincial Economic Development Forum (PEDF) that
we have established with district municipalities, public entities, and other
relevant government departments, we will seek to improve on the co-ordination
of all LED interventions in the province.
Waste management and air quality is another area of focus in our work with
local government. Our department in collaboration with the Department of
Environmental Affairs and Tourism (DEAT) is in the process of developing a
Provincial Environmental IDP Toolkit to assist local authorities to adequately
address environmental matters in their IDPs, and we expect these toolkits to be
available with effect from April 2007.
We have also started the process of developing the Eastern Cape Provincial
Integrated Waste Management plans and this will be completed by September 2007.
These plans will highlight areas of support to municipalities in terms of Waste
Management and will help the department in monitoring progress in terms of
compliance to ensure uniformity across the Province. The department will also
make preparations to receive the landfill site permitting function once it is
delegated by the national department to provincial departments.
In 2007/08 we will implement clean up projects as a build up to the Waste
Management Plans with the following municipalities; KSD, Mnquma, Mbashe and BCM
for Bhisho.
On Bio-diversity management, the province is in the process of reviewing its
Provincial Bio-diversity Strategy and Action Plan (PBSAP) which will assist in
decision-making in relation to nature reserves in the province, including those
that are managed by municipalities. This will be particularly useful in the
context of the province that is facing increasing pressure from unplanned urban
and rural development, agricultural expansion, and non-sustainable use of
natural resources, and the need to ensure that our natural resource base so
essential to sustain human livelihoods will not be eroded.
Also at a higher level, the department together with the ECPB will continue
with bio-diversity programmes that seek to ensure, among other things, the
regulation of international and domestic hunting, certification of private game
farms and the issuing of permits for wildlife management. In the 2006/07
financial year, the ECPB acquired more land for areas under protection in the
Baviaanskloof and the Great Fish River Reserve.
In the current financial year the Executive Council approved the strategic
plan for commercialisation of Mkhambathi nature reserve. This decision will go
a long way in unlocking the economic potential and leveraging private sector
resources for the benefit of our communities.
Honourable Speaker, we must report that not much progress has been made in
the establishment of the Wild Coast national park due to an incomplete process
of community and stakeholder consultation. The Wild Coast Integrated
Development conference planned for the 1st quarter of the new financial year
will go a long way in unlocking this process.
In the next financial year we will also endeavour to strengthen our
partnership with other bio-diversity management stakeholders including the
South African Bio-Diversity Institute (SANBI), Municipalities, etc.
Furthermore through the Expanded Public Works Programme (EPWP) for which
ours is the lead department in the Environment and Culture Sector, we have
managed to create a number of jobs for local communicates. This intervention
has been particularly targeted at the most vulnerable groups in our society
(unemployed youth, women and people with disabilities), in projects that are
managed mainly by the Eastern Cape Parks Board mainly in our nature reserves at
Mkhambathi, Silaka, Hluleka, Baviaanskloof Mega-Reserve and the Great Fish
River.
Provincial enterprise development
In the 2007/08 financial year, the department will have a more focused
approach to enterprise development to ensure that entrepreneurs are developed
and supported to benefit and participate in the economy. An amount of R72,5
million has been allocated to ECDC and Small Enterprise Development Agency
(SEDA) to provide financial and non-financial support to small enterprises.
This support will be aligned to the provincial priority sectors and provided in
an integrated approach taking into account similar interventions across all
public entities.
In the current financial year, the Small Enterprise Development Agency
(SEDA) was launched in the province and is currently being rolled out in
district municipalities. This is one initiative where the department, in
partnership with the dti, identified the need to provide funding to ensure that
as government we provide ongoing non-financial support to Small Medium and
Micro Enterprises (SMMEs).
As indicated in the Honourable Premier's State of the Province Address, the
department will also focus on the development and support of cooperatives. This
work will hopefully be facilitated by the proclamation of the Co-operatives Act
No.14 of 2005 after the dti would have finalised the regulations.
Honourable members, I am pleased to announce that as pronounced in the State
of the Province Address by the Honourable Premier, the ECDC has subsequently
commissioned a review of the interest rate that it charges on loans. Our
approach is to ensure that these loans are packaged such that they are both
affordable and address sector specific challenges. All these interventions are
intended to maximise the economic participation by those who were previously
marginalised in the mainstream economic activities.
The department, working within the EG&I Cluster, has been inspired by
the government's commitment to promote local procurement of goods and services,
as has been demonstrated in the Executive Council resolution to procure tea
from Magwa and Majola Tea Estates. Even though this would constitute a small
percentage (about 4%) of total marketable product, it could significantly
increase if we could successfully lobby the entire province (public and private
sectors and households) to follow suit. This could be our version of proudly
South African.
