MEC promises government investment into crucial economic sectors

11 Oct 2009

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The second annual South African Automotive Week (SAAW) conference kicked off today, 07 October 2009 with assurances from the Eastern Province government that it would be making some strategic investments into the public and private sector in order to protect Eastern Cape industry and jobs during tough economic times.

Addressing over 300 delegates, Eastern Cape Department of Economic Affairs Environment and Tourism MEC Mcebisi Jonas said “local government places a premium on the contributions of the automotive sector to the economy of the Eastern Cape.”

According to Jonas, Province has been in talks to identify crucial components of its economic strategy to benefit the Eastern Cape. He noted four aspects that government would be focussing on in the near future. The Eastern Cape government’s first move is to streamline its operations with regards to its economic policies. “There has been much debate about macro economic policies, but the Eastern Cape government firmly believes that government spending is a critical component of our GDP. If it is managed well, we are hopeful that there will be significant change in the province.”

It will also be focussing on rural development and transformation. “There are two major centres in the Eastern Cape which are crucial to rural development,” says Jonas. “The Nelson Mandela Bay Metro and Buffalo City. Government will also be focussing on a strategy to turnaround the former Transkei areas to ensure economic growth.”

Another focus area is the protection and expansion of the manufacturing sector. “This sector is extremely significant, particularly with the current economic situation. We are hoping to help stem the tide of deglobalisation, and will be directing our efforts towards protecting the manufacturing sector,” says Jonas.

The government will also be expanding opportunities in the services sector by focussing on tourism and business process outsourcing with sustainable land use – in addition to manufacturing.

“The automotive industry is one of the key sectors identified by government,” says Jonas. “Our goals cannot be achieved without the expansion of the automotive manufacturing industry.” The government has promised to seek innovative solutions to help boost the automotive industry which has been badly impacted by the economic downturn. Some of these solutions include large scale investment into the public and private sectors.

“We remain convinced that we must increase our focus on state-led investments. Our experience to date shows that in times like this we must not slide back and cap government spending. Successfully dealing with some of the challenges we face will depend on how we are able to protect the current government spend and direct it towards strategic areas,” said Jonas. “This government has made a commitment to become a developmental state. Therefore, the province must make sure that it promotes economic development.”

Jonas said Province would be seeking solutions through dialogue between state, business and labour. “The process towards generating stability is not only in public-centred terms”.

“We are driven by the view that the economy can be expanded by improving logistics and investment planning in the Eastern Cape. We remain committed to providing more support to agencies such as the Coega Development Corporation and the East London IDZ to help make the auto sector more competitive.”

The government has also identified the need to improve logistics structures in the province. It is engaging with national government to ensure synergy in the process of developing road and rail.

There have been a number of investments recently, with the port of Ngqura opening soon and a large investment by GMSA into the Coega IDZ. “These investments show that there is growing confidence in the Eastern Cape’s economy, but also highlights the importance of economic investment by government to continue to offer these opportunities,” says Jonas. “It is crucial that we develop a dialogue between government and the private sector to ensure continued investments and growth.”

“This dialogue will be benefited through conferences such as SAAW,” says Jonas. “As government, our task is to protect what we already have, but also to ensure that we have significant plans for the future which will help in job creation and boos the economy. The private sector is crucial to ensuring that government achieves many of its goals.”

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