e r 2 - Umgeni Water

Chapter| Introduction and Strategy2.2 Operating EnvironmentThe changes in the operating environment and specifically the expectations of the Executive Authority, theMinister of Water and Environmental Affairs, Edna Molewa, have informed Umgeni Water’s development of thisFive-Year Business Plan.The Executive Authority’s expectations are implicitly and explicitly reflected in the following pronouncements:2.2.1 The February 2011 State of the Nation Address, where President Jacob Zumareiterated:• Government’s continued commitment to building a developmental state for which the five keypriority areas are job creation, education, health, rural development and land reform, and fightingcrime.• Job creation through meaningful economic transformation and inclusive growth was particularlyemphasised. A New Growth Path has been introduced that will guide government’s work inachieving its goals. Every sector and business entity is urged to focus on job creation. Allgovernment departments will align their programmes with the job creation imperative.• Six priority areas have been identified for job creation: infrastructure development, agriculture,mining and beneficiation, manufacturing, the green economy and tourism.• Government has established a jobs fund of 9 billion rand over the next three years to finance new jobcreationinitiatives.• Progress made with service delivery includes provision of basic water supply access to an additional400,000 people in 2010.• This year government will spend 2,6 billion rand on water services. Among the priority areas are theprovinces of Limpopo, KwaZulu-Natal and the Eastern Cape where there are still large numbers ofpeople without safe drinking water.• Government will develop infrastructure that will boost the agricultural sector, including rehabilitationof water reservoirs. These projects will enhance food security and create work opportunities formany, especially women in rural areas.• The job creation drive will further enhance youth development.2.2.2 The February 2011 Budget, where Finance Minister Pravin Gordhan, indicated that:• The Budget sets out the financial framework for implementing government’s vision of creating jobs,reducing poverty, building infrastructure and expanding the country’s economy.• The New Growth Path outlines government’s approach to accelerating growth and employment,focusing on several key drivers: Continuing and broadening public investment in infrastructure;Targeting more labour-absorbing activities in the agricultural and mining value chains,manufacturing, construction and services; Promoting innovation through “green economy”initiatives; and Supporting rural development and regional integration.• Regarding economic growth and expectations, the domestic economy grew by 2.8 per cent in 2010.Real GDP growth is projected to reach 3.4 per cent in 2011, 4.1 per cent in 2012 and 4.4 per cent in2013.• Inflation is forecast to remain within the target range of 3 – 6 per cent, edging towards the upper endof the range in 2013 as the economy strengthens. Increasing food and oil prices represent risks to theinflation outlook.• Public sector investment remains the cornerstone of government’s strategy to support sustainableeconomic growth. Over 800 billion rand is projected to be spent over the MTEF period.Page 6 Umgeni Water Five-Year Business Plan | 2011/2012 to 2015/2016