Publish Date: 01 Jan 2009
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While the fourth term of government began against the backdrop of the global economic recession which hit hard, especially in areas such as the automotive and component industries, where it was estimated that 36 000 jobs were lost countrywide, it was a five-year period that saw the emergence of the real possibility that the Eastern Cape would finally escape from its historical role as a labour reserve.

It was a period that saw sustained growth in the Coega and East London IDZs both of which secured a significant number of investors, important ties with state-owned enterprises established, and the announcement of a number of major initiatives that could bring significant economic benefits to the Eastern Cape.

The fourth term was also marked by greater financial stability and improved audit outcomes with both Health and the Education Departments, after more than a decade of disclaimers, achieving unqualified reports for the first time in 2012-13 and 2013-14 respectively.

It was also a period of sustained leadership stability which meant that members of the executive were able to establish a strong hold on their departments and create the kind of culture within the administration that would ensure goals were met.

This term of government saw a shift in macro policy towards a counter-cyclical state-led economic development model (driven primarily around infrastructure investment and a new emphasis on industrial policy), anchored around the New Growth Path, IPAP, and the National Infrastructure Plan. The term also saw a significant shift in HIV/AIDS policy.


INSTITUTIONAL DEVELOPMENT AND GOVERNANCE 

The fourth term of government in the Eastern Cape was characterised by a shift in the focus from short-term plans to a long-term vision as embodied in the National Development Plan and Eastern Cape 2030 that critically spanned a longer period than the five-year term of office of each previous administration.
The fourth term was characterised by:

  • Sustained leadership stability, despite some HOD changes, which allowed members of the provincial cabinet to establish a strong hold on departments and create a culture within the administration that would ensure goals were met;
  • A number of restructuring initiatives that saw Planning combined with Treasury, Transport being linked to Roads as well as the establishment of the Rural Development Agency;
  • A shift in focus from short-term plans to a long-term vision as embodied in the National Development Plan and Vision 2030 that critically spanned a longer period than the five-year term of office of previousadministrations and
Turning around, at least to some extent, the Health and Education departments that collectively had been generally responsible for the tarnished image of the Eastern Cape and had more often than not been responsible for its financial woes.

The Planning Commission was established, spelling out a 2030 vision and completing a diagnostic report on the province. It was pointed out that "without a centralised planning baseline, we believe that it will be impossible for government to plan and manage its performance in an effective and efficient manner”. The Eastern Cape Planning Commission completed the Diagnostic Report and Strategic Perspectives towards Vision 2030 discussion documents.

Importantly, a number of plans that had been on the provincial agenda for more than a decade started to come to fruition, including the development of the Wild Coast and Mzimvubu hydroelectric and irrigation scheme – both as a result of national interventions.

The turnaround was underway, at least to some extent, in the Health and Education departments that collectively had been responsible for the tarnished image of the Eastern Cape and had more often than not been responsible for its financial woes. In 2011 National Cabinet declared a Section 100(1) (b) intervention in Education with six broad areas identified for specific actions. Overall progress was reported  with the turnaround plan for the department, sentiments echoed by Basic Education Minister Angie Motshega.

Local government remained problematic in some areas with Sections 139 and 154 being involved in four local authorities and Section 154 support also being required in Nelson Mandela Bay.

The Eastern Cape, along with other provinces, experienced protests, often linked to service delivery,  mainly around housing as well as local political dynamics with the latest figures showing that there were more protest actions in the province in the first quarter of this year than in any other. The Eastern Cape experienced a sharp increase in the number of service delivery protests  with 30% of all protests taking place in the province in 2012, a year that saw the Eastern Cape overtake Gauteng in terms of the percentage of protests and becoming second only to the Western Cape. The latest figures show that there were more protests in the first quarter of 2014 than in any other year.

The greatest challenge facing the administration remained the high levels of unemployment, especially among young people. The situation was clearly exacerbated by the global economic meltdown that resulted in low growth. 

As part of its fight to curb corruption, provincial government introduced a policy prohibiting officials from trading with government.

FINANCE

While the fourth term of office demonstrated the same roller coaster ride with regard to under- and over-expenditure, it was also the period in which the province started to get to grips with one of the challenges that had faced it from the start – the cost of employees.

In 2009-10, for example, there was overspending of nearly R2.1 billion as a result of higher personnel costs than budgeted for, particularly in Health and Education. By the end of the term, however, the tendency was more towards underspending, specifically on the Human Settlements Development Grant.
The crafting of the budget took place against the background of two developments. Firstly, the province was not immune from the effects of the global recession and secondly, while cushioned  from the impact , it faced a reduced budget as a result of the Census 2011 revealing that it now had a lower percentage of the national population which meant a reduction in its equitable share of national revenue. The impact of the reduction in the equitable share was softened by being introduced over three years.

