For the first time in the history of the Western Cape, the Provincial Government has undertaken an analysis of our economy and carefully studied the interventions that could be employed to remedy the fault-lines that were found.
Some of the well-known results are that the Province has the largest gap between the rich and poor, we have an unemployment rate of about 26%, about 80% of these are below the age of 35 and mostly reside in townships or rural areas. We cannot continue with this scenario. A shared path to the future, as envisaged in our growth and development policy, iKapa Elihlumayo, is our only route.
The Department of Economic Development and Tourism (DEDT) has conceptualised a plan to deal with this problem. Over the last couple of months the Department has been busy at work identifying strategies to fight the scourge of unemployment and poverty that results from a lack of economic opportunities.
The plan is called the Micro Economic Development Strategy or MEDS. As part of MEDS the Provincial Government has identified 14 economic sectors that not only show the promise of growth, but also could propel the Western Cape economy to ever-greater heights of prosperity.
These sectors are; agriculture and aquaculture, fishing and mariculture, metals and engineering, clothing and textiles, ICT, Tourism, Oil & Gas, BPO and Call Centres, Electronics, Bio-technology, Craft, Film, Cultural Industries, Financial Services.
The DEDT has conducted detailed research and analysis into these sectors.
The results of this research and analysis will form the solid platform of evidence upon which the Western Cape Government will build all economic strategies and interventions as a Province from now on.
Over the next two months, the government will engage in intensive consultation with our social partners on the contents of the strategy. The first full version of the document will be available in July 2005.
To ensure that that the government puts its' money where our mouths are, the economic development and tourism budget has been boosted significantly. Over the next three years over half-a-billion rand or about R532.3 million is budgeted for economic development initiatives in the Western Cape.
Minister Brown said: "This signals that if Government is to be taken seriously as a leader in initiatives to grow and transform the economy, we need to be able to bring to any endeavour, not only our influence, but also appropriate levels of resources to crowd in the resources of our social partners".
To this effect more than R145.1-million has been made available to the Department of Economic Development & Tourism, in the current fiscal year. This is 14.7 percent more than the anticipated MTEF amount.
In the 2006/2007 fiscal year a provision has been made for R184.5-million followed by an amount of R202.7-million in the 2007/2008 fiscal year, which is some R88-million [or 77 percent] more than the Province provided for economic development in the 2004/2005 fiscal year.
Minister Brown added: "If anything we have learnt that you can't simply deal with the socio-economic problems facing our Province by just throwing money towards social welfare. This budget allows us the opportunity to rev up economic and create more than just employment opportunities, but opportunities for people to realise their entrepreneurial potential".
In the current financial year about R80.6 million will budgeted for programmes aimed at stimulating and developing sectors that have been identified as possessing growth potential in the MEDS.
About R67.1-million is devoted to giving effect to sector-based interventions and R13.5-million has been allocated for the stimulation of the economy and increasing the strategic competitiveness of the Province's workforce and enterprises.
Some of the interventions that have been identified include:
- The establishment of Western Cape Beneficiation Initiative to enhance development of primary products. This year, the Initiative will spend R400 000 to investigate beneficiation opportunities in selected biodiversity or natural products sub-sectors, such as, Rooibos, Buchu, essential oils and seaweed.
- In the Freshwater Crayfish, we will help establish the first Marron crayfish hatchery in Africa. Marron is the most sought after freshwater crayfish species and produces the highest processing yield. We will invest R500 000 in this project.
- We will continue to support the Rooibos Trade Mark case in the United States up to an amount of R250 000. I am pleased to report that early intervention on our part last year appears to have placed us well to win back the rights to the exclusive use of this important indigenous product.
The tooling industry is crucial for the development, competitiveness and expansion of the manufacturing industry. We also outsource a large proportion of our tooling needs because of the dearth of domestic toolmakers. To address this issue, we have sent 12 mechanical engineering graduates to undergo training at the Indo-German Tool Room Programme in India.
Minister Brown said: "When they return, they will serve as trainers at a technology training centre to be established in the Western Cape which, when fully resourced, will result in the training of 240 tool designers and manufacturers over the next five years and has the potential to generate 2 000 additional jobs in the tooling industry alone, as well as increasing the industry turnover by an estimated R800-million a year".
The clothing industry's pilot cluster initiative, the Cape Clothing Cluster, seeks to make the industry more responsive to the needs of the market, has been met with support from firms employing more than 10 000 workers.
In the oil and gas sector, the DEDT is in advanced discussions with national and international players to bring the West Coast off-shore gas on shore and to prepare for the impact that this will have on the creation of downstream opportunities, including the possibility of an independent power producer and other uses.
Minister Brown said: "Our work continues with national Government and business to position Cape Town and Saldanha Bay as an Oil and Gas Supply service hub for the oil and gas industry of the West Coast of Africa".
She added: "We have also begun talks with national and international players to explore the development of a petro-chemical hub in the Southern Cape. My department is also engaged in initial work around the downstream opportunities in the petrochemical industries in the South Cape".
In the tertiary sector, efforts to develop Cape Town as a market for the international call centre industry have begun bearing fruit. Last year, CallingtheCape, our partner in this work, secured R380-million in new international investment, resulting in 2 000 sustainable, high quality jobs being created. This year, there are four new investments already and more in the pipeline.
The Wes tern Cape Government will continue to support the work of the Cape Film Commission, in its' growth and development programmes which serve to attract big budget features, increase production capacity, improve skills via a development fund initiative and make the Cape Region film friendly for both foreign and domestic producers and investors.
The Provincial Government also wishes to reiterate its' continued belief that the decision to support the development of a world-class film studio was correct and will benefit the economy in the medium to long-term.
Minister Brown said: "We have made provision for the second payment of R15-million to finance the development of a film studio in the Western Cape. The land has been purchased and site-clearing work is underway".
The Government will also strengthen its' work to increase the Western Cape's competitiveness as a tourist location. Most importantly the Government wants to ensure that this industry is fully representative of our population.
The DEDT has developed the Integrated Tourism Development Framework (ITDF) as our blue print for how provincial government and its stakeholders will develop tourism over the next 10 years. The framework identifies 11 tourism development areas. We plan to focus on the following development nodes this year:
- Plans for the Cederberg Gateway: Developm ent plans have been completed and negotiation with a private partner is underway.
- Business plans have been completed for the Northern Gateway in Beaufort West and the project has been short listed by national government to receive a possible R2.4-million for infrastru cture development.
- The Eastern Gateway is a joint initiative between my Department, Destination Martketing Organisation and the Eastern Cape Tourism Authority. We are in the process of identifying a suitable location in the Storms River area.
- A final set of proposals for the Cape Flats Tourism Development Framework is due by the end of July 2005.
Through Wesgro, the Western Cape's investment and trade promotion agency we have set ourselves target of attracting R5 billion in direct investment over the three-year period to March 2007. We also intend increasing the number of local exporters by 800 over the same period.
During 2004 Wesgro was at the forefront in the endeavours that saw the Province securing direct investment worth over R1, 5 Billion.
