Minister of Economic Opportunities, Alan Winde’s speech:
“Today marks the seventh year I am standing before you to speak about our economy.
I’ve just tabled the 2016/17 budget for the Department of Agriculture, where we spoke about the gains we have made in that sector.
This good news is not limited to agriculture.The Western Cape’s economy is outperforming every other region in South Africa. Overall, we are the fastest job-creating province in the country.
In 2015, employment growth in the Western Cape was double that of national and Gauteng. We now have the lowest unemployment rate in the country.
This is in part due to choices we have made as a government to place special attention on those areas of our economy in which we can make the biggest difference, and which can accelerate job creation and growth.
It’s because we’ve committed to delivering an open, accessible and responsive government.
It’s also thanks to strong and sustained optimism from the private sector in the Western Cape, despite several national economic shocks. Business confidence here is higher than the national average and we’re continuing to see strong investment from the private sector into key areas.
We also know that the Western Cape has unique advantages as a region.
In academia, we are home to some of Africa’s best universities, all of which are producing students ready to take up employment and take our economy forward.
Entrepreneurs in this province take risks to grow the economy and through their efforts, they employ over half a million people in the Western Cape.
Last year, a report revealed that the majority of this country’s start-ups are based here; a trend which has seen the Western Cape become known as “Silicon Cape” and the “Digital Gateway to Africa”.
This is because in the Western Cape, start-ups have a voice in the economy, a voice which this government is eager to listen to.
While we’re making significant progress, a lot more needs to be done.
There are still 571,000 unemployed people in this province, using the narrow definition of unemployment. This figure rises to 673,000 when using the expanded definition of unemployment.
Households are being financially squeezed by South Africa’s unfriendly policies, which are driving business away, and through natural events such as drought.
The Moody ratings agency is looking into whether they should downgrade our economy yet again.
A downgrade would lead to a weaker rand and higher interest rates.
It means residents who are already struggling will be hard-hit with higher prices for most goods.
They’re under pressure and they’re growing more and more frustrated.
This frustration is on the rise because we know this country is being run by self-interested forces.
This frustration stems in part from the realisation that the well-connected elite continues to enrich itself at the expense of the poor and working class,but here in the Western Cape, you have a government that puts citizens first.
For the past seven years, our goal has been jobs and growth.
And when you look at our job creation record, it’s clear we’re on the right track.
With this budget, we’re building on that foundation and we’re building on our belief that the economy must work for everyone who wants to work.
In the 2016/17 financial year, the Department of Economic Development and Tourism receives R486m to achieve our goal of adding over 300,000 jobs to the economy over the next five years.
Now I’ll take you through our plan of exactly how we’re going to make this happen.
The best thing a government can do is to create the right environment for businesses to grow and create jobs.
To do just that, Integrated Economic Development Services receives R40,9m in the 2016/17 financial year.
In the past seven years, this programme has given 36 159 entrepreneurs the tools they need to start a business.
As a government, we’ve made it our priority to get rid of outdated laws that are holding business back.
Since its inception in 2011, our Red Tape Reduction Unit has assisted approximately 5,200 businesses, with a resolution rate of around 90 per cent.
I’d like to share a story with you to illustrate how this unit is driving business in the Western Cape.
Since early 2015, we’ve been actively lobbying for change to the Home Affairs visa regulations. These regulations are one of the biggest threats facing our economy.
Last year, a UK investment and consulting firm, EXLerator, established its Cape Town offices. In the true nature of business, it soon became clear that they’d have to spend additional time in the city setting up the new office and they applied for an extension to their work visas with not much time to spare.
Our unit stepped in to escalate the matter and, working with Home Affairs officials, ensured the team received their visas one day before they were set to return to the UK. The cost of returning to Britain to apply for their visas there would have amounted to R350,000. Their investment here stands to create just under 5,000 jobs.
Simply put, investments like this are powerful economic catalysts and we need to do everything we can to get more of them.
