Download Speech by Finance MEC Mandla Nkomfe on the presentation of PERO

SPEECH BY MR. MANDLA NKOMFE, GAUTENG MEC FOR
FINANCE, ON THE OCCASION OF THE PRESENTATON OF
THE 2012 PROVINCIAL ECONOMIC REVIEW AND OUTLOOK,
GAUTENG PROVINCIAL LEGISLATURE, 20 NOVEMBER
2012.
Honourable Speaker;
Members of the Provincial Legislature;
Representatives of our strategic partners;
The People of Gauteng
INTRODUCTION
It is my privilege, indeed, to present the 2012 Provincial Economic
Review and Outlook (PERO) publication to the Gauteng
Legislature. The publication provides economic analysis on the
global and national scale and outlines the structural make-up of
the provincial economy through sectoral analysis, amongst other
things, provides an analysis of the province’s economic
performance and contribution to national output.
This is the sixth year that the Gauteng Provincial Treasury (GPT)
has produced this publication. During this period, the quality of the
final product has improved significantly, demonstrating GPT’s
ability to take raw data, interpret it, package and present it in a
simple language that even ordinary citizens can understand.
This is what makes this document such a valuable source of
information. That is why I would like to urge everyone, even
ordinary citizens and civil society to make use of PERO to track
economic progress of the province.
PERO is an annual publication that forms part of documents
produced by GPT to inform policy decisions and budget
allocation. Other publications are the Socio Economic Review and
Outlook (SERO) and the Medium Term Budget Policy Statement
(MTBPS).
Collectively these publications provide the Executive (Gauteng
Provincial Government) and the Legislative (Gauteng Legislature)
arms of government with the necessary insight into the economic
and socio-economic issues of the province.
These in turn enabling these two structures to make informed
decisions with regards to policy interventions and the efficient
allocation of resources to fund various priorities aimed at
improving the living conditions of the People of Gauteng.
The 2012 PERO is divided into four chapters of;
 Global and National Economic Review and Outlook;
 Gauteng Economic Review and Outlook;
 Economic Overview of the Agricultural Sector; and
 Labour Overview
ECONOMIC OUTLOOK
The global economy is slowly emerging from the deepest
recession in more than 30 years. This recovery can best be
described as sluggish, hesitant and fragile depending, of course,
on which part of the world you are looking at.
The developed economies, driven by the double dip recession in
the European Union and uncertainties in the economic prospects
of the US, will experience growth rates of 1. 4% this year and
possibly even higher next year.
However economic growth in the developing economies will be at
5% to 6%, suggesting that the impact of the Euro zone debt crisis
is minimal when compared to advanced economies.
In 2011, South Africa experienced the smallest Gross Domestic
Product (GDP) growth rate of 3.1% within the Brazil, Russia,
India, China and South Africa (BRICS) grouping. It also has the
smallest population of all the other BRICS countries and has an
average rating for infrastructure within the grouping.
As the Finance Minister, Honourable Pravin Gordhan noted
during the tabling of the Medium Term Budget Policy Statement
last month, this “will be supported by an increased focus on
modern tertiary sector activities, the prudent management of the
budget deficit by the government, and falling household debt”..
Therefore, our country’s economy is expected to grow by 2.5%
this year, rising to 3% next year before reaching 4.1% in 2015%.
THE HIGHLIGHTS
So what does the 2012 Provincial Economic Review and Outlook
tell us about the structural make up of our economy, performance
and contribution to national output?
It says the following:
 Gauteng remains the largest contributor to the country’s
gross domestic product, generating 35.6% of the national
output;
 The Gross Domestic Product by Region (GDP-R) of the
province was R674.9 billion last year growing at the rate of
3.2%;
 The City of Johannesburg has the largest economy of the
Gauteng municipalities; its GDP-R was R313 billion in 2011
and growing at 4%;
 The City of Tshwane has the fastest growing economy of the
municipalities, at 4.4% growth with a total GDP-R of R184
billion;
 Ekurhuleni has a GDP-R of R128 billion, with a growth of
3%, in 2011.
 Gauteng accounts for 68% of all exports from the country
and 61.4% of imports.
 The province experienced a surplus in the trade account
from 2009 to 2011; this surplus amounted to R24.3 billion
last year;
 China is the biggest trading partner of the province; it was
the destination for just under 15% of exports from Gauteng
and the source of just over 15% of imports to the province.
The tertiary sector continues its dominance of the province’s
economy, contributing 71.1% to the Gross Value Added by
Region (GVA-R) of Gauteng. The secondary sector contributed
24.3% to the economy and the primary sector’s contribution was
4.7%.
The economic contribution of the agricultural sector has been
declining both nationally and provincially. In the province, the subsector contributed 0.4% in 2011. Employment by the sub-sector
has also been declining, ranging between 50,000 and 42,750 in
2002 and 2011 for the province. However, employment in agroprocessing has increased from 62,912 to 86,768 in the same
period. The main agricultural products in the province, amongst
others are, maize, ground nuts, sunflower and cotton.
However, our province like the rest of South Africa is still facing
the challenge of high unemployment rate. This is inspite of the
fact that in the second quarter of 2012, the unemployment rate
had decreased to 24.9% from 25.2% in the first quarter. In the
same period, the number of people who were employed grew by
0.2% only. The province has a high share of the population that is
not economically active, at 10.2% in the second quarter of 2012.
The objective of PERO is to tell us a story of where we are so that
we could determine where we want to be in future. To do that we
will need to engage with facts and figures, debate what is our
shared vision for the future and then work on designing/reviewing
our plans and policies that will ensure that we arrive at the
destination as envisaged in our vision. That destination is a better
life for all of our people.
I therefore urge the people of Gauteng to get hold of the
document and start engaging with the findings. Let me
congratulate Head of Department Ms. Nomfundo Tshabalala and
the team for the hard work that they put in developing this
insightful publication. Your work is appreciated.
Thank you.