A R2 billion fund has been set aside for major investments in the Eastern Cape (EC) and a yet unspecified amount for a job creation programme, says Eastern Cape finance MEC Phumulo Masualle delivering his budget speech on Friday

Masualle says the Eastern Cape Industrial Jobs Stimulus Programme (ECIJSP) aims to create jobs through incentives and encourage the diversification of the provincial economy.

Exclusive to the Eastern Cape, ECIJSP has a target to create a minimum of 30 000 new jobs in the next three years and it is to be launched by DEDEA.

The new incentive programme will target companies in green industries, agro-processing and other non-automotive sectors indentified in the Provincial Industrial Development Strategy (PIDS). It will be controlled through an audit system that will see cash incentives paid to companies per proven job created. The administration will be done in conjunction with the chambers.

"Automotive sector incentive programmes have in the past focused on stimulating exports, but made no sizeable impact on job creation," says MEC for Department of Economic Development and Environmental Affairs (DEDEA) Mcebisi Jonas.

The recession hit the automotive sector hard between 2008 and 2010. This resulted in a substantial loss of jobs for the Eastern Cape economy which relies on the sector.

Jonas says one of the lessons to be learnt from the economic turmoil that threw the economy into a tailspin in the in the 2009-10 financial year, is that the protection of productive capability iscrucial in protecting jobs.

This has driven the province to divert its focus from the automotive sector on which it largely relies.

"The major lesson from the global recession is that countries that protect productive capability whether that be manufacturing or primary activity, did well in shrugging off the recession. A fund created during the recession to deal with companies in distress performed dismally because it was too complex and distant from companies," says Jonas.

The provincial budget speech bears the hallmarks of the president's state of the nation address and the finance minister's tone of job creation.

The Eastern Cape Investment Fund (ECIF) is expected to be launched by the Eastern Cape Development Corporation (ECDC) in the financial year beginning in April and is expected to draw investments of R2 billion in the Medium Term Expenditure Framework (MTEF). It will target equity and infrastructure-related investment projects and unspecified projects are in the pipeline.

While the details remain sketchy, Masualle says the ECIF is a provincially-dedicated investment fund that will target major investment projects, both equity and infrastructure-related and is expected to add to the province's revenue streams. This fund is already designed and negotiations are advanced with Development Finance Institutions (DFIs) and private banks.

 "The ECIF in an off budget sense is an attempt to bring in investment so that we not only rely on the fiscus. It will make it possible to enhance economic development. ECDC and DEDEA will outline details later.  It is an enterprising attempt to augment finances, otherwise it will take us longer to address the budgetary challenges we have," says Masualle.