SOUTH AFRICA ECONOMY, POLITICAL ENVIRONMENT AND ENTREPRENEURSHIP
B- BBEE Evolution
3.18 Mpumalanga’s Economic Intervention Programmes
Mpumalanga Economic Growth Agency (MEGA): The agency was established by Act 1 of 2010, with a clear mandate to fund and focus on sustainable development, especially on disadvantaged individuals in the province, which are largely black youths. Emphasis is placed on black economic empowerment as 90.7% of the populace is black (Provincial Treasury Mpumalanga, 2015). The agency is strategic is achieving the target reduction of unemployment and poverty in the province hence the allocation of R158 million in 2016 provincial budget.
Mpumalanga Economic Development and Tourism, 2016, reports on strategies aimed at generating employment and boosting local business through reforms in the energy sector includes the following:
a. Green energy development: MEGA is courting potential investors for the building of wind energy farm in the province that will generate and then supply power to Eskom.
The viability of this project is very important, as it will reduce cost of fund expended by small businesses in the province in the area of cost incurred in energy consumption. A major factor responsible for lack of interest in entrepreneurship.
b. Establishment of Bio-Diesel technology incubator: Due to large agricultural resources in the province, the provincial government is facilitating the establishment of bio- diesel incubator in Dr. J.S. Moroka local municipality. Bio-Diesel otherwise known as
‘Green Fuel’ is diesel made from vegetable oil, animal fat. This green diesel is cheaper source of energy, and it is used to power any diesel engine, machinery or
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vehicle. It’s non-flammable, non- hazardous, minimal sulphur and production 80%
less carbon dioxide emissions made the investment worthwhile. (green-diesel.co.za) c. Establishment of Biomass plant: another area of focus is the area of cheap and
sustainable energy, partnering with private investors to establish biomass plant in the province. Biomass is organic material derived from organisms; its production is plant based, animal or waste. The major components include arboriculture activities from wood processing, energy crops, agricultural residues, food waste and industrial waste (biomassenergycentre.org). Generating biogas from waste is a major source of cheap energy, which will ultimately boost business and bring down cost of production.
d. The province is also facilitating the establishment of the youth-owned electric bulb manufacturing plant in the province, targeting government retro-filling supply programme. This will not only create jobs but create ready market.
There are other intervention strategies by the province to boost local business and reduce unemployment. Among others is development of Agriculture/Agro-processing facilities, tourism, small business support-chain programmes.
e. Agriculture/Agro-processing facilities: Department of Agriculture and Rural Development and Land Administration (DARDLEA) has devise a plan to utilise the arable land mass in Mpumalanga to stimulate business creation. The focus is not only on farming activities which are presently occupied by heavy-weights in the province but to focus on small business value chain in the sector. Facilitating value-chain investments in Agriculture and Agro-allied processing is an area that can encourage youths into small business. The plan includes the establishment of International fresh- produce market in the province as a platform to bring together, small holder farmers, entrepreneurs, buyers and sellers together to participate and have access to both local and international market. (DARDLEA, 2016)
f. Tourism: as a net generator of foreign exchange, and labour intensive sector, the province is attracting investment through MEGA models, by encouraging private sector participation in delivering strategic tourism infrastructure projects, a good example is the cable car project in Blyde River Canyon.
g. Promotion of technological innovations in ICT, mining, and establishment of special economic zone (SEZ) in Nkomazi to attract new investments.
h. Mpumalanga Youth Entrepreneurship Programme: an initiative of South African Breweries (SAB) youth empowerment programme. SAB set aside R1 million to
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empower youths in Mpumalanga, this is an initiative targeted specifically to train, mentor, monitor and support youths to develop innovative, and sustainable small businesses in the province. Youths in the age bracket of 18 -35 years are encouraged to start new business, or new businesses not older than 6 months are provided capital, training and mentorship. 50 young business owners is targeted, where only 9 will be shortlisted and provided with seed-capital, intensive training and mentorship and business development support for 4 months.
i. The Department of Small Business Development has concluded plans to launch a centre for entrepreneurship at the Gert Sibande, Training and Vocational Education and Training College (TVET).
j. Small business support programmes: A lot of efforts have been expended by the provincial government in the area of small business establishment and supports. The report released by Mpumalanga Economic Development and Tourism in 2016 highlighted some milestones achieved in small business support.
i. 192 SMMEs, 282 corporations were assisted with business registration and compliance with Companies and Intellectual Property Commission (CIPC) in 2015.
ii. 684 Mpumalanga founded businesses supported with access to commercial prospects in the Kusile power station project.
iii. 11 SMMEs and 19 corporations were given technical training with South African Bureau of Standards (SABS) to improve their competitiveness and product quality in the market.
iv. 30 youths successfully undergo tool making training, 10 completed on-the- job training programme, 18 youths were nurtured through Mpumalanga stainless steel initiative utilising programme.
v. Youth-owned-fly-ash brick manufacturing plant was established in Govan Mbeki; which will provide on-the-job training and supply bricks to government’s human settlement and infrastructure projects.
In line with government interventions and measures, one would expect upward trajectory in youths participation in the entrepreneurial activities and reduction in unemployment;
however, youths unemployment stood at 39% and as high as 40.9% among black youth in 2015 (Provincial Treasury Mpumalanga, 2015). Therefore, youths seemingly lack of
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entrepreneurial behaviour may not necessarily be limited to external factors, but also psychological factors.