Province of the EASTERN CAPE - ecsecc.org · • Strategic partners: DoA, RDA, IDZs, commercial farmers’ commodity groups • Programme description: Subsistence farmers need to

Provincial Jobs Strategy Summary Page 1

EASTERN CAPEProvince of the

REPUBLIC OF SOUTH AFRICA

The Eastern Cape ProvincialJobs Strategy

A BRIEF SUMMARY

Page 2 Provincial Jobs Strategy Summary

Table of contents

Purpose of the Strategy ................................................................................................................... 3

Status of the Strategy ...................................................................................................................... 3

Depth of the Jobs Crisis .................................................................................................................. 4

Causes of the continuing crisis ........................................................................................................ 4

Guiding Principles............................................................................................................................ 5

Five Pillars of the Jobs Strategy ...................................................................................................... 6

The KIPs .......................................................................................................................................... 9


Purpose of the Jobs Strategy

The purpose of the strategy document is to present the Provincial Government’s understanding of the present provincial jobs and skills crises and on the basis of this to:

• Outline,explainandjustifyGovernment’scomprehensiveapproachtotacklingthesecrises;• ShowhowGovernment’sactivitiesarebeingrampeduptoalignwiththeNewGrowthPath(NGP)jobstargets;

• Indicatesectorsandprojectswithjobcreationpotential• Providequantifiedanddisaggregatedjobcreationtargetsfor2012-15;• Identifyanddefinethepriorityinterventionsnecessarytoachievethesetargets;and• Identifykeyissues,challengesandconstraintsthatmustbeaddressedtooptimisejobcreation

outcomes.

Status of the Strategy

AdraftdocumenthasbeencompletedanddetailedKeyImplementationProgrammes(KIPs)arebeing designed. The Draft Strategy is based on key policy documents:

• TheNewGrowthPath(NGP)• TheIndustrialPolicyActionPlan(IPAP2)• TheProvincialIndustrialDevelopmentStrategy(PIDS)

An intial draftwas submitted to theEconomicDevelopmentCabinetCommittee on 19October2011. Further consultation is ongoing. DEDEAT is seeking inputs from all interested parties,includingmunicipalitiesviasixdistrictengagements.Thisarepartofthebuild-uptotheProvincialJobsSummitplannedforMay2012.

The Depth of the Jobs Crisis

Key indications of the seriousness of the current crisis include:

• NearlyonemillionpeopleintheEasternCapeareunemployed(41%intermsoftheexpandedrate);

• Thissituationisnottemporary.Ithasexistedsincethe1980s;• Thesituationwouldbeevenworsewithoutnetout-migrationfromtheProvince;• The crisis is deepenedbya largeand steady inflowof new labourmarket entrants fromourschools;

• Thecrisisisfurthercompoundedbytheskillscrisis.

Main causes of the continuing crisis

Key causes of the continuing jobs crisis include:

• Insufficientanddiminishingformalsectorjobs;• Aninformalsectorwhichistoosmalltoimpactmeaningfullyonjoblessnessandpoorlivelihoods;• Thefactthatsbout71%oftheprovincialpopulationstillliveintheformerBantustans,wheretheconditionsforprivatesectorinvestmentarenot(andneverhavebeen)conducive

• Thefactthatmorelabour-intensivemanufacturingwaswipedoutasaresultofincreasedforeigncompetition (due to trade liberalisation) and the removal of apartheid era wage subsidies to“border industries”


• Acontinuedbiastowardsskills-intensiveandcapital-intensivenewinvestments• Thefailuresofindustrialpolicies(IDZs,MIDP,NIPFetc.)tofosterasubstantial increase in the

number of industrial jobs• The failure toadequatelyeducateandskill ourworkforce.Anexcesssupplyofunskilledandsemi-skilled labourcontinues toco-existwithan insufficientsupplyofskilled labour (artisans,engineersetc.)

• Insufficientlymodernisedeconomicinfrastructureandashortageofsuchinfrastructure• Miningretrenchmentsandtheglobalrecession(sinceend2008)• Barrierstoentrytoinformalemploymentduetoinsufficientaccessoftheunemployedtoskills,entrepreneurship,marketsandcapital.

Guiding Principles

A successful jobs strategy should:

• Bebasedonanachievableeconomicdevelopmenttrajectoryandrealisticfiscalallocations• Aimatanincreasedshort-termjobcreationimpact(2011-14)andbeyond2014(don’tneglecttheplanningandimplementationoflonger-terminfrastructureinvestments)

• Focusoncreatingnewjobswherethereare(orcouldbe)viableenterprises• Supportidentifiednewjobcreationpotentials,whilesimultaneouslyalsohelpingtoaddressmajor

constraints• Include economic potential based on the Easter Cape’s natural “economic catchment area”(“Gatewayconcept”)intermsofresources,feedstocksandmarkets

• Ensureavailabilityofcompetitively-pricedfeedstocks/rawmaterialsinmanufacturing,agricultureandagro-processing;infrastructureandotherjob-creatingsectors

• Includethedevelopmentofstrategicstakeholderpartnershipsandalliances• Developandutiliseappropriateinstruments• Specifyprovincialstrategicprojectsandtheirroleintransformingtheeconomiclandscape• Bespatiallybalanced,butwithabiastowardsareaswithhigheconomicpotential• IncludearobustandeffectiveJobsMonitoringFramework.

