A R50 million Eastern Cape Industrial Job Stimulus Fund (ECIJSP), managed by the Eastern Cape Development Corporation (ECDC), is set to drive the job creation by incentivising businesses across targeted sectors to create sustainable and decent new jobs.
Launched today by the MEC for Economic Development, Environmental Affairs and Tourism Mcebisi Jonas, the fund aims to create jobs through stimulating and encouraging the diversification of the provincial economy. Exclusive to the Eastern Cape, the ECIJSP has a target to create a minimum of 30 000 new jobs in the next three years.
“The programme is a direct response to government’s job creation drive and it will strengthen the sectors outlined in the Provincial Industrial Development Strategy (PIDS). It will further ensure a concerted effort to bring to fruition the goals of the New Growth Path (NGP) by creating strategic partnerships in all sectors for economic development,” says MEC Mcebisi Jonas.
The new incentive programme will target companies in green industries, agro-processing, tourism, manufacturing, petrochemicals, capital goods as well as Information Communication Technology (ICT), electronics and Business Processing and Outsourcing and Offshoring (BPO&O). It will be controlled through an audit system that will see cash incentives paid to companies per proven job created.
ECDC’s role is to manage the funds, as well as perform all administrative functions including receiving, processing and adjudicating applications on behalf of the provincial government.
“The incentive will only be available to businesses which operate within the province. The businesses which apply for the incentive are required to create at least 10 new jobs in the Eastern Cape. The company will be expected to keep each job for a minimum of a year from the date of employment.
“Qualifying businesses will be paid R10 000 taxable incentive pay out in line with normal income tax legislation. The fund is meant to create sustainable new jobs located within the Eastern Cape by attracting sector-specific investments across the value chain,” says ECDC chief executive Sitembele Mase.
More than a quarter (26,4%), of households in the Eastern Cape rely on government grants as the main source of income. Nationally, youth unemployment rate is estimated at nearly 35% with more than three million young people out of work. Youth unemployment in the Eastern Cape averages 41,4 %. This is more than twice the adult unemployment rate (18,4%). A total of 695,175 young people have been without work every year in the Eastern Cape during the past decade as per an ECSECC publication released in August 2010.
Mase says applicants to the fund will be measured according to the strategic impact of the jobs created, sector prioritisation, location and on skills development. All successful applicants are expected to sign a contract with ECDC before any funds may be disbursed.
“The incentive will be paid out in two equal instalments to the successful applicant. The first payment will be paid six months from the establishment date and the second 12 months from the establishment date.
“The employer will receive the incentive if it has created all the promised jobs as per the contract with ECDC. If an employee resigns or has been dismissed for misconduct or incapacity during the contract period, the employer will be required to fill the vacancy within two months. If the employer fails to do this, the total incentive for all the jobs created by the employer will fall away,’ explains Mase.
Details on the fund can be found on www.ecjobs.co.za. An online application process is effective from 20 October to 30 November 2011.
Additional questions can be directed to the fund manager:
Thabo Shenxane
Tel: 043 704 5653
E-mail: TShenxane@ecdc.co.za
