Building the SA of our dreams by 2030

● In contributing towards the realisation of the kind of society we want, as articulated in the Freedom Charter and our constitution, in February 2020 we presented the Growing Gauteng Together (GGT2030) plan of action. The GGT2030 is about the transformation, modernisation and reindustrialisation of the Gauteng economy. It is about building a sustainable future for all and a society characterised by equality, social justice and prosperity.

In response to the social and economic challenges brought by the Covid-19 pandemic, we have remodelled the GGT2030 plan of action. The remodelled plan was done by understanding three scenarios about the spread of the coronavirus. In the low scenario, about 0.5% of South Africans (about 300,000) will be infected. The moderate and high scenarios consider the possibility of Covid-19 infecting close to 1% and 2% of the population (about 600,000 and 1.2million) respectively. The low and moderate scenarios assume that the pandemic will be contained during the third quarter of 2020, and the economy will begin to recover during the fourth quarter of 2020.

The modelling exercise assisted in introducing bold policy measures to curb further social and economic distress in society, such as the introduction of an unemployment grant for those who have become unemployed, and making public works the employer of last resort for the unskilled unemployed.

The remodelled GGT2030 also brings the possibility of an expansion of the tourism sector; growth in the trade, catering and accommodation services sector; growth in exports for the agricultural sector; a rise in labour productivity; and the increased competitiveness of strategic sectors.

It also brings into sharp focus the need to improve industrial policy levers such as industrial financing incentives as an instrument to drive industrialisation and potentially reduce the trade deficit in the province. In the next five years, we will spend R60bn on infrastructure to create 100,000 jobs and develop 50 black industrialists.

Through industrial financing incentives, total annual investment in the manufacturing sector will increase by R10bn over the next 11 years; special economic zones (SEZs) and African integration programmes will increase total exports by 1.5% after 2020 and catalyse economic growth, employment opportunities and entrepreneurship; and the government’s Proudly SA and localisation policies will gradually reduce the import dependency ratios of some sectors by 20% over the next 11 years. Specifically, the Tshwane automotive SEZ will have a supplier park and a factory producing 200,000 vehicles a year for the Ford Motor Co by 2022. This will be made possible with a scale of investment of over R20bn by the private sector, matched by R3.7bn by the government. The R1.7bn spending on the build phase alone will be dedicated towards SMMEs, sourced from the Tshwane area and Gauteng at large.

We are also working with the Development Bank of Southern Africa and the presidency’s infrastructure division to unlock development in key nodes of the city regions. By funding the bulk infrastructure needed in areas such as Lanseria, Vaal River City and the Western Corridor, where we are investing in an agriprocessing SEZ, as well as implementing accompanying investments in the revitalisation of 15 industrial parks, 12 agri-parks and five agri-processing facilities, we envisage significant growth and employment prospects.

Overall, the road map to inclusive growth in the province should be deliberate in its efforts to improve service delivery and the living conditions of poor families in the province. This should also lead to improvements in total employment, a decline in inequality, a decline in government expenditure relative to its debt, and improved profits for businesses.

Under the modelled six-pillar policy scenarios, it is projected that the poverty rate will decline by almost 50%, from 28% to 15%, and that there will be a significant improvement in the delivery of social services (education, health, land reform, housing) and economic infrastructure across the country (roads, bridges, transportation). This will particularly improve the living conditions of poor families.

When the GGT2030 is fully implemented, the size of the economy is expected to more than double over the next 11 years, from its current size of about R1-trillion to a little above R2-trillion, in 2010 prices. The unemployment rate will be reduced by almost twothirds from the 36% (moderate Covid-19 scenario) and 42% (high scenario) in 2020 to 13% by 2030. Per capita GDP is expected to increase by 70% in real terms from about R68,000 currently to about R115,000 in 2030. The provincial poverty rate is expected to reduce by more than 40% over the next decade from 20% (moderate scenario) and 21.3% (high scenario) in 2020 to 11.5% in 2030. The high income inequality in the province is expected to decline by 12 percentage points over the next 11 years. This will be achieved through annual spending of R4bn in buying goods and services from 2,000 township enterprises, supporting 50 black industrialists, supporting 50 emerging black farmers and 20 black agri-processors, supporting 500 co-operatives in the care economy, and creating 250,000 sustainable and decent jobs.

The implementation of GPGRT2030 with discipline and the right kind of skills, including investing in knowledge as a strategic resource, will contribute to the SA of our dreams by 2030.

✼ Mbada is head of policy, Gauteng provincial government, office of the premier