Staff Reporter
The Free State is developing a new set of rules aimed at regulating participation in strategic sectors of the provincial economy which will see locals being prioritised in setting up businesses.
The MEC for the Department of Economic, Small Business Development, Tourism and Environmental Affairs (DESTEA), Makalo Mohale, told the provincial legislature sitting in Zastron for his department’s budget vote speech that the master plans for identified sectors are expected to be finalised by July.
“In response to the call for accelerated economic recovery in our province, we have developed a value chains economic transformation approach . . .” he said.
Mohale said the framework seeks to bring together all stakeholders to regulate and develop value chains in strategic sectors of the economy.
“As part of sharpening this approach for implementation, and as a precursor to the development of an economic recovery plan, we are developing master plans for specific sectors of the Free State economy,” he added.
According to the MEC, work has already started in the development of the master plans for the following economic sectors:
- Agro-processing
- Communications and digital economy;
- Clothing, textiles, leather and footwear;
- Automotive;
- Biodiversity economy;
- Financial services;
- Steel and metals;
- Mining and mineral beneficiation;
- Chemicals, energy and green industries; and
- Land and property development.
“It is anticipated that it these master plans will be completed by July 2021,” he said.
“The strategies contained in the master plans . . . shall be a necessary input for the provincial economic recovery plan, which we plan to roll out during the 2021/22 financial year.”
Mohale premised his speech on five priorities which he described as:
- Commitment to defeat the coronavirus pandemic;
- Acceleration of economic reconstruction and recovery;
- Improving the capacity of the state;
- Fighting crime and corruption; and
- Mitigating the effects of climate change.
Mohale however said DESTEA will not be able to financially support many small businesses this year due to acute budget cuts, but promised that his department will facilitate for them to be assisted by relevant funding agents.
“. . . we have a budget of R17.779 million for enterprise support in the 2021/22 financial year,” he said.
“We shall therefore only afford to offer non-financial support to SMMEs in the upcoming year.
“Very few enterprises will access our financial support due to these extreme budgets cuts to our department.”
The MEC said there was need to develop new skills and resources in order to coordinate private sector activity and aligning it with the public sector and identify new opportunities for businesses owned by blacks, particularly women and young people.
While the provincial economy is expected to grow by three percent between 2020 and 2021, the high unemployment rate, particularly among the youths, and a growing failure rate of business start-ups remains a concern.
The projected growth is expected to be driven by growth in the mining, utilities, trade and transport industries.
Growth in the mining industry is forecast at seven percent, utilities nine percent, while trade and transport are each estimated to grow by four percent.
The Free State’s official unemployment rate for the fourth quarter of 2020 was 33.4 percent. ‘
At the end of last year, the province had a labour force of 1.12 million.
Of the working age population, 798 000 were characterised as not being economically active while 80 000 were described as discouraged work-seekers.