Hon Chairperson, hon Ministers and Deputy Ministers present, hon members and all distinguished guests, let me indicate that the New Growth Path is a dynamic vision to collectively achieve a more developed, democratic, cohesive and equitable economy for South Africa. It highlights critical markets for employment creation and growth, and identifies where viable changes in the structure and character of production can ensure an inclusive and greener economy.
The New Growth Path also aims to improve communication between the different spheres of government, relative to their developmental responsibilities. More specifically, all spheres of government will have to identify opportunities that arise by taking cognisance of their specific conditions. In this context, a spatial economic strategy will determine how the job drivers impact on different provinces, municipalities and rural areas, thereby linking it to the local integrated development plans, and spatial plans to industrial policies. Metropolitan areas, for example, are the engines of economic growth. There is a need to strengthen the capacity of municipalities, in general, to ensure the efficient provision of planning, services and development aligned with the New Growth Path.
I will restrict my comments to the key focus areas highlighted in the 2012- 13 budget speech on Economic Development. These are as follows.
First, regarding the roll-out of the infrastructure plan of government, which is focused on implementation and consensus building, Salga welcomes the focused approach to public investment in infrastructure. We also welcome the investment in new bulk construction of water and sanitation infrastructure, technology services, and transport and housing, as well as the maintenance of existing infrastructure. It will go a long way in addressing the backlog in basic services, stimulating the local economy, driving job creation and improving the local environment for business and other economic efficiencies.
At the department's recent infrastructure and development conference on the implementation of the government's R845 billion infrastructure programme, Prof Stiglitz pointed out that investment in infrastructure is important, but citizens themselves must also benefit. Its impact must therefore also include wellbeing, decent work and long-term sustainable development. Hence, while the Presidential Infrastructure Co-ordinating Commission recently announced the 17 strategic integrated projects, including three spatial strategic integrated projects, Sips, the reality is that the infrastructure investment in all 17 Sips will take place within or across a local municipality.
From a municipal perspective, Salga wishes to emphasise the need to find the right balance and integration between top-down and bottom-up planning; to ensure a common understanding with municipalities of what we mean by "local" as in the use of "local" labour, "local" supplier, "local" beneficiation, etc; to ensure that there are platforms, political will and ability on the part of all the local, regional and national stakeholders to engage and participate in the Sip process; and to ensure labour-intensive construction, including skills development and also longer-term sustainability, with the capacity and enterprise development.
Secondly, the Minister announced steps to improve small business performance, including through the roll-out of the Small Enterprise Finance Agency, Sefa, across the country, so increasing the disbursement to small business and working to lower the cost of bureaucracy and overheads. We applaud the launch of the new streamlined model of Sefa and hopefully the much-needed acceleration of small businesses in accessing funds to start or to sustain their businesses.
As the association representing all municipalities, Salga understands the challenge in getting the right type of information and level of support to the people, especially at grass-roots level in the rural areas where most of the previously disadvantaged communities reside. We therefore make a plea to the Minister to make a recognisable effort to use Salga, municipalities and other channels to bridge the gap, and inform and provide small business support in the most neglected areas of our country.
In support of both national and local developmental efforts, Salga would like to motivate its view that every local municipality must have access to promoting and/or facilitating access to the services of Sefa. While enterprise development is not a competency of local government, Salga would like to emphasise that entrepreneurship is the single most important activity in our economy. This needs to be facilitated at the coalface, where communities engage government. It is the only activity that enables enterprising South Africans to apply their minds to creating new value, new wealth, new money and new jobs. So, Sefa needs to be more than a name change with the same levels of bureaucracy and poor delivery of services. Rather, Sefa needs to change the formula and level of professional support that will encourage entrepreneurship to unprecedented levels.
Thirdly, regarding working with the Department of Trade and Industry to determine further support for co-operatives, Salga welcomes the focus on co- operatives, especially given that 2012 is the International Year of Co- operatives. As part of Salga's annual performance plan, we continue to advocate municipal developmental strategies that support the social economy. We would like to propose a partnership between Salga, the Department of Economic Development and the Department of Trade and Industry for a nationwide campaign in support of the International Year of Co- operatives, in order to be in alignment with the United Nations.
Municipalities face a number of challenges in developing and implementing policy that creates an enabling environment for the informal economy. Salga recently developed and shared guidelines for municipalities in respect of adopting a more developmental approach towards the informal economy and encourages the Ministers and the departments to support and encourage greater developmental thinking in this area. The informal economy should be an important part of government's strategies to address unemployment, support livelihood creation and reduce vulnerability. National departments and agencies should support the efforts of local government to develop and implement a more developmental approach towards the informal economy.
Fourthly, in regard to strengthening the links with provinces and local government, including via the Minmecs and the PICC, Salga wishes to congratulate the Minister for his leadership and vision in the formation of the PICC, which brings together half of Cabinet, the nine premiers, metro mayors and Salga. Having a single structure where all economic decision- makers in the public sector sit together to drive implementation is long overdue.
In addition, Salga notes that 200 local government officials are to be trained in economic development capacity. We would like to encourage the Minister and department to also engage with and complement Salga's capacity- building programme around local economic development, LED. Sound LED practices can facilitate an appropriate environment for economic growth, impacting positively on an enabling environment, job creation opportunities and poverty reduction. This should result in quality economic development planning and facilitation, and the development of good LED practices and sound, pragmatic LED initiatives, as well as improved local economic and job creation performance. Finally, we have two crosscutting items for the attention of the NCOP. It is agreed that spending across the three spheres of government can impact on small business and affect economic development positively or negatively. Therefore, preferential procurement is an important strategy for the government to extend opportunities to the previously disadvantaged groups. Most municipal supply chain management policies encourage procurement from within a local municipal environment. This is to ensure that the municipality itself supports companies and small, medium and micro enterprises from their local community, where possible. The imperative of promoting local small enterprise development is constantly reinforced at local izimbizo and IDP consultation processes.
In conclusion, Salga is excited to support the new strong partnerships between national, provincial and local government around economic development, especially the implementation of the infrastructure investment programmes stemming from the PICC. To be successful, the department will need to work in partnership with key stakeholders, particularly local government. [Applause.]