Honourable Speaker,
Honourable Premier,
Honourable Chief Whip,
Honourable Members,
Business and Trade Union Leadership,
The leadership of youth and community based organisations in Gauteng,
The leadership of the informal sector,
Members of the GDED Boards,
Officials from the department and agencies,
Guests and dignitaries,
Residents of Gauteng.
Honourable Speaker, I am tabling the Budget Vote for the Gauteng Department of Economic Development in a month that is populated with a number of important historic dates and events.
Last week marked the 50th anniversary of the formation of the Organisation of African Unity. The formation of the OAU, which was renamed the African Union (AU) in 2002, was a product of the African people’s resistance against European colonialism and imperialism. It is also a symbol of the quest to unite the African people to confront our challenges and chart the course for Africa’s development.
Madame Speaker, fifty years on, we have learnt the true meaning of winning political freedom without the ever so important economic freedom. We are convinced, now more than ever, of the need to put an end to a system that results in our vast natural endowments serving as irrigation streams for Western economies. We are more conscious today about the need for a new development trajectory that is punctuated by our firm conviction that we too deserve economic freedom.
Honourable Speaker, tomorrow will mark the 103rd anniversary of the 1910 Act of Union, which cemented the exclusion of Africans from this country and the reign of white minority group.
Indeed we must be proud that since our democratic breakthrough in 1994 much has been done to address and reverse the terrible legacy of apartheid. In spite of this stubborn legacy, especially as it relates to access to land, the people’s government has opened up opportunities for property ownership by many South Africans who would otherwise not have had access under the ugly past we referred to above.
Property ownership is key to unlocking opportunities to economic access and giving people meaningful freedoms.
Needless to say Honourable Members, a lot still needs to be done if we are to have a thriving economy in our country and in this province in particular. We have given deliberate and focused attention to growing an inclusive economy with clear characteristics of a caring government. We have focused on entrepreneurship through our support to cooperatives and small businesses.
We continue to build confidence in our economy and in our efforts to position Gauteng as an economic hub of South Africa and as a gateway to the rest of the continent, especially Southern Africa.
We are humbled by the continued support of the investor community and we must continue to work around the clock to create an enabling environment for investment and job creation in the province. At the same time, we must continue to create an unfettered atmosphere for our own entrepreneurs and small businesses to thrive.
Honourable Members, in light of the fact that we also celebrated Workers’ Day earlier this month, let me salute the sterling contribution of workers to our economy. Without them, there would be no bridges, no houses and many other important goods and services in society. In fact without workers there is no economy and there is no development.
Honorable Members, this year marks the 49th anniversary of the death of the first uMkhonto weSizwe recruit and staunch trade unionist, executed by the apartheid regime in 1964. His name was Vuyisile Mini.
Mini was arrested along with two other prominent members on 10 May 1963. Long live the spirit of Vuyisile Mini and the countless martyrs who died for the freedom we enjoy today.
Madame Speaker, May is also a month of great moments in our history. It was during the month of May on the 10th in 1994 that South Africa’s first democratically elected president Nelson Mandela was inaugurated. His words during this august occasion are still relevant today.
He said: “We have…achieved our political emancipation. We pledge ourselves to liberate all our people from the continuing bondage of poverty, deprivation, suffering, gender and other discrimination.”
These words continue to serve as inspiration for all of us as public representatives, for we know that South Africa’s liberation is incomplete without the liberation of the majority of our people from economic bondage.
A global economy in crisis
Honourable Speaker, I table the Budget Vote of the Gauteng Department of Economic Development (GDED) at a time when the global economy is undergoing a series of hardships. Economic growth in all major economic centres including advanced and emerging markets, has been lower than expected. The global economy is expected to grow at 2.4 per cent in 2013 and 3.2 per cent in 2014, a significant downgrade from the IMF’s forecast of half a year ago.
The sluggish economic growth both internationally and domestically is a stumbling bloc to our plans and efforts to create decent jobs on a massive scale. Internationally, the European troubles continue to hinder economic activity in other parts of the world, including the southern tip of Africa.
The Eurozone is an important export market for many economies, consuming more than 34% of Russia's merchandise exports, about 14% of China's, almost 18% of Brazil's and close to 17% of South Africa's. China’s economic growth fell to a 3-year low of 7.6% in quarter 2 of 2012, raising fears that the economy would suffer a hard landing after years of double-digit growth.
