Towns in the former homelands stand to benefit from a newly drafted economic development strategy.

Unlike the previous economic development strategy, this new strategy would attempt to integrate regional and local economic strategies, Trade and Industry Minister Mandisi Mphahlwa said today addressing a national conference to discuss the Regional Industrial Development Strategy (RIDS).

Representatives from government departments and the private sector have converged to discuss a draft document in this regard.

“Our research shows the heavily biased distribution of economic activity in South Africa, with the majority of gross value add clusters around the three major metropoles,” noted Minister Mphahlwa.

According to the Minister, the share of the three metropolitan areas Johannesburg, Cape Town and Durban and functional hinterlands represents close to 65 percent of the country’s Gross Domestic Product (GDP).

In addition, studies have shown a vastly different growth rate of districts between 1996 and 2004.

“The worrying factor from our analysis is the fact that medium and high economic growth districts are only contributing more than 0.05 percent of the national Gross Value Add (GVA), while low base district contribute less than 0.02 percent,” Mphahlwa said.

These lagging regions, with few economic assets, are characterised by stressed natural environment and often have very high population concentrations.

However, Mphahlwa said this situation was about to change, as government along with the private sector was embarking on a plan to rejuvenate formerly deteriorated mining towns in maginalised provinces.

Government and the private sector intend to use the new strategy to build vibrant industrial zones in the homeland towns of former Bophuthatswana now North West, Transkei and Ciskei in the Eastern Cape and Qwa Qwa in the Free State.

“It is clear from this analysis that there are a number of districts in an economic decline,” said the Minister.

He indicated that his department would foster a close relationship with local municipalities in implementing the new RIDS.

He further urged business to lead this renewal process of industrial development.

While the new strategy seeks to address economic disparities between regions, it would also try to close the gap between the first and the second economy.

“Government will do anything in its power to play a smart supportive and facilitative role as possible,” says Mpahahlwa.

He explained that government’s intervention this time around would come in a form of industrial financing.

“We will achieve this through localised direct support to the SMME sector using technical assistance funds to provide business advisory services and upgrade overall productive capability,” he noted.

The final draft will be presented to the Cabinet Lekgotla before the end of this month for approval.

“RIDS proposes to work through regional growth collisions operating on the basis of strategic partnerships between the public and private sectors,” said Mphahlwa.