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Mahlangu: Leandra Business Development Initiative & Gala Evening

6th March 2003


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Date: 06/03/2003
Source: Mpumalanga Provincial Government
Title: Mahlangu: Leandra Business Development Initiative & Gala Evening


Programme Director
His Worship, the Executive Mayor, Councillor Tsheke
Her Worship, the Executive Mayor, Councillor Mdluli
MEC Mabena
CEOs of Parastatals
The Business Community
Ladies and gentlemen

I am again truly honoured to begin the year, as I did last year, in the midst of the business community, working together to try and map out a partnership plan for developing a prosperous Mpumalanga.

In my address during the opening of the Legislature two weeks ago, I emphasised the importance of all of us working together in partnership, as a family of Mpumalanga, in order to emerge as victors in the war we are waging against poverty.

The goal of government is to strive to enable people to escape from wretched poverty, to be gainfully employed, and to enjoy a prosperous and happy life.

Poverty reduction is not only a basic social policy that is accorded special attention from the Government, but also an important component of the development objective.

You have asked me to focus my remarks on the *Role of the Business Sector in the Development of a Local Economy*.

I have no new story to tell; but only the old one, to repeat again and again.

Government, the business sector and the public must all join hands in working to foster a local business climate that improves the competitiveness and incomes of the Leandra community.

The business community, in order to do what they do best, running their businesses, has a core of basic needs.

These include:

* A stable macroeconomics climate
* A stable political and regulatory climate
* A welcoming environment
* Available sites and premises to locate their businesses
* Appropriate and reliable transportation and utilities
* Available skilled workforce; and
* Available local suppliers and resources.

Who provides many of the things listed above? All of us, in partnership.

This is the value of the partnership.

Government, at national level, has succeeded in bringing about a sound and stable macroeconomic environment.

Evidence of that stability was proven quite clearly last week when the Minister of Finance announced a business-friendly budget, especially aimed at bolstering small and medium enterprises.

Also, at the national and provincial government levels, the skills development processes and strategies are in place not just to address the high unemployment rates, but also to take a proactive step to address the acute skills shortages among our people.

It was here, in Secunda, your municipality, that the provincial skills development strategy workshop was held last year.

The provincial department of labour is waiting for you, the employers, to submit claims against the training that you are, or should be conducting, out of your contributions into the skills development fund.

The Minister of Finance, in his address, mentioned the fact that employers were moving very slowly in this regard.

You want a skilled workforce. And we, as government, are saying here is your money that you contributed, use it to train the people in the skills that are needed by your business.

This is what the government is saying. At the level of our province, we, as government, have set up a provincial training institution, the Mpumalanga Regional Training Trust (MRTT) to train your workforce on demand.

You tell MRTT what special skills you want your employees to have, and they provide the training.

Together, in partnership, we will succeed in up-skilling the workforce and creating more and better employment opportunities.

Also at the second tier of government, Mpumalanga, over the last four years in particular, and increasingly in the last two, has extended its arms towards the business community.

We have done this by channelling funds into the provincial parastatals in order to bridge some of the gaps left by what is often referred to as *market failure*.

These parastatals together with government, are there to address the business needs of the private sector operators, you.

And key among the services we strive to render are:

* Business retention visits and surveys
* Technical assistance to business
* Financial advice and assistance
* Public procurement policies and campaigns in Leandra first, then Secunda, and finally, the province at large; before going nationally and outside
* Bureaucracy reduction programmes as well as the
* Provision of sites and premises.

All you have to do is link up with these parastatals, link up with government, and interact among yourselves regarding these services.

I am also aware that some of the communities within your municipality, especially in the Secunda area, businesses are leaning more towards the procurement services.

Procurement is indeed one of the best ways to empower small and medium sized businesses.

This can be facilitated via a strict stipulation of awarding big tenders to companies that team up with small and medium sized businesses.

Through this process, it becomes easier to monitor the extent of empowerment by tracking transferred skills. And the provincial government has shown its willingness and ability to partner with the business community by establishing tender administration offices not just in the Department of Finance and Economic Affairs, but also province-wide, for ease of accessibility.

Through these offices, free advice, information and guidelines on tender procedures are readily available.

All that you need do is ask; and they will come to assist you.

All government employees know that the Batho Pele principle must be the guiding principle at all times when dealing with the public.

Moreover, to make such services even more accessible to our business community, I have, for the past three years, persisted with the Economic Forum effort as a more proactive attempt at forging these partnerships among business, government and civil society.

In these talks, I have been urging municipal residents to join forces to achieve sustainable economic growth that brings economic benefits and quality of life improvements for all in the respective municipal boundaries.

It is my ardent belief that the Local Economic Development (LED) strategy, as proffered by the Department of Provincial and Local Government (DPLG), can only succeed if Forums (or Committees) are established to bring together all the relevant stakeholders to the table.

