In the State of the Province Address on 22 February 2010, Premier Nomvula Mokonyane highlighted the overarching priority for the Department of Economic Development, which is the creation of decent work through inclusive economic growth. This is one of the five priorities of the Gauteng Provincial Government (GPG).
The department has reprioritised its programmes and budget to focus on this priority. In that light, we have decided to close down the motorsports programme, which has made it possible to refocus the department’s programmes on its new mandate. Details of the terms of the settlement with contracting parties will be disclosed next week.
In order for the department to contribute to achievement of decent work through inclusive, labour absorbing growth, and sustainable economic development, a two-pronged strategy has been devised. The strategy includes immediate measures by government to address structural unemployment and the impact of the recession. Despite consistently high levels of economic growth over the last 15 years, unemployment never dropped below 22 percent. This suggests structural unemployment. The recession has aggravated unemployment which had increased to 25,2 percent in the third quarter of 2009 according to the Labour Force Survey.
GPG has therefore made a decision to actively target unemployment. First and foremost, anti-recessionary measures aimed at supporting job retention in distressed sectors and retrenched workers will be introduced. This will be done by strengthening the implementation of the National Framework Agreement. Secondly, the Expanded Public Works Programme (EPWP) led by the Department of Infrastructure Development will continue and be expanded.
In addition, GPG will allocate significant resources to support the new programme, which has significant potential to create a large number of job opportunities in a relatively short period of time, by supporting and leveraging off a national initiative. Thirdly, the GPG will introduce for the first time a programme, which again complements a national initiative, to support the employment of young school leavers.
The second strategic pillar focuses on developing a new long-term growth path for Gauteng aimed at promoting decent work through inclusive and sustainable economic growth, a matter that was mentioned by the Premier in her address to the legislature and Minister Davies in his address to Parliament.
Pillar 1: Direct employment creation
Direct employment creation – community works programme
The national government has allocated R2,2 billion to support job creation initiatives in communities across the country. Currently, there is one pilot site operating in Gauteng, Munsieville. The national government has allocated funding to a further 10 sites in the province. Over the next four years, GPG will make a significant financial commitment to expanding the programme in the province. This programme provides an employment safety net to individuals while alleviating poverty through a stable income of R150 a day for two days a week and 100 days a year.
Optimum participation in the programme is expected to grow by 1 000 people per site per annum to an average of 4 000 people. The Community Works Programme (CWP) operates at 65 percent labour intensity, where 65 percent of the costs are for wages. It targets communities at ward level in order to build up and improve the services and infrastructure available. The programme has the potential to trigger the expansion of businesses and increasing incomes in the poorest of areas. It is expected that a minimum of 40 000 job opportunities will be created by this programme alone, over the next three years.
Expanded Public Works Programme two direct employment creation
Led by the Department of Infrastructure Development (DID), this programme targets a million people (women, youth and people with disabilities) by 2014.
A targeted programme that promotes employment for school leavers
This is a Gauteng intervention to promote youth employability. It also aims to address factors that contribute to high levels of youth unemployment including: poor work readiness (such as personal presentation, communication skills, timeliness, information technology (IT) skills, or communication); weak work-related capabilities (skills that are related to the workplace); weak job matching services aimed at school leavers; difficulty acquiring a first job (as employers want prior experience or a reference); poor matching of youth into post school further education and training opportunities, and very low completion or pass rates.
This programme targets 23 948 school leavers over the Medium Term Expenditure Framework (MTEF). In implementing the programme, the department will consult wildly, including the labour movement.
Pillar two: anti-recessionary plan – measures focusing on economic recovery
These interventions include:
* Support distressed sectors and companies focusing on the hardest hit industries such as the automotive and components sector
* Cooperation with Sector Education and Training Authorities (SETAs) for re-skilling and up-skilling of retrenched workers and school leavers (National Training Layoff Scheme (NTLS))
* Training of retrenched metal workers and others (re-skilling), including support to SMMEs to promote the manufacture of the components for motor vehicles together with the original equipment manufacturers (OEMs);
* Establish a help desk for distressed companies to assist companies and employees while linking them to the NTLS, or facilitate support from the Industrial Development Corporation (IDC), financial institutions, Development Bank of South Africa (DBSA) or the Gauteng Enterprise Propeller (GEP) as appropriate.
* GEP to provide special assistance to distressed SMMEs in the sectors and companies identified.
The GEP initiative will target 30 000 retrenched workers and school leavers.