For Gauteng, which exports 30% of mineral, agricultural and manufacturing goods to Europe, this is a daunting reality. This calls on us to intensify our work on intra-Africa trade and South-South economic relations. We have to find new markets for our commodities, industrial products and services. More importantly, there is a dire need to boost domestic demand by creating more jobs and entrenching the notion of decent work across the labour market.
Madame Speaker, everywhere across the globe, from the riots in London and Stockholm to the protests in Athens, people are questioning some of the fundamental ways in which the market organises their everyday lives. People are raising sharp questions about a system that relegates society to a mere accessory to the market. They are increasingly becoming suspicious of a reality in which the market is the absolute ruler that determines the economic and political faith of nations.
As a result, people are engaged in ceaseless battles against the so-called hidden hand of the market and are imploring their leaders to untie their countries from the apron strings of profit thirsty multinationals. These battle lines stretch from those countries considered the citadels of capitalism to the most marginalised areas of the global South.
Where do we locate ourselves in these battles? Where do we seek to go as a country?
Interpreting our mandate: Decent work and inclusive economic growth
Honourable Speaker, the National Medium Term Strategic Framework (MTSF) 2009-2014 is unequivocal on the need to ensure a more equitable distribution of the benefits of economic growth and the reduction of inequality, poverty and unemployment.
The Gauteng Medium Term Strategic Framework (GMTSF) 2009-2014 lends commitment to the same objective. In addition, the Gauteng Employment Growth and Development Strategy (GEGDS) is also vocal on the imperative to increase economic equity and ownership in Gauteng Province. This is the electoral mandate vested on this government by the people of South Africa.
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 inclusively growing Gauteng’s economy. The intricate link between our electoral mandate, strategic objectives and our ability to attract investment and expand productive activities in this province is one that we must always bear in mind.
After nearly 20 years of democratic rule, we now understand, better than before we assumed the reigns of power, that we exercise state power within the boundaries determined not by ourselves in concert with the people but by the way in which production is organised in our society.
This means that for us to effectively exercise political power and fulfil the promises we make to the electorate directly depends on the volume of private accumulation in our country. The logic is that there is a direct link, Madame Speaker, between the political goals of the African National Congress and the material dependence of the state on the mode of accumulation.
Unless we alter the way in which our society undertakes production and distribution, our institutional survival will always depend on the state’s ability to expand accumulation, attract investment in the province and as a result create jobs to meet the needs of Gauteng’s ever growing population.
But fortunately Honourable Speaker, gone are the days when the neoliberal mantra, which proclaimed that there are no alternatives, enjoyed hegemony. We are now fully aware that there is, contrary to some hasty declarations, no end of history in sight. Gaping holes have been punched into the neoliberal straightjacket and conventional wisdom today dictates that alternatives are within reach.
On the other hand, our country is faced with a serious dilemma of what can be characterised an “investment strike” from big business. We agree with Finance Minister Pravin Gordhan that “a significant increase in private sector investment and competitiveness is needed in the wider economy: agriculture, manufacturing, tourism, communications [and that] every sector has to play its part in expanding trade, investment and job creation.”
Madame Premier, we need a public discourse that seeks to understand the underlying factors behind the reluctance of business to invest in an industrialisation drive capable of creating large numbers of viable jobs in our economy. This public discourse must ponder some difficult and uncomfortable questions.
As a start, we should ask: is it true, as some commentators argue, that the business elite in this country refuses to come on board and join our efforts to reindustrialise the economy largely because of a disinclination to allow more space for the state to intervene in the economy?
Is it true that the business elite still looks at the state with suspicious eyes, distrust and a fear that increasing the power of the state that is under the political stewardship of the ANC might be to their economic detriment? Could it perhaps be that the state does not have the leverage to nudge big business towards a particular developmental trajectory?
To what extent do the concessions we gave to big business since the dawn of our democracy, including the relaxation of exchange controls which effectively gave the green light to capital flight, provide a fertile ground for this so-called “investment strike”?
Honourable members, perhaps we do not have precise answers to these questions. What we do know however is that escaping the trappings of a jobless growth path requires us to make significant changes to our economy. It is now conventional wisdom that the creation of decent jobs on a massive scale requires us to focus on the labour intensive sectors of the economy.
This means that we have to take a bold stance to protect the manufacturing sector, which employs about 600 000 people in Gauteng province alone. This sector continues to experience challenges, while the financial sector continues to flourish. The financial sector in South Africa is one of the largest and most unregulated within emerging economies.
