Metros play crucial role in ensuring inclusive economic growth

Monday, June 5, 2017

Pretoria - The country’s eight metros have an important role to play in bringing about inclusive economic growth, Finance Minister Malusi Gigaba said on Monday.

Speaking at the Ekurhuleni Investment Conference at Emperors Palace, Minister Gigaba said the country needs cities, what the City of Ekurhuleni is already doing, which is going to forge strategic partnerships.

“It is clear that metro governments have an extremely important role to play in bringing about inclusive economic growth,” said Minister Gigaba.

“South Africa needs a social contract for growth, transformation and jobs. Government needs the private sector in order to boost the business confidence we needs to grow our economy in short-term and lay the basis for long-term sustainable inclusive growth,” said Minister Gigaba.

He told those attending the conference that cities are the engines of the South African economy and of growth with 57% of the national economic product is generated within the country’s eight metros.

“Furthermore, our cities have long been growing faster than the national economy.

“Information available to the National Treasury shows that over the last five years, between 2011 and 2016, the metro economies grew by 11.1%, but all other areas of South Africa combined managed to grow by only 4.6%.”

Cities were also the engines of job creation, with the Statistics South Africa’s Labour Force Survey showing that 50% of all employment, formal and informal, are in the eight metros.

The Minister said while cities are the engines of economic growth, they are not performing as well as they should.

“City economic growth of 11% over five years is not sufficient. City job creation of 448 000 over two years is not sufficient. One of the major reasons for the insufficient performance of our city economies is related to the dispersed and inside-out spatial form that was inherited from apartheid.”

In the past, black people were placed in townships that were far from economic and social opportunities, with poor quality services, little access to acceptable housing and very poor transport services.  

Government said that despite the massive investments in public housing, basic services and transport systems made by government since 1994, both public and private investments have tended to re-inforce apartheid urban development patterns.

To be more inclusive, cities need to made more compact.

“Cities are supposed to be meeting places of people, ideas and opportunities. Our cities have a shape which is preventing them from fulfilling this role properly. Our cities remain among the most unequal, unproductive and unsustainable in the world,” said Minister Gigaba.

He further added that the country must tackle the challenge of spatial transformation in cities through clear growth management strategies, plans and programmes.

To date, Ekurhuleni has 109 informal settlements and is developing a comprehensive informal settlement upgrading programme.

“Metros need to play a leading role in coordinating and leading this inclusive growth agenda,” said Minister Gigaba, adding that in 2016 the Ekurhuleni city economy generated almost R210 billion in economic product.

While Ekurhuleni is growing, figures show that it is not growing fast enough and also not creating enough jobs.

“Inclusive economic growth requires that Ekurhuleni grows faster and generates jobs more quickly and on a sustainable basis,” said Minister Gigaba. -

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