Industrial sector development
Honourable members, it is pleasing to note that more and more investors are
increasingly showing confidence in our province, and they are evidently finding
our two IDZs ready with world-class infrastructure. We derive comfort and
satisfaction from noting that the state resources that were allocated to
develop this infrastructure have attracted investments that far exceed the
original state expenditure.
The ELIDZ during the 2006/07 financial year finalised the bulk internal
infrastructure, rendering it ready to sign up new investors. The IDZ performed
beyond expectations in its construction of the Automotive Supplier Park, which
took just less than six months to finish, allowing suppliers to Daimler
Chrysler to meet stringent timelines set by the Original Equipment
Manufacturers (OEM).
In this regard, the IDZ has to-date announced seven component manufacturers
which have invested in the zone, increasing the number of investors in the zone
from four to eleven in just less than a year. This has ramped up the total sum
invested by the private sector in the ELIDZ to R755 million, a R450 million
increase from the previous financial year. A total of 1 180 direct
manufacturing jobs will be created in addition to the 2 000 direct construction
jobs which have been created to date. It is for this reason and for the need to
continue with this work that our department has allocated the R113 million to
the ELIDZ for the next financial year, and we are also aware that the dti will
provide additional funding to meet the budget shortfalls.
However government recognises that our work would not be complete without
successfully increasing the capacity of the East London port. Through the
ELIDZ, we will continue to work together with Buffalo City Municipality, the
National Ports Authority, Department of Public Enterprises, and the dti to make
sure that this goal is achieved.
In the Coega IDZ, in the current financial year alone, a total of eight
investors have signed up to take space in the zone. The Alcan and SEA-ARK
projects are outstandingly significant amongst those that have so far signed up
with a total investment in excess of R40 billion. Jobs in excess of 15 000 have
been created to date.
Honourable Members, we cannot fail to mention the strategic importance of
the logistics park that our department is funding in partnership with the
Nelson Mandela Metro. In the 2007/08 financial year, R10 million has been
allocated (R30 million over the MTEF period) to continue with this work. We
believe that this will go a long way in equipping the logistics park to better
service the automotive sector in the region, particularly in the light of the
General Motors South Africa (GMSA) contract to produce the Hummer SUV largely
for export purposes.
Targeted second economy interventions
Honourable Speaker, Premier and members, as part of our second economy
interventions, our department is participating in the design and programming of
the HIPPS that have been identified and whose implementation is expected to
start in the 2007/08 financial year.
For the EG&I Cluster, the main focus will be on Infrastructure
Development (N2 Corridor, strategic roads, IDZ programme, ports development),
Mzimvubu Catchment Basin (dam(s), hydro-energy, tourism, irrigation, forestry)
and agricultural beneficiation and timber processing (bio-fuels, beneficiation
of agro-products).
The department, in the context of the EG&I Cluster, is championing the
processes towards convening the Wild Coast Economic Development conference,
which will consider all major developments including tourism, road
infrastructure, fishing, land, agriculture and agro-processing initiatives.
This conference which will bring together relevant national and provincial
departments and agencies, local government (Amathole, OR Tambo and Alfred Nzo
District Municipalities) and many other local role players is scheduled to take
place at the beginning of the next financial year.
In the area of product beneficiation and marketing, our department and
public entities are working closely with the Department of Agriculture to seize
the beneficiation opportunity of expanded production. Agro-processing has
become a key priority in moving from second to first economy approach. The
beneficiation of grain and bio-fuels crop will go a long way in expanding the
activities of this value chain.
By the same token our growing forestry opportunity needs to be complemented
by wood processing capacity, as exemplified by the Steinhorf / PG Bison project
in Ugie as we have alluded to earlier on.
Our economy produces good quality primary products, such as wool, beef, and
maize. There are a lot of products extracted from primary production that
require more value addition, and our department would need to assert leadership
when it comes to secondary and tertiary production.
Business Processing Outsourcing (BPO) is one growth sector that is
increasingly finding expression in the economic landscape of the Eastern Cape,
and it has been identified as a critical sector that has a potential to create
a number of jobs. Working in partnership with the dti and other provincial
government departments, a value proposition on BPO has been done. We are
presently working on mobilising support and funding for the Mthatha furniture
incubator, and call centres in Mthatha and Nelson Mandela Metro.
In line with the emerging trend in the draft provincial industrial
development strategy / policy, sector strategies will be prioritised, developed
and consolidated from 2007/08 onwards, especially the automotive,
agro-processing, tourism, and forestry. This will be done in line with the
recommendations of the jobs summit, the national sector planning framework of
the dti and the newly developed Regional Industrial Development Strategy
(RIDS).
Skills acquisition, development and retention
Honourable members; our department takes seriously the need to create and
retain jobs within the Province in all the economic sectors. In the year
2006/07, we gave out bursaries to 52 learners. In the same year 32 interns were
placed in the department for the duration of one year. Of these 32 interns, 29
were absorbed by the department after an internal recruitment process was
undertaken to fill funded vacant posts.
