Gauteng State of the Province Address 2018

David Makhura on Gauteng's growth and development

Excerpt from Premier David Makhura's State of the Province Address 2018

We are acting together with township communities and investors to turn them into havens of sustainable socio-economic development and empowerment.

The people in the townships need real jobs and thriving businesses where they live. They need state-of-the-art schools, libraries, clinics, hospitals, roads and other social amenities right in the townships. They need reliable, efficient and affordable public transport.

For township residents, the new dawn must represent a major facelift in the infrastructure as well as the look and feel of their townships, as part of our renewal and revitalisation programme.

The Gauteng Provincial Government and municipalities have been the leader in the country in the revitalisation of the township economies.

Between 2014 and 2017 public procurement spend on township enterprises has increased from R600 million to R17 billion.

The number of township enterprises doing business with our government has increased from 642 in 2014 to 4 182 in 2017. We have also helped formalise many township enterprises.

The introduction of the Township Economy Awards has stimulated huge interest amongst township businesses which compete to showcase their services and products. The awards have contributed to the growth of township businesses through financial support as well as access to markets.

Our work, as the champion of the township economy,has given rise to a serious wave of entrepreneurial activity in the townships, especially amongthe youth.

Accordingly, the 2017 Ventureburn Tech Startup Survey shows that 44% of tech start-ups list Gauteng as their home, as compared to only 26% in 2015. The survey also indicates that 53% of start-ups owned by Black young entrepreneurs are Gauteng-based while most of the Western Cape startups are owned by older white entrepreneurs.

Funding and access to markets are two most critical barriers facing Black start-ups and township enterprises. The initiative on the township stock exchange is in its final stages in partnership with the private sector. We have also completed a feasibility study on the establishment of a provincial state bank which will enable us to mobilise funding for SMMEs, township enterprises, women and youth businesses as well as for infrastructure development.

Another major problem facing township businesses is the mushrooming of unregulated businesses owned by foreign nationals. This is a matter we must address boldly and decisively to enforce by-laws and trading regulations. Many township entrepreneurs are being squeezed out of businesses by this unlawfully operating foreigner-owned businesses. This year, I will inspectors in visiting townships and inner-cities to conduct inspections and shutdown these illegally operating businesses.

The partnership we have with more than 40 corporates is opening new vistas of opportunities for township based businesses to participate in corporate supply chains, thus helping to transform these township enterprises into more sustainable businesses, without having to rely solely on government contracts.

We continue to invest in the development of cooperatives.To date, Gauteng has 14 registered co-operative banking institutions serving over 16 000 member-owners, with over R100 million in savings and R150 million in assets.

We are working with these institutions to ensure that they become future financial providers to township enterprises.

In partnership with the Italian co-operative movement, we are facilitating the formation of consumer co-operatives in the wholesale and retail sector. These cooperatives will mobilise the collective buying power of 250 000 township households to purchase affordable goods at stores they own and control.

Women-led cooperatives, the majority of whom are in the townships, are producing dignity packs and school uniforms and have created more than 30 000 job opportunities.

Madame Speaker, we remain consistent with our procurement strategy which must help drive re-industrialisation and the development of black industrialists.

Our province is determined to champion the use of public procurement budgets to stimulate local production. For example, the billions we spend on designated sectors like furniture must be used to procure goods sourced from local productive enterprises.

The majority of our departments are not yet complying with local content requirements. We will ensure that capacity is developed within government to procure goods that are produced or manufactured in this province.

Honourable Members, the social compact is underway in Gauteng. We have been working with private sector partners to unlock the potential of other sectors of the economy. For instance, we have agreed with the Business Process Outsourcing (BPO) sector on creating 30 000 jobs in the call-centres and business support services by 2019. In 2017 alone, this sector has already created 6 000 new jobs.

We have also set up joint Action Labs focusing on industries such as capital equipment and machinery, ICT, automotives, mining, food and beverages, agriculture and agro-processing.

Madame Speaker, despite the progress we have made in the past four years, the Gauteng economy continues to face enormous challenges.

Low levels of growth are impacting negatively on the ability of our economy to create a sufficient number of jobs to drastically reduce unemployment.

We need to create 5 400 jobs per day to eliminate unemployment. To halve unemployment we need to create 2 700 jobs per day.

The new dawn heralds better prospects for our economy as both investor and consumer confidence rises. It will also boost South African exports, especially to the rest of the African continent.

We in Gauteng have intensified our work regarding trade and investment activities on the African continent.

Madame Speaker, there is no doubt that our work is bearing fruit. In 2016 alone, we attracted 75 Foreign Direct Investment (FDI) projects into our provincial economy, worth R36 billion. These projects have created 9 354 jobs in our economy.

Over three years (2014-2016), our province attracted more than 200 FDI projects worth R69 billion, which created 19 000 jobs.

Gauteng is the leader with regard to intra-Africa trade. As of 2017, Gauteng companies had 169 projects worth R356 billion across our continent. Intra-Africa trade generated a total of 46 732 jobs in the Gauteng economy.

One of the major drivers of Foreign Direct Investment and sustainable economic growth is the quality of infrastructure.

Sustained investment in world class infrastructure stimulates growth, employment, spatial transformation and social integration by connecting communities and linking producers to markets.

Since 2014, together with the private sector, we have invested more than R40 billion in building and maintaining infrastructure such as building and upgrading schools, early childhood development centres, recreational facilities, libraries, clinics, hospitals, houses, roads and public transport, broadband, township industrial parks and agri-hubs.

According to the Quality of Life Survey released by the Gauteng City Region Observatory in 2016, the quality of infrastructure in Gauteng has received the highest rating in the citizen’s satisfaction survey.

Our infrastructure investment projects have also contributed in creating and maintaining close to 100 000 jobs and in growing businesses, especially those owned by black people, women, youth and people with disabilities.

Listen to this part of the address here -

Listen to the full SOPA 18 here -


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