Speech by Premier of KwaZulu-Natal, Sibusiso Ndebele at the 12th International Labour Organisation regional seminar at the International Convention Centre, in Durban

All levels in the KwaZulu-Natal government have a shared objective of peace and stability, growth and prosperity. Without peace and stability, prospects for economic development and therefore job creation get hampered. In this province, we have been able to ensure that the environment for intensive-labour creation is not only created but also sustained.

Infrastructure investment

The construction of the new 2010 stadium is under way. More than 2,2 billion is being spent on the project. More than R4 billion will be spent on the construction of the new international airport and the Dube Tradeport at La Mercy. All in all we have projects in the region of close to R20 billion underway in the province.

On completion, the Dube Tradeport alone will contribute R12,4 billion to the economy and will create thousands of new jobs. If you add to that figure current and planned expenditure by the parastatals such as Transnet that figure more than doubles over the next four to five years.

The work on improving Durban's port and logistical infrastructure is well underway. The city has spent R200 million and Transnet will spend close to R1 billion over the next year in widening the harbour entrance. Over the next six years the city and Transnet will spend over R10 billion and over the next 15 years the figure is likely to be over R20 billion. In all therefore ladies and gentlemen, we are spending more than R30 billion. This is a lot of money in any one's language.

The following statistics are relevant in assessing our progress:

The Gross Domestic Product per region (GDP-R) of the province of KwaZulu-Natal is now the second largest in the country after Gauteng, and the GDP-R growth rate rose over five fold from 1 percent in 1999 to 5,3 percent in 2005. Our provincial government has managed to reduce the unemployment rate from 36 percent in 2003 to 29 percent in 2006. According to Global Insight, the percentage of people in poverty in this province (poverty rate) decreased from 54 percent in 2004 to 51 percent in 2005. The literacy rate in this province has improved to 88 percent.

Using economic growth to tackle poverty and unemployment

In spite of this phenomenal and historic growth, KwaZulu-Natal remains a province with one of the largest HIV and AIDS infected populations. We have a backlog of 26 percent houses without access to electricity. At least 44 percent of our people do not have access to sanitation while 52 percent do not have access to electricity. We stated early in the year, that the Human Development Index in KwaZulu-Natal was 0,57. This represents an improvement from 0,52 in year 1996 and means that KZN is in the medium range of human development. Yet, according to the latest figures from Global Insight, the poverty rate for KZN stands at 51,9 percent. This means that the vast majority are poor. What we know is that they remain African. Infant and child mortality rates stand at 68 and 124 per 1,000 live births, respectively. This is so, despite the significant progress being made in the provision of water and electricity and delivery of basic services to our communities.

Economic growth only has meaning when it starts to reduce levels of unemployment and reduces poverty. Economic growth only begins to have a positive if it improves the lives of our people, especially the poor. Because of our history, the eradication of poverty has been at the centre of our policies and programmes since the first democratic elections. In 2004 we identified the goal of halving poverty in South Africa by 2014. In our case we have had to undo the devastating legacy of colonial and apartheid oppression, dispossession and deliberate underdevelopment. We have also taken steps to redirect state expenditure towards meeting the needs of the poor, and to free up resources previously used to service our inherited public debt for spending on bettering the lives of our people.

It is in this context that we introduced the Expanded Public Works Programme (EPWP). The EPWP was also agreed to at the Growth and Development Summit (GDS) held in June 2003 to provide poverty and income relief through temporary work for the unemployed to carry out socially useful activities. The GDS also said the EPWP would be designed to equip participants with a modicum of training and work experience that should enhance their ability to enter the job market.

Government as a whole is now fully committed to creating one million job opportunities through the EPWP. This is one of many initiatives to bridge the gap between the growing economy and the large numbers of unskilled and unemployed people who have yet to fully enjoy the benefits of economic development. At a policy level we must increase economic growth so that the number of net new jobs created starts to exceed the number of new entrants into the labour market.

Secondly, it is to improve the education system such that the workforce is able to take up the largely skilled work opportunities which economic growth will generate.

Driven by the KZN Department of Transport on behalf of provincial government, one of the EPWP projects is the Zibambele Programme. This is a labour intensive road maintenance initiative aimed at alleviating poverty and unemployment initiated by the KwaZulu-Natal Department of Transport. Zibambele means "doing it ourselves". Zibambele targets women-headed households with an aim to provide sustainable job opportunities.

The Zibambele contractors have savings clubs which empower them to invest in business enterprises. Some of these contractors have, with the help of government, started projects like growing mushrooms, sewing reflector road safety vests and making tents.

Another of these is the Siyazenzela community-based waste management project which we launched in April 2007. The project, part of the EPWP framework, originated from travels to Brazil by government. It will result in poor households exchanging waste for food products. This programme will be piloted on the Hibiscus Coast, in Umgungundlovu and eThekwini municipalities, in KZN.

