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Invest In Township Economies For Economic Transformation — David Makhura

Too much pressure is put on political leaders alone to drive economic transformation, says Gauteng Premier David Makhura.

20/03/2017 10:34 SAST | Updated 20/03/2017 14:57 SAST

Economic transformation isn't solely the responsibility of government and often too much pressure is put on political leadership, said Gauteng Premier David Makhura.

Speaking at a Barloworld event on its SMME incubation programme in early March, Makhura highlighted the role of public-private partnerships in delivering economic transformation, saying that government or individuals "mustn't scare or attack business, but must ask business to help us transform the economy".

Asked by the Huffington Post South Africa if Makhura was confident in the national leadership's ability to drive a coherent programme of economic transformation, he shifted focus to leadership "at all levels" which he says includes effective leadership in government.

"The economy is a complex, multi-stakeholder entity and we must embrace partnerships with business," he said, evading comment on his confidence in the country's top leaders.

Amplifying the importance of SMMEs for job growth, Makhura said Gauteng said big businesses need to open their doors to entrepreneurs to achieve sustainable job creation in a province in which overall official unemployment grew by 1 percent year-on-year to 28,6 percent in 2016, according to Statistics South Africa's latest quarterly report.

The province's township economies in particular present an enormous opportunity for job growth, he said. Citing a World Bank statistic, he said South Africa's townships contribute up to R100 billion to the overall economy. He also said government's support of SMMEs in the province generated 150,000 jobs in a single year. "If you want to find more black people, more black entrepreneurs, you're going to find them in the townships," he said.

Reiterating the role of big businesses in responding to potential for job creation in townships, he cautioned that SMMEs "can't just rely on tenders from government". "There's not a lot of money in government, we can't just hand out millions," he said. Without intervention from big businesses in the form of partnerships, incubators and inclusion of SMMEs in their value-chains, those 150,000 jobs would only last one or two years, he said.

The informal sector, defined by Stats SA as the non-VAT registered businesses, represents 12,2 percent of the share of total employment in Gauteng according to the latest measurements in 2014. Levels of economic informality remain substantially higher above national levels in other provinces including Limpopo, Mpumalanga and the Eastern Cape.

Despite persisting high levels of structural unemployment, Makhura said in his State of the Province Address that Gauteng added 700,000 jobs between 2010 and 2016. This improvement has, however, been overshadowed by crises in the province's health sector, notably the deaths of over 100 patients transferred from the Esidimeni Life Centre in February and a recent roof collapse at the Charlotte Maxeke hospital.

The ANC Youth League last month called for Makhura to resign after the Esidimeni deaths, calling on him to "listen to his conscience", The Citizen reported. Makhura had previously used these exact words to call for the resignation of President Jacob Zuma following last year's Constitutional Court ruling on the Nkandla saga.