BuaNews (Tshwane)
17 September 2007
Pretoria — The state of investment in the North West province has improved since 2005 and is set to further increase after a R5.2 billion budget boost for the province's investment agency, writes Lehuma Ntuane.
Before 2005 investment in the Platinum province had an average growth rate of below 3 percent.
Social investment and economic growth and employment opportunities were in short supply. At the same time, poverty and the level of unemployment were at their highest.
However, since 2005, the platinum province has turned the corner with more investment confidence and economic growth and accelerated job creation.
The provincial government has now declared war against poverty and unemployment and a notable dent has already been made.
The official unemployment rate in the province has been reduced from 28 percent to 27.4 percent, due to the dominating investment in flagship industries such as mining, farming, and tourism.
Mining, which is one of the key economic sectors in the province, increased its dominance from 20.1 percent in 1996 to 24.7 percent share of the economy in 2005 and 23.4 percent share in the labour market.
The labour absorption rate that remained around 35 percent until 2006 has improved to 38.4 percent.
The pace of economic growth accelerated to 5.1 percent in 2005 becoming one of the highest growth rates achieved by provinces in that year.
The government agency at the helm of the province's investment, Invest North West, has been attracting much investment in the province and with the recent additional R5.2 million to its coffers, a further promotion of investment and trade is expected.
With the province's target of achieving an average economic growth rate of 6,6 percent per annum and halving unemployment by 2014, the Chief Executive of the agency, Gaba Tabane, they will be able to help generate a provincial investment of R6, 3 billion per annum from public and private sector.
He said the budget they received (R5.2 million) will ensure that they have necessary resources drum more investment and also position the province as the investment destination.
"All economic activities are geared towards achieving government's drive of promoting small business and job creation and we have achieved a lot over the past two years.
"We want to ascertain that investment and many other economic developments also promote small businesses and create jobs.
"It therefore becomes important that Invest North West create and strengthen partnerships with the investors within the context of promoting the second economy," said Mr Tabane.
Although much of investments, both mining and property investments, are taking place in Rustenburg, which the province's economic stronghold, the province is currently relishing a major investment coup, particularly in the capital city, Mafikeng.
Mafikeng has seen R3 billion in foreign investment by an Egyptian based company, Orascom Construction Industries (OCI). This will be used for the building of the new state of the art Greenfield cement plant.
The CEO of the Cairo based company, Nassef Sawiris, said the plant will have a production capacity of 2 million tons per year and will employ thousands of local people.
"The plant will be one of the most modern plants in the country and our subsidiary will contribute to the development of the North West province (in) numerous ways including the creation of new job opportunities during and after the construction of the plant.
"We are extremely pleased to have such a huge investment in South Africa and we are committed to deliver a state of the art cement plant which will cater the fast-growing demand for cement in the country and offer the highest quality products," said Mr Sawiris.
He said the plant will begin producing by 2010.
At the moment the country is experiencing shortage of building materials, especially cement, to a point where local providers are prompted to stock up off shore.
This venture will also benefit local tribal authorities who are partners.
While the Egyptian company is a major shareholder with 67.5 percent, Broad Based Black Economic Empowerment (BBBEE) groups Barolong-Boo Rapulana Traditional Council, the Barolong-Boora Tshidi Traditional Council, Osman Family trust, Bazan Family Trust, Lezak Family also form part of the trust.
An Economist and Small business development expert, Simon Mohapi said the state of investment is strongly boosted by state 'swelling interventions to promote the growth and development of the first economy.
"All these investments have the potential to increase the possibility of creating jobs and eradicating poverty and these two are key to the government's mandate in its term of government," said Mr Mohapi.
He said the 2010 FIFA World Cup will bring even much needed economic opportunities which will benefit the hospitality sector including emerging Beds and Breakfast (B&Bs).
The Rustenburg Local Municipality is the host city of the world cup games and much preparation are being done.
The host venue, the Bafokeng Royal Sports Palace, is under going a facelift to prepare for the football showpiece. About R 147 million is to be spend in the upgrading of the stadium including additional 6000 seats to put the stadia at 45 000 capacity.
Road infrastructure and power supply are also getting attention in order to contain the demand during the tournament.
The North West Premier, Edna Molewa, has noted that there were "rising stars" in the province's second economy citing small companies such as the Catfish Supreme and Sumba Foundry Engineering as having export potential.
The two received awards from the Invest North West as rising stars poised for breakthrough in the international business arena.
She said the two companies are the embodiment of what the government envisages from small enterprises in the second economy.
"Catfish Supreme is fish farming and processing company which has been operating for ten years.
"It has already captivated Asia and therefore requires expansion to service the export market and the same goes for Sumba Foundry Engineering which casts aluminum parts for mining and automotive industries," said Ms Molewa.
Regarding the implementation of the BBBEE policy, Ms Molewa said the province will implement for the advancement of emerging and small businesses, including those owned by women, youth and people with disabilities.
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