Breaking the cycle of poverty

from City Press

ANDILE NTINGI

THE country’s second richest province this week dedicated about two-thirds of its R51.2 billion budget for 2008 on education and health, the two areas closest to the hearts of its citizens.

Education received the lion’s share of the budget from the province’s minister of finance and ­economic development, Zweli Mkhize, who allocated it a mammoth R21.4 billion.

The money will allow the province’s education department to ­provide free public transport to learners who travel long distances to schools. It will also be spent on early childhood development ­programmes and the expansion of Grade R in public schools.

“Improving education is the key to breaking the inter-generational cycle of poverty. People who succeed in breaking out of poverty do so through education.

“If our quest for freedom from poverty, ignorance and disease is to be achieved, education needs to be universal, accessible, affordable and mostly free,” said Mkhize in his budg et speech.

Keeping the population of Kwa­Zulu-Natal healthy has also been identified as key if the province’s economic growth is to be sustained. It is with this objective in mind that the health department has been ­given R15 billion, the second largest allocation after education.

The money will be used to hire ­additional health practitioners, strengthen primary health care and fight drug-resistant tuberculosis and HIV/Aids.

Over the past four years education and health have been at the top of KwaZulu-Natal’s agenda.

This targeted expenditure has, however, not made a big dent in ­poverty and unemployment.

“We constantly evaluate whether our government interventions have made a difference proportional to the vast amounts of money we have expended on them.

“Employment and poverty rates have not declined proportionately to the increase in government ­expenditure and inequality has not improved significantly,” said Mkhize.

Education and health are not the only areas where the provincial ­government is making interventions to effect changes in the lives of its citizens.

Infrastructure development and support for small, medium and ­micro enterprises (SMMEs) are also receiving attention as the province strives for faster economic growth and employment creation.

KwaZulu-Natal, which contributes 16.5% to the South African gross domestic product, is growing at over 5% and it is hoped it will achieve a growth rate of 10% by 2014.

Sipho Shabalala, head of the province’s Treasury, said the government had a number of interventions aimed at stimulating SMMEs.

These included facilitating easy ­access to finance and supporting them through preferential procurement by the public sector.

The provincial government has set a target of channelling 10% of its procurement spending towards ­cooperatives and 40% to SMMEs.

“With these targets we are sending a strong signal to business. If we are targeting 40% they should also be targeting 40%.

“We are putting money where our mouth is and we are encouraging business to follow suit,” said ­Shabalala.

Through state-owned financier Ithala Development Finance, the province is providing funding to ­cooperatives through a R300-­million fund and to SMMEs through a R400-million fund.

Over the past three years, 1 996 cooperatives and 1 330 SMMEs have received funding.

To ensure long-term economic growth, KwaZulu-Natal is also ­upgrading its ports (Durban and ­Richards Bay), roads, airports and 2010 Football World Cup-related ­infrastructure.

The province is committed to the Dube Trade Port project, which ­involves the construction of an ­international airport, industrial zone, agro-processing zone, trade zone and a cyber zone.

The project is being developed by the Ilembe consortium at a cost of R6.7 billion. Shabalala said the Dube Trade Port would be open for business next year.

The airport which is being built at La Mercy, north of Durban, will cost R2.6 billion. The province was contributing R300 million towards its construction, Shabalala said.

He said there were good investment opportunities in the province, ­especially in sectors such as ­construction, agroprocessing and technology.

“Elsewhere in the country you will find that construction is reaching its optimum, but the growth of this sector in KwaZulu-Natal still has a long way to go.

“For instance in Pietermaritzburg, where the provincial government is based, there is a need for ­office parks and residential houses for middle-income earners.