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MEC's intervention during debate on Premier's Speech
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Speeches and Media Release
 Provincial Treasury, Economic Affairs, Environment & Tourism

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EASTERN CAPE PROVINCIAL GOVERNMENT

INTERVENTION BY THE MEC FOR FINANCE AND ECONOMIC AFFAIRS

DURING THE DEBATE ON THE PREMIERS SPEECH

ON 14 FEBRUARY 2000



"The prospects of success continue to be bright to those who see beyond the immediate fog" Premiers opening address.

Mr Speaker those of us who see beyond the immediate fog concur with the Honorable Premier that indeed the prospects of success continue to 
be bright. While most of these issues will be dealt with in the Policy Speech on 15 March, we wish to highlight three areas, namely, 
investment promotion, tourism and SMMEs.

Before attempting to deal with these issues, it is important to quickly review the context in which we are transforming the SA society and 
in particular in this Province.

Provinces vary substantially in their geagraphic, economic and demographic characteristics. These differing characteristics affect the 
demand for public services. The cost of deliverying these services and the capacity of a Province, both in terms of human resources and the 
ability to raise revenue, to meet the needs of its people. People normally lose sight of these factors.

We have, on numerous occassions, pointed out that despite the fact that EC has 15.5% of the SA population, it has 18.4% of the school age 
children and 19.1% of its elderly. This means we need to spend relatively more on social services. In terms of Census 96 as we all know, 
unemployment in this Province is 48.5%. This of necessity burdens the public sector e.g. by limiting the availability of private health 
care.

1. INVESTMENT PROMOTION

Governments role is to create the right environment and to market the Province as an investment destination. South Africans economic 
fundamentals are sound and this is demonstrated by good investment grading the country continues to receive. This will have positive spin-
offs for the Province of the Eastern Cape.

The Province has competitive advantage in many respects. It has lower costs than the other industrial metropoles in respect of wages, local 
taxation (rates), electricity and factory rentals. Labour relations are more stable than the national average. Statistics from Andrew Levy 
& Associates show that in 1999 only 1.1% of non-national strikes were in the Eastern Cape. The SAPSs Monthly Crime Bulletin consistently 
shows that the Eastern Cape has s relatively low crime rate. Our Province is ranked sixth, seventh or eighth positions out of South Aficas 
nine Provinces for 14 out of 15 crime categories.

It is not suprising therefore that we have witnessed huge investments from VWSA, DCSA, Ford, Delta, Goodyear, General Tyre etc. Provincial 
Government has been working closely with some of these companies. CIMEC has also been instrumental in other key investments.

2. TOURISM

Following the successful Tourism Indaba, we are now ready with the product, which will be published as an inset in newspapers for public 
comment by the stakeholders.

The Eastern Tourism Board has assisted with development and establishment of 27 new tourism products.

On the marketing side, hotel trading statistics for the months of Jan to August 1999, which were released in November 1999, the estimated 
trading income from hotels in SA was R3.3 billion. The Eastern Capes share for the same period is R283m. Compared to the rest of SA, which 
had hotel occupancy rates of 50.7%; the Eastern Cape had occupancy rates of 52.3%. Our target is 65% because it is at that level that we 
will see major investment in the sector.

3. SMMEs

The majority of the new product owners assisted by ECTB are SMMEs. The ECTB also exposed 8 SMMEs from the travel, hospitality, craft, 
cultural tourism and tour operators to the Durban Indaba, the largest international tourism exhibition held in SA.

ECDC has already granted loans in excess of R20m for new and existing businesses. ECDC together with Hans Merensky are preferred bidders 
for the North Eastern Forests surrounding Umtata and Kokstad. It is estimated that SMMEs will significantly benefit from this process 
through the creation of opportunities such as harvesting of timber, transportation of logs, pruning and trimming, making of fire breaks, 
pallet manufacturing etc.

Employees will own 9% and shares will also be available for empowerment.



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