COLLAPSING DEPARTMENT

Madam Speaker.

Distinguished visitors and guests.

Colleagues.

I am sorry to have to tell you that I have no good news for you today.

But they say it is better to know the truth and deal with it than to live in ignorance until everything collapses under you. And collapse is what I will be talking about, because it is my view that the Department of Economic Development in the Province of Gauteng is on the verge of collapse. And with the DED goes this government’s hopes of encouraging more jobs in this term of office.

What we have here is a failure of management and a failure of vision across the board, not just in the DED but in the Agencies that serve it.

We all know that the CEO of the DED has been suspended. But that is just the tip of the iceberg.

A helicopter view of the DED and its Agencies reveal, behind all the big talk, a very discouraging picture.

The fact is the majority of the projects of the DED and its Agencies are not working.

First we have the collapse of the Y Age project, which in this very House we were promised would create one million jobs. There are no jobs emerging out of the Y Age Project, although we are told that a few hundred may be rescued from the ashes.

Behind the scenes, we have the failure of the Gauteng Economic Development Agency (GEDA). Unlike South Africa, the rest of Africa is booming. Opportunities for exports are enormous. Yet this agency, Gauteng’s premier export  development and investment facilitation agency, is missing the boat.  In passing, it is worth noting that evidence shows that SMEs involved in exporting employ more people than non exporting ones do.

In the 2011/12 DED Annual Report, the failure of projects by GEDA to produce anything of substance is reported;

-         The Gauteng City Region’ facilitation and promotion of investment was not achieved

-         Of 8 Foreign Direct Investment projects targeted, only 3 were completed.

-         During the last quarter investment facilitation and marketing by GEDA produced a grand total of zero jobs.

On export training, we now hear that training in export readiness this year has stopped entirely because of a failure to find service provider.

The Enterprise Hub of Winterveld is a farce in the making. As my colleague Jack Bloom points out, a year after the multi million rand launch, literally nothing has been done. Now the food is gone, the marquee is gone, and Winterveld is left with a bare piece of veldt and a big pile of government promises.

Let’s take another example, the Moringa Olifiera project. This is one of Gauteng’s flagship Green Economy projects that are supposed to create many jobs in the province. It is a classic example of how the DED works and of how the DED reports on its work to us, the people tasked with oversight.

The Moringa is a tree with a high nutritional value, and with a seed that can be processed into biofuel. We in the Portfolio Committee have been told endlessly about the Moringa tree project. It is not a complicated project. You plough the land, plant the trees and harvest them. Not the DED though. The seedlings were planted some time ago, the Department claimed in the latest Annual Report. So where are the trees? Well, they were all killed by the frost, we were told this week. But new seedlings are being grown, and next spring we will try again.

It makes you want to weep with frustration.

Instead of helping small and meduiun enterprises by creating an enabling environment (the less said about the Gauteng Enterprise Propeller the better), this government makes it harder for people to run their businesses and to create jobs.

The latest blows to jobs coming from provincial government are in the proposed new liquor regulations. The proposed ban on Sunday liquor sales in restaurants is a blow to the tourism industry, both domestic and foreign. There is no link between drinking in restaurants as part of your meal and alcohol abuse. The ban makes no sense, except to a Puritan. And the ban will cost jobs.

Let us now turn to look at the Third Quarterly Report of the DED, put before the Portfolio Committee this week. What do we see?

The failure of the enterprise hubs = now reduced to 3 instead of 6.

But performance bonuses continue to be paid, according to third term quarterly report.

Don’t believe me? Then how about this quote on the third term quarterly report by our researchers: “In terms of service delivery performance, the dismal failure of the Department to realise job creation targets is of grave concern.”

In general, when it comes to SMEs and to Coops, there is too much focus on consultation and training, and too little on the impact and the sustainability of what is being done.

On the proposed Media Park – land is being acquired, but progress is slow. In the proposed BPO Call Centre  an MOU with the Joburg Expo  has been signed, but no progress on the ground; On the MOUs yet to be concluded with international companies to move to Gauteng Smart City complex, no progress at all.

The Department has failed to appoint a supplier for the Industrial Waste Exchange project. Green projects in general have ground to an almost complete halt.

The Medical Waste project has been further delayed by a mix up with appointing Green consultants.

The Consumer Protection Office is only working at half pace due to low demand due to inadequate marketing. Too few consumers know the office exists.

Where there are successes they are mostly the result of private sector partnerships – AIDC and e.g. 61 people employed at Ford T6 SMME Incubator,

We all agree that the role of government is to create an enabling environment for business; but they are not even doing this properly.

Year after year, from sizeable SMEs right down to street corner traders one of the main complaints is government ignorance of business requirements, corruption, over regulation and an incompetent bureaucracy.

There is almost a total disconnect between what GPG DED does and unemployment rate in the province .The DED claims credit when it goes down, but it is very quiet when it goes up.

Business environment company SBD released its latest survey on SMEs this week. It shows that red tape and rising administered prices (e.g. electricity) are now the two leading problems facing SMEs in South Africa. A heavy compliance burden is diverting business attention away from doing business and imposing crippling costs. Red Tape consumes 3-6% of turnover. Fully 74 % of the 500 SMEs surveyed said it had become more difficult to do business over the past year.

The national policies of the ANC are not working, and since these set the parameters for provincial government, including cadre deployment, the GPG DED is doomed to repeat failures of national government.

In MEC Kolisile the DED has probably the best leader it could have. But unless government fundamentally changes the ways that it thinks and acts, we will never make a real difference to the people of this province.

This term of office for the ANC government in Gauteng is all but over. The jury has sat, and the verdict looks grim.

Thank you.