An Overview of the EC Jobs Strategy:

Five Strategic Pillars

Theproposedstrategyhasfivestrategicpillars:

1. Jobsretention2. NewJobs3. Social Economy4. Economic Infrastructure5. Skills Development

Pillar One: Jobs Retention

Labour-intensivemanufacturingcompanieswerecloseddownduetoincreasedforeigncompetition(duetotradeliberalisationinthe1990s)andtheremovalofapartheidwagesubsidiestoso-called“borderindustries”.Furtherde-industrialisationthenoccurredbecauseofglobalrecession.


It isnownecessarytobuildproperlyresourcedanddedicatedcapacitytopreventtheclosureofcompaniesthatcanbesupportedtomedium-termviability.

Pillar Two: New Jobs in Priority Sectors

Potentialnewjobcreationopportunitiesandconstraintsarehighlightedinsevenmainareas:

• Minerals• Energy• Agro-industrialvaluechains• Forestry• Manufacturingindustry• Greenindustries• Servicesincludingtourism

Thestrategypaysparticularattentiontothedevelopmentofmineralsandenergyresourceswithinthe catchment area of the Province for industrial job creation. These resources are:

• ManganeseandironorefromNorthernCape• Molteno-Indwecoal• Karooshalegas

The above diagram indicates the potential for Port Elizabeth and its Coega IDZ to act as the “gateway” to minerals and energy resources in the hinterland.


Pillar Three: Social Economy

TheaimistoincreasethenumberofjobssupportedbyGovernment,through:

• Ahugescale-upintheExpandedPublicWorksProgramme(EPWP)• Theincreasedconstructionofsocialinfrastructure• TheincreasedconstructionofRDPhousing• Improvedemploymentoutcomesfromgovernmentprocurementofgoodsandservices• Strengthenedsupporttoco-ops.

Pillar Four: Economic Infrastructure

Theprovisionofeconomicinfrastructureprovidesastimulustojobcreationintheshort-termduringinfrastructureconstruction.Itisalsonecessarytosupportincreasingactivityinagrowingeconomy.Inadequate infrastructurecreatesbottlenecksand reduces theeconomiccompetitivenessofourenterprises.

AsidefromtheIDZsandNgquraporttheEChasseenlittleneweconomicinfrastructureinvestmentoverlast30years.

Pillar Five: Skills Development

TheNationalSkillsDevelopmentStrategy3(January2011)haseightgoals:

• Improvedskillsplanning• Increasedaccessto(andimprovedqualityof)vocationalprogrammes(trainingofartisansetc.)• IncreasedenrolmentsatFETcollegesandimprovedtrainingquality• Higherlevelsofliteracyandnumeracy(ABET)toenableadditionaltraining• Increasedworkplace-basedtraining• Moreandbettertraininginitiativestoco-ops/communityprojectsandsmallenterprises• Improvedpublicsectorskills• Improvedcareer/vocationalguidance.

Skilling for Job Creation

Asthetablebelowindicates,ourskillspipelineisbroken:

StageNumber of

people Comments

Grade2enrolmentsin2000 234000

Grade10enrolmentsin2008 152000

Matricpassesin2010 37000

Bachelor Degrees 5000 1,400science,engineeringandtechnologydegrees

Diploma/highercertificate 13000 Assuminga50%passratefromthoseeligibletoenter

FET College graduates 7000 2,000inengineeringstudies

SETA learnerships 2000

NSFinitiatives 6000 Short courses for unemployed

EC Strategic Skills Project 1000


Pillars and KIPs

Five Pillars

Job

Ret

entio

n

New

Jobs

Soc

ial

Eco

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Eco

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fras

truc

ture

Ski

llsD

evel

opm

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Jobs per year: 3,000 14,000 35,000 12,000 10,000

12

KIP

s

1.JobRetention

2.Agro-processing

3. Forestry

4. Industrial

5. Services

6. Social Economy

7.EconomicInfrastructure

8.SkillsDevelopment

9.WildCoast

10.EnterpriseDevelopment

11.LocalProcurement

12.JobsData


Selected KIPs

Agro-Industrial Value Chains Programme

• Convenor: ECDC

• Strategic partners: DoA,RDA,IDZs,commercialfarmers’commoditygroups

• Programme description: Subsistence farmers need to be linked to value chains.

711,000 people in the Eastern Cape engage in subsistence agriculture. The aim is to link aprogressively increasing proportion of these. A strong professional team must be established to drive this

Job creation estimates:

• Atleast5000jobs/livelihoodsPAinthenextfewyears,increasingthereafter. • At least2,000 jobscouldbecreated just insupplying thenecessaryvolumeofsoya to the

existingbio-dieselplantinBerlin.