To achieve this, we need to make sure firms like EXLerator continue to view our region as a good place to do business, so over the next four years, the Red Tape unit has set itself the goal of saving businesses in the province R500m.
In partnership with Wesgro, the Red Tape Unit will be working to establish the Western Cape Investors’ Centre – a platform to ease the path for medium to large investors wanting to set up shop or expand their current businesses in the province.
We also have a proactive team in place to hunt new business, inside and outside of our borders, and to assist interested investors. Through Wesgro, our tourism, trade and investment promotion agency, we’re aiming to create between 1,800 and 3,740 jobs through investments worth between R3,1bn and R5,4bn over the next three years.
Our efforts to create an enabling environment for business are also set to propel our Project Khulisa growth strategy.
Through Project Khulisa, we are focused on growing specific areas of our economy, namely oil and gas, tourism and agri-processing. These sectors have the highest potential to dramatically accelerate growth and jobs.
I have shared our plan for the agri-processing sector earlier during my Agriculture budget speech, but in short, we will focus on growing our share of the Halal market, increase wine and brandy exports to strategic markets and increase local processing capacity through key infrastructure projects.
To drive our focus on the Project Khulisa sectors and attract increased investment into our region, the Trade and Sector Development programme receives R59.5m in the 2016/17 financial year.
The transformation of Saldanha Bay into a duty free zone for rig repair is the anchor of our oil and gas programme.
We can add up to a further 60,000 formal jobs to our economy if we all work together to realise our vision of becoming the prime base for rig repair on the continent.
We already have most of what it takes: high rig traffic, affordable labour and service sophistication.
In partnership with strategic stakeholders in the national and local government, we are determined to fill the gaps through the completion of the following projects:
· Development of the Saldanha port and back-of-port land;
· Development of strategic marine infrastructure, including a deep water
rig repair quay, an offshore supply base an additional jetty for repair and ship building;
· Bulk services; and most crucially
Along with oil and gas, tourism has been identified as another focus area.
We know that tourism is our fastest-growing sector, employing over 200,000 people and generating R17 billion for our economy each year.
Through Project Khulisa, we are seeking to add up to a further 100,000 jobs in this sector.
The Tourism, Arts and Entertainment programme receives R46,5m in the 2016/17 financial year to grow the Western Cape’s tourism sector.
As part of this province-wide effort, we have identified a set of exciting projects.
One of the most exciting is our Air Access programme. Through a dedicated Air Access team comprised of global aviation specialists, we are targeting the development and initiation of new routes to key strategic markets. This is a part of our plan to get more visitors here.
Another crucial part is to keep them here for longer. To boost awareness of the Western Cape in key markets and to convert business tourists to leisure tourists, we will implement a Delegate Boosting and Conversion Programme, targeting conference attendees.
To attract more tourists from strategic markets, we will develop and implement an Africa and the Gulf Cooperation Council (GCC) growth strategy.
We know we have to be responsive to market trends and demands. In this respect, we are determined to make technology work for us by tapping into the power of big data to grow our economy. Very shortly we will launch a tourism data and real-time business intelligence dashboard which will provide us with the most recent trends and performance of the Western Cape tourism industry.
We also have a range of initiatives to boost the attractiveness of the Western Cape.
First and foremost, we will continue with our plans to position the province as the trail capital of Africa. In the next few months we will start to build the first part of our cycle track which will eventually stretch from Plett to Cape Town. This track will become the backbone of a trail system driving business to farms and communities all along our southern coastline.
We will also focus on culture and heritage tourism, and in this regard we have something special up our sleeves which we hope to unveil later this financial year. We will also continue to drive food and wine tourism, and our growing events economy.
First impressions of the 2015/16 tourism season have been promising and I’ll be tabling the official visitor numbers for the traditional peak period next month.
I’d like to commend every person working in this sector for the warm welcome and excellent service offered to our visitors. You are the reason our tourism sector continues to thrive. Part of the Project Khulisa plan will include a service excellence and a ‘tourism benefits me’ campaign and we’ll be sharing more on this shortly.
