Honourable Speaker,
The Premier of Gauteng,
Chairperson of the Portfolio Committee on Economic Development,
Honourable members of the Provincial Legislature.
Madame Premier, the African National Congress won the confidence of the people of Gauteng in 2009 against the backdrop of a world in economic turmoil. This was a period in which many countries, especially the United States and the countries located in Europe, were besieged by debt and banking crises.
There was a global decline in commodity demand, affecting many developing economies and emerging markets. We saw horrid images of industry failure and collapse across the globe, leaving the working people and the poor globally in dire straits.
Against the wishes and projections of our detractors, South Africa’s economy avoided a full-scale crisis and weathered the storm. Working together with our social partners in business and labour, national and provincial strategies were implemented to cushion us from the impact of this crisis.
But to a great extent, Madame Speaker, the global economy is still on its knees. Today our trading partners are still reeling under the pressures of the global economic crisis. With Gauteng enjoying a 24% two-way trade with Europe, this crisis has had serious implications for our mineral, manufacturing and agricultural exports destined for this region.
Nonetheless Madame Speaker, the Gauteng Provincial Government, working in concert with our social partners in business and labour continues to break new ground in managing South Africa’s biggest employer and biggest economy. We are optimistic that Gauteng has the fortitude and the leadership to ride out this tough period.
We say this because even though these are testing times for the global economy, Gauteng’s position as a leader of growth, employment and development in South Africa remains unparalleled.
With the exception of agriculture, Gauteng contributes the highest percentage share in almost all sectors of the South African economy including manufacturing, construction, trade, finance and mining. Gauteng’s 34.5% contribution to South Africa’s GDP is second to none in the country.
The size and performance of Gauteng’s economy is also linked to the province's good record of service delivery and its ability to attract investment and create jobs on a massive scale. But, Honourable Speaker, at 25.6%, our unemployment levels are still too high. In the 2009 elections, the people of Gauteng gave us the mandate to create decent jobs and sustainable livelihoods.
The people of this province also found resonance with the ANC’s fervent belief that political inclusion must go hand in hand with economic inclusion. We continue to sing from the same hymnbook as the people of Gauteng on the need to grow Gauteng’s economy. We also understand and appreciate that growing an economy without creating decent jobs is a perilous exercise.
Informed by the people’s aspiration, the Provincial Government led by the Department of Economic Development, continues to labour tirelessly to create decent jobs and lead an inclusive and equitable growth and development trajectory. This imperative finds expression in the Gauteng Medium Term Strategic Framework (MTSF) 2009-2014 and the Gauteng Employment Growth and Development Strategy (GEGDS).
Honourable members, Gauteng is the most populated province in South Africa, with 12.3 million people calling this province their home. This increase in our population places a heavy burden on our shoulder. The Department of Economic Development is fully cognizant of the pressures presented by this reality.
Conversant with these challenges, the department set out to achieve the following broad objectives for the year under review:
- promoting trade and investment
- developing strategic economic infrastructure
- driving the re-industrialisation of the economy to support the growth of labour intensive industries
- building an innovative and knowledge-based economy
- and strengthening green economy interventions to support sustainable economic growth and development.
Collectively, these priorities signal our zeal in confronting the triple challenges of poverty, unemployment and inequality through the large-scale creation of decent work opportunities, enhancing the inclusivity of the Gauteng economy and propelling the province into a globally competitive City Region.
Allow me, Honourable Speaker to elaborate on the achievements for the year under review:
Trade and investment
Honourable members, increased and sustainable investment from the private sector is crucial if we are to realise the strategic objective of creating decent jobs and growing Gauteng’s economy.
In addition, there is an intricate link between the electoral mandate vested on the African National Congress by the people of Gauteng and our ability to attract investment and expand productive activities.
Under an uncertain and hostile global economic environment, the Gauteng Growth and Development Agency (GGDA) facilitated a total of seventeen (17) foreign and domestic investments in sectors as varied as steel beneficiation, auto components manufacturing, food processing, pulp and paper manufacturing and ICT. These investments created a total of 3 209 jobs, with 2 441 of these jobs being permanent.
This resonates with our objective to increase Gauteng’s share of global foreign direct investment and position the province as a global destination of choice for investment, trade and tourism.
The Gauteng Growth and Development Agency is currently focusing its energies on an export promotion programme that will enable access to booming markets, coordinating support programmes and incentives for investors in the province and securing new trade deals in target markets.
These strides notwithstanding, Honourable members, we still need a public discourse to ponder the underlying factors behind the reluctance of business to invest in an industrialisation drive capable of creating large numbers of decent jobs in our economy. The twenty years of freedom that we will be marking next year presents us with the opportune moment to make this reflection.
Enterprise development and youth empowerment
Honourable Speaker, small businesses and cooperatives are critical for job creation, wealth sharing and poverty alleviation. We have introduced a number of initiatives and measures aimed at boosting the performance of the small business sector.
A total of 33 437 small businesses and cooperatives have benefited from the department’s various development interventions and funding. This number is above the five-year target of 30 000 that we set at the beginning of the term of office in 2009. This finds resonance with our quest to build an inclusive economy where small businesses occupy a special place in the fight against unemployment, poverty and inequality.
Because we believe that the economy of Gauteng must serve everyone, in particular the poor, we will be focusing our efforts on the informal sector. This, we believe, augurs well for the African National Congress’ mission to create a better life for all.