The overcrowding of our economy with large flows of portfolio investments results only in our over dependence on the fluctuations of world capital markets. It relegates us to spectators who watch on as sloshes of hot money move in and out of our country at the click of a button.
The question is: can we afford to continue treading the finance capital plank in an overly cautious manner considering that even the most ardent supporters of the unfettered domination of the financial sector such as the IMF have recently joined the chorus and nailed their colours to the mast on the need for increased regulation of this sector?
Is it incorrect to assert that the unbridled domination of the financial sector in our economy tempers with our ability to create the millions of jobs that are urgently needed for us to break the back of poverty and inequality?
Gauteng as a leading trade and investment destination in South Africa
Honorable Speaker, today, we table a budget of R967,5 million, which has increased by 10.65% from last year’s budget of R874,4 million. We intend to use this budget to complement the efforts of the entire Gauteng Provincial Government to create a better life for the people of Gauteng.
In light of the need to attract investment into Gauteng’s productive economy, we have the responsibility to lead government’s efforts to grow the economy of this province and position Gauteng as a globally competitive city region.
Madame Speaker, the 2013 Mid-year estimates show that Gauteng remains the most populous province with an increase in the population size from 23,7% of the national proportion in 2011 to 24% in 2013.
What does this reality translate to? The answer is simple Madame Speaker, it gives rise to new needs and demands as well as heightened expectations. It means our economy must grow and garner enough strength to provide jobs and sustainable livelihoods to millions and millions of people who call Gauteng their home.
Madame Premier we are certain that the rising level of in-migration to Gauteng is a sign that this province is doing something right. Gauteng is indeed a province of choice for many people searching for better life prospects in this country.
Gauteng’s position as a leader of growth, employment and development in South Africa is unrivaled. The province contributes a higher percentage share in almost all sectors of the South African economy such as manufacturing, construction, trade, finance, mining with the exception of agriculture.
Over and above this, Gauteng’s 34.5% contribution to South Africa’s GDP is second to none in the country. We are also one of the biggest contributors to the economy of the continent. Last year, Gauteng accounted for an impressive 7.7% of Africa's GDP.
The size and performance of Gauteng’s economy is directly linked to our strides and good record of service delivery. As testimony to this, the Census 2011 results confirm that the proportion of households having access to piped water inside the dwelling or yard is the highest in Gauteng at 89,4% of the total households in this province. The Census 2011 also indicated that the proportion of households using electricity for heating increased over the period under consideration in all provinces, with the highest proportion of 74,3% recorded in Gauteng.
The picture in terms of employment follows the same narrative. Over 4 million or 29% of people with jobs in this country are located within the geographic confines of Gauteng. This province is testimony to the popular adage “dynamite comes in small packages.”
Honourable Members, I can assure you that the sterling performance of the Gauteng Provincial Government, despite the pressing problems associated with the legacy of apartheid, global economic crisis and a bourgeoning population, is not only chest thumping on our part but something that is widely recognised and has earned us accolades on the global stage.
The Organisation for Economic Co-operation and Development (OECD) Territorial Report in 2012 made the following observations about Gauteng: “the windows of economic development since apartheid have opened for a large number of citizens. Institutionally, the new departments of economic development have been created and charged with advancing a raft of programmes, from the support of advanced research to community economic development.”
Madame Speaker, our programs on export promotion are bearing fruit. The solid partnership we have with the Department of Trade and Industry is very important if we are to sustain our competitive edge on trade and investment. Already Gauteng contributes 68% of all exports from the country, which suggests that Gauteng is able to generate more money from abroad than any other province and that Gauteng is the bedrock to South Africa’s ability to maintain a healthy trade balance.
The OECD Review in 2012 further pointed to the fact that under the stewardship of the African National Congress, “Access to basic infrastructure – flush toilets, piped water, heating and lighting – greatly increased after the end of apartheid, along with access to education and training. This adaptability augurs well”, says the OECD, “for the next wave of economic development.”
This shows, Madame Speaker, that our detractors are wrong to suggest that we failed the people of this province. In fact, the reason why the people of Gauteng continuously vote for us to occupy these positions is because they recognise the strides we have made in their name and know that we are capable of doing more!
Significantly, our people also take to the streets to remind us of their collective power and to urge us to utilise this power to take decisions that will radically transform their lives.
