Premier David Makhura: Sedibeng SMME Conference
Address by the Premier David Makhura at the Sedibeng SMME Conference, Vereeniging City Hall, Sedibeng District Municipality.
Programme Director;
Deputy Minister of Trade, Industry and Competition, Hon Fikile Slovo Majola;
Deputy Minister of Small Business Development, Hon. Sdumo Dlamini;
MEC for Economic Development and Agriculture in Gauteng, Hon. Parks Tau;
Executive Mayor of the Sedibeng District Municipality and Mayors of Municipalities of Lesedi, Midvaal and Emfuleni;
CEOs and Leaders of various Development Agencies, DFIs and Private
Sector Funds present – National Empowerment Fund, Industrial
Development Fund, Gauteng Enterprise Propellor, Automotive Fund,
Solidarity Fund, Gauteng Growth and Development Agency and the
Gauteng Innovation Hub;
Heads of departments and senior managers of DED, GDARD and municipalities;
The distinguished delegates who represent SMMEs and township-based businesses in the Vaal;
Ladies and Gentlemen
It is an honour to address the Sedibeng SMMEs Conference. This conference represents a great movement forward for the people of Sedibeng. It signals a new beginning: the dawn of a new day and arrival
of a more inclusive and greener industrial development.
As we said during the opening of the recent Sedibeng Investment Conference, the Vaal Triangle occupies a significant pride of place in the history of South Africa, with an exceptionally rich heritage. Please allow me to summarise the politico-economic history of this southern district of Gauteng and why it has inherited a particular industrial structure and spatial morphology.
It is on the banks of the Vaal River and on the hills of present-day Suikerbosrand Game Reserve that an ancient city of Kweneng was built during the 15th century with 10 000 inhabitants. The Afrikaners and the British signed a peace treaty here in Vereeniging in May 1902, to end the Anglo-Boer War and paved the way to form the Union of South Africa,which excluded the indigenous people from the polity, and disposed them of their land. In March 1960, Sharpeville protests and the subsequent massacre of transformed forms of resistance to apartheid, ushering in the armed struggle. In 1996, the new Constitution was signed into law here in Sharpeville, marking the birth of a new order sealed in the supreme law of our land.
The Vaal is also correctly referred to as the birthplace of industrialisation due to the role played by the steel industry in Vanderbijlpark and the energy complex in Sasolburg.
To re-industrialise our province and rebuild our economy, we cannot leave out the Vaal region. It is for this reason this conference is themed,‘Reigniting the Vaal SMME Economy’, because indeed our intention is to ensure that this event lays the foundation for the regeneration of the Vaal economy. The SMME sector and the township economy is the future of the new Vaal economy.
Accordingly, we have convened this conference to seek and consolidate ways of reigniting the Vaal SMME Economy.
The early industrialisation of the Vaal destroyed and polluted the environment and excluded Black people as nothing other than sources of cheap labour living in townships as sources of labour. Our aim is to spark the beginnings of the second industrialisation which is green and more inclusive, and which leaves no one behind. If you remember well, we have emphasised in every State of the Province
Address the need to rebuild the Vaal economy.
We therefore see these efforts in Sedibeng as continuous with similar efforts in terms of the empowerment of emerging black firms which we have already supported as both contractors and sub-contractors. As a matter of policy, our emphasis is always put on women and the youth,to ensure an all-inclusive economy.
This SMME Conference follows in the footsteps of the Inaugural Sedibeng Investment Conference held on 15th October 2021. That Conference obtained and received more than R40 billion in investment pledges and commitments.
Our engagement today provides a concrete way forward on how we integrate the Township Economy of the Vaal, deliberately, consciously, and conscientiously into the initiatives of the regeneration and revival of the economy of Sedibeng.
From the point of view of the Province, therefore, this conference is one of a number of engagements that we will undertake to explore various interventions, opportunities and innovations that can help reposition Gauteng SMMEs towards growth and economic impact.
The regeneration of the Vaal into a new, smart, green, and more inclusive economy is the single biggest inter-governmental investment effort and public-private partnership initiative that focuses on the District Development Model (DDM) to make Sedibeng an investor-friendly, economically, and financially viable as well as environmentally sustainable district.
Please allow me to repeat something I said at the Investment Conference held two weeks ago: History will not measure the success of this SMME Conference in terms of the speeches and the pledges made by the participants, whatever the eminent positions they occupy. Posterity will judge us in relation to whether the outcome of this Conference changes the destiny of the people of the Vaal and their economic fortunes. Can this be a Conference that marks the beginning of the second Vaal industrialisation, which is greener and more inclusive than the first one?
