Migration costs Eastern Cape R13bn | Fin24
 
  • Another VAT hike?

    Absa warns that govt may again announce an increase in value added tax in next month's Budget.

  • SA Revenue Service

    The tax agency says a unit that tackles illicit financial flows has recovered R2.6bn since April 2019.

  • State Capture Inquiry

    Former Eskom chairperson Zola Tsotsi says Tony Gupta threatened to have him removed.

Loading...

Migration costs Eastern Cape R13bn

Jul 15 2018 06:10
Lubabalo Nguckana

Cathedral Rock near Waterfall Bluff on Eastern Cape’s Wild Coast where the waterfall falls directly into the sea.

Related Articles

Eastern Cape parts supplier cuts 150 jobs

BAT signs MoU to help emerging tobacco farmers in E Cape

Jobs crisis looms as drought grips Eastern Cape

 

The Eastern Cape needs to have a better plan and focus on economic development in different sectors to mitigate the loss of R13 billion in equitable share of government funding over the years as a result of migration, says Oscar Mabuyane.

Mabuyane, MEC for economic development, environmental affairs and tourism, also wants a better funding model.

Most of the people leave the province for Gauteng, Western Cape and KwaZulu-Natal, resulting in these provinces getting a bigger slice of the budget, to the detriment of the Eastern Cape.

In a recent interview with City Press, Mabuyane said the province urgently needed to deal with its huge infrastructure backlogs and make it difficult for its citizens to leave the province.

Eastern Cape MEC of finance Sakhumzi Somyo announced in his March budget speech that of the province’s R78.2 billion allocation, the departments of education and health would get the lion’s share of R34.7 billion and R23.7 billion, respectively.

'Make people feel at home'

“We must make our people feel at home. We must have an economic development programme that encourages people to stay in their rural homes, rather than leave for urban centres,” Mabuyane said.

“In the current dispensation, our people leave their homes to go places like Cape Town, even if they have to stay in shacks, to get some income. They take their kids away from the province.

“That is why the Eastern Cape has lost about R13 billion in the current equitable share. It is because of that migration. Our people leave the province and the funding formula from the national budget or public fiscus is about numbers in terms of the population,” Mabuyane said.

He said there were Eastern Cape footprints across the country because, in addition to the three provinces that gain from the province’s migration, there were people who also left for North West, Free State and Limpopo because of mining activities there.

“We are talking about ordinary people and even professionals. They always leave. We need to create greener pastures for our people here.

“At least those who leave must be people who cannot be absorbed into our economy as a province. It’s because those provinces can provide what we can’t [that make people leave],” he said.

Think strategically

Mabuyane – who is also MEC for the provincial treasury and the chairperson of the ANC in the Eastern Cape – said the province needed to think more strategically.

“We must think what else we can do other than the automobile sector. How we can explore more provincial capabilities in the agricultural sector, in agroprocessing and maritime or oceans economy, and in transport and logistics. We have a lot to offer. This is where we can look investigate and create jobs for our people,” he said.

Mabuyane said already the road network was being improved as a catalyst to economic development but that needed to be connected to other sectors to respond to the province’s challenges.

“The problem is that as a province we don’t have a plan. This is the situation that I am reading. We are one of those provinces that tops the list in terms of unemployment. That is a very serious time bomb. We need to do things differently from how we have been doing them. We need to put money into strategic things for development,” Mabuyane said.

He said the province used about 1.5% of its budget to focus on economic development, unlike KwaZulu-Natal and Gauteng, which allocated 2% or more.

“This tells us that as long as we are not creating money, making money available out of the small cake that we have, trying to have more money that can encourage economic opportunities, investing where we can invest, we are not going to go far,” Mabuyane said.

Tourism

Tourism was one area that has not realised its full potential, even though it has many opportunities.

“Those are real issues that we need to have a serious dialogue about. We need to offer more solutions. There is room for improvement. We need to encourage more strategic thinking and innovation,” he said.

Mabuyane said the province had already raised the matter of the funding model – which was affecting the province’s equitable share – with national government.

“Already we had a discussion with the president about changing the funding formula. If it is not changed there should be special funding for provinces, such as the Eastern Cape, which loses people to other provinces because they offer more opportunities. We are always going to lose people and its worse now because fathers who work in other provinces take their wives and children,” said Mabuyane.

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER

eastern cape  |  migration
NEXT ON FIN24X

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Add your comment
Comment 0 characters remaining
 

Company Snapshot

Voting Booth

How concerned are you about ransomware attacks?

Previous results · Suggest a vote

Loading...