Pillar three: Inclusive growth and sustainable economic
GPG is in the process of finalising its post 2010 and post economic recession growth strategy, which includes:
* Industrial policy development – a sectoral focus
The department has completed the first phase of the industrial policy. Some sectors that have been provisionally identified include: agriculture and agro-processing; automotive and components; tourism; clothing, textile, leather and footwear; transport; capital equipment including metals; furniture; information and communication technology (ICT)-E; BPO-O; construction and knowledge economy.
Through focused sector strategies, aligned upwards with the national action plan, the department will focus on labour absorbing sectors and thus promote decent work outcomes. We will align our enterprise development, procurement and infrastructure spending with our sectoral strategies. In addition, we will endeavour to promote localisation and in this way contribute towards the balance of payments.
*Infrastructure spending
Spending on economic and social infrastructure will remain one of the pillars of the growth strategy for the province, as announced by the Premier earlier this week on Monday. The department’s focus will continue to be on strategic economic infrastructure such as information and communication technology (ICT) and transport logistics.
*Enterprise development – supporting SMMEs and cooperatives
Our enterprise development work will be reinforced by strengthening our support programmes, introducing a programme on micro financing and expanding the mandate of GEP to include cooperatives. Furthermore, enterprise development will be aligned with sector work since strengthening supply chains contributes to both small business development and employment creation. 150 000 small, medium and micro enterprises (SMMEs) and cooperatives will be provided with non-financial support, while 35 000 SMMEs will be provided with loans by 2014.
*Green jobs and a pro-green economic development strategy
A green strategy for economic growth and development has been developed, focusing on green jobs and decent work. This strategy aims to contribute towards a new growth trajectory focusing on energy efficiency and a gradual shift towards the reliance on renewable energy through collaboration with our relevant sister departments. The Department will promote regulatory change, is considering providing subsidies to promote demand for the manufacturing and installation of renewable energy technologies, support research and development, promote investment in renewable energy products; support the local manufacturing capabilities; and promote training for the maintenance and supply of goods/services to promote a low energy sector.
This financial year, we will focus on:
* Food security programmes research and piloting (Maringo Oliferous which reduces carbon emissions, obtains carbon credits, supports innovation in pharmaceutical and cosmoceutical sectors)
* Energy security: creating viable sectors for solar water heating (through subsidising the installation of solar water heaters) concentrated solar power (over R12 billion savings p.a. or six tons of carbon emissions averted)
* Water security: long-term water supply, water demand management, pollution reversal, sanitation
* Waste management strategies.
Tourism 2010 and tourism
This is an unprecedented opportunity to promote Gauteng as a tourist destination. The 2010 World Cup is expected to generate more than R11 billion with 21 of the 64 games being played in the province, coupled with the opening and closing ceremonies being held in the province. It is worth noting that 19 of the 32 teams have chosen Gauteng as their base. Gauteng is a gateway to the other provinces. The department, under the direction of the Premier and as part of the gateway strategy, has developed a three-pronged strategy which includes enterprise development, product development and marketing to maximise tourism opportunities.
The following are key actions:
* Grading of non-hotel accommodation (4 000 sites are to be graded); facilitate second economy opportunities (marketing of local offerings such as curios) erection of tourism signage; skills development programmes (e.g. foreign languages for tour guides, customer service training); route development and establishment of Fan Parks.
*Liquor Board functionality
The functionality of the Liquor Board is being addressed through a specific turnaround strategy. Part of the strategy is to focus on limiting trading in the vicinity of schools, places of worship and irresponsible trading in dense residential areas. For 2010, special measures will be put in place to ensure speedy award of licences coupled with facilitating trade during the 2010 World Cup. In addition the Liquor Board will addressing the backlogs in licensing; improving revenue collections; bolstering data collections and mapping with GIS related software; putting processes in place to eliminate fraud and illegal licenses; and improving the inspectorate function. A proper review of the Gauteng liquor policy and legislation is underway and will embrace wide consultation of stakeholders in the liquor industry. The short-term deliverables of this strategy focuses on improving service delivery, compliance as well as enforcement.
The department has a new set of priorities, focus, and strategy to promote decent work through inclusive growth. We will work hard in the coming years to deliver on our mandate.
For more information contact:
Mandla Radebe
Tel: 011 355 8703/8716
Cell: 083 288 8915
E-mail: mandla.radebe@gauteng.gov.za
Issued by: Department of Economic Development, Gauteng Provincial Government
24 February 2010