In other words, we are not here for a talk-shop. Nor are we here to just cut a ribbon. Certainly, I am tired and impatient with talk-shops and cutting ribbons.
We must rid ourselves of the danger of turning governance into an exercise in bureaucratic rituals and red tape, where nothing gets done except long-winded protocols that make no difference in people’s lives.
This Sedibeng SMME conference must focus on how we get to shovelready projects and turn the entire Vaal into a construction site in 2022. We must have a single-minded focus on getting shovel-ready projects to the ground and will do ribbon-cutting only when the projects are taking concrete shape on the ground.
Let us start by outlining the vision of where we want Gauteng and the Sedibeng District to be by the end of this decade, 2030. For “where there is no vision, the people perish” according to the Book of Proverbs 29:18. We are inspired, driven, and bound by a common vision of a smart, green, inclusive, integrated sustainable urban ecosystem with biodiversity and a thriving blue economy in the Gauteng City Region.
We are also determined to ensure that Sedibeng District and the entire Vaal Triangle, which includes some areas in the Free State and Mpumalanga, become the cornerstone of a new thriving Special
Economic Zone and Vaal River Smart City.
In other words, through infrastructure interventions and target public private investment initiatives, we must shift the mindset of all stakeholders from treating the Vaal River and Vaal Dam as a problem, to seeing the entire Vaal River System as an opportunity to build a Blue Economy, a new smart city, new logistics sector, and building a hub of the Cannabis Industry and Hydrogen economy in the South of the Gauteng City Region.
The vision of the Gauteng City Region and Growing Gauteng Together (GGT2030)
In 2006, the ANC-led Gauteng provincial government adopted a vision of a seamlessly integrated, socially cohesive, inclusive, and globally competitive Gauteng City Region (GCR).
In 2014, the GCR vision was further consolidated, through the programme of transformation, modernisation, and re-industrialisation (TMR), into five development corridors that have complimentary industries with distinct comparative advantages.
Accordingly, there is one plan to “Grow Gauteng Together, GGT2030” through a network of Special Economic Zones that will ultimately transform Gauteng into a single, integrated, multi-tier SEZ and Mega City.
In this plan, each of the two districts and three metros have a distinct role with industries that have comparative advantages. Each district or metro will have a Special Economic Zone that will help attract specific types of investments into the local economy, to create employment and new industries while revitalising the old industries and integrating township businesses into the economic mainstream.
High-growth sectors of the Gauteng economy being prioritised:
The economy of the Gauteng City will be driven by the following ten highgrowth sectors:
• Automotive, Aerospace, Defence and rail manufacturing;
• Financial Services;
• Energy, with a focus on renewable energy and new technologies;
• Transport and Logistics, including expanding current logistics and aviation hub;
• The Digital Economy – ICT, Media and digital services;
• Tourism and hospitality;
• Construction and infrastructure;
• Agri-Food, Agribusiness and Agro-processing
• Cultural and Creative Industries;
• Biomedical sector and Cannabis Industry
We strive to attract investment into these ten high-growth sectors and ensure their location is spread across the five development corridors based on comparative advantage and local, provincial, and national incentives.
Through targeted policy interventions and infrastructure development in specific peripheral districts and communities, we strive to transform the Apartheid spatial morphology and build more integrated, inclusive, liveable communities in new smart and sustainable cities. The Gauteng City Region economy must be balanced and evenly spread across the geography of our province, from the north to the south and from the east to the west.
The revitalisation and mainstreaming of the Township Economy
As we have said many times before, the Township Economy and businesses owned by Black people, women and youth are the priority of the ANC-led government wherever we govern.
It is the policy and strategic perspective of the ANC-led Gauteng Provincial Government that there must be meaningful participation of township-based and SMMEs owned by South Africans in the value chains of the major sectors of our economy.
The Township Economy and Black-owned, women-owned, and youthowned businesses integrated into the value chains of the high-growth sectors and link them with value-addition opportunities within each SEZ. To achieve the strategic goal of the revitalisation, growth and mainstreaming of the Township Economy, the ANC-led Gauteng Provincial Government has tabled the Township Economic Bill in the
Provincial Legislature and it will be passed into law before Christmas this year. All old prohibitive by-laws will be scrapped and new funding and infrastructure and other forms of non-financial support will come into effect.
