[ Home ] [ Speeches & statements ]

20 April 2009

Programme director
Madam President and members of the Chamber
Distinguished ladies and gentlemen

Programme director; please allow me to begin my address by quoting the Italian Prime Minister, Silvio Berlusconi who once said that entrepreneurship should become a virus, “spreading through both the social and economic spheres in the country.” I, therefore, believe that this Chamber will prove to be a critical driver in that process in our province.

Addressing a National African Federated Chamber of Commerce and Industry (NAFCOC) conference in Port Elizabeth in June 2006 whilst I was MEC for Department of Economic Development and Environmental Affairs (DEDEA), I submitted that “We have the biggest and most diverse economy on the African continent with substantial manufacturing and beneficiation capacities, and indeed we are the largest investor on the African continent. So, are we making progress?

It is also true that despite these achievements and its current strength, our economy is facing huge global challenges from other countries that produce products for trade that are cheaper than our similar products, and this inhibits our competitiveness. We also have the largest number of universities and technikons on the continent and a culture of apprenticeship training, and yet today we face a serious skills shortage in critical sectors of our economy.

Government is of the view that if these structural and functional defects are not addressed, our economic growth will soon begin to slow down.”

The question that we need to ask ourselves though is whether we are making enough progress in extricating our small business people out of economic marginalisation and whether we are creating sufficient opportunities for them to grow their businesses!

The Eastern Cape has one of the lowest gross geographic products per head compared to other provinces. It has the worst matric and university entrance pass rates, and is among provinces with the lowest literacy rate. It also has the highest proportions of households without access to clean water or electricity, and the highest number of households living in traditional dwellings.

Other interesting statistics, however, is that this province achieved an economic growth rate in the period between 2004 and 2007 that nearly equalled the national growth rate. But the real question is whether we are taking good advantage of our province’s industrial, manufacturing agricultural, tourism and forestry potential? Particularly so because some of the relevant infrastructure already exists, but we need to identify new opportunities and develop partnerships between the public and private sectors and between local companies and foreign investors. The motor and construction sectors already provide a strong base for further economic activity and growth.

The other question you may ask, as small business people, is how do you benefit from these government and private sector programmes and initiatives? Our province’s DEDEA works very closely with the Department of Trade and Industry (dti), and through the organs such as the Apex Fund, Small Enterprise Development Agency (SEDA), and we provide expert services and resources for business development through Eastern Cape Development Corporate (ECDC), we are at your service, particularly in promoting self employment and entrepreneurship development, especially Small, Medium, Micro Enterprises (SMMEs) and Co-operatives, targeting the manufacturing, tourism, infrastructure and agriculture sectors.

We have exciting opportunities in our Industrial Development Zone (IDZ) programmes in Coega and East London Development Zone (ELIDZ), with the former being more advanced and boasting the deepest sea port in the Southern Africa region. These IDZs lead our campaign in the quest for Foreign Direct Investment.

Our province boasts an enormous potential and opportunities in the tourism, including the hospitality, sector with outstanding fauna and flora in our game parks.

The 2010 Soccer World Cup also provides our province with an opportunity to train our people on the provision of good and quality services, and once more particularly the hospitality services, and this training does not go away with 2010, but will add to the skills legacy we are building for our nation. Accommodation establishments seeking to benefit from the World Cup must be graded, and providers of these services should grab the opportunity created, for the first time in FIFA’s history, that non-hotel accommodation such as national park accommodation, bed and breakfasts, lodges and guesthouses will be contracted for the tournament in 2010. Once again, this presents a unique opportunity for the smaller accommodation establishments.

In applauding the initiative, I am mindful of the many challenges still faced by SMMEs, and of the task for government and its partners, to foster and promote the development of SMMEs, as we intensify the war on poverty and unemployment.
As a country, we continue to face a myriad of challenges, including the deep seated problems of poverty, inequalities and unemployment. The development of the SMME sector is widely believed to offer some potential and sustainable solutions to some of these challenges. One of the prerequisites in developing this sector is developing a cadre of entrepreneurs that will take risks, break new grounds, innovate and create new products. The low activity rate and high failure rate in the SMME sector poses a great challenge to government, private sector, and tertiary institutions to reach out to the community and develop entrepreneurs.