This view is consistent with the findings of the South African Institute of Race Relations (SAIRR), which states: “there is no contradiction between the successes [of the ANC] and the protests that are now commonplace around the country. These protests are not a function of the failure of delivery but rather of its success in that this success has raised expectations.” 11 “Zuma Correct on Service Delivery Successes – Institute”, South African Institute of Race Relations (SAIRR), 11 September 2012, www.sairr.org.za
Delivering on our mandate: Our Priorities
Promoting Trade and Investment
Honourable Speaker, growing levels of investment in our province is a critical component of our government’s ability to “deliver” housing, health, education, water, and electricity. A national investment promotion framework adopted soon after the 1994 dispensation identified the need for the development and expansion of productive investment as a key element for the growth and development of the country.
The key to maintaining Gauteng’s position as a preferred destination for investment lies in the generation of increased inward investment and the simultaneous promotion of export opportunities for Gauteng based businesses. In the previous financial year, the Gauteng Growth and Development Agency (GGDA) successfully facilitated nine (9) FDIs in the following sectors: steel beneficiation, auto components manufacturing, and food processing, ICT and pulp and paper manufacturing.
Foreign and domestic investments facilitated by the GGDA created a total 2 441 permanent jobs and 768 temporary jobs. This amounts to a total of 3209 jobs created. This is indeed an impressive number given the hostile global investment environment. This figure indicates that we were not mistaken when we advocated for a focus on local prospects to drive economic growth during the economic downturn.
Going forward, the GGDA will expend 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. The GGDA’s export development initiative will support a hundred (100) enterprises with export readiness and know-how during the current financial year.
The Gauteng Investment Centre, which will be launched by the second quarter of this financial year will host a total of 52 trade missions during 2013/14 period. Re-Industrialisation and support for labour intensive industries.
Madame Speaker, in pursuit of the objective to create decent and productive jobs in the economy, the department will continue its work with the Tshwane Autocity. Our vision is to create the biggest Automotive City in the Southern Hemisphere and transform the Rosslyn area into a world-class automotive hub.
The project has already received support from the City of Tshwane, Department of Trade and Industry and SARS. This is a mega project, which will have a significant macro-economic impact on Gauteng and South Africa as a whole. It is envisaged that infrastructure development will commence during this financial year.
Honourable members, our incubator facilities in the automotive sector are huge successes. We believe that we should replicate this model to ensure small business growth, sustainability, job creation and ultimately the reduction of poverty and inequality in our province.
Based on the establishment of the incubator facility at Ford, a similar intervention has been undertaken by the Automotive Industry Development Centre (AIDC) for Nissan. The incubation facility at Nissan will not only train SMMEs to meet supplier needs as well as aspects of running a successful business but will also provide these entrepreneurs with a readily accessible market.
Nissan is embarking on the first global export project with a direct investment in excess of R1.5 billion in the Tshwane plant. This project will create in excess of 4000 new jobs and 400 in the construction phase. The application to the Jobs Fund has moved into the second level of approval with a possibility of R127 million being made available for this project. A total of 200 people will also receive training through the Ford Simulator facility and training academy.
As part of our commitment towards the reindustrialisation efforts to support growth in labour intensive industries, GGDA through the AIDC has developed a number of projects in the automotive sector. The first project was aimed at providing mentoring to 60 individuals working in the autobody repair industry and linking them to business opportunities. We will consider expanding this support to informal mechanical repairers and help those being mentored to access financial assistance to purchase equipment.
Strategic Economic Infrastructure
We have formed the Gauteng IDZ Development Company, which will be responsible for developing and operating the Industrial Development Zone (IDZ) to be located in and around the OR Tambo International Airport.
The first phase of this IDZ is the development of the Jewellery Manufacturing Precinct, which will also be a training hub for young students wishing to pursue careers in the jewellery industry. The first 15 students will graduate from the Jewellery Manufacturing Precinct training during this financial year.
An innovative and knowledge-based economy
The department has also been hard at work to address graduate unemployment. To this effect, The Innovation Hub (TIH) has signed a funding agreement with the Jobs Fund for the expansion of the Coachlab programme which is aimed at fast tracking the development of world-class resources for the local high-tech sector by preparing ICT post-graduates to enter the job market place as active and industry-ready knowledge workers. The expansion of the Coachlab programme will broaden access to 100 unemployed graduates and an additional 50 unemployed matriculants.
