GGDA's plans to reignite Gauteng's economy
The acceleration forms part of the province’s 2030 vision of “Growing Gauteng Together” (GGT) with priorities centred on “The Economy, Jobs and Infrastructure”. This has seen the manufacturing sector earmarked as the key driver of the province’s economic resuscitation, in the next normal.
The GGDA has a leading role to play as an implementing agency; to facilitate business enablement, the development of small, medium and micro enterprises (SMMEs), increased investment and job creation. The GGDA’s plans are in alignment with the announcement made by the State President, Cyril Ramaphosa on 23 June 2020; during which he identified Sustainable Infrastructure Development as a catalyst to reignite the South African economy.
According to the World Trade Organisation (WTO), the manufacturing sector accounts for 13% of South Africa’s gross domestic product (GDP), with Gauteng accounting for 45% of the country’s total base.
As the fourth largest sector in Gauteng, it accounts for 14.5% of formal sector GDP output. Notably, the sector serves as an engine and input into other industries such as Agriculture and Mining. Since 2014, 6 out of 10 Foreign Direct Investment (FDI) projects in Gauteng have been directed to the manufacturing sector and its subsectors.
The GGDA states that 55% of the exports from manufactured goods out of South Africa, come from Gauteng; and that one (1) in nine (9) jobs created in Gauteng emanate from the manufacturing sector.
A new way of business
Mosa Tshabalala, group chief executive officer of GGDA says, “The next normal requires a new way of thinking and conducting business differently through multi-disciplinary, solution-led approaches that are implementable within set timelines. It is therefore absolutely vital to create a conducive ecosystem, in collaboration with all key internal and external stakeholders from various industries; including the private sector.
We believe a conducive ecosystem is one that enables the ease of doing business in a sustainable manner by providing collaborative and leveragable opportunities amongst, and for SMMEs – to help stimulate innovation and competitiveness. More importantly, a conducive ecosystem must foster the enablement of access to markets and procurement opportunities for SMMEs; to enable them to build sustainable value chains.”
While South Africa’s July 2020 Manufacturing Purchasing Managers Index (PMI) by Absa fell to 51.2% from 53.9% in the month prior, business activity signals slow recovery. Greater support for SMMEs who bear the brunt of the lockdown has never been more critical.
It is against this backdrop that GGDA’s support focuses on catalytic sub-categories of the manufacturing sector such as the automotive sector, mineral beneficiation, capital equipment, agro-processing, pharmaceuticals and tertiary services such as the BPO, ITC services, tourism and the knowledge economy.
Furthermore, the GGDA is endowed with subsidiaries that strategically drive growth in these sectors, for example, The Innovation Hub which plays a key role in high technlogy sectors as a catalyst for innovation. The AIDC manages the Automotive Supplier Park (ASP) and assists in automotive investment facilitation, skills development and training, incubation programmes and supply chain development. The Gauteng Industrial Development Zone (GIDZ) at the OR Tambo precinct focuses on mineral beneficiation and export-oriented, value-added industries.
Additionally, the GGDA has created one-stop-shop under the banner of InvestSA Gauteng to remove red tape and administrative bottlenecks that Gauteng-bound investors are likely to face.
Special Economic Zones fast-tracked
The GGDA is fast-tracking the implementation of Special Economic Zones (SEZ) across the province to support manufacturers; providing them with the necessary infrastructure, policy advocacy and opportunities that are integral to growing their businesses.
The SEZs are strategic apex programmes for accelerating and stimulating inclusive economic growth in the Gauteng City region. This has seen the expansion of the OR Tambo International Airport (ORTIA), SEZ (Ekurhuleni), establishment of the High Tech SEZ (Tshwane), the Vaal SEZ (Sedibeng), and the Tshwane Automotive SEZ. These programmes form an integral part of realizing the strategic goals as set out in the GGT2030, aimed to boost manufacturing across the province.
The SEZs are supported through high impact priorities such as:
- Economic development which delivers sustainable jobs, encompassing job creation and job enablement;
- Skills development for SMMEs aimed to transform value chains within targeted sectors, with emphasis on building the ‘skills of tomorrow, today’;
- Innovative enterprise development; to help build sustainable businesses that are enterprise and supplier development driven;
- Economic infrastructure development which is geared at executing capital projects;
- Increasing the export of locally manufactured goods by highlighting SMME export opportunities and facilitating supply and demand based development;
- Increased investment into the province, with a greater focus on retention through the development and implementation of an investor aftercare strategy;
- Developing a holistic approach to the enablement of the Township Economy; underpinned by a heightened focus on young entrepreneurs and woman-owned businesses.
“We are pleased about the milestones being realised from the SEZ programmes, other projects and priorities we have embarked on in 2019 such as the; Tshwane Auto City and PWV 15 Road. We are particularly excited about the green shoots that are emerging in the midst of the lockdown. This supports GGDA’s quest to create a pipeline of SMMEs and entrench localisation in the sector; targeted training, trade facilitation and aided investment; by creating much needed linkages between investors, SMMEs and large enterprises. At GGDA, we recognise that efforts to reignite the Gauteng economy and accelerate growth require all hands on deck in collaboration with all key stakeholders, to ensure we build a sustainable business environment,” concludes Tshabalala.
As at 31 March 2020, the GGDA facilitated 19 investment projects worth R7.4 billion of which R1.2 billion went into the manufacturing sector. This resulted in valuable trade activities worth R1.8 billion in transitions; of which R1.13 billion was spent within the sector.