The key challenges we are faced with to ensure a turn around relate to some of the resolutions that have been adopted by the ruling party, which allude to the building and strengthening of development finance institutions as well as non-financial institutions, which should be accessible to the people. More importantly, these institutions must be able to effectively channel financial and institutional resources towards a variety of economic transformation objectives including development of small businesses, co-operatives and the  empowerment of women and the youth.

Building of small and micro enterprises is also a critical developmental challenge which requires the state to provide resources for building capacity and institutions. Thus, acceleration of entrepreneurial skills and training is at the centre of the drive to build self sustainable communities that can actively participate in the mainstream economy.

Ladies and gentlemen, great strides have been made by our government and these are aimed at the empowerment of women in our country. In this regard, the formation of the various structures like the South African Women’s Entrepreneur’s Network (SAWEN) is yet another innovative way of taking the empowerment further at the level of service delivery.

In 2004, the provincial government together with its social partners developed a Provincial Growth and Development Plan as a decade long guide to the provincial development and brings about a better life for all within the context of realising an Eastern Cape devoid of the imbalances and inequities of the past, with integrated and balanced development. To realise this, we envisioned an Eastern Cape that is “a compelling place to live, work and invest in”. Even at this stage we still recognised that unless we tackle economic growth, employment creation, poverty eradication and income redistribution head-on we are not likely to make any meaningful breakthrough.

To this end, a lot has been achieved through by the provincial government in partnership with all its social partners. Such achievements include the following:
* trends in the Gross Domestic Product by Region (GDP-R) figures suggest that the province has experience growth in line with the national average of above 4% per annum
* the unemployment rate in the province fell consistently during the past term down from 27% to 23% though beginning to be negated by the current global financial crisis.
* the building of world class logistics and transport infrastructure such as the Coega and East London Industrial Development Zones
* the consolidation of manufacturing strengths around the automotive sector
* the deepening and sharing of the impact of economic growth through Broad-Based Black Economic Empowerment
* addressing the skills deficit through a targeted skills plan, and the establishment of a provincial council for the Join Initiative on Priority Skills Acquisition (JIPSA)
* the establishment and beneficiation of the Mzimvubu Development Zone, and Ugie-Maclear forestry cluster
* addressing red-tape bottlenecks that constrain investment

However, through the Industrial Development Strategy, the provincial government has begun a way to identify concrete measures to diversify out of the dependence on the automotive sector into other priority sectors that create sustainable employment opportunities, including tourism, agro-processing, forestry and timber. These are all the opportunities that our government is currently embarking upon for the purpose of empowering our people, the poorest of the poor, the previously disadvantaged and, in particular women.

At provincial level, the issue of gender equity, especially the access to finance for women entrepreneurs, remains our challenge. A challenge is also still the ability of the Province to increase the number of women in the business sector as well as those that occupy management positions within the private sector. Hopefully this Chamber will assist on that as well.
Importantly, is to note that entrepreneurship is the core to building a vibrant and a sustainable small, medium and micro enterprise (SMME) sector. The SMME sector is critical to achieve our key development objectives of economic growth, employment creation and equity.

Programme director, it is a common knowledge that the majority of rural enterprises in our province comprise women's businesses in areas like crafts, hawking, personal services and the retail sector which are treated as being at the lower echelons of our economy.

Government is cutely aware of the shortcomings of its procurement and payment systems as practiced in the various departments and municipalities. In fora like these we can apply our minds to ways of addressing these challenges and close the gaps. We need to identify ways on how we can mainstream women empowerment and development mainly in the tourism, arts and craft as well as in the minerals and energy Sector. The time to work with government is now, because we believe that working together, we can do more. This also refers to the upcoming FIFA World Cup which will create lots of business opportunities.

These testify to the urgent need for more government involvement in women's entrepreneurial development, and hence the dti has chosen entrepreneurship development as a one of the best vehicles for fast track women's economic empowerment.

It is our intention to work with women through the provision of business information, economic literacy, and training for better management of their enterprises as well as capacity building for qualitative and most importantly quantitative product development. Providing women with local markets is where we want to start, proceeding to exposing them to international markets.

A challenge we are seized with and would be happy to get inputs from yourselves and beyond are packaging of specific products, including access to finance for women in a manner that ensures sustainability of women business.

May I also take this opportunity to wish you success in your deliberations, and I declare this EXPO open.

Thank you.

Issued by: Office of the Premier, Eastern Cape Provincial Government
20 April 2009
Source: Office of the Premier, Eastern Cape Provincial Government (http://www.ecprov.gov.za)