Government is making steady progress in the implementation of the Nine Point Plan to reignite growth and create jobs, which was announced in the 2015 State of the Nation Address, as part of implementing the National Development Plan.
The plan focuses on areas such as energy, tourism, agriculture, boosting SMMES, science and technology, industrialisation, transport and others.
Some of the progress made thus far is as follows:
The drafting of the Integrated Energy Plan, which represents the overarching energy policy that has been under development since 2012, when Cabinet approved the commencement of the public consultation process, is continuing. Once completed, it will provide answers to various questions our country has been grappling with regarding our country’s energy future.
As part of this year’s Youth Month commemoration, the Department of Energy (DoE) is marking the great strides made by the Renewable Energy Independent Power Producers Programme towards the development and empowerment of the youth. Fifty two percent of total job opportunities in this programme have gone to the youth so far.
The energy contribution of independent power producers is expected to grow to approximately 7 000 MW in 2016, while private investment in the programme currently exceeds R194 billion. The DoE will announce the preferred bidders from the first bid submission for domestic coal projects in July 2016. The bids will have a combined capacity of 900 MW at an investment of R45 billion, rolled over the next 4 years.
The Biofuels Regulatory Framework will be submitted to Cabinet during this financial year. It will outline how the nascent biofuels industry will be financially selected and supported. The blending of biofuels reduces the impact of fuel emissions on our people.
The nuclear energy expansion programme remains part of the future energy mix. The procurement plan for 9 600 MW nuclear build programme will be implemented at a pace informed by what the country can afford.
The DoE has worked on facilitating the gas-to-power programme. The exploitation of our country’s indigenous gas (coal bed methane and shale gas) as well as the regional natural gas resources must be seen in the broader context of regional integration.
Solar Water Heating has taken off, with contracts placed for the supply of the first 9000 baseline systems. The next step is to commence with the training of local communities in the installation of the systems, with a specific target being the youth, women and other designated groups.
The electrification programme has made remarkable progress in increasing access to electricity in South Africa by connecting over 6.7 million households between 1994 and March 2016. As of February 2016, access to electricity stands at 88% since 1994.
The Travel and Tourism sector in general attracted capital investment of R63 billion in 2015 and contributed R118.6 billion directly. This primarily reflects the economic activity generated by industries such as hotels, restaurants, leisure activities, travel agents, airlines and other passenger transportation services (excluding commuter services). This progress generated 703,000 jobs directly in 2015 (4.5% of total employment). The total contribution of Travel and Tourism to employment, including wider effects from investment, the supply chain and induced income impacts, was 1.5 million jobs in 2015, which is 9.9% of total employment.
With regards to financing for agriculture, the Land Bank is making progress. Internal governance and control processes at the Land Bank have improved considerably as reflected in unqualified audit opinions since the 2012 financial year and reduced non-performing loans which now represent approximately 5.5 percent of the now significantly larger loan book, down from 22.5 percent in 2009.
The loan book has expanded from R16 billion in 2008 to approaching R40 billion to date. About R2.5 billion or 6.5 percent of the loan book is devoted to development loans compared to no investment eight years ago.
The cost to income ratio has dropped from 82 percent in 2011 to around 58 percent currently, and the Land Bank Group posted a profit of R352m for the year ended 31 March 2015.
The process of transforming the Land Bank into a strong development finance institution that plays an even bigger and more effective role in rural and agricultural development will be accelerated and deepened. The Ministers of Agriculture, Forestry and Fisheries as well as Rural Development and Land Reform will work closely with the Minister of Finance, who chairs a committee of the three Ministers, to ensure better alignment between the policy objectives of their departments and the activities of the Land Bank, whose executive authority is the Minister of Finance.
Science and technology
The Department of Science and Technology recently launched the country's first Bio-Manufacturing Industry Development Centre (BIDC) in Pretoria. The centre supports SMMEs involved in bio-manufacturing by enabling them to exploit market opportunities. Currently the BIDC is supporting 19 enterprises of which 16 are owned by black entrepreneurs, including 10 black women-owned enterprises. 55 permanent and 171 temporary jobs have already been created, with 54 interns trained. Companies incubated at the BIDC have access to ready-to-use bio-manufacturing facilities, support in research and development laboratories. The initial phase will result in the creation of permanent and temporary jobs with the economic impact projected at R250 million per annum in the next five years.
Unlocking SMME’s, cooperatives and township enterprise potential
A total of 117 Black women owned enterprises have been supported through the Co-operative Incentive Scheme to the value of R35.9 m, while 325 Women owned enterprises were supported through the Black Business Supplier Development Programme to the value of R45.2million.
The Department of Small Business Development has provided support to 992 informal retailers and 45 informal trader organizations in the past financial year nationally. Of these, 559 were women-owned and 213 were young traders.
