Speech by MEC for Housing in Gauteng, Ms Nomvula Mokonyane, during the partnership fund between Gauteng Partnership Fund and Standard Bank of South Africa launch, Park Hyatt Hotel, Rosebank 20 September 2005 Programme Director The events of the past week in New York during the Millennium Development Goals Review Summit were a poignant reminder of a widening gap between the developed and developing nations, the powerful and powerless, the rich and poor, the North-South bipolar . The wrangling on issues of poverty alleviation and subsidisation of produce between the leaders of the developing and developed nations underscored the lie of the rich regarding their commitment to the upliftment of the poor. In our own country, we have been told many times about the growing divide between the poor and the rich resulting in the marginalisation of the majority of our people from the mainstream of economic trajectory. Many of us read about this and observe the dire consequences of marginalisation, yet we brush the problem off by rationalising so as to ease the burden of guilt that our conscience carries. In fact, when confronted we retort by saying "it's not my fault, I pay my taxes and the government has to deal with the problem" What this means is that poverty and its concomitant results is the responsibility of the government. If this is the reigning mentality, it therefore begs the question: how different we are from those rich nations in the New York summit who egoistically argue against the common good for all human kind? Fortunately, in our situation the government has since committed itself to the implementation of strategies that promote both economic growth and social development. The government has gone out of its way to stabilise the socio-political conditions. Just like a love-filled "isoka" (suitor) the government has encouraged the private sector to embrace its initiatives and work closely with it in the fight against unemployment and poverty. As a response to socio-economic challenges, the Gauteng Provincial Government formulated and adopted the Growth and Development Strategy (GDS) aimed at creating a better life for all citizens through: * Meeting the socio-economic development needs of our people; In essence, the GDS places emphasis on matters of partnership building between all sectors of society as well as the extension of economic growth benefits to all our people. It is therefore our resolve as government not to sit on our laurels until we have achieved all the strategic objectives outlined in the GDS document. It is my belief that we shall do so with the support of the business sector. So, as we build and position Gauteng as the smart province, we shall continue to explore and experiment with various models and strategies because we know smartness is also about innovation so as to stay ahead of the pack. We are not averse to trying new things as long as they are geared towards growth and development. Through the years of providing our people with shelter and security of tenure, we came to realise that people do not only deserve decent housing in well-located land but they require options on a variety of high quality housing products and tenure systems. As a result we started to review our strategies and adopted our plans accordingly. Eventually, we introduced a paradigm shift in housing delivery which places accent on delivery of mixed-income products and creation of non-racial residential areas. In a nutshell, our intention is to move away from the creation of isolated and infrastructural deprived human settlements which perpetuate the antagonistic syndrome of "us" in townships and "them" in affluent suburbia. Every one, every citizen in Gauteng deserves a better life. Ladies and Gentlemen, the notion of venturing into new territories as we always do in Gauteng is perfectly embodied in one of our innovative entities - the Gauteng Partnership Fund (GPF). We established the innovative Gauteng Partnership Fund in order to entice housing financiers to enter the low-income housing market on a sustainable basis so that investment can ultimately flow to the creation and redevelopment of integrated housing for our people. Let me take a liberty, Ladies and Gentlemen, of reminding you of a recent initiative we embark on with financial institutions. In July 2005 a Memorandum of Understanding (MoU) was signed between the national Department of Housing and the banking sector where government committed itself to a partnership that will create functional housing markets in previously under served areas. This MoU will allow the R24 billion mentioned in the Financial Services Charter to be channelled to the creation and development of sustainable human settlements. There is no doubt that the financial sector is of strategic importance to the economic development of the country. As a quickly growing sector (since 1997 the sector has been growing at 7.7 percent) its contribution to the Gross Domestic Product has been increasing. In 1995 it made a contribution to the GDP of 17.3 percent and in 2004 its contribution stood at 20.3 percent. This clearly shows that the sector has indeed made its mark and has subsequently overtaken sectors that were dominant previously such as manufacturing, mining, construction, agriculture and government services. In the June Quarterly Bulletin of the South African Reserve Bank it was reported that mortgages emanating from the banks for the household sector showed a considerable increase of some R16, 1 billion in the first quarter of 2005. The critical point here is that while there has been a boom of over 19 percent per annum in the property market over the last five years, the poor have not benefited from the same economic boom. This definitely must change and we need to have serious transformation process in this sector. However, I should point out that it is not all gloom and doom in this sector. It is encouraging to hear that the Gauteng Partnership Fund and Standard Bank Properties Low Income Housing Division have joined forces to offer R90 million in loan finance to property investors who are committed to providing secure rental units to households with a monthly income of up to R 7500. This partnership with Standard Bank is premised on the risk-sharing basis. The confidence and commitment displayed by Standard Bank in social upliftment is plausible. The action of Standard Bank management is clearly expressed and defined by a respected Literary Noble Peace Prize Winner, JM Coetzee, in one of his seminal books as "The new men of Empire are the ones who believe in fresh starts, new chapters, new pages;" In this regard, Standard Bank, your investment to us is an indication of your faith in what Coetzee refers to as "fresh starts". You did not hesitate to jump into partnership with government because you have the vision and your vision is congruent to ours. In fact, you are the "new men of Empire" as shown by pioneering spirit. Ladies and Gentlemen, it is for this reason that we gather tonight to launch and celebrate the groundbreaking deal. This deal is a major step in the implementation of the principles contained in the Financial Sector Charter. It will pave the way for similar partnerships with other private sector partners who share the same goal, namely, to create sustainable human settlements for our people. Once more, I am proud to announce the launch of this groundbreaking partnership between the Gauteng Partnership Fund and Standard Bank. This will go down in history as one of life-changing initiatives in Gauteng . Thank you. For more information contact: Mongezi Mnyani Issued by: Department of Housing, Gauteng Provincial Government
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