Industry is the backbone of the Ekurhuleni metro
The City of Ekurhuleni has developed ambitious economic development plans to tackle its high unemployment levels, which sit above the national average at an uncomfortable 28.8%, and are the highest in Gauteng.
The decline in traditional economic activities — primarily mining and manufacturing — present it with particular challenges. In the past 10 years its manufacturing sector has declined by 9.3%.
Delivering his Budget Speech last week, MMC for Finance Moses Makwakwa said Ekurhuleni contributes 25% of the provincial GDP and 8% to national, mainly from the manufacturing, construction and transport sectors.
“Although manufacturing has displayed a trend of falling contribution to employment since 1996, it remains central for our employment goals,” he said. “Metal products, machinery engineering and manufacture, and industrial componentry could have a comparative advantage, hence [they are] being supported through [the] government industrial policy to drive up production and investment in this sector, as well as skills development and local participation.”
In order to realise this potential, the city has designated re-industrialisation as one of the five pillars of its Growth and Development Strategy.
Ekurhuleni executive mayor Mondli Gungubele elaborated upon these revitalisation plans in his state of the city address in April, saying that the Ekurhuleni Investment Centre had registered and facilitated 12 large-scale, multi-billion projects that have the potential to create more than 287 000 jobs over the next 15 years.
These projects include the Prasa-Gibela rolling stock manufacturing project in Dunnotar, which will manufacture 3 600 locomotives.
Apart from its industrial sector, the township economy is also seen as a potential driver of economic growth.
“Given the strategic objective of positioning our city as a preferred destination for growth and development, as well as to accelerate job creation, skills development and township economic development initiatives, the department of economic development has been at the forefront of facilitating business growth and youth development, and forging partnerships between the public and private sectors,” said Makwakwa.
“Our investment in the Township Enterprise Hubs includes industrial parks, fabrication laboratories and business incubation centres. In this regard we have allocated R67-million towards the relevant infrastructure and a further R82-million towards the promotion and facilitation of economic growth.”
Gungubele said the focus was on the five township complexes of Ekurhuleni, primarily on the development of Township Economic Hubs.
Thus far, the Thokoza Enterprise Hub and Tembisa Enterprise Hub have both been completed, with the Duduza, Barcelona (Etwatwa) and Khulisa (Vosloorus) hubs currently under construction.
These hubs would comprise industrial parks, fabrication laboratories, business incubation centres, skills development centres and trading facilities to enhance the identified economic nodes in the five township complexes.
“Furthermore, training, mentorship and support services are also extended to local enterprises especially SMMEs, co-operative and emerging farmers in partnership with our strategic partners SEDA, SEFA, Anglo-Zimela, The Business Place and SEDA Construction Incubator,” the mayor said.
Makwakwa announced in his budget that the R2.9-billion “Mintirho Ya Vulavula” (in Tsonga this means Deeds Count) Community Economic Transformation Package would create procurement opportunities from pre-qualified businesses owned by youth, women and people with disabilities, co-operatives and community owned business.
This ring-fenced procurement budget includes:
• R1-billion for Youth-owned Enterprises (targeting at least 1 190 businesses);
• R589-million for the Community Works Programme;
• R500-million for Learner Contractors under the EPWP Vukuphile Programme (targeting at least 40 businesses);
• R500-million for black industrialists (targeting at least 50 businesses);
• R101-million for the Lungile Mtshali Community Development Programme (targeting community businesses in 101 wards);
• R100-million for Community Social Entrepreneurship through Grant-in-Aid (targeting at least 500 local businesses); and
• R115-million for the Job Fund Leveraging Projects and Programme implementation.
The plans to build a more inclusive and diverse local economy is being supported by the establishment of 20 Youth Empowerment Centres and 14 Youth Empowerment Offices in partnership with the National Youth Development Agency, to provide both financial and non-financial support to local youth.
Small business development remains a central pillar of Ekurhuleni’s strategy of growing and diversifying its economy. This has been achieved to varying degrees through some key projects that support difference sectors.
Drawing on the region’s mining heritage, the Ekurhuleni Jewellery Project is an incubator established in partnership with Rand Refinery, Mintek, Ekurhuleni City and SEDA. It aims to enhance beneficiation in metal and stone to produce quality jewellery, and has attracted 20 people so far.
In a similar fashion, the Lepharo Base Metal Incubation project is supporting 51 people involved in the programme. It manufactures base metals such as brass, aluminium and other metals for components.
The Ekurhuleni SEDA Construction Incubator, established in May 2014, has attracted 33 enterprises that are receiving training and development to help them enter this vital industry sector.
Two projects will be launched soon. The Chemical Incubation Programme includes two manufacturing hubs, at the Thokoza Fabrication Laboratory and Sedibeng Industrial Hive Centre in Tembisa. The second project in the pipeline is the APL Shipping Incubation project, focused on the freight forwarding value chain.