Economic Development Minister Ebrahim Patel today presented to parliament the Economic Development Department's Annual Report for the period 1 April 2012 to 31 March 2013.
"Industrial funding disbursements by the IDC and actions against market abuse by the competition authorities were at a record high during the twelve months," Minister Patel said.
"In difficult global and domestic economic circumstances, government was able to invest strongly in infrastructure, with about R200 billion invested in energy, transport and other key infrastructure. The economy created 199 000 new jobs. The GDP reached R3,2 trillion in value. These achievements are significant when many of our key trading partners were still languishing in recessions or weak economic recoveries," he said.
Minister Patel highlighted a number of gains made in the past year, in both the economy and the performance of the Economic Development Department and public entities reporting to it.
These included: R16 billion of disbursements by the IDC to partner companies in the economy. This is money that was approved and now transferred to investor partners, an increase of 87 percent compared to the previous year. IDC funding approvals in the financial year resulted in 18 900 new jobs and saved a further 4 000 jobs.
Small business funding approvals of R432 million, more than double what was approved in the comparable previous period. The Small Enterprise Finance Agency (SEFA) completed its first year of operation and extended its footprint across the country.
Fines and penalties of R731 million imposed by the competition authorities for actions against cartels and price-fixing in the economy. These exclude the large penalties imposed on the construction industry, which was finalised after the end of the financial year. A sustained increase in the capacity of the state to spend voted and allocated finds for infrastructure development, with about R820 billion spent on economic and social infrastructure since the start of the current administration in 2009.
The Presidential Infrastructure Coordinating Commission (PICC) is co-ordinating the roll out of 18 strategic integrated projects (SIPs) in infrastructure that embraced schools, hospitals, roads, dams, rail lines, broadband, power plants, energy transmission lines, water and electricity connections at household level, sanitation and other key infrastructure. This has sustained 180 000 jobs on the projects monitored by the PICC.
Addressing parliament on the focus of government, Minister Patel cited the successes with industrialisation and investment in green energy.
"When the current administration came into office, all mini-bus taxis and large buses used in metros were imported. Today, 38 percent of new minibus taxis sold in SA is assembled locally and all new buses used by Joburg and Cape Town's public transport systems are now being assembled in local factories.
This is the start of a determined effort in partnership with the private sector to reclaim the domestic market. Other efforts in this regard include the opening of a new television and fridge manufacturer in Atlantis on the West Coast and construction of a soya crushing plant in Standerton in Mpumalanga," he said.
"I am pleased that the IDC co-funded Long Walk to Freedom, the biography of ex-President Nelson Mandela, and in the process it helped to ensure a world-class movie was made locally, creating jobs in South Africa. This is part of creating new industries that can complement the focus on manufacturing, mining and agriculture," he said.
Minister Patel pointed to a big increase in farming jobs in the period, with agricultural employment up by 83 000 new jobs. The IDC invested R3,8 billion in 40 green energy projects which is helping to create a large solar and wind energy generating capacity as a contribution to reducing carbon emissions and protecting the environment. This is in line with government's strategy to mitigate the effects of the coal-industry on climate change and is now Africa's largest green energy programme.
Action against cartels was critical in order to open the economy to new entrants and to ensure consumers and tax payers received value for money. The Report to parliament provided information on competition actions on mergers and acquisitions.
It noted that following a process through the courts, Walmart was ordered to provide up to R240 million for a local supplier development fund. The report also noted progress made with introducing employment guarantees on the Walmart transaction and on 10 other merger cases that came before the Competition Tribunal.
The Department achieved 98 percent of its annual targets using less than 90 percent of its budget. Savings have been redirected to expanding a partnership to train young black finance graduates to be work ready for small businesses. This programme was done with the South African Institute of Chartered Accountants (SAICA) for the training of accounting graduates and the establishment of a business hub to provide strategic and in-kind business support to SMMEs, with R10 million allocated for training 170 graduates in 2013.
One of the roles of EDD that Minister Patel highlighted was facilitating new investment. An example cited was the construction of a R600 million state-of-the-art soya crushing plant in Standerton - Mpumalanga.
He said: "The plant is being built by a Singapore company - Noble Resources - and is set to accelerate change in Mpumalanga's economic landscape. The construction of the plant for crushing soya beans to produce bio-fuel, edible oils and animal feeds is at an advanced stage. The Standerton plant aims to create 120 jobs, produce 2 000 tons of oil per day and stimulate the creation of thousands more jobs on feeder farms.
Small scale farmers, transport industry players and local communities are set to benefit as the company requires a million tons of soya beans every year, while dozens of trucks are required to deliver oil to markets every day. Noble Resources has already invested R2 million in training 150 local people who have been awarded NQ3 certificates."
Minister Patel said the industrial development support provided cuts across all provinces including the following:
Northern Cape: construction of the world's largest manganese sinter plant to produce 2,4 million tons a year and create an estimated 800 jobs in the sinter plant and manganese mine Eastern Cape: a number of green economy manufacturing projects, to create over 200 jobs, including in manufacturing of Solar PV panels at the East London IDZ and towers for wind turbines in the Coega IDZ.
Western Cape: expansion of Cape Town Film Studios with a new water-tank facility for production of ocean scenes, creating a further 500 jobs Mpumalanga: support for small farmers to supply oilseeds to a new oilseed crushing facility.
KwaZulu-Natal: new factory in Durban for manufacturing plastic moulded components for motor vehicles, create 450 jobs.
Limpopo: upgrading of sawmill near Tzaneen retaining 449 existing jobs.
Gauteng: semi-automated material recycling facility able to process over 6 000 tons of waste per month.
Free State: R308 million mining project to re-develop a diamond mine in the Kroonstad area, creating 159 jobs.
North West: R6 million from the Green Energy Efficiency Fund (GEEF) to assist in funding a R11 million co-generation project close to Leeudoringstad.
"While the function of an annual report is to provide details of what was achieved against target, we need to acknowledge that the overall challenges of unemployment, poverty and inequality remain high and require further urgent interventions. We cannot be complacent in the midst of an unemployment rate that results in a quarter of the labour force being without jobs, yet willing and able to work. Trade unions and businesses must be more focussed on creating new jobs. Government must step up actions to increase the labour absorption capacity of the economy," Minister Patel said.
He told parliament that support for African regional development is the key to long-term growth of our markets and is one of the best investments that South Africa's private and public sectors could undertake.
"We have made solid progress on regional diplomacy and now need to strengthen the hard elements of regional economic integration including logistics, trade regulations and supply-chain development in and with neighbouring countries. This as well as investment in our own infrastructure, education and skills development and support for small businesses are key ways in which we can scale up jobs in South Africa," he said
Enquiries:
Manelisi Wolela
Cell: 071 313 4192
Email: mwolela@economic.gov.za