Between 1 April and December 2006, the EPWP in KwaZulu Natal had a budget of R88, 838,394 and an expenditure of R56, 661,970 over in 173 projects in the agriculture and environmental sector. During the process at least 10 986 gross jobs were created. About R635 million has been allocated to the Expanded Public Works Programme (EPWP) over the medium-term expenditure framework (MTEF) under the leadership of the Transport Department. An additional R128-million grant has been allocated to the province's infrastructure sector by the National Treasury.

The EPWP remains only one of many short to medium-term strategies put in place to contribute towards the reduction of poverty and unemployment. These include old age and child grants, housing subsidies and a host of other interventions including those under the Accelerated and Shared Growth Initiative of South Africa (ASGISA).

The Department of Social Welfare and Population Development in KwaZulu-Natal coordinates the Early Childhood Development (ECD). The EPWP in the province is providing training to ECD practitioners with accredited training in the form of learnerships. ECD services and programmes are particularly important for vulnerable children living in poverty as it can enhance their long-term capacity to participate fully in the realisation of their rights and abilities. Other EPWP programmes include the Eco-Coffin Project, under the KZN Department of Agriculture and Environmental Affairs' Invasive Alien Species Programme. The programme has tangible environmental benefits as it facilitates control of invasive alien plants, and social benefits through the creation of employment opportunities in the manufacturing of the coffins and the growing of indigenous plants for rehabilitation and healing.

Transport Department's road construction plays a vital role in the EPWP. Between New Germany and KwaMashu, there is a spot that was known as a buffer strip which was designed to keep communities apart. This spot is now being utilised to build a 14 km long dual carriageway urban arterial that will bring communities closer together and link them to new employment opportunities. Main Road 577 will span the Mngeni River and provide a new strategic road link between KwaMashu and New Germany.

Adult literacy

We have expressed our shock and disappointment that almost two million people of 15 years and above in KwaZulu-Natal are illiterate. We believe illiteracy is the starting point for dealing with poverty and unemployment. Through Masifundisane Campaign we have sought to do something on an urgent basis about this crisis. We are certain we will eradicate this phenomenon by 2009. The province has secured R100 million from the Department of Labour to empower our community in a range of areas from literacy to basic skills. There can be no adequate economic prosperity without education, skills and literacy.

Skills development

Without the necessary skills it is next to impossible to create Small, medium and micro-enterprises (SMMEs) or to encourage entrepreneurship in general. The EPWP seeks to impart skills which are necessary for people to enter the job market eventually. We believe Further Education and Training (FET) colleges are positioned to respond to the provision of scarce skills. FET Colleges in KwaZulu-Natal offer learnerships, skills programmes, National Certificate Vocational Programmes, National Technical Certificate courses, short courses and many more. All these programmes integrate theory lessons and practical training in different learning areas. These mainstream learning programmes have been accessed by 128 000 learners already. We have already trained a number of co-operatives in a variety of skills. This includes training in garment making, block making, welding, building construction, carpentry, baking, vegetable propagation, painting and general maintenance.

Our colleges have cooperation agreements with Belgian institutions in the areas of entrepreneurship support, tooling, welding and maritime initiatives. Other countries which have partnerships with FET colleges include the United States of America (USA), United Kingdom (UK), India, Europe and Australia. The Flemish model has been highly successful in creating more sustainable new small businesses and is currently being adapted for KZN conditions. The three year project will train 25 trainers from KwaZulu-Natal. In turn the South African trainers will have trained 100 SMMEs by the end of 2008 (50 at Coastal FET and 50 at Umgungundlovu FET Colleges respectively).

Once implemented, it will be rolled out to other FET Colleges. The project will contribute towards bridging the gap between the first and second economy in South Africa and is a response to poverty alleviation, job creation and economic development in KwaZulu-Natal.

Agricultural development

This province's competitive advantage lies in mass-scale agricultural development in the Second Economy. It is for this reason that KwaZulu-Natal has deliberately built relations with countries such as India and China. The central programmes of the agrarian revolution are the "Ploughing and Planting" Mushrooms and Dryland Rice, Nguni Revitalisation and Invasive Alien Species Eradication programmes. All these programmes have one common goal: Creating food security for the vulnerable and creating an opportunity to move from unemployment to employment, and ultimately to self-employment through SMMEs. We are pleased to note that the Agrarian Revolution Strategy is starting to bear fruit within the rural food security programmes.

The R60 million project funded by the Flanders government has taken food to the most impoverished districts of our province.
Considering these backlogs and the major infrastructure developments in the province, we need to ensure that there are adequate skills to execute these programmes. Imagine the job creation opportunities for our plumbers, artisans and bricklayers.

Why SMMEs?

The Ntsika Annual Review of 2000 indicates how important this sector is to the economic development of our country. SMMEs contribute about 40 percent to South Africa's Gross Domestic Product (GDP). The SMME contribution to overall employment (in the formal and informal sectors) is well above 60 percent, with 70 percent and more achieved in trade, agriculture and business services. The SMME sector has over the past 10 years maintained positive employment growth in most of the economic sectors, compared to some of the other sectors in our economy

Black Economic Empowerment

Our Government has correctly identified Black Economic Empowerment (BEE) as a means to redress historical economic imbalances. When it comes to uplifting the social-economic profile of society, no government can be neutral. But what is business doing?