To ensure our Khulisa sectors, and every other sector in our economy, has the right environment to grow, we are dedicated to the task of getting our key enablers right.
In the 2016/17 financial year, our Economic Planning unit receives R215.1 million to drive these priorities.
We recognise that innovation is a key enabler and I’m pleased to announce that this year, we’ll be developing an Innovation Strategic Framework. If we are to encourage a spirit of innovation among our residents, we know we must think differently too. Through this process, we’re going to plot how we can unlock innovation in government.
Connectivity is also a critical enabler for our economy. Just two weeks ago, the Premier and I launched the first 50 of the 384 public WiFi hotspots we are rolling out in partnership with Neotel.
In the 2016/17 financial year, a further 100 hotspots will be delivered to communities across the province. The remainder will be rolled out in the year therafter.
Our public hotspots in Atlantis, the Southern Cape and Delft, which have to date been accessed by 123 000 residents, are showing us the power of connectivity.
Through accessing the internet at our hotspot, Thobeka Yose emailed the Facebook page of an international magazine.
After providing samples of her work, she was hired as a contributor. To do her work, she Skype calls with the chief editor of the magazine in the Netherlands, and e-mails through her stories.
I’m happy to have Thobeka here today. She is an example of how technology connects us to opportunities across the world.
We’re also entering the final year of the test phase of the I-Can Centre in Elsies River. This centre provides access to digital training and public internet and the response from residents has been encouraging. Since October, around 100 new registrations have been achieved at the centre each month.
It’s our goal to have public access centres like these throughout the Western Cape and we’ll evaluate this project to see how we move forward.
Energy security has been identified as our most important strategic enabler. For an economy to thrive and attract investment, it must have stable, affordable power.
In the Western Cape we have prioritised the development of clean energy sources.
While the National Government is signing nuclear deals and building coal-mines, we are going green.
In this regard, we recently submitted and are awaiting the outcome of our application to transform Atlantis into a Special Economic Zone.
If approved, this would open up the way for further investment in manufacturing and services in the Atlantis industrial area, resulting in 1000 direct jobs and over a billion rand of investment in manufacturing by 2025.
The SEZ is not designated yet but we have already seen over R500m in direct investments creating close to 400 direct jobs, and a very exciting investor pipeline.
Over the last five years investments of over R17bn have been made in renewable energy projects in the Western Cape – R2,5bn last year alone – creating over 2,000 jobs on these projects, and another 700 in component manufacturing.
Many of these initiatives have been facilitated through the hard working team at Green Cape.
Our efforts are being bolstered by the City of Cape Town, which has given home-owners the power to receive rebates for the clean energy they produce.
Following on the programmes we have seen in the city and Drakenstein, work is also already underway to allow the large municipalities in the Western Cape to implement similar rebate or ‘embedded generation’ schemes.
We anticipate that the national process for procuring power from liquefied natural gas will be critical to unlocking the potential for our economy of having an alternative source of energy – not only for electricity but for industrial application.
The province is working intensively with public sector stakeholders at national level to help realise this opportunity.
Here in the Western Cape, we are producing and selling the energy of the future.
We are growing an economy that delivers opportunities for all. At the same time, we need to grow our skills to ensure they work for the economy.
The best place to start is by investing in young people.
This is why we have selected skills as a game-changer.
In the 2016/17 financial year, our Skills Development and Innovation programme receives R63,242m.
Our drive to boost the number of young skilled people in this province will go beyond government to involve academia and the private sector.
We will invest R12,4m in training young people in technical and vocational skills, but we need partnerships to make this a success. In this regard, we rely on business owners to open their doors to artisans-in-training needing to complete their internship phase, and I ask that employers reach out to my office if they are able to assist.
This is our roadmap for the year ahead and it will be executed by Solly Fourie and his dedicated team in the Department of Economic Development and Tourism.
I’d like to commend them for their efforts and the important role they continue to play in making the Western Cape the fastest job-creating region in this country.”