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Date : 09/09/2004
Source: Eastern Cape Provincial Government
Title: N Balindlela: Launch of Provincial Growth & Development Plan


PGDP LAUNCH - OUTLINE OF PROVINCIAL GROWTH AND DEVELOPMENT PLAN BY THE HONOURABLE PREMIER MRS NOSIMO BALINDLELA, 9 September 2004

We are gathered here today to celebrate the launch of our Provincial Growth and Development Plan. This Plan will serve as our blueprint for growth and development over the next ten years, and will be the basis around which we will give effect to "The People's Contract to create work and fight poverty".

My input will walk you through the key elements of the PGDP. In this regards I will speak to:

the challenges that it addresses;
the quantified vision, targets and six planks of the strategy;
the programmes that have been packaged and budgeted for in our MTEF;
the institutional arrangements that have been put in place to drive PGDP implementation and ensure policy compliance.

The Eastern Cape economy very much conforms to the President's metaphor of "two economies" - a modern industrial, financial, and services sector located in Buffalo City and the Nelson Mandela Metropole, and a "marginalised" economy located primarily in the former bantustans, characterised by underdevelopment, containing most of the population, contributing very little to GDP, and being incapable of self-generated growth and development.

This uneven development is a direct result of the apartheid growth model that condemned the role of the Eastern Cape to being a supplier of unskilled labour for industrial development elsewhere in the country (centred around the Pretoria - Witwatersrand nexus).

By way of example, the four ISRDS nodes - OR Tambo, Chris Hani, Ukhahlamba, and Alfred Nzo - together contribute less than 8% of secondary output; yet contain 70% of the population. All these district municipalities have significant potential for growth of resource-based industries (such as agro-processing, forestry, and tourism). But these sectors remain underdeveloped. Instead public services and informal trade remain the dominant economic sectors in these regions - neither of which provides the basis for sustained and job creating growth.

The fact that large numbers of our Provincial population are not participating in wealth creating entrepreneurial activity is economically costly, and compromises the revenue base of many of our rural-located municipalities. This in turn increases dependency on state-sponsored safety nets, and limits the resources we have available for infrastructure and economic development.

The PGDP is aimed at turning this situation around through a number of innovative measures that transfer skills and productive assets to the poor in order to facilitate their participation in the economy.

Partnerships will be key to making the PGDP work. This will require new forms of co-operation between the spheres of Government, as well as partnerships with the private sector. We will also need to be more proactive in influencing the investment decisions of our public entities (such as the DBSA and IDC) in order to crowd in resources for PGDP programmes.

We have set bold targets to grow our economy and reduce levels of poverty and unemployment.

Key among these targets are the following:

* Economic growth rate of 5-8% per annum
* 80% reduction in the number of households living below the poverty line by 2014
* Food self-sufficiency of the Province by 2014 with a particular focus in OR Tambo and Alfred Nzo DMs
* Clean water for all by 2008
* Elimination of sanitation backlogs by 2010

In order to deliver on these targets, a clear strategy has been developed, articulated in the Framework for Growth and Development 2004-2014.

The Strategic Framework argues for interventions along six "planks" or strategic focus areas - these being:

* Agrarian Transformation and Food Security;
* Poverty Eradication;
* Manufacturing Diversification and Tourism;
* Public Sector Transformation;
* Infrastructure Development; and
* Human Resource Development

I will now present the essence of each strategic focus area, and provide details of the Flagship Programmes that have been packaged, and in many instances are already being implemented.

Agrarian Transformation

One of the keys to poverty eradication lies in the rapid transformation of the agricultural sector. The challenge of poverty requires a focus on the growth of the agrarian economy in the former homelands through:

* Programmes to promote household food security by expanded smallholder production. Here we are busy implementing the Siyazondla Comprehensive Nutrition Programme which next year will see 5000 of the Province's poorest households producing their own food
* Development of commercial agriculture through optimum use of the highest potential agricultural land in the former homelands. Here we have Massive Food Production Programme which this year has the target of putting 20 000 hectares of land in our impoverished rural areas under maize cultivation
* A focus on land redistribution and land tenure reform to release land for poor households and for new commercial farming enterprises
* The promotion of industrial crops, such as cotton, hemp and sugarbeet, for the stimulation of agro-industry.

