Coega Celebrating 40 years of SA’s resilience

MARCH 2, 2016

South Africa (SA), in the year 2015 saw unprecedented socio and political activities, mainly attributed to a generation described as the ‘lost generation’ or ‘post-democracy babies’.

The introduction of the #FeesMustFall movement made 2015 an unforgettable year for many South Africans, both young and old. It reinvigorated the debate on the value of education and its’ role in a socio-political environment marginalised by the imbalances of the past.

In the midst of all this one may forget that the year 2016 marks 40 years since the gallant youth of 1976 stood up in protest of the compulsory introduction of Afrikaans together with other grievances against the government of the time.

In light of the various challenges faced by South Africa - one of which is the current economic climate - it is important to note that unemployment continues to pose a challenge. A study done by the World Bank on South Africa’s economy reported that key to a higher performing economy is: an aggressive job creation plan.

On this front there is some good news: The recently released Quarterly Labour Force Survey (QLFS) by Statistics SA for Quarter three of 2015 highlight an increase in the number of people employed. The survey also shows a decrease in the national unemployment rate from 25.5% in the previous quarter to 24.5% in the third quarter 2015. In the Eastern Cape, 39 000 more people found jobs in the third quarter, with 1,4 million people  being able to find employment.

Whilst there’s been gradual improvement in the employment numbers of the country, challenges still persist.

This is where the private sector and parastatals such as the CDC can make a difference. The CDC recognises that it and other organisations like it exist within a socio-economic environment which demands heightened levels of consciousness and understanding of the organisation’s role in contributing to the developmental needs of the country.

These needs are detailed in the National Development Plan (NDP) 2030. In response the CDC recently adopted the implementation of its five year strategic plan – Sustainable Growth Strategy (SGS) 2015-2020, which is fully endorsed by both the CDC board and executive management. 

The SGS strategy, takes cue from the NDP under the section – “Growth and jobs, education and skills, and a capable and developmental state”. The section spells out three priority areas of focus, mainly:

(1) Raising employment through faster economic growth.

(2) Improving the quality of education, skills development and innovation.

(3) Building the capability of the state to play a developmental, transformative role.

Raising employment through faster economic growth

The CDC, as catalyst for empowering growth and development both through investment promotion and project management services has in the past decade been in the forefront of economic transformation and development.

The CDC, through the Industrial Development Zone (IDZ), has managed to transform the economic landscape of the Eastern Cape away from its almost total dependence in manufacturing on the Automotive sector. Although the sector remains important, and in 2014 contributed approximately 7.2% of GDP, the Eastern Cape is diversifying.

There is growth in sectors such as energy – both conventional and renewable, chemicals, metals, agro-processing and aquaculture, just to mention a few.

As part of this diversification the CDC brought 31 operational investors, with a combined investment value of R6.44-billion, and a total investment portfolio in excess of R181-billion to the Eastern Cape. One such strategic investment within the IDZ is the Dedisa Peaking Power Plant – a R3.5 billion, liquid fuel open cycle gas turbine with a 342-megawatt (MW) generation capacity, which became operational in 2015.

The CDC’s contribution to job creation has seen the organisation win a number of awards. One which speaks to the priorities of the NDP is the Job Creation Award, which was presented to the CDC at the 13th Annual Oliver Empowerment Awards in 2015. The organisation in the financial year 2014/15 exceeded its jobs target by 101% through creating over 14 765 jobs (bringing the total to 96 776 since inception). These jobs were created through activities both within and outside of the IDZ. The CDC expects to exceed its 2016 jobs target by the end of the financial year on 31 March 2016.

Improving the quality of education, skills development and innovation

The CDC has provided training to more than 71 445 people since inception, and 8 147 over the past financial hear.  The CDC’s flagship socio-economic development (SED)  programme established in 2013 focuses on the teaching maths and science at school level. The low matric pass rate of 56,8% in the Eastern Capeis, in part, plausibly a result of poor performance in subject areas like mathematics and physical science.

Over 4 000 learners in Port Elizabeth, Uitenhage, Fort Beaufort, Mdantsane and Mthatha in the Eastern Cape benefit from the initiative. It has yielded impressive results with an impressive pass rate of 98% in both subjects as well as subject average of 56,6% for Mathematics and 55,2% for Physical Science.

Other CSI initiatives include a driver training programme which helped 1 249 young people to acquire drivers’ licenses in the 2014/15 financial year; the Youth Leadership Development Programme which focuses on enhancing the leadership skills of students in higher institutions of learning, together with CDC’s Science Mobile Lab which is aimed at encouraging and equipping learners for careers in science, mathematics and technology.

Building the capability of the state to play a developmental, transformative role.

In support of meeting the developmental needs of the country, the CDC provides strategic solutions that include a world class suite of Information and Communications Technology (ICT) as well as Research Unit (RU) services to a range of clients.

CDC’s value-added services are provided by a team of experienced economists and analysts with extensive and in-depth knowledge of global and local economic issues.

CDC’s Research Unit provides socio-economic outlook intelligence and knowledge management of key industries including agro-processing, construction, automotive and tourism to support strategic decision making. Among the services offered are local economic development strategy (LEDS), impact analysis and technical advisory.

As part of the CDC’s transformative role, the organisation has achieved a level 1 B-BBEE accreditation certificate for two consecutive financial years, making it the first state-owned enterprise to achieve such a milestone.

The CDC’s commitment to economic transformation is also reflected in its procurement spending. The CDC exceeded its SMME procurement spend target of 35% by a whopping 130% and achieved 46.17% SMME spending for the FY 2014/15. The CDC has projected to exceed the procurement spend target by year end 31 March 2016.

In addition the CDC hosts compliance workshops across the Eastern Cape with the aim to encourage SMMEs to comply with the legislation affecting their business growth. “Accredited training is provided relating to finance, tendering and pricing, business management, and health and safety management.

In conclusion, the CDC has uplifted the lives of more than 10 million people through its projects throughout the country, particularly in the Eastern Cape and KwaZulu-Natal.

Forty years on it is a beacon of hope for the new generation who will take the economy of South Africa forward. With their combination of knowledge, energy and a keen social conscience they will help eradicate poverty and inequalities   by taking full advantage of the economic and employment opportunities created by the CDC throughout South Africa.

RESILIENCE: Simlindele Manqina, Coega Development Corporation’s (CDC) Communications Officer. Reminding SA’s resilience to bounce back when chips are down.