Gauteng’s plan for a mainstream township economy seems to be working
The Gauteng government’s plan to revitalize and mainstream the township economy appears to be working.
Through the Township Economy Revitalisation Programme, the Gauteng provincial government seeks to channel at least 30% of its annual procurement expenditure to township enterprises.
Delivering his political report at the Gauteng Legislature on Tuesday, Gauteng premier David Makhura said: “There is ample evidence to demonstrate that, step by step, we are succeeding in catalyzing sustainable and meaningful economic activity in our townships.”
He noted that at the end of the second quarter of the year, the government had already exceeded the 18% target for 2016/17, “and we spent over R6.8 billion procuring goods and services from 1,600 township suppliers”.
“Already all linen contracts in our hospitals have been awarded to women-owned enterprises, a number of whom are based in the townships,” Makhura said.
The premier said that municipalities have also spent more than R4.2 billion on procuring goods and services from township enterprises just in the 2015/16 financial year. “Over the past two years we have provided financial and non-financial support to a total of 25,526 SMMEs, township enterprises and co-operatives.”
He said that the government is developing 700 township based suppliers, “fitting them into our supply chain and introducing them to the provincial government’s large suppliers for absorption into their value chains”.
He said that target sectors include automotive, machinery and capital equipment, business process outsourcing, aerospace and defence, food and beverages and ICT.
“This work will be intensified in 2017,” Makhura said.
He pointed out that the GDP per capita for Gauteng grew from R74,052 in 1996 to R81,821 in 2015, up 10%.
Over the past ten years, the provincial economy has consistently grown above the national average, at 4.5%, and during the second quarter of 2016, the provincial economy grew by 2.9%, up from 0.1% before.
Gauteng’s contribution to national GDP grew from 33% to 35.1% in 2015.
Makhura has previously said that the government wants to double the size of the Gauteng economy and grow it to a two trillion rand economy over the next 15 years.
The provincial economy grew from R504 billion in 1995 to R952 billion in 2014.
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