Honourable Speaker
Honourable Deputy Speaker
Honourable Premier
Honourable MECs
Honourable Members
Heads of Departments
Invited Guests
Ladies and Gentlemen
Best Greetings to all of you, especially the people of Gauteng!
I stand before this house at one of the most challenging economic period in the history of capitalism. The global economic downturn is still marking its mark with the risk of recession in most European economies and the United States.
Most European economies such as Portugal, Ireland, Italy, Greece and Spain are currently faced with crisis levels of unemployment rates and high government indebtedness.
As a result of the crisis plaguing these economies, many governments in Europe are shifting towards and implanting fiscal austerity measures, which have contributed to low domestic demand, stagnating wages and high unemployment.
Honourable members, I am painting this picture of the crisis largely because the nature of our insertion in the global capitalist system means that these developments have a direct bearing on our economy and the challenges we face as a province.
Europe is our major trading partner as a province, with two-way trade at 30%. On our side, this crisis will have an adverse impact on our exports to Europe. Because of strong industry linkages, the economy-wide impact is likely to extend beyond our main exports to European markets such as agriculture, mining and manufacturing, to numerous other sectors such as transport, vehicle assembly and finance.
The crisis itself makes our national target of creating 5 million jobs by 2020, extremely difficult to attain. We have to pursue new markets for our commodities, industrial products and services.
Honourable members, the current period poses significant challenges for some of our plans as a department.
Madam Speaker, job creation remains a huge challenge for our province. While we contribute 34% to the Gross domestic product (GDP), we are still faced with an unemployment rate of 25.4%. Our ability to alter this reality, depends on the strategies we put in place to ensure that our economy grows from the current 3% to 7% per annum.
This is a critical period as there are attempts globally to enforce more favourable conditions for market profitability.
In many instances, these attempts are at the expense of the working class. As I speak here today Madam Speaker, the unemployed in this province is facing untold misery.
Madame Speaker, as the tragic events at Marikana reminded us, inequality is a dreadful beast that threatened to devour our society into chaos. As government, we have a critical role to play in addressing the legacy of inequality in this country.
We have also been emphatic on the need to ensure that our economy is inclusive and that the wealth created in our province is adequately redistributed. This is an imperative we can only avoid at our own peril.
Allow me in tabling this annual report, to remind the House of the strategic priorities of the Department of Economic Development.
Our priorities as a department include, among others - the development of strategic economic infrastructure for employment-led growth and development; re-industrialisation to support the growth of labour intensive industries; building an innovative and knowledge-based economy to drive competitiveness; strengthening green economy interventions to support sustainable economic growth and development; promoting trade and investment as well as creating decent sustainable employment.
Madame Speaker, these priorities are indicative of the Gauteng Provincial Government’s commitment to overcoming the triple challenge 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 to become a globally competitive City Region.
The department has made serious strides in achieving these objectives. Allow me, honourable members, to share with you, the steps of real movement that we have recorded in the year under review.
Strategic Economic Infrastructure
Madame Speaker, the Department of Economic Development continues to live up to the expectation to lead the development of strategic economic infrastructure in order to stimulate employment-led growth and development.
The OR Tambo International Airport Industrial Development Zone (IDZ) now has a transaction advisor and the first draft of the Commercial Case has been completed. Land zoning processes for the IDZ have also been resolved. Good progress has also been recorded in the creation of the Tambo Springs Inland Port with the Master plan being finalised. The proposed design and technical specifications of the hub have received a nod from Transnet.
Re-industrialisation and support for labour-absorptive industries
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. One of these efforts is the collaboration between the Automotive Industry Development Centre (AIDC) and the Ford Motor Company of Southern Africa (FMCSA) in areas such as training, recruitment as well as re-skilling of over 1 000 current employees to ensure readiness for the manufacturing processes at the FMCSA production facility in Silverton, Pretoria.
Nissan South Africa is also in the process of biding to manufacture the next generation pickup truck at their vehicle assembly facility in Rosslyn. These projects have the potential to turn our province into a compelling automotive investment destination. These projects are also important in light of our objectives to re-industrialise Gauteng’s economy and provide support for labour absorptive sectors.
Building an innovation and knowledge driven economy
Madame Speaker, our resolve to build an innovation and knowledge-based economy to drive competitiveness and economic growth is bearing fruits. The land area needed for the Smart City development has been secured, with negotiations for smaller pieces of land currently underway. We have also struck various agreements with a number of multinationals to move their call centres to the Smart City. The Master Blueprint for the Smart City will be completed by end of the financial year.
The Innovation Hub (TIH) also recorded a number of successes. A total of 139 jobs were created by the TIH in the year under review. As part of providing support, skills and training to small, medium and micro enterprises, Maxum, has trained 13 small, medium and micro enterprises (SMMEs). In addition, the pre-incubation SMME incubator graduated five companies into the incubation programme while 26 students were recruited to participate in the Coach Lab programme for the 2011/12 financial year. TIH also partnered with the Gauteng Department of Agriculture and Rural Development to produce a bankable business plan for the Gauteng Biotechnology Park.
Green Economy Interventions for Sustainable Economic Growth
Honourable Speaker, we are on course in developing green economy interventions to support sustainable economic growth and development. To this effect, an alternate waste to energy facility (AWESOME) will be built on approximately 8 hectares of land at Zesfontein, Ekurhuleni. This facility will make use of mass burn incineration technology to dispose of waste and create electricity and other bi-products.
Madame Speaker, the Moringa Oleifera project, which was the flagship Green Economy project for the 2011/12 at TIH is also on course. Thus far, a total of fifty five (55) jobs have been created for the community.
