Outcomes of Western Cape Cabinet meeting

Media Release: Outcomes of Western Cape Cabinet meeting

Premier Alan Winde chaired a regular meeting of his Cabinet, on Wednesday 7 June 2023.

SARB’s energy crisis contingency plan

South African Reserve Bank (SARB) Governor Lesetja Kganyago was invited to give a presentation to Cabinet on the institution’s preparations should the country’s power system collapse completely. While this is very unlikely, it is still necessary for all critical institutions in the country to have contingency plans in place, particularly finance.

In the presentation it was emphasised to the Western Cape Government (WCG) executive that not being prepared for a crisis is not an option. An Internal Joint Operational Centre has been established at the SARB to plan and coordinate strategic, tactical and operational response plans, that take into account numerous scenarios against which appropriate measures can be planned. This is aimed at ensuring:

• Banking services are protected; and
• An orderly closure and reopening of markets.

Premier Winde stressed, “Protecting this critical institution in the event of a total grid collapse is of paramount importance. We have to unfortunately all plan for the very worst so as not to be caught off guard.”

Key to the plan is ensuring all essential SARB facilities are self-sufficient during severe stages of blackouts for 30 days.

During extended loadshedding SARB will be fully operational, the Western Cape Cabinet was assured, but banking and market functions will be dependent on individual institutions’ contingency plans.

Western Cape Local Government, Environmental Affairs and Development Planning Minister Anton Bredell said other provinces must be convinced to come up with their contingency plans too so we as provinces can coordinate our overall response as a nation.

Growth For Jobs strategy and key economic trends update

Finance and Economic Opportunities Minister Mireille Wenger gave an update on the WCG’s Growth for Jobs strategy, which is in the final stages of its implementation.

It was noted that Cape Town’s solar photovoltaic (PV) installations reached record levels. “More of this will help ease loadshedding,” the Minister said.

Residential applications are the driving force behind the record-breaking level of applications. So far this year, 2 333 solar PV installation applications have been received by the City of Cape Town, with 5000 systems authorized to date. The first four months of 2023 account for a substantial 21% of all applications received since records began.

Western Cape Infrastructure Summit

Cabinet noted that the inaugural Western Cape Infrastructure Summit was held on 31 May 2023. It was well attended by both the public and private sectors. Given that certain sectors will shape the infrastructure landscape in the future, the inputs presented focused on energy, water and logistics, all crucial areas incorporated in the Growth for Jobs plan.

The state of the Western Cape economy

Cabinet discussed key economic trends affecting the Western Cape:

• Although the economy is under significant pressure, there are some positive signals.
• While at high levels, producer and consumer inflation is starting to ease. If this trend continues, it bodes well for interest rate reductions in the future.
• The rand had reached an unprecedented low of R19.92, at one stage, against the US dollar, with the cost of business and slow economic growth still a major concern for the economy.

Cape Town International Airport passenger numbers have fully recovered. The latest data indicates that passenger volumes have increased significantly since the Covid-19

pandemic. Furthermore, flights have been added from Lusaka and Eswatini, which will add to the province’s tourism recovery. It was noted cost pressures for consumers are easing. Although at high levels, inflation has reached its lowest level in the last 11 months.Cabinet remains concerned about rates increases and the added burden this presents for citizens. The South African Reserve Bank raised its main lending rate by 50 basis points to 8.25% in May, which was higher than expected. This move brought borrowing costs to their highest level since May 2009.  The decision to increase the rate was driven by concerns over the significant depreciation of the Rand, which is at an all-time low and mounting inflationary pressures.

Top performing municipalities

Cabinet lauded the Western Cape’s best performing municipalities. The municipal financial sustainability index, Ratings Afrika, tracked the financial performance of 104

of the largest municipalities and all eight metros for the year ending in June 2022. Four of South Africa’s top 5 most financially stable municipalities are in the Western Cape. They include George, Mossel Bay, Cape Town, Saldanha and Swartland. Cape Town was the most financially stable metro in SA.

Decrease in province’s murder rate

The latest quarterly crime statistics revealed a decrease in the murder rate of 14.1% compared to the same period in 2021/22, the highest drop nationally. But the Premier pointed out levels of crime, particularly contact offences such as murder, are still intolerably high. The province’s Peace Officer programme was commended. Over the past few weeks 33 Peace Officers graduated. They will serve as force multipliers in the Overstarnd and Drakenstein municipal regions.

President’s Coordinating Council (PCC)

The recent meeting of the PCC was also discussed. Premier Winde expressed disappointment that the Africa Growth and Opportunity Act (AGOA) and the risk of South Africa’s access to the statute not being renewed was not on the agenda of the PCC, but anticipated that it would be added to a future meeting.

Draft Employment Equity Regulations

Cabinet received a briefing on the provincial government’s stance on the Draft Employment Equity Regulations, which are the subject of a public participation process. The WCG recognises and fully supports measures to promote vulnerable groups. However, these should be nuanced and informed by:

• Socio-economic analyses of vulnerable population groups;
• Analysis of the realistic supply of skilled and experienced persons from vulnerable groups in the labour force

The draft regulations may severely impact the province’s ability to achieve substantive equality and may exacerbate disadvantages. Cabinet was informed that the regulations in their current form were likely not to pass constitutional muster and the consultation process thus far had been flawed. Overall Cabinet has agreed that the provincial government will not support the regulations in their current format and will submit in its response on outline of the actions that the provincial government is taking to address the inequalities in our society, much of which is outlined in the Growth for Jobs strategy.