The focus throughout the term was on reducing what could be broadly described as "fruitless and wasteful expenditure” in areas such as catering, travel and accommodation, and ensuring that spending on the cost of employees was reduced.

In the last budget before the end of the term, Provincial Planning and Treasury MEC Phumulo Masualle also pointed to the fact that work was ongoing "to balance core staff and support staff in an effort to skew it heavily towards core service delivery skills”.

The Eastern Cape is still grappling with the veracity of employee numbers and has conducted verification exercises at considerable expense – following Health and Education the focus will now fall on Rural Development and Agrarian Reform.

Surely one of the first tasks of the next administration must be to put this "ghost” from the past behind the province once and for all.

ECONOMIC DEVELOPMENT

During the fourth term partnerships with state-owned enterprises started to bear fruit. An MOU was signed with Transnet which subsequently led to the reversal of earlier decisions taken by the SOE with regard, for example, to the future location where manganese would be exported from, and R17 billion investment over seven years in the Eastern Cape’s three ports. A further investment of R121 million for the upgrading of the railway line between Coega and the Northern Cape for the transportation of manganese was secured. 

Flowing from that, Transnet announced as part of its Market Demand Strategy that construction of a manganese export terminal at the Port of Ngqura, the upgrading of the railway line from the Northern Cape and relocation of the existing manganese facility in Port Elizabeth to Coega by 2019.

The decision to export manganese from Ngqura also paved the way for the construction of two ferro-manganese smelters at the IDZ. While Port Elizabeth was being positioned by Transnet as the country’s premier automotive hub, the prospects for East London were somewhat murkier, following the operational collapse of Elitheni Coal and financial tribulations of its major shareholder. At the end of the term there was no clarity as to when the mine might become operational, having only shipped one cargo of coal to date.

President Jacob Zuma also officially opened the Port of Ngqura during the fourth term. Significant investment was also secured from Eskom, although the timeframes for this are likely to be put back as a result of the parastatal’s financial challenges.

The launching of the Strategic Infrastructure Projects (SIPs) also had an impact in areas such as the Mzimvubu hydro-electric and irrigation scheme; N2 Wild Coast Highway and the positioning of the Port of Ngqura as the trans-shipment hub for Southern Africa.

The province completed refurbishment of the Mthatha Airport runway, positioning it as the gateway to the Wild Coast and the eastern part of the province, although challenges still remain on the sustainability of the airport. The province also concluded successful discussions with Eskom in terms of which it will invest more than R10 billion in energy infrastructure in the Eastern Cape by 2017.

The enactment of the Special Economic Zones legislation paved the way for the existing IDZs to access a suite of incentives that had been lacking in the past and for the declaration of the Wild Coast as an SEZ and possibly an SEZ around Queenstown.

The fourth term also saw the transfer of 2 011 kilometres of provincial roads, including the R72 coastal road linking Port Elizabeth and East London transferred to the South African National Roads Agency Limited (Sanral). This was on the back of securing spending of R2.2 billion by Sanral on new roads and improving, maintaining and strengthening existing ones. 

From a tourism perspective the launching of the "Home of Legends” initiative gave the province an image and a branding that it had lacked in the past. The province was part of the successful hosting of the World Cup in 2010 following construction of a new stadium in Nelson Mandela Bay. 

The term also saw the introduction of the industrial "cluster” system with an automotive cluster established with the support of all stakeholders. Other clusters are also being investigated.

HUMAN DEVELOPMENT 

After a history of disclaimers and adverse opinions, the Health Department recorded a qualified audit in 2012-13, and the Education Department in 2013-14 as a result of joint actions taken by the national and provincial departments in terms of the intervention. Education also addressed another area where it had been pilloried in the past with the timeous delivery of text books and stationery to all schools.

The Accelerated Schools Infrastructure Development Programme (Asidi) was somewhat of a disappointment with deadlines for the provision of schools repeatedly put back, although 49 schools had been completed and handed over by the end of the fourth term.

The redeployment of teachers in excess of complement remained a challenge. By the end of the term 54 000 pupils  benefited from scholar transport while 95% of all schools were part of the National School Nutrition Programme.

During the fourth-term the number of people benefiting from the ART programme increased from 102 186 to 273 305 and the number of facilities able to provide the treatment from 85 to 790.The turnaround plan in health also resulted in a significant number of arrests for fraud and corruption.

Nelson Mandela Bay was a host city for the 2010 World Cup although attempts to secure Buffalo City and Mthatha as venues for training camps for teams participating in the event failed and the major economic benefits from the event were largely restricted to Nelson Mandela Bay.

According to the Fifia World Cup Legacy Projects Close-Out Report, a total of 17 key legacy programmes and initiatives were initiated throughout the province, 13 of them located within the Department of Sport, Recreation, Arts and Culture.


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