Captured FDC and provincial government the reason for increasing Free State unemployment
18 June 2019
The Free State’s grim employment prospects are a direct result of provincial capture. The recent Manpower Group Employment Survey indicates that hiring intentions of 752 employers will be flat in the third quarter of 2019 (July to September) in the Free State with 5% of employers indicating that they would reduce their workforce. According to the survey this is down by 6% on a quarter-to-quarter basis and down by 9% on a year-on-year basis.
The Free State Development Corporation (FDC) was established with a mandate to provide financial and business support to SMME’s and Cooperatives, undertake the development and management of properties and facilitate and promote investment and trade in the province. In terms of its core mandate, the FDC has failed dismally and has, from its inception, been embroiled in state capture controversy that includes among others:
- As far back as 2008 the wife of the former MEC for Economic Affairs Neo Masithela, who was responsible for appointing the FDC board, received a loan from the entity. The former MEC for Finance, and current MEC for Education, Tate Makgoe and his associates received two loans of R2,66 Million (R2,660,000.00). At the time, the Chairman of the FDC Tsietsi Matang defended these loans on the grounds that MEC’s, their associates and families were regarded as previously disadvantaged.
- In one of the most troubling deals, Magashule himself allegedly helped ensure that properties owned by the FDC ended up in his daughter's hands. A concurrent R11 Million (R11,000,000.00) "upfront" rental agreement with petroleum giant Shell helped Thoko Alice Malembe to purchase properties from the FDC while allowing her to pocket a further R9 Million (R9,000,000.00) without so much as lifting a finger.