Towards a developmental state? Provincial economic policy in South Africa

Figures & data

Table 1: Labour market conditions in the provinces

	EC	FS	GP	KZN	LP	MP	NW	NC	WC	RSA
Unemployment rate Oct–Dec 2009 (%)	27.0	25.3	25.7	19.2	26.9	26.6	27.0	24.9	21.5	24.3
Employment rate Oct–Dec 2009 (%)	31.4	42.2	52.2	37.6	29.0	39.6	35.9	40.9	53.9	41.5
Loss of employment over last year (000s)	95	39	330	222	−40	53	109	26	37	870
Loss of employment over last year (%)	7.0	4.7	8.1	8.4	−4.6	5.7	12.2	8.2	1.9	6.3
Source: Statistics South Africa (StatsSA, 2010).
Notes: The employment rate (or ‘absorption ratio’) is the proportion of the working age population that is employed. Negative figures for LP indicate employment growth. EC, Eastern Cape; FS, Free State; GP, Gauteng; KZN, KwaZulu-Natal; LP, Limpopo; MP, Mpumalanga; NW, North West; NC, Northern Cape; WC, Western Cape; RSA, Republic of South Africa.

Table 2: Provincial economic aims and objectives

	Provinces mentioning objective		Provinces mentioning objective
Growth	9	Shared/inclusive growth	4
Employment	9	Poverty reduction	4
Sustainable growth	8	Informal/second economy	3
Diversification	6	Transformation	3
Global competitiveness	5	Good governance	3
Knowledge economy	2	Food security	2
Higher value added	2	Environmental sustainability	2
Local linkages	2	Decent work	1
Regional competitiveness	1	Broader econ. participation	1
Productivity	1	Livelihoods	1
Innovation	1	Spatial balance	1
Enterprise	1	Wealth redistribution	1
Source: Provincial survey responses and strategy documents.

Table 3: Provincial economic development activities

	Number of provinces mentioning activity		Number of provinces mentioning activity
Business development		Human development
Inward investment	9	Basic skills	0
Trade/export promotion	9	Vocational training	4
Sectoral support	9	Public works	1
Tourism	9	Labour market matching	0
Business associations	1	Empowerment	5
Science/R&D/innovation	1	Talent attraction	0
SME advisory support	9	Physical infrastructure
SME financial support	8	Transport and logistics	5
Cooperatives	8	Supply of serviced land	2
Informal enterprises	3	Business premises	1
Institutions		Public realm	1
Municipal capacity-building	5	Place image and branding	3
Public–private partnershipsLeadershipEconomic researchArts & cultural activities	4243	Regeneration of old industrial areasIndustrial development zone	14
Source: Provincial survey responses and strategy documents.

Table 4: Provincial economic development resources

	Average per province		Average per province
Financial (Rm)		Ratios
Internal ED budget	128	Budgets per capita (R)	79
Budget transferred to agencies	384	Budgets/staff (R)	0.96 million
Total ED budgets	512	Total budget/Province budget	1.3%
Staff
Department staff	135	Number of agencies	4.5
Agency staff	402
Total staff	537
Source: Provincial survey responses, annual reports and budget statements.
Notes: ED, economic development.

Table 5: External partners

	Number of provinces with these links		Number of provinces with these links
National departments	8	Financial institutions	2
National agencies	5	International donors	1
DBSA	3	Professional bodies	1
Other departments in the province	6	Local universities	6
Province arm's length agencies	5	Training colleges	1
Municipalities	6	Research/consultancy bodies	5
Other provinces	2	StatsSA	1
Chambers of commerce	4	SA Reserve Bank	1
Other business associations	5	Organised labour	2
Property developers	1	Civil society organisations	1
Sources: Provincial survey responses and strategy documents.

Table 6: Main achievements

	Total mentions		Total mentions
Create forum for policy discussion	4	One-stop shops for all entrepreneurs	2
Undertake analysis/research/feasibility studies	3	Targeted business support for disadvantaged groups	3
Develop a strategy	3	Infrastructure for informal traders	1
Support municipal LED	6	Science park/business incubator	2
Create a new agency	2	Specialised business park	2
Prepare business plan(s)	3	Funding industrial & commercial property	2
Organise a BEE conference	1	University–business collaboration	2
Organise a cultural festival	2	Supplier development programme	2
Exhibition for SMMEs	1	Programme to support cooperations	5
Attend international trade exhibition	2	Major road infrastructure	1
Supporting sectoral infrastructure	8	Create major visitor attraction	1
Launching IDZs/SDIs	4	Develop an international airport	1
Levering public investment	2	Develop major logistics hub	1
Levering private investment	4	Attracted inward investment	2
Create province growth fund	3	New businesses started	2
Advice/training for SMMEs	5	Actual job creation	3
Financial aid for SMMEs	6	Temporary jobs via EPWP	2
Information centre – SMMEs	1	Skills training	1
Sources: Provincial survey responses.
Note: BEE, black economic empowerment; EPWP, expanded public works programme; IDZ, Industrial Development Zone; SDI, spatial development initiative.

Table 7: Main obstacles and other concerns

	Total mentions		Total mentions
Skills and capacity		Coordination
Lack of municipal capacity to plan & implement projects	6	Poor coordination between spheres or departments	3
Shortages of professional skills in the department	4	Lack of common vision among key stakeholders	1
Shortage of professional skills in private consultancy	1	Low commitment of key stakeholders	1
Lack of capacity in agencies	1	Lack of influence over agencies	1
General low skills/shortage	3	Contradictory government requirements	1
		Poor support from national departments	1
ResourcesLack of resources from government to deliver a large mandateLack of resources for R&DLack of venture capitalLack of private sector match fundingLack of municipal resources	51111	Lack of strategic perspectiveLegislative obstacles to BBBEEDelays caused by Environmental Impact Assessment requirementsLack of government support for vulnerable sectors	1121
		Wider economic obstacles
ImplementationInadequate implementation of beneficiation programmePoor implementation of PPPsSlow implement. of BBBEE	111	Recession, tight credit, strong rand, less private investmentNarrow economic baseCannot attract FDI to provinceExtreme poverty, weak tax base, serious social problems	1112
Sources: Provincial survey responses.
Note: BBBEE, broad-based black economic empowerment; PPP, public–private partnerships.

Table 8: Coordination problems

	Total mentions		Total mentions
Poor coordination between departments in the province	4	Fragmented legislation, regulations and policies	2
Poor links between province and its agencies	1	Restructure MinMec to focus on key policy priorities	1
Poor links between province and municipalities	4	Many disjointed initiatives	2
Lack of knowledge sharing between provinces	5	Need practical cooperation on joint projects	1
Need more communication between national & provinces	3	Poor coordination between SMME support agencies	2
Need more transparency in decision-making	1	Poor coordination of skills programmes	1
Poor alignment and overlapping responsibilities between spheres	4	Poor coordination of infrastructure investment	2
Lack of joint planning between spheres	2	Need more monitoring and evaluation	1
Sources: Provincial survey responses.
Note: MinMec is a regular forum between national and provincial ministers of economic development.

StatsSA (Statistics South Africa) . 2010 . “ Quarterly Labour Force Survey, October–December 2009 ” . Pretoria : StatsSA .

 Google Scholar