During the course of this financial year, a total of eight (8) SMMEs will be incubated through the Gauteng Innovation Competition. As part of the success stories of this programme, a company called Mobility - a finalist in the Gauteng Innovation Competition - received seed funding and development support, recently signed a contract with Metrorail for rolling out a web based train schedule for commuters. The young brains behind this concept are present here with us today.
We will continue to work with the National Department of Science and Technology and our international partners in intensifying the work of the Gauteng Accelerator Programme in Biosciences to promote entrepreneurship and biosciences innovations that are geared towards improving the quality of life of the people of Gauteng.
Together with Gauteng Department of Agriculture and Rural Development, we are proceeding with the design and development of the Biosciences Park to be located at The Innovation Hub. The focus will be on the development of a pre-commercialisation infrastructure to support the successful implementation of the national bioeconomy strategy and, in particular, to support the commercialisation of bioeconomy initiatives in the health, bio-manufacturing and agriculture.
An amount of R4.6 million was invested in the Maxum Incubator programme over the 2012/13 period. Maxum is an integral part of our entrepreneurship support and development strategy in the knowledge-intensive sector. The project focuses on early stage and start-up SMMEs and provides an enabling environment where start-up companies in the ICT, biosciences, electronics, advanced materials and manufacturing sectors acquire global competitiveness. The number of small businesses incubated will increase from nine (9) to sixteen (16) during this financial year. A total of twenty-six small businesses will undergo a pre-incubation phase.
Through the mLab project, which is a product of collaboration between the Council for Scientific and Industrial Research (CSIR) and The Innovation Hub, we have assisted 11 new developers to commercialise their innovations.
The Gauteng ICT Park (Smart City) has been endorsed by the Department of Trade and Industry as a Special Economic Zone. The master blue print for the ICT Park has been completed. We are working closely with the Department of Communications, the City of Johannesburg, the Department of Public Works and the City of Tshwane.
The ICT Park will also connect to all other Municipalities within Gauteng ensuring their full participation in the cluster. The department will partner with Microsoft to train unemployed graduates and school leavers in the ICT sector.
Bolstering local manufacturing
Honourable Members, public procurement remains one of the policy levers that can be utilised to achieve the imperative to inclusively grow Gauteng’s economy and create decent jobs. The Gauteng Strategic Procurement Framework seeks to foster change in procurement practices within Gauteng provincial departments and entities, to drive the localisation agenda and improve the competitiveness of locally based companies, giving them a foothold in the global production networks.
As part of the implementation of the framework, the provincial government has committed to source locally produced products such as Buses, Steel Power Pylons, Railway Rolling Stock, Canned/ Processed vegetables, Pharmaceutical, Clothing, Textile, Leather and Footwear, Office and School Furniture as well as various other goods.
As the champion of this strategy, the department will ensure that we collaborate with institutions such as Proudly South African and Manufacturing Circle, local enterprises, workers and consumers.
Honourable Speaker, the growth and expansion of the Gauteng textile industry will receive key focus during this financial year. The industry has an important role to play in stimulating the local economy and labour intensity is an aspect that we should leverage on. The fashion industry has called on us to embrace designers and lay the institutional foundation to launch them as brands that can compete on the world stage.
Export readiness and business skills are some of the cardinal issues that need to be addressed in the industry and the GGDA has already initiated work in this direction. Working with the sector, the department aims to establish the Gauteng Fashion Council during this financial year. We will also facilitate the training and mentoring of four (4) young designers in business skills.
Working with the Africa Fashion International (AFI) Fast Track programme, the GGDA will also facilitate trade orders for three young designers and support ten (10) designers to showcase at the African Fashion Trade Expo. Employment for two (2) talented young designers will be facilitated through the Fast Track programme.
Honourable members, I must say that we are humbled by our interaction with the players in the fashion industry in Gauteng. Many of them, including Ole and Sonwabile Ndamase who are both present here today, have rolled out the red carpet for us in our engagements and embraced some of the plans we have in mind for the industry.
In addition to this work, five (5) big furniture manufacturers and twenty-two (22) furniture manufacturing SMMEs will be supported with export marketing at various furniture expos and exhibitions. We will also train 30 furniture craftsmen and designers enrolled in the Furntech training programme.
Youth employment strategy and enterprise development
Honourable Members, young people continue to be at the receiving end of the unemployment crisis in South Africa. This situation is not a unique feature of the South African economy. Since 2008, the numbers of unemployed youth has increased throughout the world.
