KwaZulu-Natal - April 3, 2007

A R5.5million South Coast sugar cane farming project which is set to create thousands of jobs and result in a R28-million community financial boost, is the first beneficiary of a newly formed partnership aimed at driving local economic development in the province.

ABSA signed a Memorandum of Understanding (MoU) with the KZN Department of Economic Development (DED) in Pennington on the South Coast today to partner the department’s European Union-funded Gijima KZN Local Economic Development (LED) Support Programme.

Since its inception in 2003, Gijima KZN has focused largely on identifying projects with maximum potential to alleviate poverty, but which are economically sustainable in the long term.

Addressing the guests, who included the financial sector and beneficiaries of the project, KwaZulu-Natal MEC for Finance and Economic Development, Dr Zweli Mkhize lauded financial institute, ABSA today for its commitment to pro-poor local economic development in the government’s campaign to eradicate poverty in the province.

Dr Mkhize said: “The principal role of provincial and local government is to create an enabling environment within which local economies can grow and prosper. It is the role of the private sector to take advantage of the opportunities afforded to stimulate and invest in the emergence and growth of competitive and sustainable enterprises and jobs.

“The MoU concluded with ABSA, being the second one signed with a large financial institution, once again demonstrates the confidence that private sector has in government’s initiatives in developing a pipeline of financially viable projects to stimulate the local economies of the province.” He added the MoU signaled a positive response to the call to action by the Premier during the State of the Province address earlier this year, to “build the economy through partnerships”.

“Not only has Government, through the GijimaKZN programme, successfully pushed back the frontiers of poverty, it has also pushed forward and expanded the financial access frontier by successfully leveraging R22 million from private sector investment.

“ABSA, an excellent good corporate citizen supporting sustainable business in KwaZulu-Natal, is lauded for its commitment to narrowing the divide between the rich and the poor and partnering government in its initiatives.” Ranveer Persad, DED Gijima KZN Programme Manager said: “The essence of LED is that it must be driven by local stakeholders acting in partnership across government, business and civil society. The economic participation and empowerment of communities and workers is another critical dimension of LED.

“More than 80 percent of R138 million grant funds have been allocated to local economic projects in KwaZulu-Natal which, has significantly contributed towards alleviating poverty in KwaZulu-Natal.

“The lack of access to finance remains one of the greatest obstacles to economic growth and entrepreneurial ventures. This MoU, therefore, is significant in creating financial access to new market entrants.”

Persad said the approval of funding for the Sezela project was a clear example of the benefits of the importance of such partnerships in promoting pro-poor local economic development.

“ABSA’s partnership is a positive endorsement in Gijima KZN as a vehicle for local economic development to strengthen the LED environment by implementing projects which promote sustainable economic growth, investment and skills development.”

Ike Nxedlana, ABSA General Manager Public Sector, said: “As a provider of finance to BEE enterprises and SMEs, ABSA is intent on contributing to broadbased black empowerment objectives of the government.

“We are fully supportive of Gijima KZN’s objectives and programmes and are cooperating with the DED to provide finance to designated applicants in terms of our lending criteria.”

The MoU identifies mechanisms and processes through which the Department of Economic Development and ABSA will co-operate in the process of project generation, evaluation and financing.