Sustainable Employment Creation
Madame Speaker, we have made significant inroads in increasing efforts to formalise businesses and create jobs in our townships. To this effect, business plans dealing with technical, commercial and operating business modelling for the establishment of Township Enterprise Hubs (TEH) were developed and approved. These plans apply to all the automotive, industrial and enterprise aspects of the hubs.
Through the Department of Trade and Industry (Dti) Employment Creation Fund (ECF), the department was able to set up the initial project set up phase for the TEH and to appoint a Transactional Advisor to ensure the viability and proper development of projects.
The Dti funding was also geared towards assisting the department with the implementation infrastructure for the youth placement programme. In this regard, the Y-AGE programme was launched with the participation of civil society structures. By the end of March 2012, Y-AGE had attracted 100 000 responses through online; mobi site; manual and call centre platforms. This programme has since been mainstreamed into the core programmes of the Gauteng Enterprise Propeller (GEP).
As part of our efforts to create sustainable employment opportunities, the Gauteng Enterprise Propeller launched and awarded Business Development Service interventions to 811 SMMEs and Cooperatives. This non-financial support contributed to the indirect sustenance of 2 404 job opportunities.
Honourable members, the Gauteng Enterprise Propeller has been able to train a total of 552 SMMEs and Cooperatives during the year under review. An additional 30 cooperatives have benefited from GEP’s Cooperative Assistance Programme (CAP). The agency has also launched the Cooperative Flagship Programme, which provides tailor made assistance to enhance the performance of cooperatives with a high potential for labour absorption.
Trade and Investment Promotion
We have marched ahead with the mandate to promote trade and investment in the province. In the last year, the Gauteng Growth and Development Agency has successfully facilitated investments that generated 2 000 permanent jobs and 1 346 temporary jobs. This brings the number of jobs created through property development, ICT, manufacturing and green economy sectors to 3 346 jobs.
The agency also organised a three-day Gauteng Investment Conference and Trade Week Exhibition in October 2011, which attracted the participation of at least one hundred and sixty (160) exhibitors. A total of 16 companies reported sales of R1 107 510 during this exhibition. GGDA also participated in various domestic and global trade exhibitions.
As part of our endevours to promote foreign direct investment and enhancing the experience of doing business in the province, we have established a Gauteng Investor Business Lounge located in Sandton. This lounge offers state-of-the-art facilities for conducting business in the province.
Tourism Sector Development for Competitive Economic Growth Honourable Speaker, the tourism sector has been a critical focus of our efforts to drive the province’s economic growth and competitiveness. Our province attracted 5.6 million tourists in 2011, resulting in tourism earnings amounting to R40.3 billion. Among the milestones recorded in the period under review is the development and approval by the Executive Council of the new Gauteng Tourism Strategy (GTSS), which replaces the outdated Gauteng Tourism Development Strategy of 2007.
We are also delighted to report that Dinokeng Game Reserve, which is Gauteng’s first Big Five game farm, was officially opened during the year under review. As part of stocking the game reserve, eight lions and 10 elephants were procured during the year under review.
Madame Speaker, I am delighted to inform the house that we have made giant leaps in developing the Constitution Hill Precinct. We also concluded an agreement with national departments for the development of the Justice Precinct. A draft agreement with the City of Johannesburg is already in place. We have also submitted funding applications to the DBSA for these plans. A draft layout based on the current infrastructure and capacity on the site as well as heritage components on site has been developed.
Honourable members, we have also embarked on initiatives to enhance the tourism experience at the Cradle of Humankind World Heritage Site. A total of 200 youth and women were trained and employed as tourism safety monitors at the site.
As honourable members are aware, the Gauteng Liquor Bill was published for public comment and to prepare for its submission in the new financial year. The Gauteng Gambling Board has seen a 6,72% year-on-year increase from R657,2 million to R701,4 million. In rand terms, tax revenue collection has increased from R657,2 million to R701,4 million for the period under review.
Honourable Speaker, I am also pleased to announce that we have spared neither energy nor effort in ensuring that we adhere to the principles of the Public Finance Management Act and the recommendations of the Auditor-General. To address the Auditor-General’s concerns about the misstatement in financial statements, the department has put in place a system of Integrated Reporting in the form of an activity list and circulated this to all role players within the process of compiling financial statements.
We also perform expenditure monitoring on a monthly basis in order to ensure that corrective action is taken where possible unauthorised expenditure is identified.
To ensure payment of invoices within 30 days, the department has put in place an internal process of invoice submission and circulated this to all the departments’ staff.
Honourable Speaker, these efforts are a sign that we are determined to continue subscribing to the ethos of statutory compliance to ensure value for money and good corporate governance.
Let me hasten to say that, amid all these achievements, our work was not without challenges. Some of these challenges include the global economic downturn, which negatively affected our efforts to lure investment into the province and low private sector funding of our projects. GEP also operated with a shortage of key personnel in the core programmes such as Micro-Finance and Cooperative Support, which in turn adversely affected the realisation of some of our targets in the first half of the financial year.
I am confident that some of these challenges will be mitigated with better planning and dedicated staff in our department and our agencies. Needless to say, this will include an extra-ordinary attention to actual implementation and as we all know, we cannot talk about implementation if levels of efficiency are not improving.
In conclusion Madame Speaker, we are making headway in our contribution to make Gauteng an inclusive and sustainable city-region that promotes a developmental and equitable society.
The key elements of this developmental agenda, at least from the economic standpoint, are job creation, expansion of our manufacturing capacity and development of our human resources.
With regard to job creation, Madame Speaker, on the 3rd October, I will be launching a job creation campaign. This campaign aims to engage, among others, the private sector to invest and get people to work. Appropriately, I call upon all members to support the Department and the province in this campaign.
Thank you.
Province