The new pioneering legislation will create a new dispensation and new deal for growth of township businesses. MEC Tau will say much more about the far-reaching and transformative implications of this groundbreaking policy agenda of the Gauteng provincial government.
To understand the full logic of GGT2030 and our provincial economic plan, I would like to briefly outline the vision and programme for each of our five corridors of the Gauteng City Region, the role and place of the Vaal or Sedibeng in the economic transformation and spatial reconfiguration of our province within the context of the National Development Plan and Economic Reconstruction and Recovery Plan.
The vision and programme for the Northern Development Corridor In the Northern Corridor, the administrative and diplomatic Capital, we are making tremendous headways in diversifying the economy of the City of Tshwane into Gauteng’s automotive city and the research, development, and innovation hub.
The revitalisation of the industrial hubs and the deliberate effort to attract new businesses in the far-flung townships is part of the effort to integrate and create new economic opportunities in neglected and under-invested areas.
One of the major catalytic projects is the construction of the R20 billion Tshwane Automotive Special Economic Zone which is currently underway and will start operating in September 2022. Essentially, Tshwane is becoming the automotive city in our lifetime.
Other major transformative developments will gather pace once the governance and institutional reforms gather momentum.
The vision and programme for Western development Corridor
In the Western Corridor, the mining belt of the Gauteng City Region, we are aggregating all efforts and bringing together businesses and communities around the development of a Special Agro-Processing Zone.
We are working with the private sector, the Development Bank of Southern Africa (DBSA) and the African Development Bank to complete feasibility studies and de-risking of the ecosystem to unlock major opportunities in urban agriculture, food industry, post-mining rehabilitation of land and reclamation, cleaning acid mine drainage to produce hydrogen energy and clean drinking water.
The recent announcement of an investment of R20 billion in the West Rand Mega Park will serve as a catalytic project to make the Special Agroprocessing Zone a reality. The Lanseria Smart City is going to be the major economic node that will lift the economy of the Western Corridor.
The vision and programme for the Eastern Development Corridor Over the last half-a-century, Ekurhuleni, the Eastern Corridor, was the industrial engine and logistics gateway for the SADC region. However,
significant de-industrialisation has occurred over the years and many manufacturing companies closed, as it happened here in the Vaal.
Significant work is underway to revitalise the industrial base and build new advanced manufacturing capabilities, modernise the transport and logistics infrastructure and turn the City of Ekurhuleni into Africa’s biggest Aerotropolis.
The OR Tambo Gauteng Industrial Development Zone is the anchor of the new city (the Aerotropolis) around the airport which will focus on manufacturing and logistics. The OR Tambo International Airport new cargo terminal is under construction and work has also started to put bulk infrastructure for the construction of the Tambo-Springs Logistics Gateway and Inland Port.
The cherry on top will be the building of a new university in Ekurhuleni,the OR Tambo University of Science and Technology which will focus on the development of skills required for the Eastern Corridor economy and in the value chain of the manufacturing sector. The City of Ekurhuleni and Gauteng government are working closely with national Government on the realisation of this goal.
The vision and programme for Central Corridor
The Central Corridor Johannesburg is the financial, technological, and pharmaceutical nerve centre of Africa. All other major developments taking place in the northern, western, eastern, and southern development corridors of the Gauteng City Region are integrally linked to the economy of Johannesburg.
By the sheer size of its economy, Johannesburg is a major player in the national and provincial economy – 16% of South Africa’s GDP and 40% of Gauteng economy’s GGP. It is crucial that Sedibeng is fully integrated and connected to the nerve centre of our economy through better and smart infrastructure and knowledge-based institutions that already exist in the Vaal. Through the current interventions, the Vaal River will become a place of entertainment and leisure for the people of Gauteng, thus providing dynamic incomes and economic opportunities to the people and businesses of Sedibeng.
The vision and programme of the Southern Development Corridor
Let me now focus on the Southern Corridor and the Vaal. This Investment Conference is a culmination of the work done by the three spheres of government on the economic regeneration of the Vaal Triangle.