This way, the developmental route that is adopted is a balanced one, integrated and region-or-municipality specific, taking into account resource and asset endowments of that particular area.

A successful local development strategy is therefore one that hinges on a collective effort of the public, private and community sectors; hence the need for both formal and informal structures and processes.

The Economic Forum idea is the informal structure, which ensures that all stakeholders are involved, and their voices heard, during the mapping out of the local economy's development path.

At the local sphere of government, your mayor and his councillors are here to meet your needs:

* in respect of business sites and premises
* in respect of conducive local regulations and by-laws, and
* in respect of reliable transport, water, telecommunications and electricity.

This is the partnership we must work together to enhance, so that in the end, the economy of Leandra flourishes.

This is the government-to-business partnership that we want to see and encourage.

Also, as a government, we also know that businesses want consistency and efficiency.

Many businesses now operate within a two to three year business cycle, and need to take relatively quick planning decisions. And in general, it is very difficult to establish methods of exchanging information between the different partners involved with economic development.

There is no best practice guide as to how to achieve a better understanding of the objectives between the private and public sectors.

In practice, this tends to happen informally; hence the appropriateness of the Local Economic Forum structures.

These provide an avenue for promoting dialogue between the business community and the government, local as well as provincial.

So, for their part, the private sector interests and business organisations need to show their commitment to the process of developing the local economy, and devote sufficient management time to help provide the planning authorities with a clear view of future business and industry needs.

Then there are also business-to-business partnerships that need fostering and nurturing.

In the spirit of vukuzenzele (voluntarism), more experienced businesses are urged to extend a helping hand towards the upcoming, small and medium businesses.

By twinning or forming joint ventures with them, especially via procurement, they are not only helping the smaller operators, but they are helping themselves as well.

A more viable and thriving small business sector means a more reliable supply chain for the bigger businesses that get their raw material supplies not only timely, but also more cheaply.

Furthermore, business-to-business partnerships need to be encouraged in the form of mentoring.

As business mentors, you act as sounding boards for the ideas and plans of the growing business operators.

That way, you bring your own unique experience of life and business and share your skills and know how * and your contacts as well* with the less experienced peers.

This way, the growing businesses will be helped to focus, to look at their businesses from a distance and remember what their original goals and plans were.

And by so doing, they will master the confidence they need to go forward with their plans.

Thus, the mentors' role is to support and develop, stimulate and challenge.

It is thus up to the experienced and successful businesses of Leandra to take up this challenge of mentoring seriously because you cannot be a mentor if you:

* Cannot listen and empathise with people
* Are not willing to offer encouragement, sympathy and practical advice, ideas and opinions
* Have no respect for other people's views and the flexibility to take these in your stride
* Cannot offer a supportive hands-off approach, that allows others to take responsibility for their own decisions; and if you
* Lack a willingness to offer your time and skills voluntarily for the benefit of small business owners.

But if big business does mentor the new entrants, the latter will learn to run their businesses with greater efficiency, generating more incomes and wealth, thereby yielding a win-win outcome for all.

Government also wins in terms of increased employment opportunities, poverty reduction; and, of course, a wider source of government revenue.

I also want to urge the business sector of this area to identify more opportunities for public-private partnerships (PPPs).

By forging stronger (PPPs), we in the province should be better able to combine the deployment of private sector capital and public sector capital to improve public services as well as the management of public sector assets.

We all agree that the discipline of drawing up a PPP contract between a public sector client and a private sector contractor, on the one hand, obliges the public sector to better articulate its long-term service needs. At the same time, the private sector is sure not to put its capital at risk to deliver these services until it is satisfied about the PPP's long-term sustainable performance.

Ladies and Gentlemen, I am also aware that since the completion of the N4 toll road, major PPP deals have eluded our province.

Why? We would like to hear from you.

We, as a government do ascribe to the belief that PPPs provide a flexible framework within which the skills and resources of the private sector can be mobilized to provide better quality, sustainable, and more cost-effective public services in the right circumstances. And we do want to deliver quality service at minimum cost.

Hence, my call to the local business community to revisit the PPPs issue, with a view to establish their viability not only in the Secunda municipality; but also in the province at large.

Ladies and Gentlemen, successful private enterprises create wealth, jobs and improved living standards in local communities. Private enterprise depends on favourable local business conditions to achieve prosperity.

It is our role as government to create a favourable environment for the success of business and job creation.

Let us therefore rededicate ourselves to the strengthening of this partnership among local government, business and the community, in order to foster rapid and sustained growth of our local economies.

In so doing, we shall triumph, and eliminate degrading poverty from our province.

I thank you.

Issued by Office of the Premier, Mpumalanga
6 March 2003


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