About R40m has been set aside to support informal businesses in the clothing, textile, services and retail sector in the Eastern Cape.
This was revealed by finance MEC Mlungisi Mvoko while tabling the 2021/2022 financial year budget and policy speech at the legislature in Bhisho on Wednesday.
With a budget of R1.6bn, Mvoko said the lion’s share would go to priority sectors as a means of economic rehabilitation.
The R40m announcement is expected to be warmly welcomed as informal businesses have been complaining about not getting support from the provincial government.
The economic development, environmental affairs and tourism department aims to target 1,000 informal businesses in 2021 and lend its support in all the six district municipalities as well as the Nelson Mandela Bay and Buffalo City metros.
Mvoko said the Eastern Cape economy was constrained and the rate of unemployment increasing, with the latest statistics reflecting 47.9% of which the youth were predominantly affected.
He said while Covid-19 had exposed glaring weaknesses in government capabilities it also challenged future planning to achieve resilience in state-owned institutions.
Reflecting on the past year, Mvoko said due to lockdowns several economic sectors were negatively affected, with the economy taking a nosedive in the second quarter and reaching lows of -49.4% in manufacturing production with retail sales dropping by 50.7%.
Overall, economic growth in the province recorded a decline of -7% in 2020.
Agriculture was one sector that showed resilience throughout as it recorded an average growth rate above 20% for the first three quarters.
The sector created 21,000 jobs in 2020.
Mvoko said the 47.9% unemployment rate — the highest in SA — was a concern.
“This calls for deliberate and focused interventions towards addressing the challenge of youth unemployment.
“There will be no smooth sailing in achieving this, considering that the economy is never static and as such requires a dynamic and flexible policy response.
“Though still low, the economic growth prospects are estimated to range between 2-3 % for 2021,” Mvoko said.
Looking forward to the year ahead, the department will continue with the implementation of approved stimulus fund projects to the value of R365.5m.
These projects are intended to boost the economy.
The perlemoen facility in Coega is one of the projects that will be funded, to the value of R206m over three years.
It would, in turn, attract R3bn in potential investments, creating 5,000 permanent jobs at full operation and 500 construction jobs, Mvoko said.
He said the department had also approved R12m funding towards additional gas concept design technical studies and reactivation of the gas environmental impact assessment work to advance gas readiness at the Coega special economic zone.
In addition, a partnership with the Eastern Cape Automotive Industry Forum and the EC Automotive Industry Development Centre remained one of the department’s top priorities to ensure growth and development in the automotive sector.
Mvoko said the development centre would implement the smart academy in Gqeberha and the automotive incubator in East London.
The East London IDZ and Coega special economic zones were primed to attract seven new investors, with investments totalling close to R1bn each.
He said the department would maintain the support programme to distressed businesses through the manufacturing support centre and Covid-19 business support portal, and the job stimulus fund with an allocation of R36m.
On the oceans economy, identified as a sector for economic growth and job creation, Mvoko said the department was seeing reasonable progress in maritime manufacturing and aquaculture.
He said economic recovery would be reinforced through tourism development.
Mvoko said R42.9m through the provincial economic stimulus fund was available for infrastructure for conservation reserves.
HeraldLIVE
Informal businesses get R40m support from Bhisho
Image: MICHAEL PINYANA
About R40m has been set aside to support informal businesses in the clothing, textile, services and retail sector in the Eastern Cape.
This was revealed by finance MEC Mlungisi Mvoko while tabling the 2021/2022 financial year budget and policy speech at the legislature in Bhisho on Wednesday.
With a budget of R1.6bn, Mvoko said the lion’s share would go to priority sectors as a means of economic rehabilitation.
The R40m announcement is expected to be warmly welcomed as informal businesses have been complaining about not getting support from the provincial government.
The economic development, environmental affairs and tourism department aims to target 1,000 informal businesses in 2021 and lend its support in all the six district municipalities as well as the Nelson Mandela Bay and Buffalo City metros.
Mvoko said the Eastern Cape economy was constrained and the rate of unemployment increasing, with the latest statistics reflecting 47.9% of which the youth were predominantly affected.
He said while Covid-19 had exposed glaring weaknesses in government capabilities it also challenged future planning to achieve resilience in state-owned institutions.
Reflecting on the past year, Mvoko said due to lockdowns several economic sectors were negatively affected, with the economy taking a nosedive in the second quarter and reaching lows of -49.4% in manufacturing production with retail sales dropping by 50.7%.
Overall, economic growth in the province recorded a decline of -7% in 2020.
Agriculture was one sector that showed resilience throughout as it recorded an average growth rate above 20% for the first three quarters.
The sector created 21,000 jobs in 2020.
Mvoko said the 47.9% unemployment rate — the highest in SA — was a concern.
“This calls for deliberate and focused interventions towards addressing the challenge of youth unemployment.
“There will be no smooth sailing in achieving this, considering that the economy is never static and as such requires a dynamic and flexible policy response.
“Though still low, the economic growth prospects are estimated to range between 2-3 % for 2021,” Mvoko said.
Looking forward to the year ahead, the department will continue with the implementation of approved stimulus fund projects to the value of R365.5m.
These projects are intended to boost the economy.
The perlemoen facility in Coega is one of the projects that will be funded, to the value of R206m over three years.
It would, in turn, attract R3bn in potential investments, creating 5,000 permanent jobs at full operation and 500 construction jobs, Mvoko said.
He said the department had also approved R12m funding towards additional gas concept design technical studies and reactivation of the gas environmental impact assessment work to advance gas readiness at the Coega special economic zone.
In addition, a partnership with the Eastern Cape Automotive Industry Forum and the EC Automotive Industry Development Centre remained one of the department’s top priorities to ensure growth and development in the automotive sector.
Mvoko said the development centre would implement the smart academy in Gqeberha and the automotive incubator in East London.
The East London IDZ and Coega special economic zones were primed to attract seven new investors, with investments totalling close to R1bn each.
He said the department would maintain the support programme to distressed businesses through the manufacturing support centre and Covid-19 business support portal, and the job stimulus fund with an allocation of R36m.
On the oceans economy, identified as a sector for economic growth and job creation, Mvoko said the department was seeing reasonable progress in maritime manufacturing and aquaculture.
He said economic recovery would be reinforced through tourism development.
Mvoko said R42.9m through the provincial economic stimulus fund was available for infrastructure for conservation reserves.
HeraldLIVE
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