In the next financial year, the department has allocated R2,1 million for
training, bursaries and internship programmes. Most of our bursaries are in
Economics, Tourism and Environmental studies.
In line with the Joint Initiative on Priority Skills Acquisition (JIPSA)
initiative, the department and its Public Entities are looking into the
Curriculum Vitae (CV) of unemployed graduates that recently returned from India
on training. Most have skills in the tourism and hospitality industry, and we
will also recommend them for appointment in the private sector. As government
we need to lead in the implementation of our own (government's) initiatives and
practice what we are preaching by creating space for these unemployed graduates
to receive the mentoring they need to launch their careers.
We will also work closely with Further education Training (FET) colleges and
other training providers to make sure that we identify and develop priority
skills for priority sectors in the economy. We are further providing funding
for transversal and financial management training to the Office of the Premier
and Provincial Treasury totalling R1,2 million. This brings the total budget
for training in 2007/08 to R3,3 million.
Honourable members, it is now an established fact that in an economically
depressed province such as the Eastern Cape, government becomes one of the
biggest employers. In our endeavours to create jobs and fight poverty, the
filling of funded vacant posts by government departments and agencies, in
response to the Premier's call, becomes urgent and should be treated as matter
of priority by all departments.
Environmental management
Honourable members, in the current financial year new environmental impact
assessment regulations were promulgated in terms of the National Environmental
Management Act (NEMA) No. 107 of 1998. The effect of these regulations is the
streamlined, shortened and time bound turnaround activities for Record of
Decision (RoD) to be issued and as a consequence of this intervention, we do
not have EIA backlogs in terms of the new regulations.
However, as observed in the Honourable Premier's State of the Province
Address, we have been concerned by the accumulated backlog in terms of old
regulations, and a dedicated team has been set up to assist with the clearing
of these backlogs. As a result of this, we have been able to reduce from 600
applications to about 380. Furthermore, the province has received assistance
amounting to R2,1 million from the national department for the appointment of a
service provider to deal with these cases. Ninham Shand has since been
appointed in December 2006 for this purpose.
Readiness for 2010
Honourable members, our department is fully aware of its responsibility to
ensure that the economic benefits associated with the 2010 Federation
International Football Association (FIFA) world cup accrue to the people of the
Eastern Cape as well. In this regard, we have noted with satisfaction the
announcements made in both the national and provincial budgets of the provision
to cater for major infrastructural development and upgrade, including stadia
and roads. This has further provided us with the opportunity to improve our
accommodation facilities and quality craft production capacity.
The department is fully participating in the 2010 Provincial Co-ordinating
Committee (PCC), and we are in the process of appointing our department's 2010
project manager early in the new financial year.
We have also initiated the process of developing the Tourism Master Plan in
consultation with all relevant stakeholders. A Provincial 2010 Tourism
Readiness conference will be held in the first six months of the new financial
year, and a tourism sector summit will be held later in the year. These
initiatives will be in addition to the already existing Tourism Partnership
Fund that was launched in the current financial year as our intervention in the
development of emerging tourism entrepreneurs.
Honourable Speaker we are also pleased to report that the national
celebrations of the World Tourism Day will be held in the Eastern Cape on 27
September 2007, giving the Eastern Cape the national platform to showcase and
profile its tourism offerings.
In conclusion, Honourable Speaker, I wish to express my sincere thanks to
all those who have sustained my hopes and aspirations during the year.
Firstly, I would like to express my appreciation to the Honourable Premier
and to my colleagues in the Executive Council for guidance and political
support through a series of steep learning curves. I have benefited from the
wisdom and enthusiasm that is evident in our meetings.
Secondly, my thanks are also due to the Chairperson and members of the
Cabinet Committee on Economic Growth and Infrastructure, which continues to
make a significant contribution to growing the economy of our province.
My thanks go also to the Portfolio Committee for Economic Development and
Environmental Affairs, which has maintained a valuable and constructive
oversight function regarding the activities of our department and its Public
Entities.
Finally, I would like to express my sincere appreciation to Advocate Naledi
Burwana-Bisiwe, the Head of our department, the senior management team as well
as the management and staff of the department; chairpersons, boards, CEOs,
management and staff of our family of public entities.
Honourable Speaker, I also wish to commend the collective efforts of our
stakeholders and social partners who have remained supportive during this
period.
We are inspired by the individual and collective hopes of the people of the
province, who continue to encourage us to achieve more as we strive to attain a
better life for all.
I thank you and may God bless you!
For budget allocation on department's operation programme, visit the Eastern
Cape provincial website: http://www.ecprov.gov.za
Issued by: Department of Economic Affairs, Environment Affairs, Eastern Cape
Provincial Government
Source: Department of Economic Affairs, Environment and Tourism (http://www.ecprov.gov.za)
14 March 2007
