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Gauteng to prioritise development of SEZs

Parks Tau, Gauteng MEC for Economic Development, outlines how the province is doing its bit to reignite its economy in terms of SA’s Economic Reconstruction and Recovery Plan.

NOMPU SIZIBA: Earlier this week Gauteng premier David Makhura delivered the State of the Province Address, reflecting on the challenges presented by the Covid-19 pandemic, the interventions made and the lessons learned. It’s well understood and experienced that the pandemic has wrought economic havoc and, being the custodian of South Africa’s largest economy, the premier went into great detail around how Gauteng is doing its bit to reignite the economy in line with the National Economic Reconstruction and Recovery Plan, as outlined by President Ramaphosa in October 2020.

Well, to discuss some of the issues I’m joined on the line by Parks Tau, the housing MEC for economic development. Thank you very much, sir, for joining us. Now, industrialisation and in turn the promotion of buying local are key areas focused on by the Economic Recovery Plan. How is Gauteng Province looking to lead or take the charge in this regard, and in what sectors?

PARKS TAU: Thank you very much, Nompumelolo, and good evening. In terms of our industrialisation and reindustrialisation plan, we’re focusing on 10 priority sectors in the Gauteng Province of  government. These include financial services, which is anchored in Johannesburg. We are focusing on tourism and the automotive sector – in which we’re making great strides.

As you would know, we recently unveiled the intention by Ford to invest R15 billion in the province of Gauteng, to ensure that they are able to manufacture by next year 200 000 vehicles, 90% of which would be for the export market. This is supported by their own, let’s say, first-tier suppliers and supply-chain managers that come in with their own technologies that support Ford.

But it’s also complemented by local industry and local development of second- and third-tier suppliers into the Ford value chain. This is part of a response to Gauteng’s automotive industry programme and our launch of the Tshwane automotive special economics zone.

We are also looking at, among other things, agriculture and agro-processing, ensuring that Gauteng  continues to position itself primarily as the agro-processing centre of the country, and continues to pivot our ability to increase our export capability and ensure that we facilitate import substitution.

NOMPU SIZIBA: Now what about the special economic zones? You’ve touched on one, which is the Tshwane Automotive Special Economic Zone. But what other sectors are benefiting from special economic zones in the Gauteng region, and where are you seeing good prospects in those zones?

PARKS TAU: The agriculture and agro- processing sector we are focusing in the West Rand of Gauteng. We’re already engaging with, among others,  private-sector role-players. One of the land owners, Sibanye Stillwater, has partnered with the provincial government to look at both agriculture and agro-processing, but also to look strategically at hydro-energy solutions in the area. So the beneficiation of platinum minerals is one of the areas that we’re focusing on and partnering around.

We’re also looking at the Sedibeng region, the southern corridor of Gauteng, where  we’ve already established the Vaal Special Economic Zone. The programme management unit is currently being established and we are working with the National Department of Trade and Industry to ensure that we can support a special economic zone that would enable us to reindustrialise what used to be a very strategic industrial part of the country with Iscor, Sasol and those industries located there.

We ask  what we can benefit from the existing infrastructure, but expand into new opportunities in the province of Gauteng.

NOMPU SIZIBA: We know that the Gauteng government for the longest time has been quite keen to boost the fortunes of the aviation-related hub. But of course there’s been this decimation of the industry in the recent past because of the pandemic. Are you rethinking how you’re going to be doing things in that regard? Will investments still be continuing as we speak?

PARKS TAU: We certainly think so. In fact, with …… [4:32] initiatives around aviation, defence and the automotive sector as part of a strategic core of industries that we need to support, working with, among others, parastatals and other state-owned enterprises, but also liberating from the infrastructure that we have in the province.

One of our special economic zones historically has been the OR Tambo Airport, which is essentially what we call the Gauteng Industrial Development Zone, which would anchor among others, the jewellery[??]  sector, but also the aviation and defence opportunities that we are seeing.

