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DEVELOPMENT: Accelerate's Qualms About Relief


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It is important to note that Accelerate Cape Town has not been asked to become part of the Provincial Development Council (PDC). We were therefore not invited to participate in the formation of the “Plan for Economic Stability and Poverty Relief”, to sign the related Declaration or to attend the earlier Economic Stimulus Conference, it says.

"Nevertheless, we have now had a chance to study the Declaration, as well as the speeches and announcements made by Premier Lynne Brown and MEC Garth Strachan at the conference, and we wish to express the following views on its content and intentions," an Accelerate statement says.

"We agree that the poor, vulnerable and disadvantaged must not be the disproportional bearers of the hardships of the economic crisis and will encourage our member companies to continue to do what they can to ensure inclusive economic growth now and into the future, as we believe this to be the best long-term remedy for inequality and poverty."

"We join the Provincial Development Council in calling for municipalities not to cut free basic services to poor communities in these difficult times. These services are important elements in ensuring the upliftment of the poor, particularly in enabling young children to learn and grow in a healthy environment."

"While we agree that services should ideally not be cut to firms that are unable to pay their bills due to the economic downturn, we would hope that firms that are struggling due to bad management as opposed to the economic crisis will not abuse this situation. We hope that the capacity of the PDC and the proposed Rapid Response Unit will be bolstered to such a degree that they will be able to make this distinction clearly before supporting such calls."

"We are happy to hear that there has been a call to intensify higher levels of appropriate investment in public infrastructure, as this will not only help economic activity in these difficult times but also put in place the building blocks of future growth. As such, we were happy that the provincial government chose to find savings for the coming year’s budget in areas that will not negatively affect infrastructure investment."

"MEC Strachan suggests that the government could redirect underutilized incentive programme funds to assist companies in trouble. We would agree that any underutilized funds should be used as effectively as possible, especially in times of economic crisis, although we would recommend that incentive programme funds should be used for the purpose for which they were established rather than being redirected."

"The Declaration calls for bold interventions, of which it appears that the Rapid Response Unit is the first. This unit aims to help identify, diagnose and marshal resources to intervene where industries and companies are in distress. Apart from an early warning system to identify companies in distress, there are plans for capacity for comprehensive diagnostic analysis leading to detailed rescue recommendations. It also aims to put people in touch with the appropriate state financial institutions such as the Industrial Development Fund’s Work-Out and Restructuring Unit."

"Although a number of details of exactly how the Rapid Response Unit will operate must still be finalised, we note that R1-million has been allocated to establish the unit. We are concerned that this may not be enough money to build an effective unit that can address all of the expectations associated with it."

"In addition, if the unit is to be effective as an early warning system to identify companies in distress, it will need to be widely recognised and trusted by owners, managers and workers within troubled businesses. MEC Strachan recognised in his speech that “many companies are simply not aware of the support available from national and provincial governments and the parastatals”, and this will be no different. Therefore a significant marketing campaign will be required to develop the required awareness and trust."

"We reiterate that Accelerate Cape Town welcomes the PDC’s Declaration and the plans for interventions in the economy during these challenging times. We look forward to receiving further details about specific interventions such as the Rapid Response Unit and we welcome engagement on how to make these interventions as effective as possible."

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