R50m jobs fund for Eastern Cape

2011-10-29 12:00

The Eastern Cape’s economic development minister, Mcebisi Jonas, has launched a R50 million jobs fund that will grow to R150 million next year.

This means that the Eastern Cape is the first province to roll out its own initiative under the banner of the R9 billion jobs stimulus fund managed by the Development Bank of Southern Africa.
The fund aims to create 150 000 jobs nationally over the next three years. The province aims to create 30 000 jobs over the same period.

The unemployment rate in the province rose to 26.9% in the first quarter of this year from 24.7% in the fourth quarter of last year.

Jonas said the Eastern Cape’s version of the jobs fund would go a long way towards easing the pain of massive job losses.

“We can’t fold our arms and not do anything about the job losses. We need to lobby for regional incentives because we are losing jobs in a manner we can’t manage.”

Jonas said applicants would receive a response from the fund within three to four weeks of the closing date for submissions.

The fund would pay a yearly amount of R10 000 for every job created.

The province lost nearly 40 000 jobs because of the recession, while the South African economy shed 1 million jobs. The Eastern Cape lost 16 000 jobs between the first and second quarter of this year.

Sitembele Mase, the chief executive of the Eastern Cape Development Corporation, which will manage the Eastern Cape’s jobs fund, said the development lender had implemented strict measures to ensure that the fund was not looted by fraudsters.

“There are bound to be chance-takers who will try to take advantage of the public funds.

 We have put measures in place to combat fraud,” said Mase, who is a former deputy director-general of the Department of Trade and Industry.

He said the jobs fund was crucial for a province like the Eastern Cape, which had a low labour-absorption capacity. He said the province would ensure that its jobs fund was used to create sustainable jobs.

“Since 2009, the Eastern Cape Development Corporation has disbursed more than R600 million in loans, but we did not create sustainable jobs. We need to ask ourselves if we are disbursing to viable and sustainable businesses.

There is a big percentage of our funding that goes to tenderpreneurs, but they are not growing the economy. All they do is create short-term jobs.”

Mase said the Eastern Cape Development Corporation and rural development agency AsgiSA Eastern Cape had applied for R500 million funding from the R9?billion fund managed by the Development Bank of Southern Africa to fund the province’s job-creation plan.

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