21 February 2014

South Africa: Responses to Economic Crisis Yielded Results - Premier Kiviet

Through a combination of measures aimed at mitigating the effects of the 2008 global economic recession, the Eastern Cape Provincial Government was able to save 5,000 critical jobs in the manufacturing sector.

These jobs would have otherwise been lost, said Premier Noxolo Kiviet, in her State of the Province Address, on Friday.

Delivering her address in the Legislature, the premier said the creation of decent work had been hampered by the economic crisis. "The impact of this crisis was particularly significant in the Eastern Cape, and set us back at least eight years with respect to job creation, especially in the manufacturing sector."

In response, the provincial government developed the Provincial Industrial Development Strategy, the Jobs Strategy as well as intensified the implementation of the Expanded Public Works Programme.

A multi-stakeholder Rapid Response Coordinating Committee was also established to consider ways in which the impact of the global economic crisis could be mitigated in the province.

"A combination of these measures resulted in government saving 5 000 critical jobs in the manufacturing sector that would otherwise have been lost, as well as the creation of new jobs."

She said through these measures, companies in distress were assisted.

The provincial government has done well in terms of logistics projects. Transnet has radically increased their project portfolio in the province, with significant investments going into its three ports.

"[A total of] R2.1 billion is allocated to transform Port Elizabeth harbour into a leading automotive export hub; R2.4 billion is allocated to East London as a diversified cargo port; and the Port of Ngqura, will get R15 billion to further develop it as a leading trans-shipment container hub for sub-Saharan Africa.

"These ports will put the Eastern Cape on the global trade map, and forever change our status as a labour reserve," said Premier Kiviet.

Regarding the Industrial Development Zones, the premier said they were beginning to work and would complement the ports through securing investment for industrialisation.

The East London Industrial Development Zone has, since its inception, secured 32 investments with a value of R4.2 billion. Of this, more than R1 billion is linked to MBSA's W205 project.

The East London IDZ also has strategic pipeline investments such as the new multi-modal Original Equipment Manufacturers, with the Department of Trade and Industry, Industrial Development Corporation, and private investors already showing interest in making this massive development a reality.

Premier Kiviet said the Coega IDZ had secured 21 operational investors to date, with a total investment value of R2.1 billion, yielding 4 409 operational jobs.

"Plans to commence steel beneficiation in Coega have been cemented with the investment by Agni Steels SA in the Coega IDZ, and GDF Suez have just signed a 15-year power purchasing agreement with ESKOM and are investing R2.5 billion in a power peaking plant in Coega which will produce 335MW of energy," said the premier.

As part of the manganese corridor development to the Northern Cape, which is a Strategic Infrastructure Project 3 project, the new tank farm and manganese export facility in Coega is on track, said the premier.

She said an investor for the major manganese smeltering facility had been secured.

Afrox has also recently announced an investment of more than R300 million in an air separation unit in Coega to supply industrial gas.

"These are all exciting developments, and will be catalytic for major industrialisation and value adding economic activity," said Premier Kiviet.

She said there were also exciting economic opportunities linked to the proposed nuclear power station at Thyspunt and the beneficiation of shale gas will be further developed in the next term of government.

"We are also starting to show success in our drive to diversify the provincial economy and make it less reliant on the automotive sector through initiatives in the fields of renewable energy; agro-processing and aquaculture among others," said Premier Kiviet, adding that the province was poised lead in the green energy sector.

The province has secured 12 wind farms in the National Renewable Energy Independent Power Producer Programme valued at R21 billion. Of this amount, R7 billion has been earmarked for local content.

"In this regard, DCD have just started construction work on a 23 000 m2 wind tower manufacturing facility at the Coega IDZ, valued at R300 million. The plant will create 1 951 jobs," she said.

Through the Expanded Public Works Programme (EPWP), 707 286 job opportunities were created, far exceeding the target of 489 920.

"We have also targeted the further development of agroindustry in the east of the province, and related logistics capacity. Key here is the establishment of a new Special Economic Zone, which is one of 10 new SEZs to be developed by the [Department of Trade and Industry]."

Premier Kiviet added that key to economic development in the east of the province was the refurbished Mthatha Airport runway, which was completed and opened last year.

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