The Vaal River SEZ Strategy and Business Case is based on the following pillars:
• Making the Vaal the critical location for the development of the Hydrogen Economy and green re-industrialisation initiative which will transform and modernise this industrial basin into the country’s preeminent hub for low-carbon manufacturing and renewable energy production;
• Making the Vaal the Cannabis Capital of Africa, the new sector that has enormous potential to offer opportunities to new emerging farmers and new industrialists who grow and process cannabis for medicinal and other uses;
• Making the Vaal a high-impact investment zone for the food industry, agriculture and agri-food value chains: building the Vaal agrotropolis;
• Making the Vaal the logistics gateway (air, road, rail, river) in collaboration: the Vaal aerotropolis;
• Making the Vaal River a key destination for tourism and the Blue economy;
• Building a Smart City along the Vaal River to enable SEZ development and drive urban regeneration;
• Vaal Marina development;
• Heidelberg aerodrome;
• Building strong linkages between township/rural economies with the value chains that the Vaal SEZ will develop and strengthen;
• Working with universities and the private sector to build comparative advantage of the key sectors and industries such as green hydrogen,cannabis, Agri-foods, logistics, tourism and the blue economy through research, skills development and innovation.
The DTIC and GPG, in collaboration with Sedibeng District Municipality, have already established the Vaal River SEZ Company and the Programme Management Unit, in line with applicable legislation, to help
coordinate and fast-track all the planning and rollout of specific shovelready projects that will catalyse the entire smart city and SEZ. On our part as government, we fully understand that the major obstacle
to the realisation of the SEZ and Smart City has been the infrastructure decay and the decline in the quality of governance. Poor maintenance of infrastructure, sanitation infrastructure and poor governance has led to the sewer spillage into the Vaal River and the consequent devastating impact on the economy and environment of the Vaal.
The Vaal River and Vaal Dam are major natural resources that should be protected and harnessed to unleash the full potential of this region to provide sustainable livelihoods, decent incomes, and a better quality of life for the people of Sedibeng district.
Many would know that the Vaal region was a historic cluster of steel related industries underpinned by the strong steel mining and export sector. As the sector experienced a marked decline starting in the late 1990s, the knock-on effects on smaller local businesses and their skills base was acutely felt.
Distinguished delegates, we must fix infrastructure and governance issues so that we can pay serious attention to finding long term solutions to the primary problem behind the decline of this region: an economy that has de-industrialised.
I would like to take this opportunity to thank the Public-Private Growth Initiative (PPGI) team for working closely with government and business leaders on the rallying cry for the regeneration and revitalisation of the Vaal manufacturing sector. We have come a long way and now we have a shared vision and programme.
The establishment of the SEZ and Smart City are the cornerstone of the regeneration of the economy of the Vaal. We are currently working on the Master Plan which details the SEZ Strategy and Business Case and produces a comprehensive SEZ Designation Application.
The Gauteng Growth and Development Agency, assisted by ARUP, recently concluded a Design Framework Study to facilitate effective design and implementation of programmes aimed at spurring inclusive
economic growth throughout the Gauteng province.
To fix infrastructure and governance, both the national and provincial government are intervening through Sections 63 and 139 of the Constitution to fix governance and infrastructure to pave the way for
economic development and sustainable investment to take place in this part of our province.
We have a team of administrators who are working flat out on fixing the finances and governance in Emfuleni. We have got to ensure that the municipalities are governed by capable and purposeful leaders and managers who share our vision and passion.
Two weeks ago, Minister Mchunu and I met with stakeholders to outline urgent intervention plans to fix the water and sanitation infrastructure as well as to clean-up the Vaal River and return it to its beauty. Rand Water has been appointed to undertake this work.
On the 13th October 2021, we handed over 21 major roads that have been rehabilitated and resurfaced by the Gauteng Provincial Government. Before the introduction of Section 139 intervention in 2018, these roads were in very bad shape.
More roads are receiving attention, including the construction of the new interchange which will catalyse the development of the smart city and the Vaal River SEZ.
The team of administrators has refurbished and fixed 15 electricity substations to mitigate the chronic power supply problems terribly affecting communities and businesses of Sedibeng. We have procured 30 waste management trucks for Emfuleni Local Municipality to improve waste management and refuse removal.
Our drive to re-industrialise this region has prompted government to continue to encourage the evolution of local businesses to new opportunities and support existing businesses to be competitive.
SASOL and Mitochondria Renewable are leading ground-breaking initiatives on making the Vaal the hydrogen economic hub for Gauteng. Several renewable energy initiatives are underway, and these will create new industries and small businesses that will provide jobs and income to the people of this region:
• Solar & battery storage;
• Bio-mass;
• Hydrogen;
• Circular economy;
• Carbon capture.
The Vaal Cannabis Consortium, coordinated by Mr MK Malefane, has put forward formidable plans that will see major investment into the development of the Vaal as the major hub for Cannabis growing,
processing and export.