Poverty Eradication

Poverty is primarily characterised by a lack of access to opportunities for a sustainable livelihood, and eradicating the deep and pervasive poverty of the ex-homelands and underdeveloped townships of the Province will serve as a foundation for economic development in which all the people of the Eastern Cape can participate. Our approach to poverty will focus on actions that:

* Establish greater control over and access to decision-making processes by poor people
* Strengthen the income, asset and skills capabilities of the poor
* Accelerate access to basic services
* Create work opportunities and thereby reduce the dependency of the poor and marginalised on the state

Our Flagship Programmes is the Expanded Public Works Programme that aims to provide work opportunities and skills development to 200 000 unemployed persons over the next 5 years.

Also in this strategic focus area, we are delivering programmes that accelerate delivery of housing and water and sanitation, provide support and care to victims of sexual assault and violence, as well as mitigate the impact of the HIV and AIDS pandemic.

Manufacturing Diversification and Tourism

The manufacturing sector requires consolidation by extending growth beyond a relatively small number of volatile export markets. Diversification into new markets can be achieved through three main strategies:

* Consolidating the value chain and supply chain in existing markets by identifying inputs that can be supplied and higher value products linked to existing production
* Creation of regional growth points for manufacturing development based upon availability of raw materials, skills and existing industrial profile
* The development of agro-industries based upon expanded agricultural production in the former homelands.

Moving forward we have packaged programmes to give effect to these strategies. Among the Flagship Programmes include an Auto-Sector Support Programme, the Timber Industries Development Programme, and Information and Communications Development Programme, an Agro-Processing Programme, as well as an Enterprise Finance Programme to provide much need financial support to SMMEs and co-operatives.

The development of provincial tourism has high potential to create employment and raise incomes in rural areas through community tourism programmes. The development and protection of existing and new parks and reserves, improvement of infrastructure, especially along the Wild Coast, and the development of a strong marketing brand showcasing a number of core attractions and themes are priorities.

Infrastructure Development

The aim of this plank is to package and deliver, in the short to medium term, catalytic economic infrastructure projects to kick-start and sustain growth in key sectors and sub-sectors of the provincial economy. These include strategic transport infrastructure projects, particularly rail and road projects, aimed at building development corridors between our developed and underdeveloped regions.

Key projects here include Kei Rail, as well as proposed rail linkages between Buffalo City and Nelson Mandela Metropole, as well as between these cities and Gauteng.

We will also be further consolidating the logistics hubs of East London IDZ and Coega, as well as looking into the feasibility of other mega infrastructure projects such as the Trans-Karoo Water Transfer Project and the Umzimvubu hydro-energy project).

We will be looking to partner with our national departments, municipalities, public entities and the private sector on all these ventures.

Human Resource Development

Human resource development underlies both poverty eradication and growth in the key economic sectors through:

* Improving levels of general education by full universal primary education (UPE) and a higher uptake of further education
* Increasing the intermediate technical skills needed in the key growth sectors of the economy
* Promoting the high level skills needed for further growth in the modern, export oriented sectors.

Flagship programmes that have been packaged for in this strategic focus area include Critical Skills for the Public Sector Programme; the FET Transformation Programme; Adult Basic Education and Training, as well as the Early Childhood Development Programme.

Public Sector Transformation

The transformation of the state is a crucial condition for growth and development by way of the strong leadership role that is required from government institutions, recognising:

* Improved capacity to plan, manage, and monitor implementation is necessary at all levels of government
* Local government will increasingly become the main focus for service delivery. Planning the phased delegation of powers and functions therefore becomes a key challenge
* Local authorities will have an increasingly important role in promoting local economic development through the implementation of integrated development plans (IDPs)
* Participation by the provincial social partners in planning and implementation needs to be institutionalised.

Key measures to be undertaken for the first MTEF include:

* Service delivery improvement in the Eastern Cape Departments of Health, Education, Social Development and Public Works;
* Establishment of a Planning, Co-ordination and Monitoring Unit in the Office of the Premier to drive implementation of the PGDP;
* Co-ordinated support to develop local government capacity, which will be a key condition for progressive delegation and assignment of powers and functions to the local sphere of government;
* The development of a provincial monitoring and evaluation system to ensure policy compliance to PGDP;
* Strengthening our Clusters to co-ordinate planning and budgeting of our integrated programmes
* Effective mainstreaming of gender, HIV/AIDS and the environment in all PGDP programmes, including detailed programme design, implementation, and monitoring
* Continued engagement with all the provincial social partners to ensure their continued participation in the PGDP.

In conclusion, I would like to thank all our partners who made our Plan come together - the UNDP, DFID, our Executive Council, organised business, labour, the NGO Coalition, SALGA and our municipalities, ECSECC, ECDC, DPLG, our Provincial Departments, the Director-General, among others.

Together we will defeat poverty.

Issued by: Office of the Premier, Eastern Cape Provincial Government
9 September 2004

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