The Small Enterprise Development Agency (SEDA) and Small Enterprise Finance Agency (SEFA) are now co-located in all nine provinces. For the 2015/16 financial year, 29 co-location points were established. This is intended to greatly improve the ability of SMMEs and Co-operatives to access the services provided by these agencies.
Industrial Policy Action Plan and Investment Promotion
President Zuma has welcomed the recent investments which have been announced in the country. These include the investment by Toyota for a new Toyota Hilux and Fortuner manufacturing plant in Prospecton, Durban. This was made possible through the support provided by the Department of Trade and Industry which has attracted investments of over R25 billion in the automotive industry in the past five years. This investment will support more than 4 000 jobs with total employment in the plant already exceeding 8 000 jobs.
Toyota injected of R6.1 billion investment into South Africa's manufacturing industry and the country's local vehicle production. BMW has also announced the construction of a R6 billion a new, state-of-the-art body shop. The expansion will enable BMW to produce and export the next generation of the BMW X3. This demonstrates that the Rosslyn Plant is highly competitive within the global BMW production network both in terms of cost of production and quality.
In another investment, the Minister of Trade and Industry recently launched a R100 million Dursots & All Joy Tomato Processing Plant in Modjadjiskloof near Tzaneen. Dursots has embraced supplier development as a mechanism to encourage 15 black emerging famers into the value chain.
To support the upgrade and expansion of the rail locomotive programme, Gibela Rail Transport consortium has commenced building a one billion rand factory at Dunnottar in, Ekurhuleni. The factory will be utilised to manufacture trains for PRASA.
Aberdare Cables launched its new production line in Pietermaritzburg. The production line will produce cables for PRASA and Transnet locomotive build programme.
The Investments Inter Ministerial Committee which is chaired by the President continues its work, supported by business, to remove obstacles to doing business in the country.
Operation Phakisa: Boosting the ocean economy and tourism
Within the oceans economy, Government continues to ensure that it creates an enabling environment to promote and attract investments, either through an enabling policy regime and legislation or by providing incentives. Over the last 18 months, approximately R17 billion in investments had been attracted, creating approximately 4500 jobs. Within the Marine Transport and Manufacturing Focus Area, substantial investments in the port infrastructure had been committed by Transnet, through Transnet National Ports Authority.
Within the Aquaculture sector, ten aquaculture projects had been implemented. This secured investments totalling R444 million from Government and Industry, creating around 521 jobs (23% women and 66% youth) and a projected production of 2901 tonnes.
Rural Development – new projects launched
On 10 May 2016 the President officially handed-over the state of the art Beaufort West Youth Hub to the Kwa-Madlankosi community in the Western Cape. The Hub is part of the Department of Rural Development and Land reform programme of revitalizing rural towns. An amount of R52 million was invested in the project which is now being used by the young people in the community, to acquire skills training in various fields, as well as using it for sports and recreational activities.
On 21 May 2016 the President handed over compensation for land as part of Phase 1 of the settlement of claims on the Kruger National Park. A total of R84 million was awarded to six communities, three from Limpopo, and three from Mpumalanga. In terms of land area this portion measured 318 748 hectares.
Due to the status of the Kruger National Park been a flagship of South African National Parks, cabinet took a decision in 2008 not to restore any of the land within the park to claimants. The claim is settled in two phases with phase one being the financial compensation and phase two in the form of projects aimed at ensuring the communities continue to benefit in the longer term from business opportunities within the Park.
In empowering these communities, a one per cent community tourism fund has been generating approximately R6.5 million per annum for community beneficiation. The beneficiation scheme is done in partnership between the Department of Rural Development and Land Reform, the Department of Environmental Affairs and SANParks as the management authority for national parks. A total of 813 claimant households will benefit from this settlement.
On the 26th of May the Women in Maize project was launched. This is an agricultural empowerment initiative under the Department of Small Business Development in partnership with South African Breweries and the Agricultural Research Council.
The programme seeks to empower 5000 women-in-maize farming cooperatives over the next five years, increase inclusion of women owned cooperatives in SAB’S supply chain, develop skills of women farmers, improve food security and stimulate local economies by increasing local economies by procuring from local farmers.
On 5 April the Department of Rural Development and Land Reform rolled out the One Hectare One Household programme in Ganspan rural settlement, Jan Kempdorp. This initiative seeks to promote conditions which enable the previously disadvantaged individuals, communities and target groups to obtain security of tenure on land for sustainable livelihoods.
Land is made available on the basis of “institutionalised Land use right”. Use Right Certificates (URC’s) are issued to landholders to be able to use as collateral when they seek loans from financing institutions, particularly state-owned development finance institutions.
Work is being done in all segments of the Nine Point Plan, as part of implementing the National Development Plan.
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