In this regard, we’re looking at export opportunities and input substitution, and leveraging off the hub of the OR Tambo International Airport.

NOMPU SIZIBA: You guys for the longest time have been talking about investing and nurturing the township economy. What work has been done in this regard, and what interventions have been made to aid SMMEs who’ve been badly affected during the period of the pandemic?

PARKS TAU: The first part is we’ve identified the need for a legislative environment that would enable and facilitate economic development in townships. If you think about it, one of the major limitations to growth is what would have been constituted through the town-planning schemes that dictated the townships which would historically be designed as mono-functional residential dormitories. So, through an intervention that is legislative, you can think about the sort of industry that you can introduce, how you can leverage off existing industries and create a legislative framework that enables support for enterprises into the townships.

But we’re also thinking about and working on programmes, in fact, around how we leverage off existing industries, how we enhance the taxi industry, which has been a major economic contributor in the townships – how to enhance its opportunities, but the value chain in the industry. And that value chain includes sales to maintenance, to property ownership around what the taxi industry benefits from, and to using them as anchor investors in some of these initiatives.

The same applies to residential development. If you think about it, when you’re talking property ownership and property development, many of us who come from the township would know that most of the townships have either backyard shacks or backyard rooms that they rent out. This is part of economic activity. All we need to do is to institutionalise support to this industry, and see this as part of the property market in our cities. A specific support programme has been developed, including partnering with financiers that are prepared to go into that market and begin to turn around the real estate environment in the townships, and ensure the township property owners can leverage from the assets that they have and be able to benefit from the assets that they have.

These are just some of the programmes that constitute what we seek to achieve through the township economic revitalisation initiative growing of course at the back of the legislative intervention that we’ll be introducing to the legislature in April this year.

NOMPU SIZIBA: Well, it’s going to be interesting when we speak to you this time next year, to find out what has actually been yielded from all of these fabulous ideas that you have.

But now on to a very basic issue. The issue of cooperative governance is an important one as the province seeks to work with districts, municipalities and so on. But it does look as though basic economic essentials are not sorted out. There are potholes all over the place in the City of Johannesburg, which is supposed to be the place to live and work. Those issues are not being sorted out. People pay their rates but they remain dissatisfied by this type of issue. Why are these issues continuing? Why doesn’t there seem to be a will to ensure that the basics, basic economic services, are made available?

PARKS TAU: Well, finance is a major impediment right now, and we should accept that. In fact, I these [areas] are facing added pressure as a result of lower revenue collection during the pandemic, but also the institutional and financial structuring issues faced by local government. I’m talking here of basic needs, based on my previous responsibility as  Cooperative Government and Traditional Affairs and the observations we made about the key pressure points.

That’s why National Government decided in the department that in fact we should introduce the district development module so that we have institutionalised mechanisms of working with local governments, so that national government doesn’t come in at the point of the needs ……, provincial government doesn’t come in to introduce a Section 139 intervention and take over the functions of a municipality. It must be that we institutionalise the mechanisms of planning together, deploying resources together, and ensuring that we have common outputs that we are working towards.

And that’s what we’re currently institutionalising together with national government, but working with municipalities. I think that that gives us a great opportunity to aggregate all the resources of government in a common set of objectives. One of the things that we have observed is that, while we talk about capacity constraints in local government, sometimes you have capacity located somewhere else that is underutilised. Why don’t you deploy it in local government? Sometimes you send money back to the national fiscus from a department – and that might be a department responsible for roads – when part of those resources could have been redirected to local government had they had planned together and executed as part of a cohesive unit.

So that level of cooperative governance institutionalised around the district development model is important to how we are going to solve these problems going forward.

NOMPU SIZIBA: Mr Parks Tau, thank you so much for your time, sir. We’ll speak to you again in the future. That was Parks Tau. He’s the Gauteng MEC for economic development.

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