Eastern Cape Automotive budget allocation – Comment on Finance MEC Budget speech – 8 March

The Eastern Cape Finance minister’s budget allocation speech on March 8 was a welcome boost to the province’s automotive manufacturing sector.

“The positive posture that we are realising from the Provincial Government should be welcome by the industry and the community of the Eastern Cape at large,” says Automotive Industry Development Centre Eastern Cape CEO Thabo Shenxane.

Shenxane said an allocation of R60m over three years to the Coega Development Corporation and R74 million to ELIDZ for an automotive manufacturing incubator this financial year, were among the highlights announced by Finance MEC Mlungisi Mvoko.

Shenxane said, in addition, an allocation of R93.9 million over the 2022 Medium Term Expenditure Framework (MTEF) to the AIDC EC, provincial government’s implementation arm for its economic policy relating to the region’s dominant automotive manufacturing sector, would ensure a sustained and strategic focus on automotive growth.

“In the context of major supply chain and technology disruptions, including a world-wide shift to electric vehicle technology within the sector, increased focus and budget allocation, is timely and absolutely necessary to ensure that the region maintains its contribution to GDP and its status as a significant automotive manufacturing centre.”

“The AIDC EC has aligned its resources to directly impact targets set jointly by government and industry in the South African Automotive Masterplan.  It is our expectation and the expectation of province that solid, measured progress is achieved.’’

Shenxane said the AIDC EC was on “high alert” to work with different stakeholders and institutions of higher learning to assist with engineering skills for the youth and also assist with supplier competitiveness. We hope these will help prepare the automotive value chain in the Eastern Cape to produce higher volumes of parts more efficiently while simultaneously developing new energy vehicle capabilities.’’

“Market access – particularly into new African markets is also essential for export growth as our major export destination, Europe, begins to reduce and finally eliminate sales of all internal combustion engines within the next five years.”

Shenxane said the recognition by both Finance MEC Mvoko in the budget speech and Premier Mabuyane in his state of the province address around the importance of infrastructure development and energy security, also “sent a comforting message to the sector and potential investors, but did not diminish the scale of effort required in particular to improve the movement of goods.”

For this financial year, an amount of R37 million is allocated to ELIDZ for an auto sector manufacturing incubator. This will be matched by an additional R37 million from the Department of Trade Industry and Competition. It is evidently clear that the posture of the Eastern Cape Provincial Government is gravitating towards recognising the value of the automotive industry and we welcome that tremendously.

Issued by AIDC EC  (Deon Engelke)

Contact:  Thabo Shenxane (CEO):   tshenxane@aidcec.co.za: 041 3932100