This is the case even in countries that were previously considered the crown jewels of capitalism. The International Labour Organisation (ILO) report published early this month noted that this year there are 73.4 million young people unemployed throughout the world, an increase of 3.5 million since 2007.
Young people between 15-25 years represent more than 60% of Africa’s population and account for 45% of the total labour force. 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. Honourable Speaker, the Census 2011 results showed that indeed Gauteng is a young province.
Youth unemployment is a major national challenge and a priority for the department. The signing of the Youth Employment Accord on 18 April at the Hector Pieterson Memorial is proof that an urgent and coordinated response to address youth unemployment is needed. This cannot be achieved by government alone. Joint commitment and participation by all social partners to expand opportunities for greater employment is a necessity.
The crisis of youth unemployment points to the need to accelerate mass employment creation. Our youth employment strategy rests on four pillars: youth entrepreneurship development and training; township enterprise hubs; youth placement and skills development.
The Gauteng Enterprise Propeller (GEP) will implement the Youth Entrepreneurship Program, an internally run programme to develop the entrepreneurial skills of young people in Gauteng as well as to support businesses established by these individuals. GEP intends producing at least 1 000 new youth owned businesses in the 2013/14 financial year. We believe these interventions will complement and increase the impact of the 5 200 jobs already created as well as the 21 680 jobs sustained by GEP interventions since the establishment of the agency in 2005.
During 2013, the department will focus on increasing the number of Township Enterprise Hubs. These hubs will cater for the youth, women, people with disabilities, small businesses and cooperatives. The hubs will provide shared manufacturing facilities training support, capacity building and incubation to start-ups.
In a bid to impart artisan skills on the youth, the department, in partnership with the dti, GCRA and the Tooling Association of South Africa, has embarked on a tooling training programme offered by four FETs located in various areas of Gauteng, such as Kempton Park, Kwa Thema and Tshwane. There are currently over 200 young people participating in this training and will graduate in June 2014. Furthermore, GDED and the National Institute of Foundrymen will enlist 20 students for the foundry-training programme at Ekurhuleni East College (Kwa Thema) in September 2013.
We will accelerate the placement of 3 000 young people in job opportunities in 2013. The department has signed MOU’s with strategic partners such as Microsoft which makes provision for the placement of 450 young people into the company.
I am also delighted to announce that 60 young people from Gauteng will be taken on board for the South African Breweries (SAB) apprenticeship programme. The programme is targeting instrument mechanics, electricians, fitters and turners and millwrights. Twenty (20) young enterprenuers will also be absorbed into the SAB’s Kickstart programme for mentoring and training. Upon completion, succesful enterprenuers will be awarded seed funding to make their businesses a reality. In addition to this, SAB has also committed R3 million for funding of cooperatives in the province.
We are also cultivating a partnership with PRASA that we believe will accelerate, enhance and promote employment creation and sustainable development programmes. Working together we will embark on initiatives that will include among others a wheels manufacturing factory, rolling stock manufacturing factory; investment facilitation, youth employment and skills development.
The department is in the process of signing the cooperation agreements with strategic private sector partners including Filpro (Auto mechanics), Busmark (Upholstery), Westcol (Training and SMME Support) and Coricraft (Furniture). We challenge the rest of the private sector to replicate this sterling work by SAB, Microsoft and many others.
Madame Speaker, 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 solution lies in growing the real economy and creating productive jobs on a massive scale.
Enterprise development and support
Honourable Speaker, the Gauteng Provincial Government has identified small businesses as 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.
The Gauteng Enterprise Propeller will continue to assist Gauteng small businesses and cooperatives with financial and non-financial support. This includes a new funding instrument called the GEP Start-Up Fund, for new businesses as well as newly formalised ones. This will take the form of a once-off non-repayable contribution of up to R9 000 per business to be utilised for equipment and inventory. An amount of R1.4 million has been earmarked for this programme.
Revitalising township economies
Honorable members, under the apartheid system, black enterprise was significantly stifled and hindered. The apartheid state had a conceited strategy to deny black people the right to engage in enterprise and trade and tremendously undermined property ownership among black people.
GEP will proceed to assist SMMEs in the townships through the Township Business Renewal programme. This programme supports the revival of township businesses by funding equipment and business refurbishments up to a value of R50 000. We have already assisted 294 township businesses to the tune of R13 million since the introduction of this initiative in 2009.
