‘RADICAL SOCIOECONOMIC TRANSFORMATION’: A tough job ahead for new MEC Sakhumzi Somyo

BY TAI CHISHAKWE - JULY 23, 2014

Both the ANC and Eastern Cape business are pinning hopes on new Finance, Economic Development, Environmental Affairs and Tourism MEC, Sakhumzi Somyo, to inspire economic revival and put the sweet words contained in new Premier, Phumlo Masualle’s, “radical socioeconomic transformation” plan into action.

Somyo, who is Deputy Provincial Chairperson in the ANC, replaced Mcebisi Jonas and Masualle after their previous portfolios were combined into one - certainly making him one of the most influential men in Bhisho.

But who is he?

MEC Somyo holds a BA degree and a Teacher’s Diploma and was a teacher for many years. He began his political career as an executive member of the UDF in the mid-80’s and became a Chief Liaison Officer in the Office of the Premier after 1994 before a fairly successful tenure as Amathole District Municipality Executive Mayor for 13 years.

He also held senior positions at the South African Local Government Association (SALGA); Amathole Water Board, the Housing Development Agency, Eastern Cape Development Corporation (ECDC) and the South African National Biodiversity Institute (SANBI) and is listed as Partner at PR agency, Intengu Communications.

Somyo’s skills and experience in economic development are largely speculative. His promotion can be seen as the ANC doing away with having ‘two centres of power’ – different leaders for government and party, for better synchrony between ANC and government policy.

Most observers said he deserves an opportunity to prove himself while the few who know him said he is a man business can deal with.

“He has a proven record of being a person that listens, deliberates and then acts. He seldom shoots from the hip – but does accept the role of accountability. He has good attributes and always ensures the leadership around him is effective,” described Les Holbrook, Executive Director at Border-Kei Chamber of Business.

In a statement, Head Of Department at Economic Development, Environmental Affairs and Tourism, Bongani Gxilishe, said Somyo will provide leadership needed to take the provincial economy forward describing him as “very experienced and had played a critical role at various levels of government”.

Cometh the hour, cometh the man

Somyo’s new task is unenviable. He has to provide transparency, assurance and keep investments flowing at a time when the provincial economy is sliding - mirroring a struggling national economy, and when business confidence in the province has been declining, according to the Bureau for Economic Research (BER).

Holbrook said that it was time that government partners with business and find solutions to enterprise development across the province.

“We are weary of trying to present our case, only to be side-lined or ignored. Further, government departments need to be listening to each other, especially in legislation. At the moment, it seems like every department is trying to outdo the other!” he said.

Speaking on behalf of the Democratic Alliance’s Shadow MEC for Economic Development, Environmental Affairs and Tourism, Ross Purdon, Nalisha Dhaya said, “The MEC has to create an environment that will stimulate growth and investment. This involves major focus on infrastructure development - especially in the rural areas.”

Consulting Economist, Roshan Makan, said unemployment, especially among the youth, is a major concern. StatsSA’s Provincial Labour Market 2008-2014 report showed that unemployment among the province’s youth dropped from 37.6% to 40.7% between 2008 and 2014. Today, 92% of those without work experience are young people.

Eastern Cape Chairperson of the National African Federated Chamber of Commerce and Industry (NAFCOC), Phumzile Ndendela, said; “The question of youth/women unemployment is a worrying factor in the country, not necessarily in our province. In my view, the MEC must engage all the role players in the economic space.”

The prickly issue of transformation will be another challenge for the MEC. The Department of Labour’s 2014 Employment Equity Report says the province has the second highest number (55.5%) of White men in top management positions in the country - as compared to 16.6% (African), 5.5% (Coloured) and 2.8% Indian men.

Chairperson of the Graaff-Reinet Chamber of Commerce, Fabian Cairns, said skills shortages and infrastructure development need attention.

Good governance in our towns and incentives would also help in encouraging expansion and in attracting new enterprises,” he added.

Dhaya said Somyo will also have to deal with endemic corruption, especially in the public sector, and ensure value for money in government spending.

Above all, the new MEC has to steward the provincial economy from overdependence on the automotive sector which exposes it to pressures in the global economy – as seen in the turmoil of the 2009 Global Recession.

“We need to give agriculture a push start. There is enormous potential in a whole range of downstream beneficiation, including food, energy (bio-fuel) and manufactured goods,” said Holbrook.

Cwenga Pakade, CEO of Walter Sisulu University’s Enterprise Development Centre, said the proposed transformation of IDZ’s into Special Economic Zones was a welcome strategy and urged Somyo to ensure buy-in from organised labour.

While Dhaya proposed a provincial youth wage subsidy, Makan said stimulating the SMME sector would ease unemployment.

“On a macro level, there is a lot of government incentives but small enterprises struggle to access these and funding. There are also structural issues within the Eastern Cape economy that need the MEC’s attention such as red tape and the role of the ECDC,” he described.

Makan urged Somyo to implement a draft strategy document titled; ‘An Integrated Strategy For Promotion Of Entrepreneurship And Small Enterprises In The Eastern Cape’ which was commissioned by his department back in 2009.

“It is often said our province is the most researched region in the country; the challenge has always been how to transfer all that knowledge into real solutions, hopefully he is the man to do that,” he concluded.