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Officials from Joburg’s economic development department met with local business leaders to discuss ways of accelerating economic recovery.
WITH an expected economic recovery on the way, the City and its private sector partners are looking to push Joburg’s economy out of its recession hangover into a bullish economy, with special impetus given to small and medium enterprises.
Delivering the key-note address: Joburg’s member of the mayoral committee for economic development, Oupa Monareng
Meeting to discuss tactics , government and the private sector held an economic development recovery summit at the Metro Centre on 7 December.
The summit was held as “a formal response from business and government to the economic crisis”, according to the City’s executive director for economic development, Jason Ngobeni – something that has not happened before.
The keynote address by Joburg’s member of the mayoral committee for economic development, Oupa Monareng, reiterated that business and government are partners: “We must take collective responsibility. The City must provide favourable conditions for business. If business is stressed it has an effect on Joburg.”
Nine percent target
The economy, said Ngobeni, is showing signs of recovery and growth and the summit aimed to accelerate this process.
A key sector that is showing excellent potential for returns in Joburg in the near future is the business process outsourcing and information technology sectors, Ngobeni said.
And although the retail and manufacturing sector is still in a slump and the country’s job losses are now standing at almost one million according to Statistics SA, one segment which is punted for its economic growth and job creation potential is small, medium and micro enterprises (SMMEs).
Johannesburg is maintaining its 17 percent contribution to the country’s Gross Domestic Product and 48 percent of the Gross Value Added of the Gauteng province. GVA is an economic measure of goods and services output on a regional level and is therefore also closely related to GDP – which measures goods and services output on a country-wide basis.
Summit delegates agreed that the City’s growth target to nine percent by 2014 should remain unchanged, despite a full recovery being still some way off.
Export promotion
The City’s SMME Export Promotion Project, run under the auspices of the economic development department, is now in its fifth year and aims to provide SMMEs with the potential to enter the export market or the capacity to expand existing trade links, with appropriate institutional support.
“Every year we train people to make their products export ready,” added Ngobeni.
According to Keith Brebnor, chief executive officer for the chamber of commerce and industry in Johannesburg, the emphasis for SMMEs should be shifted from “small” to “enterprise” with the development of a vibrant private sector which can grow output, employment and income.
“The main thrust of small business policy must be to strengthen the productive private sector – we need to shift the emphasis from small to enterprise.”
Brebnor, one of the key presenters at the summit, touched specifically on SMMEs and other sectors with the potential for growth in pre-2010 Joburg. This included “sealing the gaps” in tourism and transport; safety and security; and an “all-out” tourism plan.
“We must continue to look to ourselves and Africa to see what ideas and projects can still be implemented in the next six months,” he said.
A sentiment echoed by Ngobeni, who mentioned that most of the infrastructure and services upgrades related to the FIFA 2010 World Cup™ is fast nearing completion.
“We have to re-prioritise,” Monareng added.
Local conditions
One of the strongest messages which came out of discussions was the lack of access to information experienced by many smaller businesses.
President Jacob Zuma’s distress fund, developed by the Industrial Development Corporation (IDC) to fund South African companies in distress as a result of the global economic crisis was a case in point, said Barbara Ziyane, economist in charge of economic policy in the Gauteng Provincial Government. According to her, many smaller businesses are unaware of its existence.
The need for an entrepreneurial database; programmes which operate in isolation and maximising on 2010 was also under discussion.
The findings of the summit, as well as the way forward in the short and medium term, will be presented by the deputy director for sector specific interventions in the economic research unit of the City’s department of economic development, Dr Selma Karuaihe, at the next forum meeting to be held early in 2010.
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