GEP will also continue to approve loans between R10 000 to R5 Million per case through the Captive and Micro-Finance Funds. An amount of R40 million has been set aside for the loans programme in the 2013/14 financial year. GEP has cumulatively approved an amount of R272 million to over 350 businesses since 2007.
To facilitate market access for SMMEs, GEP will in the 2013/14 financial year, intensify its efforts towards creating market linkages through partnerships as well as exhibitions and expos while intensifying work on non-financial interventions such as business development support, mentorship, training and incubation.
Decentralising economic development
Honourable Members, GDED as the department charged with the responsibility to lead and facilitate investment, job creation and inclusive economic growth in the province has been hard at work to forge partnerships with the private sector in Gauteng. The Diepsloot Industrial Park, which is a partnership between Century Property Development Company and the Gauteng Department of Economic Development is a product of these efforts.
We have raised R370 million from the Jobs Fund to make the Industrial Park a reality. The Industrial Park will cater for all sizes of industry as well as provide jobs and uplift the Diepsloot community. The development will also facilitate enterprise development through the construction of an SMME Incubator facility. This incubator facility will ensure that we have sustainable small businesses with a readily accessible market.
We are confident that these developments resonate very well with our attempts to decentralise economic development and ameliorate the socio-economic challenges prevalent in areas such as Diepsloot.
Support for the Informal Economy
Honourable members, Ms. Lulama Mali, a female street trader in Johannesburg, who is present here today, in the recently convened Informal Traders Consultative Workshop urged this government to make radical changes to its approach to informal traders. She reminded us that informal traders “are the survivalists, living from hand to mouth, however we would love to move from the informal to the formal sector level, we believe that could be possible with the help of the government which always preaches a better life for all”.
Honourable Members, we cannot speak of an inclusive economy without addressing the plight of informal traders, who are among the most marginalised workers in the province. Our focus on the informal sector is informed by our commitment to defeat a development trajectory that glorifies the economic activities of rich while criminalising the attempts of the poor to eke out a living.
The department has made an undertaking to train 250 informal traders in the current financial year. We aim to train a total of 950 informal traders in Gauteng in three years’ time. We will also assist 50 informal traders to register their businesses this financial year. Our target is to increase this number to a 100 by the year 2016.
Because we understand the challenges relating to access to finance in this sector, our entity, the Gauteng Enterprise Propeller is reviewing its funding model to make provision for loans ranging from R2 000 – R10 000. These loans will be tailor made for workers in the informal economy and will go a long way in helping them to build their credit profiles.
Tourism as a sector of growth
Honorable Speaker, tourism continues to be an important sector in the expansion of the national economy. In 2012 we had over 9 million visitors to South Africa. This is 10.2 % higher than 2011 and more than twice the current world average of 4%.
The tourism sector has delivered well in line with last year’s promises. Gautengers can now make use of the Hop on Hop off Bus and explore the inner city. The route includes Constitution Hill; the Origins Centre; Newtown; Apartheid Museum and Gold Reef City. This project represents a successful partnership between City Sightseeing South Africa, the City of Johannesburg and the Gauteng Province. The bus is fast becoming a catalyst for a web of ever-expanding tourism experiences across the province.
Honourable members, infrastructure is a cardinal pillar of the national development strategy. We are proud to announce that Gauteng is the first province to finalise a comprehensive Tourism Infrastructure Strategy and Plan. In the coming decades the Tourism Infrastructure work will transform the Gauteng landscape. In this financial year R15 million will be spent on infrastructure upgrades that enhance tourism.
Madame Speaker, the Gauteng Birding Route will take off soon. Exciting new developments are afoot in the Cradle of Humankind World Heritage Site to encourage repeat visits by schools, families and other niche markets.
Another positive development that has enhanced Gauteng’s only World Heritage Site is a craft cooperative called Hands that Rock the Cradle, whose members are present here with us today. This group of creative entrepreneurs was established with the support of the Gauteng province and has already made its mark by being accepted to exhibit at the 2013 Design Indaba in Cape Town.
The establishment of the Gauteng Convention Bureau has already begun to bear fruits. We hosted a total of 16 international conferences with over 28 000 delegates in the previous financial year. This demonstrates how business tourism can have a significant impact on the leisure tourism industry.