Forestry Progamme

• Champion: RuralDevelopmentAgency(contemplated)

• Strategic partners: DAFF,DWA,DTI,IDC,ECDC,Corporates(Sappi,Merensky,PGBison)

• Programme description: WorkwithSappi,MerenskyandPGBisontoestablish100,000haofnewcommunityafforestation.

• Job creation estimates: 20,000jobs(over10years)

• Priority interventions

• Facilitationofcommunityforestry • Landownership • DWAforestrylicences • Funding

Industrial Jobs Stimulation Programme

• Champion: DEDEAT

• Strategic partners: ECDC,IDZs,IDC,DTI,AIDC,existingmanufacturingindustry

• Programme description: The industrial jobs incentivewasrecently launched in2011,andatthisstagecomprisesanindustrialjobsincentiveequaltoR10,000payableforeachprovennewindustrialjobcreatedintheProvince,targetingthenon-automotivemanufacturingsector,greenindustriesandagro-industries.


TheprogrammewillbeextendedtoincludeIPAP2-relatedinitiatives,andinitiativestobefundedfromNationalTreasury’sJobsFundandDTIsEmploymentCreationFund

• Job creation estimates: 39,000 manufacturing jobs over the next three years and 11,000constructionjobs(ProjectMthomboandManganesesmelter)

Sector / Area Construction Full time/year

NewECindustrialjobsincentive 4000

NewIDZjobsincentive 4000

Automotive Cluster Initiative 1000

ManganeseSmelter- 1000 400

Project Mthombo 10000 2000

Informal manufacturing 2000

OtherIPAP2initiatives

TOTAL 11 000 13 400

Economic Infrastructure: Preliminary Jobs Targets

Sector/AreaEstimated Job

Creation potentialComments

NgquraPortexpansion 1000Ongoing;constructionoffutureberths dependent on demand

LogisticsCorridor(PE-Gauteng) 1000Ongoing;includesdedicatedmanganeseline(approved)

Motherwell-CoegaPRASArail-link 500 Approved

PEWaterfront 5000

Commence construction in 2013?Tenyearproject;jobsimpact should increase in outer years

R72-N2TollRoad 5000 Designed and costed: R5 billion

Upgrade EL Harbour 3000R4.9 billion allocated by Transnet?

N2TollRoad 6800 R9billion;3yearcontract

WildCoastMeander 3000 R4.1billion

30large-scalerenewableenergyprojects 3000

NtabelangaDam 4000 R1billioncost

Otherconstruction(includingprivatepropertydevelopmentcatalysed)

2000

TOTAL 34 300


Social Economy

Social Economy: Potential New Jobs

SectorExisting Jobs

ImpactPotential newjobs (2011-14)

EPWP 49000 105000

Social Infrastructure 46000 5000

RDP housing 9000 4000

Government Procurement 15000 12000

Co-ops 5000 2000

TOTAL 124 000 128 000

Jobs Data Programme

• Champion: DEDEAT• Strategic partners: ECSECC,DR&PW,DBSA,SITAetc.• Programme description: Ensure that the implementation of the Jobs Strategy is supported by relevantandreliabledataflows

• Priority interventions:

° Amathuba Jobs Portal (DR&PW): skills intelligence gathering & job/training opportunitiesmatching

° JobsStrategyMonitoringandProjects/InterventionsDatabase ° Provincial Labour Markets Research Unit ° TheAmathubaJobsPortalaimstomatchdiscouragedunemployedyouthtoworkandtraining

opportunitiesinGovernmentDepartmentsandtheprivatesector.Theportalwillbeweb-basedandwork-seekerswillberegisteredineachoftheProvince’s715wards,withtheassistanceofNYS,DBSAandSITA.DR&PWhasallocatedR30milliontothisprojectinFY2012-13.

Concluding Remarks

Thepreliminarytargetofthestrategyis150,000newjobsby2014.ThiscanrealisticallybeachievedandisalignedtotheNGPtargets.Alotofworkmusthoweverstillbedone.Furtherworkincludes:

• DesigningoftheKIPs• Furtherstakeholderconsultation• Resourcemobilisation• PreparationsfortheJobsSummitinMay2012


Who to contact

Pleasesubmitallenquiresandinputsonthisdocumentto:

Ms Mickey Mama at 071 880 [email protected]

12GloucesterRoad,VincentEastLondon,5247Postnet,Vincent,P/BagX9063SuiteNo3025246,Vincent,5247

Tel+27(0)437013400Fax+27(0)[email protected]


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© 2012 Eastern Cape Socio Economic

Consultative Council

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Province of the EASTERN CAPE - ecsecc.org · • Strategic partners: DoA, RDA, IDZs, commercial farmers’ commodity groups • Programme description: Subsistence farmers need to