Programme Director, meaningful participation of black people means in the context of the developmental province, the empowerment of particularly women, rural communities, youth, workers and the disabled. This participation can range from the creation of economic opportunity to ownership of businesses. The essence of BEE is that it must benefit the majority of black South Africans, and do this by addressing all seven pillars of the generic BEE scorecard. These are ownership, control, skills development, employment equity, preferential procurement, enterprise development.

The targets set include:
* 40 to 50 percent black representation at board and management level
* 40 to 80 percent black representation in terms of employment equity
* 3 percent of annual payroll towards skills development.

A study conducted by the Provincial Department of Economic Development provides interesting information and here are some of its findings:
* in terms of equity ownership the survey indicates that 27 percent of respondents did not feature black shareholding at all
* 59 percent of respondents indicated no black ownership
* 42 percent of respondents have not achieved the target set by government to have 40 percent blacks in management
* 57 percent did not fully disclose corporate social responsibility.

We are finalising the establishment of a provincial BEE Advisory Council as an objective mechanism to monitor progress in BEE in the province. This Council will consist of government representatives and senior leaders in the private sector. The primary aim of the Council will be to come up with concrete strategies and targets to transform the ownership structure of businesses located in the province.

Our partners in business in the province will be defining themselves against the basic criteria of transformation, and the extent to which their boardrooms are non-racial and non-sexist. In this way our partnership with business will be actively contributing to a developmental province. This is a do-able. Let us therefore together put more pressure on the accelerator of transformation.

2010 FIFA World Cup

It is estimated that the 2010 World Cup will inject more than R50 billion into the South African economy. We have taken a decision as government to ensure that young people and SMMEs are properly empowered with skills so that they are able to benefit from the economic spin-offs generated by the tournament. SMMEs and Co-Operatives are set to benefit from the upgrading of stadiums and construction of multi-purpose sports facilities. We have always reiterated our commitment to supporting youth owned SMMEs and co-operatives. At least eight Soccer World Cup matches will be played in the province. These matches will attract more than 100 000 soccer fans from all over the world. This provides endless opportunities for SMMEs and young people. Here are specific opportunities that as government we have identified:

Food and Beverages: Major KZN-based food and beverages producers have agricultural resources to draw within the province and have been able to access the international markets. During 2006 Soccer World Cup in Germany, 1 056 000 litres of beer were sold in the 12 stadiums. 5 500 000 drinks in returnable cups were also sold.

Tourism: Tourism is a R3,3 billion-plus industry in KwaZulu-Natal. South African tourism industry contributes 7 percent to the GDP and is destined to grow to 12 percent by 2014. About 8,4 million tourists landed in South Africa in 2006, 1 million more than in the previous year. Recently tourism has grown by about 10 percent annually. This is twice the global tourism growth rate. We can only maintain the predicted dramatic growth in the tourism industry if more young people and new SMME join this sector.

Information and Communication Technology (ICT): The Internet is currently being used by more than 1 billion people worldwide. During 2010 Soccer World Cup, SMME and young people can be involved in the provision of cabling throughout the stadiums, copper wiring for network; and installation of communication points and Integrated Service Digital Network (ISDN) and internet connections. Both the Zibambele ("Doing it ourselves"), Vukuzakhe ("Arise and build yourself") and Expanded Public Works Programme continue to build the infrastructure backbone of our province using an empowerment approach. We have extended this philosophical basis of the EPWP, which is increasing labour-intensity in government projects, to other areas. In line with building the Second Economy, 43 women cooperatives have been trained and are currently providing food to selected schools. If we continue along this path, I am certain that KwaZulu Natal we will be able to meet its challenge of halving unemployment by 2014.

We are pleased that in KwaZulu Natal we are part of the effort to create one million work opportunities in South Africa by 2009. We are pleased that according to the latest quarterly report of the EPWP, of the total reported net work opportunities reported, 36 percent of the total reported were created in KZN followed by the Eastern Cape (17 percent) and the Western Cape (13 percent).

This means we are well on our way towards meeting some of our goals. We are also pleased that the highest proportion of person-years of work created across the four sectors of the EPWP during this quarter was also in KZN (34 percent), followed by the Eastern Cape (14 percent). All in all most jobs were created in KZN, with relatively high concentrations in the Western and Eastern Cape provinces, albeit limited to certain district municipalities. The additional employment creation through the use of employment-intensive methods in the infrastructure sector varies, depending on the degree of labour-intensity of the production methods used.

It is clear from our presentation ladies and gentlemen that we have adopted an approach which does not limit our efforts only to the creation of non-skilled jobs through the labour intensive projects. We have adopted what we believe is a comprehensive approach to dealing with poverty and unemployment. Our approach is by no means the best solution, but we believe that we are proceeding slowly along the way towards a prosperous, non-racial, non-sexist KwaZulu-Natal in order to provide a better life for all.

I thank you.

Issued by: KwaZulu-Natal Provincial Government
8 October 2007