GAUTENGS PROGRESS ON TOWNSHIP ECONOMIES

Gauteng MEC for Economic Development, Environment, Agriculture and Rural Development, Lebogang Maile briefed the media about the key priorities for Economic Development and Agriculture and Rural Development at the Gauteng Provincial Legislature in Johannesburg Tuesday morning.

The budget votes outlined the key priorities of the two departments for the 2015/16 financial year, in line Gauteng government’s ten-pillar program for radical transformation, modernisation and re-Industrialisation of the economy. The major announcements were on progress made in the implementation of the Township Economic Revitalization Strategy; steps taken to reposition Gauteng’s agricultural industry to focus on agro-processing; the modernization of the environmental authorisations as well as job creating initiatives and private sector investments into the economy.

On the township economy, the following advances have been made:

  • MassMart partnership that will result in R650 million cash injection into various townships across Gauteng. This partnership will see the establishment of 500 retail shops within Gauteng townships and give township entrepreneurs ownership opportunities in these shops. The project will be piloted across the six townships of Katlehong, Attridgeville, Sharpville, Randfontein, Alexandra and Khutsong. It is envisaged to create more than 1000 jobs.
  • A partnership to secure spaza shops a foothold to Pick ‘n Pay’s distribution channels, giving them access to a variety of stock and merchandise at competitive pricing. This will allow spaza shop owners to pool their resources and take full advantage of the benefits of bulk buying.
  • The Banking Association of South Africa (BASA) and Gauteng are exploring incubation approaches and innovative financing models for township enterprises. This partnership will open avenues for resource mobilisation targeted and enterprise development at township businesses.
  • 287 township businesses in construction and building maintenance companies are undertaking government construction projects, maintenance of electricity and lighting, plumbing and the structural upkeep of government buildings, schools, hospitals and police stations.
  • 53 township based and black owned clothing and textile businesses are currently supplying linen to public hospitals in Gauteng.

Maile urged township businesses to pull their weight behind the Competition Commission’s Market Inquiry into the expansion of the grocery retail sector in townships. “This investigation is a direct response to the challenges highlighted by township businesses in our engagements with them. We are particularly interested in the real impact of the expansion of retail giants into township markets, barriers to entry for small business such as shopping mall tenancy agreements as well as the competition dynamics between local and migrant owned grocery retail businesses” said Maile.

Gauteng has robust plans for the economy

Gauteng will continue facilitating job creating investment in the economy. Some of the key projects for 2015/16 include:

  • R222 million invested for an incubation facility through which 8 black owned SMMEs will supply to supply parts and components for the Nissan Pick Up truck which is due for production in 2018. This project will create 27 000 jobs in the medium to long term and increase black participation in the automotive industry.
  • Work on the OR Tambo IDZ is proceeding well and the funding agreement with the Department of Trade and Industry (dti) has been concluded. Gauteng has allocated R8million while the dti has allocated R200 million to kickstart the project. The IDZ will boost manufacturing capability in targeted, export driven sectors such as pharmaceuticals and electronics assembly.
  • Gauteng has finalised Regional Economic and Industrial Plans for the West Rand and Sedibeng. An amount of R3 billion has been allocated to spur the industrialisation of the Western and Southern Corridors through agro-processing, green industries and tourism.

Agro-Processing to Reposition Gauteng

Maile also outlined plans to expand the agro-processing industry in Gauteng, which includes food processing, beverage and furniture manufacturing as well as the processing of leather products. While Gauteng occupies the smallest land-mass at 1.4%, the has the fairly big agroprocessing industry, with over half of food processing companies being based in Gauteng.

The food and beverage sector has experienced an 18% growth from 1996 to 2013 and now employs well over 120 000 people in the province. The sector faces many challenges, including minimal lack of black participation and a sharp increase in imports in most divisions of the sector. Maile outlined progress made since the adoption of the Gauteng Agro-Processing Strategy at a summit held in Soweto in March 2015. These include:

  • Facilitating market access and enterprise development for black small holder farmers. Partnerships agreements have been reached with Wooldworths and Pick ‘n Pay to provide off take agreements for famers, training in areas such as product development, quality management, brand packaging and grading as well as postharvest handling.
  • Public hospitals will source 40% of their fresh produce supplies from black emerging farmers. Gauteng aims to increase this to 80% by the year 2016.
  • Facilitating access to economic infrastructure such as abbatoirs and storage facilities, access to inputs such as seeds, animal feed and fertiliser at competitive prices, market opportunities and integration into established value chains.
  • Reviving Fresh Produce markets that are located near townships. R7 milllion has been committed to infrastructure upgrades at the Vereeniging Fresh Produce Market.
  • The department is also leading the work to establish four agri-parks in Bekkersdal, Khutsong, Sebokeng and Eikenhof.The agri-parks will not only increase the volume of economic activity in townships but will expose unemployed youths to farming opportunities, provide economic infrastructure for clustered agricultural production and encourage agricultural value-adding activities in townships.

 


ISSUED: GAUTENG DEPARTMENT OF ECONOMIC DEVELOPMENT

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