Honourable members, allow me proceed to talk about the albatross of our economy: youth unemployment, which admittedly also constitutes the biggest political question facing most democracies today.
Since breakout of the global economic crisis in 2008, youth unemployment has increased throughout the world. The International Labour Organisation (ILO) report published in May this year noted that there are 73.4 million young people unemployed throughout the world, an increase of 3.5 million since 2007.
The African continent, especially sub-Saharan Africa is experiencing a youth bulge, with youth as a proportion of the total population projected at over 75 per cent by 2015.
Madame Speaker, the youth question is of pivotal importance to Gauteng’s economy. As the Census 2011 revealed, Gauteng’s population is predominantly young.
Our youth employment strategy is premised on four pillars namely youth entrepreneurship development and training; township enterprise hubs; youth placement and skills development.
While youth unemployment still remains a pressing matter, the department has made headway in supporting a range of youth businesses, directly creating and sustaining jobs in the economy.
In the past year alone, initiatives targeting small businesses and cooperatives yielded 1 344 permanent job and sustained a total of 3 392 jobs. Young people in the province also benefited from several programmes aimed at training young artisans to play a key role in the manufacturing sector, especially in the automotive, furniture, jewellery, tooling and metal fabrication industries.
The completion of the Township Enterprise Hubs is a matter that we are undertaking with agency. We have completed the construction of the Winterveldt Township Enterprise Hub and are on course in ensuring that the Mohlakeng hub is fully operational and contribute in mitigating the youth unemployment challenge in these areas.
Madame Speaker, the challenges that confronted the Y-Age program resulted in the decision to remodel the initiative and place it directly under the auspices of the Gauteng Enterprise Propeller (GEP) as the Youth Entrepreneurship Program. This is now an internally run programme to develop the entrepreneurial skills of young people in the province. Through this program, we intend to produce at least 1 000 new youth owned businesses moving forward.
We believe these interventions will complement and increase the impact of the thousands of jobs created and sustained by GEP interventions since the establishment of the agency in 2005.
A total of 3 439 young people have registered with the Youth Placement Programme whilst over 1 270 have received work-readiness training. The department will continue engagements with the private sector to forge partnerships towards placing more candidates that have registered with the programme.
Madame Speaker, I must emphasise that the reality is that the massive absorption of young people to the labour market requires that we grow this economy and stimulate productive sectors such as manufacturing. All other initiatives we undertake merely provide a soft-landing and a short-term solution to a deep-seated crisis. The long-term solution lies in growing the real economy and creating productive jobs on a massive scale.
Tourism development
We have upgraded the Visitor Information Centre (VIC) at the OR Tambo International Airport and finalised contracts for the upgrading of the Maropeng Interpretation Centre. We also employed 400 tourism safety monitors to guarantee the safety of tourists in the Cradle of Humankind World Heritage Site and Dinokeng area. An additional 123 jobs were created through the ‘Working for Fire’ project.
Industrialisation to support labour intensive sectors
Honourable Speaker, in pursuit of our objective to generate inclusive economic growth and create decent jobs, the department has forged strategic partnerships with the automotive sector. The Automotive Industry Development Centre (AIDC) contributed to the creation of 1 112 jobs through its projects and programmes. The Centre trained a total of 51 young welders, boilermakers, fitters and diesel mechanics.
We have also created six (6) new automotive businesses through the incubation programmes in the automotive sector. The GGDA trained 32 furniture craftsmen and designers as part of the overall strategy to promote local industries and to increase Gauteng’s slice of the export pie.
An innovative and knowledge based economy
Madame Speaker, we are also making headway in our resolve to build an innovation and knowledge-based economy to drive competitiveness and economic growth. An integral part of our entrepreneurship support and development strategy in the knowledge-intensive sector, Maxum trained 259 SMMEs and incubated six (6) companies, two of which have made significant inroads in the commercialisation of their products.
As part of efforts to provide experiential learning to young people and address the graduate unemployment in the knowledge sector, the Coach Lab programme saw the graduation of 31 students while 13 mobile developers received our active support.
Regulatory issues
The Gauteng Gambling Board increased its revenue by R71 million from the previous financial year’s R701 million. The entity contributed a total of R9 234 million towards corporate social responsibility initiatives. The Gauteng Liquor Board collected R23 million in licence revenue and issued a total of 1 685 liquor licenses.
In the year under review, the Consumer Unit managed to increase its visibility and accessibility, conducting 91 education and awareness workshops and resolving 1 774 consumer complaints.
Honourable members, Gauteng must build on its strength as a fortress of the South African economy. We must work ceaselessly to boost our labour intensive industries and protect the goose that lays the golden egg – our manufacturing. We must prioritise those sectors of the economy that have the greatest potential to maximise the multiplier effect on downstream industries.
Madame Speaker I wish to thank the Acting Head of Department who assumed the reigns of the department with vigour and energy. My gratitude is extended to the senior managers and the departmental staff for their role and contribution in ensuring that the province delivers on its electoral mandate and commitments.
As a collective, we are looking forward to fostering more partnerships with the private sector, the people of Gauteng and all important stakeholders in the economic terrain.
Last but not least, I would like pay tribute to the late Honourable Nkosiphendule Kolisile who was a torchbearer for the ANC’s vision to create a better Gauteng and a better life for all.
Thank you!
