Infrastructure plan driving industrialisation

South Africa Infrastructure

South Africa Infrastructure

Pretoria – South Africa’s massive infrastructure programme is driving a wave of industrialisation across the country, says Economic Development Minister Ebrahim Patel.

“The Infrastructure Programme that the President [Jacob Zuma] spoke about is driving a wave of new industrialisation. The programme provides jobs to more than 150 000 people across the country, direct jobs, with 43 500 of these jobs in energy-related projects,” said Patel on Wednesday.

Speaking during the debate on the State of the Nation Address delivered by Zuma last week, Patel referred to several examples showing the impact that the programme has had on the country. The plan sets out to turn the country into a major infrastructure site for development.

For example the cities of Johannesburg and Cape Town have now introduced new tender conditions that require local manufacturing of buses. Under the new tender conditions 80% of the bus bodies are required to be made locally. In the past buses were simply imported from Brazil.

Close to 250 buses will be made in South Africa, creating jobs. The Joburg buses will be made at Marco Polo’s plant in Gauteng while the chassis will be made at Mercedes Benz in East London. Busmark is setting up a new factory in Cape Town, with Industrial Development Corporation (IDC) support, to manufacture this city’s buses.

Another example was that the IDC partnered with a local company to complete a contract for the supply, manufacturing and erection of an air-cooled condenser system for Eskom’s Kusile power station. The contract value is R2.4 billion and will create about 750 jobs.

One of the key themes pursued by the President is economic integration. South Africa has expanded trade links with the rest of the continent, having sold R20 billion more goods last year to neighbours than the year before.

Exports to African countries totalled R123 billion. Trade with Africa created 16 400 new direct jobs in South Africa last year alone. “In all, 111 000 direct jobs and more than 320 000 indirect jobs are supported in SA from trade with other African countries,” noted Patel.

Though there are significant employment challenges, progress is being made.

Turning to protests at Marikana and the  strikes in the Western Cape farming sector, ordinary workers – a quarter of workers earned under R1500 monthly in 2011 while in contrast chief executive officers of large listed companies in mining, finance and services earned between R6 and R9 million a year.

“We point to these vast disparities not to score points but to recognise that they limit our country and our people from developing the social cohesion that successful economies need and benefit from.”

Last year, a new minimum wage for the sector was set to R105 a day. Though there have been complaints from farmers on the impact of the new minimum wage on their operations, Patel called on them to “recognise that their answer lies in accepting collective bargaining as the preferred system for wage setting.”

“Of course we need to improve productivity and lift the levels of investment as part of the strategy to address the need to improve both industrial performance and working conditions,” added Patel. –