Business

Eastern Cape in a crisis, set to lose R5.9bn of government share

2019-01-09 01:02

The struggling Eastern Cape could lose a further R5.9 billion of its equitable share of national government revenue, says Oscar Mabuyane, the province’s MEC for finance, economic development, environmental affairs and tourism.

He was speaking at a gala dinner held by the Eastern Cape Business Chamber in Mthatha last month, where he spoke to business leaders about the state of the province in general.

“We are in a mini crisis as a province. We hold a record for almost all the wrong reasons in this country. Statistics SA reports that, between 2006 and 2018, more than 1.5 million people from our province have migrated to the Western Cape, Gauteng, KwaZulu-Natal and all other provinces,” he said.

He added that, due to the funding formula that “follows human beings”, in the last medium-term expenditure framework, the province had lost R13 billion due to migration.

“As I was presenting the budget adjustment estimate a few weeks ago at the legislature, I also indicated that we are projecting to lose another R5.9 billion in the medium-term expenditure framework.

For 30 years, there had been an opportunity available to mine titanium, but the people from Port Edward and other places put this on hold because they preferred tourism, believing that this place must not be touched.

“I would be talking about details on that sometime in February,” Mabuyane said.

He said that this was due to the fact that the province could not hold on to its citizens and prevent them from leaving in droves.

Mabuyane explained that solutions needed to be found to arrest the situation because when people left the Eastern Cape for greener pastures, the province’s share of national government revenue fell – and it lost money that would otherwise have been spent on developing the province and creating opportunities within it.

“There is only one way we can prevent our people from leaving and seeking jobs elsewhere – we must create jobs here,” he said.

The MEC made an example of the controversial proposed mining project in Xolobeni on the Wild Coast, saying it provided a great opportunity to create jobs.

Mabuyane also reiterated his call for a referendum on the proposed project, which had been rejected by some residents who said they preferred ecotourism because it was more sustainable than mining.

“It is for this reason that we must plead with the people of Mbizana, and those in Xolobeni particularly,” he said.

“For 30 years, there had been an opportunity available to mine titanium, but the people from Port Edward and other places put this on hold because they preferred tourism, believing that this place must not be touched.

“Even though there is a model of keeping the environment intact when you are using the Richards Bay model, people from this province, including in Mbizana, leave their homes and migrate to other places, including Port Edward, Margate and Port Shepstone,” Mabuyane said.

He said he believed that the mining venture in Xolobeni could coexist with tourism.

“That mining can be done within the acceptable norms and laws that govern our environment for its rehabilitation. We cannot be reckless about that,” he said.

There is only one way of consulting the people of Xolobeni, and that is to do a referendum and go homestead by homestead and ask if they want mining or not.

He added that it was painful that people from Mbizana and other areas in the province packed their bags and had to go and look for jobs in Richards Bay, Marikana and other mining towns when there was an opportunity to develop people where they were, especially when they were lucky enough to live in areas that had natural resources.

“But we are not saying things must be imposed on our people. There must be a negotiated arrangement that must unite our people so that they don’t fight among themselves,” he said.

The MEC said they welcomed the court decision regarding mining in Xolobeni that said people had the right to say how their land was used and that they be properly consulted before mining could take place.

Mabuyane said the courts did not say mining should not take place in Xolobeni.

Read: Eastern Cape MEC blames R13bn loss on people leaving the province

“There is only one way of consulting the people of Xolobeni, and that is to do a referendum and go homestead by homestead and ask if they want mining or not.”

He said the R13 billion that the province had already lost was a problem as there are huge social infrastructure backlogs.

During apartheid, the Eastern Cape’s population in particular became a source of cheap labour in other parts of the country where mining was increasing.

Mabuyane said the apartheid government had wanted this source of manpower to last indefinitely.

“That is why Gauteng is where it is – they still get the bigger slice of the equitable share. If you look at the budget, Gauteng gets R50 billion more than us. That is why they don’t have a problem with maintaining roads in Gauteng. In the Eastern Cape, we need more than R60 billion for our road infrastructure network,” he said.

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September 22 2019