Gauteng Premier David Makhura says plans to establish a bank owned by the provincial government will form an integral part of the administration’s turnaround strategy to grow the economy and create much-needed jobs.
The bank would replace the Gauteng Enterprise Propeller (GEP), the province’s flagship agency aimed at supporting small business growth, as the main funder of small- and medium-sized enterprises (SMEs) and township businesses.
Speaking to the Mail & Guardian on Tuesday — a day after he delivered his State of the Province address — Makhura criticised the current model used by the GEP, saying it has failed to meet the province’s economic targets, including addressing slow job creation.
In his address, Makhura said Gauteng needed to create 5 400 jobs daily to deal with the unemployment crisis, which mainly affected the youth. The unemployment rate in Gauteng is 29.1%, of which nearly two million are young people.
“The Gauteng Enterprise Propeller is currently not able to provide support to business and SMEs and township enterprises at the scale that is required,” Makhura said.
“I have been talking to the big four banks [Standard Bank, First National Bank, Absa and Nedbank] and all of them are not willing to take the risk on SMEs, so we have a gap,” said Makhura.
With an annual budget of about R40-million, the GEP was finding it difficult to fund small businesses in the province. Makhura is now planning to bring the private sector to team up with the provincial government to establish an effective bank that can cater for a larger portion of small businesses.
“We can use the fact that we have financial muscle from our own budget to bring private sector partners who will be willing to take a greater risk on supporting SMEs and township enterprises,” he said.
“We need to break down monopolies in the financial sector. I will be the happiest person the day we have more banks in South Africa, because, if we have more banks, they will force the big four to operate differently. Even the few DFI [development finance institutions] we have are operating like monopolies themselves.”
The bank will be the primary financer of Gauteng’s infrastructure development needs. Makhura also hopes that the province’s townships, which remain untapped sources of economic growth, would be major beneficiaries of the infrastructure development plans.
Gauteng continues to grapple with the issue of apartheid spatial planning, which means that people who live in townships are far from economic nodes. The provincial government’s planned intervention was human settlements projects aimed at moving people closer to economic hubs.
The provincial bank would allow for a reverse of that model by keeping residents in townships and moving industries closer to them with the creation of industrial parks, which would be financed by the entity.
“Building megacities is important but our people are not going to relocate from where they are located now. Several million of them still live in the old townships so we need to build industrial parks around our existing townships and allow investors to come there. So [we can] create employment right there.”
The facelift promised for Gauteng townships will also involve radical changes to the province’s transport system. This year, the Gauteng government hopes to launch its single transport authority, which will run an integrated public transport network premised on a single ticketing system. This will cover the Gautrain, minibus taxis and bus rapid transits such as Rea Vaya.
The provincial government hopes that, with the new system, “irrational” pricing, particularly in the taxi industry, will be curbed to make transport services more affordable.
Makhura said he also wanted to transform the role of taxi operators by allowing them part-ownership in the Gautrain once the roll-out of its expansion programme has begun. Under the single transport authority, Makhura said he hoped the isolated operation of the taxi industry would be a thing of the past.
“Those transport operators who are in the minibus industry cannot be limited to minibuses. They must also be part of owning the buses. They must also be part of the core ownership of the Gautrain. That’s what true empowerment means. It’s extremely radical; it’s not just that they must keep buying minibuses and getting into debt,” Makhura said.
Despite the plans and progress made to address the province’s economic growth challenges, the quality of service provision and the conduct of public servants and political heads were still areas of concern for Makhura.
During his address the premier announced mandatory lifestyle audits for himself and members of his Cabinet and called on other members of the legislature to participate in the assessment voluntarily.
Makhura said he hoped to work with the public service and administration minister, Ayanda Dlodlo, to find an instrument to compel public servants to undergo lifestyle audits.
“They declare their interests every year but I don’t think that’s enough. It’s easy to hide assets that people are accumulating unlawfully and unethically.
‘‘We need to be able to have agencies of the state that can verify if there is something hidden,” he said.
The audits would form part of an intensified drive to curb corruption in Gauteng. Insisting that he “wants to be watched”, Makhura has appointed a civil society-led dvisory council that will act as a watchdog over public officials and their departments. The body has been mandated to “name and shame” the public servants and departments not exercising their duties effectively.
“We need more players to ensure public office bearers and public servants are saved from themselves,” Makhura said. “So we need more watchdogs, more regulations and more training in ethics.”
Premier promises to whip province into shape
Acting Gauteng ANC chairman David Makhura is adamant that the party will improve its performance in the province to boost the party’s performance in next year’s general elections.
The province is expected to turn into a political battleground, and opposition parties the Democratic Alliance and the Economic Freedom Fighters have already invested a large portion of their resources in their election campaigns to topple the governing ANC from power in the 2019 elections.
In 2016, the ANC lost two key metros in Gauteng — Tshwane and Johannesburg — and narrowly won the Ekurhuleni municipality.
Makhura and his ANC comrades in Gauteng have blamed former president Jacob Zuma’s many scandals, including Nkandla, as the reason behind the party’s electoral decline over the past few years.
But now that Zuma is out of the picture and Cyril Ramaphosa is in it, Makhura believes the party stands a good chance to gain power in Gauteng.
“They [the opposition] did believe before the ANC elective conference [in December] that they will win Gauteng. All I can tell you now is that they are very demoralised. They cannot hide that. They may try to pretend. They are very demoralised that the ANC has elected a president who has brought a lot of hope among South Africans that our country will be back on track,” said Makhura.
“We will fix the problems in our economy and help to ensure that all the major social and economic issues facing our people are addressed effectively.
“Essentially, the opposition, in all their plans, they were really banking on ANC decisions, not on their capability. They were praying that the ANC does not elect a leadership that will be able to win so much confidence. I want to say that, as Gauteng province, we are extremely confident.”
He said the party would hold its provincial conference in May to elect the new leadership that will campaign for the party ahead of next year’s elections.
“We will have our regional conferences completed in April and the provincial conference in May so that the ANC [can] focus on one thing and one thing only — how do we recover lost ground and restore public confidence in the work that we are doing for the people of Gauteng.
“Essentially, I’m whipping the system of government. I’m whipping officials, I’m whipping my colleagues in Cabinet that we must make sure that we don’t let our people down.
“Renewal and change is something that our people must feel in every area of our work — in education, in healthcare, in the economy, in housing, in fighting crime. Our people must feel this re-energised machinery,” said Makhura. — Matuma Letsoalo