Honourable Members, we must acknowledge that the absence of a big international convention centre that can compete with others located in different provinces in the country is a major disadvantage to our quest to strengthen Gauteng’s position from that of a gateway to the rest of the country to a big conference destination. We will, working with local government, intensify our plans to build a world-class International Convention Centre as a way of overcoming this challenge.
There were six signature events supported by the province in the previous financial year, including the Joy of Jazz, Sansui Summer Cup, the 80s Rewind Festival, the Vaal Wine Route, the Tribute Concert and the Cradle Festival, which activated 100 000 domestic trips within the past year. This year the province will support all of these events as well as the Gauteng Shopping Festival, Pale ya Rona, SA Serengeti Golf Open and Vaal Carnival.
The Grand Sale Shopping Festival will be Africa’s equivalent of the Dubai and Thailand Shopping Festivals. There will also be 30 confirmed International Conferences and Exhibitions within the current year which will host over 150 000 people. The Province has continued to lead the way in digital tourism marketing with the Gauteng Travel Guide becoming the number one travel application in South Africa.
Madame Speaker, the importance of the hospitality sector in this province should not be underestimated. We are working around the clock to ensure the transfer of the Garankuwa Hotel School from North West to Gauteng. We have also finalised the plan to regenerate the school by addressing infrastructure, machinery and equipment needs to meet international standards.
We have also completed the preliminary work for the development of the Struggle Hero’s Visitor Centre at Constitution Hill.The Visitor Centre will be the premium place for hosting exhibitions, seminars, dialogues and other activities.
Sustainable economic growth and development
Honorable Speaker, our vision is to promote Gauteng as a Manufacturing Hub for Green Technologies by investing in innovation, research and development. Whilst the bulk of green economy investment will ultimately have to come from the private sector, the effective use of public expenditure in the short term and investment incentives can play a useful role in triggering the transition to a green economy.
The department is investing in the following green projects in 2013/14 financial year: A waste to energy plant at a Poultry Farm in Ekurhuleni, Conducting feasibility study of waste to energy plant in Sedibeng and West Rand and installing Bio-Digestors across schools in the province.
Intergovernmental collaboration
Honourable Speaker, it is now commonly accepted that local government is a sphere of government that is closest to the people and where the maximum impact of our policies, strides and achievements as government finds expression. We believe that local government is the centrepiece of our efforts to grow Gauteng’s economy in order to meet the rising needs of the province’s growing population.
As part of this recognition, the department signed a cooperation agreement with the City of Ekurhuleni in April this year. The agreement spells out areas of cooperation between the province and the metro, which includes tourism, the revitalisation of township economies, innovation and the green economy, enterprise and skills development.
We are also finalising a partnership agreement with the Department of Energy and Mogale City to implement energy projects that will focus on Renewable Energy technologies, particularly rooftop photo-voltaic and Waste to Energy systems, smart grid systems for integrating these renewable energy technologies and electricity distribution infrastructure rehabilitation.
Regulatory Issues
Consumer
Honorable Speaker, as a regulatory arm of the department, the Consumer Unit takes care of a very important stakeholder in our economy, the consumer. The Consumer Unit has managed to reach a total of 35,7 million consumers over a five-year period.
The alignment of the Unfair Business Practices Act of 1996 with the Consumer Protection Act 2008 remains a challenge. The unit will focus on completing this process during this financial year. The migration of our manual complaints management system to the Electronic Complaints Management System is nearing its final stages and will be implemented at the end of May 2013. We will also scale up our consumer education and awareness workshops across the province.
Liquor
The department will sign a performance Charter with the Gauteng Liquor Board, which will commit the Board to processing license applications within the turnaround time of 41 days. The liquor unit has recorded tremendous improvements since the adoption of the Liquor Turn-Around Strategy.
Thanking all
I wish to thank the Premier for her support and leadership. I am immensely grateful for the support and camaraderie offered by my colleagues in the Executive Council. My sincere gratitude to the Honorable Members, in particular the Chairperson of the Portfolio Committee on Economic Development Honourable Siphiwe Mgcina. Many thanks go to the Acting HoD, Mr Albert Chanee and the entire staff of the Department of Economic Development. Your zeal and selflessness in serving the people of Gauteng is duly acknowledged.
Last but not least I am infinitely grateful to my family, my wife and children. Your unwavering support and sacrifices you make on a daily basis are highly appreciated. With these words, I table before this august house, the 2013/14 Budget Vote for the Department of Economic Development.
Inkomu, Ke a leboha, Ngiyabonga, Baie Dankie.
