Speech notes: Economic Development, Environmental Affairs and Tourism Portfolio Committee Report and Budget 2020/2021

Issued by Yusuf Cassim, MPL
Shadow MEC for Economic Development, Environmental Affairs and Tourism

Honourable Speaker, Fellow South Africans… I greet you with the universal greeting of peace, As-salamu alaikum wa rahmatullahi wa barakatuh.

The Eastern Cape’s expanded unemployment rate as of the first quarter of this financial year sits at 48.9%. This is not a new phenomenon. Our jobs crisis has worsened year-on-year, spurred on by a flawed economic approach and inept government.

In the midst of the global Covid 19 pandemic, President Cyril Ramaphosa and his merry-band of command councilors including The Honourable ‘when-people-zol’ Zuma, subjected us all to an incoherent and irrational lockdown crisis that has since gutted our provincial economy, stripping many more of our people of their livelihoods.

The jobs bloodbath that has been raging across our province for years, the same bloodbath that I have spoken about in this House in every one of my speeches with respect to this department, has now become a jobs massacre.

The tragedy is that credible solutions have been offered, solutions that have worked for our neighbours in the Western Cape, yet they have fallen on tin ears. This whilst some of your own children have been forced to relocate to the Western Cape for a job.

As I scrutinised the DEDEAT budgets and plans for the forthcoming financial year, my heart sank. It appears even the reality of a jobs massacre cannot deter this department from pursuing the same failed strategies it always has.

The role of government and its entities should be to create an enabling environment for the private sector, and for the markets, to drive economic growth and job creation, and to back business in the province.

It should not be the role of the ECDC to act like a quasi-real estate company. They are proving this point themselves. Their property business unit sustained a R14m loss in the previous financial year and is plagued by high vacancy rates and squalid conditions. Of its 1 211 properties, 659 tenants were occupying without paying. Their own target for rental collection is an embarrassing 65%, which they will not even meet.

It should not be the role of the CDC to run a hotel or event’s management even under ordinary economic conditions. Whilst similar businesses in these sectors have had to confront the realities of the lockdown crisis, the CDC decides to increase their scale and employ more people to run unprofitable and mismanaged businesses, despite an over 80% decrease in projected revenue from these businesses.

If SAA, ESKOM, PRASA and countless other SOEs have taught us anything, it is that when government wants to run businesses, it results in lost money that could otherwise have been spent on services or lost jobs.

To make matters worse, more money is committed to bloating the bureaucracies of the department and its entities, money that should be directly spend on empowering our businesses, industries and economy.

The office of the MEC, fresh from a 12% increase to his office last year, is allocated a whopping 75% increase this time round. We are told it is to give him another assistant and to pay for increased foreign travel. Whilst I concur that the MEC probably needs all the assistance he can get; it is unclear which increased foreign travel the MEC plans to embark on when it is prohibited during the covid 19 pandemic.

The massive increases to Cost of Employment is cause for further bewilderment and includes a 12.6% increase for programme 1 and a 16% increase in programme 2 with decreases in budgets for goods and services. So as not to be outdone, the CDC increased its allocation for CoE by a whopping 18% or R50m, this follows from their R25m last year.

The same old is just not going to cut it and investors are sick of it and are taking their business and jobs elsewhere. The province hosted an investment conference hosted by the Premier whose only investment pledge was from the provincial government which hosted the conference.

Radical economic change is needed to unleash the potential of our province, bring in investment and create jobs. The kind that has been stimulated in the Western Cape.

Their tourism, trade, and investment agency Wesgro has worked tirelessly to create an enabling environment for the private sector to drive economic growth and job creation and boy has it paid dividends.

Investment into the Eastern Cape was R3.25b last year, the Western Cape attracted more than triple, R10.73b, in the same period.

Our expanded unemployment rate is 48.9%, theirs is 24.8% and whilst tourism nationwide suffered, tourism in the Western Cape remained solid.

Their achievements were because of interventions, which mirrored their ideologic clarity on what exactly the role of government should be in creating jobs.

They set up an economic war room to improve communication between the provincial and metro governments and the private sector to boost economic growth.

Their Premier expanded their province’s red tape reduction unit to all municipalities and has focused on the issues preventing small businesses and entrepreneurs from getting their enterprises off the ground, addressing technical issues that constrain growth, such as visa regimes, port fees, licensing requirements and slow planning processes. They are even going as far as developing their own ease of doing business index to track its progress in this regard.

Their businesses are also benefitting from the establishment of a cruise ship terminal at Cape Town Harbor and the efforts made by Wesgro Air Access which has seen visitors to the Western Cape soar and a greater ease of doing business.

Hon. Speaker it is clear that the outdated, ideologically muddled economic path that we are on will inevitably lead us off a cliff. We have a responsibility to follow the example set by our neighbors. In the face of joblessness that continues to rob our people of their potential and dignity, our pride and political differences must be set aside.