New EL factories to create 3,000 jobs
Optimistic picture for SMMEs, youth employment and cannabis growers
The establishment of 14 new factories in the East London industrial development zone will create 3,000 jobs by the end of March 2021 — a development that the Eastern Cape government hopes will assist in alleviating the unemployment crisis in the province.
Addressing the province’s 39.5% unemployment rate was high on premier Oscar Mabuyane’s agenda as he delivered the state of the province address (Sopa) in the Bhisho legislature yesterday.
Mabuyane also announced that 18 investors at the Coega IDZ were ploughing R2.6bn into the provincial economy.
Mabuyane pinned his hopes for job creation on small businesses, saying his administration was cutting the red tape that had hamstrung the development of some small enterprises.
Small businesses owners have previously stated that only established construction companies were doing business with the state — a move that meant they did not improve their CIDB (Construction Industry Development Board) grading.
Speaking about the 14 factory projects in East London, he said these were already under construction and an estimated 3,000 people would be employed.
He said the projects were funded through the R1.4bn department of trade & industry’s special economic zones’ fund “to unlock private sector investment of R3.4bn”.
“In essence, by the end of 2021, the Eastern Cape province will see an additional 14 new factories being operational in the East London IDZ, the bulk of which will be in the automotive sector. An additional 1,600 people, particularly the youth, will be employed permanently to work in these factories,” he said.
Mabuyane welcomed the multibillion-rand investment by VM Automotive in Berlin, which had already injected R450m for the construction of a factory to supply aluminium and steel blanks to MercedesBenz.
Mabuyane delivered his Sopa just weeks after Stats SA released bleak unemployment figures for a nation shedding more jobs than was creating.
The jobs bloodbath has seen 100% black-owned East London ICT company Yekani Manufacturing opting to go into business rescue after a struggle to pay its debts and workers earlier this year, and tyre makers Goodyear and Continental, as well as pharmaceutical giant Aspen Pharmacare, have retrenched, or are retrenching, workers this year.
Mabuyane was optimistic that the province would turn things around.
“Our challenges are not insurmountable and if we all have the right minds in place, we can overcome them.”
The premier described SMMEs as “a fountain for job creation”.
“The application processes of government development finance institutions are too cumbersome, hindering their (SMMEs) growth and productivity,” he said to applause.
“We will develop a system that will fast-track allocation of funds to deserving businesses.”
Mabuyane said during his term in office, which ends in 2024, his administration would work tirelessly to create jobs, especially for the youth. This would be done by using the R1.1bn Bhisho approved for the provincial economic stimulus fund and “making a consolidated investment of R41bn for the development of infrastructure in the six districts and the two metros over the medium term expenditure framework in line with the district development model”.
Finance MEC Mlungisi Mvoko would reveal details in his budget speech early next month, Mabuyane said.
The stalled Umzimvubu water project would also finally get off the ground, he promised.
Mabuyane is also placing his faith in the cannabis industry to help grow the provincial economy.
“We have directed our special economic zones [Coega in NMB metro and the ELIDZ] to be aggressive in attracting investors under the current legislative regime, which permits cannabis production in a controlled climate. The establishment of a Wild Coast SEZ is progressing very well, and we intend to use it to unlock the entire agriculture value chain on the eastern side of our province.”
Mabuyane also promised to “invest significantly” in public transport facilities to transform taxi ranks into economic transport nodes, saying four interregional and inter-modal public transport terminals would be established in East London, Port Elizabeth and Mthatha.
He said the waterfronts in Buffalo City Metro and Nelson Mandela Bay Metro would be significantly improved to attract investors and boost tourism, and small towns would not be left behind.
Mabuyane said the province would create 478,000 jobs over the medium-term expenditure framework “to fight poverty among vulnerable groups”.
“We will not rest until all those who enter the labour market find jobs. We will not rest until we have a capable and ethical state that serves the interests of the people.”
The application processes of government development finance institutions are too cumbersome, hindering growth