All these initiatives must be inclusive, transformative, and empowering for small businesses and township businesses based in the Vaal. They must bring in black business, women, and young people in this region to play a meaningful role.
Delegates and Participants of this Investment Conference, since 2015 we have been articulating a vision of building four SEZs and new two smart cities in Gauteng by 2030. Two of our SEZs are already under
construction and one is in operation. The planning for Lanseria is complete. Now we focus on Vaal River City and SEZ.
Even more positively, not only does the Vaal region has an existing university, but it boasts a young population with huge potential, and it is connected to other national and provincial initiatives in Gauteng. This potential demographic dividend is awaiting some effort to tap it into economic value for this area. The Gauteng Provincial Government is developing a rationale for infrastructure provision based on priorities and catalytic investment potential.
It has set its sights on initiating development applications/approval processes early to support land readiness. Given our location, we also want to develop a logistics integration framework to identify key logistics projects to support competitiveness.
In this case, we particularly have the N3 Corridor in mind. In relation to infrastructure, we recognise the imperative to find innovative solutions to finance the infrastructure backlog for the SEZ enablement.
Partnership remains key strategic consideration and it is what motivated us as government to develop strategies for implementation and private sector participation, including private sector involvement in top structure building, infrastructure development and other partnership.
We are working closely with the Black Business Council (BBC) and their various affiliates to ensure that these new blended finance channels will also be used to build enterprise and supplier development pipelines into our 10 high growth sectors.
The commitments made in the Paris Agreement are provoking a fundamental change in how countries at all levels of development source and utilise energy. As a result, the exploration of – and commitment to – the use of chemical storage of green energy to decarbonise entire grids and industries is a major emergent frontier of global energy markets. We are taking green economy initiatives which flow directly into the Gauteng Overarching Climate Change Strategy which identifies ten (10) key sectors for mitigation and adaptation action. To determine the extent of the action and roles and responsibilities, we are developing a Gauteng Climate Change Implementation Plan – on energy, transport, industry, health, biodiversity, agriculture, mining, water, and the waste sectors with clear actions.
The intention of the development of the implementation plan is to ensure that both the public and private sector actors take measures to ensure that the transition to a low carbon footpath is resilient to climate change effects. I have already made reference to the fact that the Gauteng economy is highly integrated. What you do in one development corridor must always be linked into another.
We are in advanced negotiations with the clusters of private sector investors that have formally put themselves forward as the future anchor tenants of the Western Corridor Special Economic Zone, including Sibanye-Stillwater and Busmark. We will be using this SEZ to build a green energy and agro-processing ecosystem along the N12 corridor.
We will unlock the deployment of large-scale embedded generation (LSEG) industrial grids using Green H2 for specific industrial sites serving either sectors with large scale facilities that need green power to be export competitive in coming years, or areas with very unreliable power supply in need of reliable micro-grids or industrial growth, particularly in Ekurhuleni and Emfuleni.
Our partnership with SASOL and Mitochondria Energy – both incoming investors into our Vaal SEZ, will directly support this. We need other players, especially Black industrialists.
We are also embarking on the embedding of strategic localisation and supplier development initiatives with respect to manufacturing of components, installation and servicing of renewable energy systems and participation more broadly in value chain management. This can extend to the facilitation of a cohort of black industrialists’ energy companies providing and running the large-scale embedded generation capabilities for industry.
Conclusion
In conclusion, I wish to emphasise the point that all our major economic initiatives throughout the province of Gauteng are about building a new economy in which Township businesses, Black and Women-owned businesses play a visible role in all sectors, specifically in all the SEZs we are building in the five development districts. This is the vision for a new Gauteng economy where Black people are at the centre, not in the periphery.
Through SEZs processes and projects, we are explicitly tying in the upgrade of township industrial estates and using the SEZs the way legislation intended; that is, as levers for scaling industrialisation and
investment into new and revitalised industrial clusters.
We are convinced that the Vaal SEZ holds out great prospects for the reindustrialisation of this region which could in turn impact positively on the developmental aspiration of our province by further giving a boost to the GGT2030, as well as stimulate the goals of the NDP. I would therefore like to invite the business community to take advantage of this immeasurable potential offered by the Vaal SEZ so that together we can unleash the possibilities that lie dormant in this great region of Sedibeng.
Let us build the new Gauteng economy and new smart cities together, leaving no one behind.
Let us revitalise the economy of Sedibeng and build a new Vaal River City and SEZ together.
I thank you and wish the Sedibeng SMME Conference huge success.
Source: Government of South Africa