Gauteng’s government has been orienting the province’s economy toward high technology and finance

In coming months, investors will be focusing on South Africa’s powerhouse province, Gauteng, to gauge how the global economic crisis will affect the entire country, finance experts say.

“Gauteng has consistently registered more than 30% of total GDP of the country,” says Mandla Nkomfe, Gauteng’s Member of Executive Council for Finance and Economic Affairs. “As such, the province has a crucial and specific role within the national economy, a historic responsibility in that if we want the South African economy to grow we have got to get things right in Gauteng first.”

Outside of Gauteng, investors will monitor how South Africa, Africa’s largest economy, performs in 2009 to assess the continent’s economic condition and resilience.

Gauteng, a landlocked, high-altitude grassland region to the north, is home to Pretoria, one of South Africa’s three capitals, and to the country’s economic engine, Johannesburg.

The province, which makes up only 1.4% of South Africa’s landmass, is home to roughly 9 million of the 49 million citizens and carries tremendous clout.

“Our province accounts for 10% of GDP of the entire continent,” highlights Mr. Nkomfe. His main task right now, he says, is to promote job creation in light of the economic slowdown.

Mandla Nkomfe MEC for Gauteng

Diversification of employment opportunities comes at a key time for the province because traditional industries have begun to slow. “We cannot deny that some sectors such as mining are declining but even before the global economy started melting down, there were signals of deterioration,” Mr. Nkomfe says. “However, over time we have been diversifying our economy, moving away from commodities.”

Gauteng’s new economy will likely include expanding its high technology and finance sectors. “Our banks are renowned all over the world and our IT companies are rapidly rising,” the finance minister says. “I want to see an increase in collaboration with the private sector.”

Additionally, he says use of public funds to support private initiatives will help spur investment. Currently the province has multiple public-private programs, and Mr. Nkomfe highlighted some of the larger ones.

“Through Blue IQ, a multi-billion rand initiative to develop economic infrastructure for specific major projects in the technology sector, high value-added manufacturing and tourism, 11 mega projects with a potential to make significant impact on local economy were identified. The Innovation Hub in Tshwane has a similar outline. This Silicon Valley-like initiative made it possible to get people to work on new ideas and develop them. Finally, there is also the Gautrain project which we believe will bring tremendous added value to the province.”

Mr. Nkomfe says that projects designed for the World Cup, like the Gautrain project, will not be underutilized once the thousands of contented soccer enthusiasts leave. BuaNews, a South African government news service, reported that the Gautrain project has created and sustained 63,000 jobs.

“As the Provincial Government of Gauteng, we are already looking beyond the 2010 World Cup to make sure that we bear long-lasting fruits from this incredible event,” says Mr. Nkomfe. “Gautrain will be completed by 2010 and in line with our vision and the many existing projects, we have no doubt that visitors will come back to South Africa, whether to invest or to explore more of our beautiful and fascinating country.”

Furthermore, revenue generated from the World Cup will go to helping the country’s least fortunate citizens. Poverty eradication is at the top of Gauteng Province’s biggest priorities.

The province has dedicated R123 billion ($13.28m) over the medium term on social spending, such as education, social development and healthcare, according to Mr. Nkomfe. Through the Bana Pele Program and No Fee School Policy, needy children are given school uniforms and food, and in other cases, free electricity and water is supplied. “I believe it is fair to say that we have managed to achieve some of our objectives, especially given the reduction of unemployment from 30% to about 19.3% today,” says Mr. Nkomfe. “Increasing the quality of life for all our residents is our first and last goal.”