The Gauteng Department of Economic Development (GDED) has to do more with less as budget’s shrink and the Covid-19 pandemic ravages small businesses.
Delivering the 2021/22 departmental budget on June 18, Gauteng Economic Development and Environment, Agriculture and Rural Development MEC Parks Tau tabled a budget for 2021/22 financial year of R1.5-billion.
This is a decrease on the R1.84-billion tabled by former GDED MEC Morokane Mosupyoe during last year’s budget vote.
The budget will further decrease to R1.4-billion over the medium-term expenditure framework.
“In simple terms, this means we have to do more with less. This implies spending our resources efficiently in order to aggregate all our collective efforts and to leverage from existing policy instruments and tools,” Tau highlighted.
During the virtual delivery of the budget, he pointed out that the pandemic has exposed and exacerbated the structural deficiencies of the economy, reflected in South Africa’s record-high inequality, poverty and unemployment.
“The impact of Covid-19 is even dire in townships and rural areas. The small, medium-sized and microenterprise (SMME) sector has suffered worst in our townships since research in Gauteng alone shows that 42% of SMMEs are likely to have closed their doors permanently.”
To ensure recovery, Tau assured that the department was turning a corner and is implementing pragmatic policies and actionable programmes in townships and rural areas that will enable diverse commercial and industrial zones where high growth sectors are widely represented and financial instruments are made available to open capital markets to township businesses.
It is also leveraging public resources to drive the Growing Gauteng Together 2030 (GGT2030) strategy across the Gauteng City Region, as it builds the capacity of the department.
Over recent months, the GDED reconfigured the Gauteng Enterprise Propeller (GEP) Agency into a fit-for-purpose vehicle for blended financing, enterprise and supplier development.
Further, recruitment was opened for all senior management positions, with the GDED now shortlisting suitable candidates, while engagements are under way with organised labour to solve internal challenges and institutionalise the best possible labour practices at all levels of the organisation, he explained.
“But the enhancement of internal human capital is only the beginning. Through public-private partnerships, we are forging on special programmes for our high growth sectors, we are setting up a war room, for instance, with the Development Bank of South Africa (DBSA) to drive the GGT2030 apex initiatives.”
For the current financial year, the war room will focus on running special programmes covering green energy, information and communications technology and broadband connectivity, and transportation and logistics.
Further focus is placed on the reindustrialisation of Gauteng through the build phase of the Tshwane Automotive Special Economic Zone (SEZ), which is the first stage of a now confirmed R15.18-billion investment by the Ford Motor Company.
The GDED is also partnering with Airports Company South Africa and the City of Ekurhuleni to fully realise the potential of the OR Tambo SEZ as an anchor of the broader aerotropolis vision.
In addition, the Vaal SEZ management company has been established in partnership with Department of Trade, Industry and Competition and is currently securing expert support staff that will equip the SEZ to operate along the lines of a Vaal Regional Economic Development Agency.
“We are in advanced negotiations with the clusters of private sector investors that have formally put themselves forward as the future anchor tenants of the Western Corridor SEZ, including Sibanye-Stillwater and Busmark. We will be using this SEZ to build a green energy and agroprocessing ecosystem along the N12 corridor,” Tau continued.
“Throughout the life of these SEZs processes and projects, we are explicitly tying in the upgrade of township industrial estates and using the SEZs the way legislation intended, [including] as levers for scaling industrialisation and investment into new and revitalised industrial clusters.”