North West

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IDC a beacon in platinum province

North West Regional Director David McGluwaNorth West Regional Manager David McGluwa 

If you just count North West’s mineral wealth, the province is doing alright. But little of the cash is reinvested locally, and the unemployment rate is staggering. With this in mind, the Industrial Development Corporation is aggressively investing in local economic growth.

The economy of the mining province of North West is twice the size of its neighbour, Botswana, and is similar in strength to Kenya. Its gross domestic product (GDP), which is heavily based on mining minerals such as gold, platinum and chromium, stood at 3.5 % for the first quarter of 2013, up from 0.2% in the fourth quarter of 2012. The national average in the first quarter of the year was 0.9%, down from 2.1% in the last quarter of 2012.

And Rustenburg, a mining town in the platinum belt, had a year-on-year GDP growth rate of 10% for five consecutive years before the mining strikes began in 2012. It is, therefore, no coincidence that the Industrial Development Corporation’s funding in the province has reflected this growth.

According to the IDC’s regional manager in North West, David McGluwa, the corporation’s total exposure in the province sits at R5.7-billion – a substantial growth from the initial R1.4-billion exposure in 2008. In the last three years, the office has funded 34 companies, which has translated into 18 598 direct jobs. And McGluwa is proud that 90% of those funds went to black economic empowerment companies and women-owned businesses.

Being a mining province, 90% of the IDC’s approvals in terms of value went to that sector. Mining plays such a key role in North West that most of the other sectors the IDC has funded are linked to it. It has funded two chrome smelters, namely Hernic Ferrochrome and Merafe Resources in Rustenburg.

But mining is not the only business in the hot, lush, fertile region. Agriculture also features highly on the IDC’s priorities

Another sector in which McGluwa sees potential is tourism. Though it is the home of tourist mainstays such as Sun City, Pilanesberg and Hartbeespoort, the rest of North West is not as appealing to tourists as it can be. To boost tourism, authorities from the provincial department of economic development and tourism are planning to develop the N18 route, which runs through the town of Taung. Besides the abundant wildlife, it is famous as the excavation site of the fossilised skull of the Taung Child, which was unearthed in 1924.

Despite the revenue that is generated by mining, McGluwa says the money is not reinvested in the province. Infrastructure, in particular, remains poor and in some parts is out-dated. “When you come into Brits, the mines’ trucks are driving on roads that are in bad condition.”

Population

North West’s population growth, which is imperative to its economic development, has been stable over the last 10 years. According to the 2011 Census, the province’s population is just over four million, which is up by 800 000 from 2001.

According to McGluwa, natural born citizens make up most of the numbers. Though thousands of mineworkers come from other parts of the country and Africa, there has not been a huge influx of people. “If you look at the country growing from 40 million to 50 million, it means the province would have grown by less than 10% over the last 10 years.”

But there is a small consolation in that the population has not declined, which means people choose to stay in the province. “We have that stability. People who are here set themselves up and try to make a living.” Yet he admits that a large number of young and educated people have left, seeking better opportunities in Johannesburg. To prevent this brain drain becoming a major issue in the future, the IDC is trying to create jobs in North West.

And since Johannesburg’s infrastructure cannot cope with its increasing population, McGluwa says it makes sense for the national government to aggressively ensure people remain in their home provinces so as to accelerate development.

Employment

In its Labour Force Survey for the second quarter of 2013, Statistics South Africa found that employment in North West had increased by 2.3%, with jobs created for 17 000 people between the ages of 15 and 64.

Despite this growth, the province remains rural and poverty stricken with a high unemployment rate of around 40%. McGluwa points out that in towns like Vryburg and Taung, unemployment can be as high as 75% to 80%. Adding to its woes, mining companies in North West often procure labourers from Gauteng, leaving locals penniless. “You have not seen poverty until you see those people struggling.”

To counter this, the IDC is looking for other means of creating jobs for locals. McGluwa is in talks with a German solar panel manufacturer with a view to set up produce farms underneath solar panels, an innovation pioneered by the Germans. He says solar farms create 1.6 jobs per megawatt, but add produce farms to the project and it will increase to 35 jobs per megawatt. The solar panels form a sort of greenhouse that aid the production of fruit and vegetables.

“That is the perfect solution for our country. It is a little more costly because of the design but instead of creating 1.6 jobs, you create 35.” After the idea is approved, McGluwa will link a number of the farmers to major retailers such as Pick n Pay and Checkers.

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