Eastern Cape to diversify its economy

2012-12-09 10:00

Eastern Cape is looking to diversify its economy in areas not related to the automotive sector, its lifeblood and largest employer.

In the wake of the 2008 global economic crisis, local car sales and production plummeted, hitting the province, which produces roughly 50% of South African-made vehicles.

The task of spearheading this economic diversification strategy has been placed on the shoulders of Sithembele Mase, the chief executive of the Eastern Cape Development Corporation (ECDC). The corporation is a vehicle for industrial and small-business development.

“It is true Eastern Cape is heavily dependent on the automotive sector . . . However, the ECDC is looking to build new economic sectors and crowd in private-sector investment . . . We are looking at developing the green economy, agroprocessing, and renewable energy sectors,” Mase told City Press.

The province’s auto industry employs more than 40 000 people and is home to four of South Africa’s major car manufacturers.

Mercedes-Benz is based in East London, Volkswagen is in Uitenhage, while Port Elizabeth is the home of Ford and General Motors SA.

Mase said the ECDC has already invested R44 million to develop agroprocessing, which is seen as crucial in reducing Eastern Cape unemployment, which is currently at 30% and above the national average of 25.5%.

Mase also revealed the ECDC has received R175 million from the R9 billion Jobs Fund administered by the Development Bank of SA. The money will be invested by the ECDC in conjunction with the Eastern Cape Rural Development Agency.

“The (agency) will drive agricultural production and the ECDC will focus on agroprocessing and forestry beneficiation . . . We will also handle the commercialisation of these projects, marketing, and logistics,” said Mase.

He admitted the province needed to improve its poor roads infrastructure and upgrade its skills base.

“Unfortunately, the cost of doing business in Eastern Cape is high because of poor infrastructure, but it is still full

of opportunities,” Mase said.

Two-thirds of Eastern Cape’s 6.6 million people live in the ex-homelands of Transkei and Ciskei, where infrastructure is

the worst in the province.

But the provincial government is planning to build a R9 billion Wild Coast toll highway to connect Durban and East London.

The road is expected to promote tourism along the Wild Coast, a stretch of beautiful coastline in Transkei, and possibly pave the way for the development of titanium mining in Pondoland.

- City Press

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