GAUTENG finance MEC Mandla Nkomfe has added his voice to those appealing to the private sector to inject more money into the economy, amid reports that companies were sitting on a cash pile of R500bn.
Mr Nkomfe’s comments come less than a week after Finance Minister Pravin Gordhan made a similar plea, saying more private sector investment was critical in accelerating economic growth and employment, which he conceded was “not adequate”.
Public private partnerships were seen as a means to boost the provincial revenue stream for SA’s largest regional economy.
Speaking at the Gauteng legislature yesterday during the provincial budget speech, Mr Nkomfe announced a R76.9bn budget for the province in the 2013-14 financial year. This was expected to increase to R89.3bn in 2015-16.
Mr Nkomfe said the province had in the first three quarters of the past financial year spent more than 66% of the R10bn budget for infrastructure development. About R25bn had been put aside by the province for infrastructure development over the three years starting from the 2012-13 financial year.
The private sector was expected to play a role. Mr Nkomfe said there had to be a conversation, also at national level, with the private sector to determine the levels of predictability and transparency needed to ensure that the country gains more investment. “Now the investment is still led by the public sector and this is not sustainable,” Mr Nkomfe said.
Gauteng plans to spend R60m over the next three years following the province’s youth employment strategy to create opportunities for young people. Gauteng Premier Nomvula Mokonyane said last month during her state of the province address the youth employment strategy would this year focus on the automotive sector, information technology services, as well as light manufacturing.
Three hubs are to be established at Winterveldt, north of Pretoria, which will focus on the automotive industry and link the production of vehicles in greater Tshwane. Hubs in Mohlakeng and Kagiso will focus on youth enterprises for the maintenance of vehicles.
Each hub will provide training, capacity building, working space and access to startup grants.
Gauteng has received R1.4bn in additional funds from the Treasury for the 2013-14 financial year, owing to its population having passed the 12-million mark, according to the 2011 census.
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He said a large part of the additional money would be spent on staffing the education and health departments. The province’s wage bill still accounts for more than half of the provincial budget (56%), which Mr Nkomfe said was necessary for the delivery of public services.
However, he warned that the province had to be alert to the danger of the wage bill putting too much pressure on the provincial budget in the long run. The provincial treasury’s deputy director general for sustainable resources Jeff Mashele said Gauteng was trying to contain its wage bill below 60%.
