Budget Speech delivered by the Limpopo MEC for Economic Development, Environment and Tourism MEC Pinky Kekana on the occasion of the Departmental Budget Speech: Budget Vote 06, Lebowakgomo Legislative Chambers
23 Mar 2012
Members of the legislature
Members of the Executive Council
Executive Mayors, Mayors and leaders of our local municipalities
Director General and Heads of Departments
Our esteemed Majesties and Royal Highnesses
CEOs of our parastatals
Members of our boards
Provincial Secretary of the African National Congress (ANC), Comrade Soviet Lekganyane
Stalwarts and veterans of our struggle
Leaders of chapter nine and ten Institutions
Leadership of various religious formations
Leadership of business and labour
Youth, women, community leaders and media representatives
Our honoured traditional leaders
Our honoured embassy representatives
Distinguished guests, friends and comrades
The people of Limpopo
Honourable speaker, allow me to table a Budget Vote 6 of the Department of Economic Development, Environment and Tourism in my capacity as the executing authority of the department.
We want to start by thanking the Premier of the province of Limpopo, Mr Cassel Mathale for bestowing on me the responsibility to lead the department which is not only critical for accelerating economic development, but which is the engine that should ensure a sustainable and balanced economic growth across the length and breadth of the province.
This is a challenge which is not only daunting but humbling and fulfilling. However, we have no doubt that with the support of every member of this august house, it is a responsibility that we will carry with the necessary zeal and fortitude as we understand that the future of our province rests on how well we contribute as a department.
We also want to thank my predecessor MEC Pitsi Moloto for the solid foundation he has laid in the past three years of his stewardship of this department. Indeed honourable Moloto, the foundation you have cemented has made my entry into this portfolio a relatively easy one as the building blocks were already in place.
We will not rest on our laurels and become complacent as we strive to deliver on the economic transformation targets as set-out in the election manifesto, the Limpopo Employment, Growth and Development Plan (LEGDP) and the national outcomes. We shall deploy our resources to attain great results. Our approach is informed by our collective commitment in fighting the triple crisis of high unemployment, deepening poverty and growing inequality amongst our people.
Honourable speaker, this commitment to economic transformation cannot be overemphasised. We deliver this budget to the people of Limpopo during the historic moment in the life of our glorious movement, the African National Congress as it celebrates its centenary year 2012. We feel very privileged to be part of this important milestone in celebrating the history of the movement of the people, our beloved ANC.
It is through the ANC that the downtrodden, the poverty stricken, underprivileged among others will realise total economic emancipation and a better life. While this may seem unthinkable and insurmountable the same was propagated when the ANC was formed in 1912 influenced by the noble course of fighting for freedom, protecting human rights, building a united, democratic, non-racial, non-sexist, prosperous South Africa.
The enemies of freedom, naysayers and counter revolutionaries were paralysed by shock and disbelief when the ANC attained freedom for all in 1994 with the landslide victory at the polls bringing the new dawn to the government of the people. That has been a great journey which produced great achievements for our country and pride to the people of Africa. Today the journey to a prosperous South Africa with equal opportunities, work for all and economic emancipation continues.
As leaders we shall spare no effort, we must fight any obstruction with action and that no challenge will be too great, no mission too hard in our resolve to bringing meaningful change to the lives of all our people.
Honourable speaker, the current economic outlook is characterised by serious concerns around the European debt crisis and fragilities in other countries. The risk exists that Europe might experience a recession during 2012 which will impact negatively on the export sectors like mining and agriculture.
Developing countries like China and India have recovered at a relatively faster rate from the global meltdown than the developed world. The International Monetary Fund (IMF), however, also expects the growth in the developing countries to slow down due to a worsening external environment and weakening internal demand.
The USA is currently recovering faster than expected due to increased consumer expenditure. Against this global economic background, national economy is expected to grow at an expected rate of 2.7% (national budget 2012). According to Statistics SA, the provincial economy declined by 1.8% during 2009 and recovered to a positive growth of 2.6% in 2010.
Depending on developments in the international economy and changes in the value of the rand, the provincial economy is expected to grow at a rate of approximately 2,3% during 2012. In December 2011, Limpopo's unemployment rate was 20,2%, which is the second lowest unemployment rate of all the provinces in South Africa. Despite the jobs that have been created in Limpopo the focus is still on increasing the labour force participation rate in the province by focusing on labour intensive production methods.
Honourable speaker, the major contributors to the provincial economy remain our traditional sectors - the service sector at 52,2%, while mining has contributed 27,2%. Government is the second biggest individual sector contributing 17,1% to the provincial economy. In 2010, the province registered a 2,6% growth rate, while the mining sector grew by 4,6% and the Services sector grew by 2% compared to higher 5% during 2005 – 2007.
Manufacturing is underperforming provincially relative to national statistics. While the manufacturing sector is a major employer on national level, where the sector's performance stands at 16%, in Limpopo, manufacturing contributed only 2,6% to the provincial economy. In this light the diversification of the provincial industrial base is critically important and a heightened sense of urgency should be the driving force as we seek to correct the market failures and place our economic performance in a double digit growth trajectory.
Honourable speaker, Limpopo managed to increase its share of the national economy from 5,5% of the national economy in 1995 to 7,2% in 2010. According to Statistics South Africa, the labour force in Limpopo increased by 77 000 workers between December 2010 and December 2011. The province had 441 000 discouraged work seekers in December 2011.
While globally jobs were shed, honourable speaker, despite difficult economic conditions highlighted earlier, Limpopo province managed to create 23 000 jobs during 2011. The resilience of our economy indeed indicates signs of hope moving forward.
Honourable speaker, as I present this budget vote to this august house, let me reflect upon the general economic issues affecting not only the people of Limpopo but our country as a whole:
- The repo rate of the South African Reserve Bank is expected to stay unchanged despite increased inflationary pressure on national level.
- The rand will be relatively stable, possible depreciating mildly against major currencies. This is positive for mining industry in Limpopo.
- The boom in commodity prices seems to be approaching its end. According to the World Bank, mineral prices declined by 19% from July to December 2011. The mining industry in Australia is planning a major expansion over the next few years and this is likely to put downward pressure on coal and iron prices.
- A major impediment for economic growth in Limpopo province is lack of enabling economic infrastructure like rail and water resources. However, we must be pleased by President Jacob Gedleyihlekisa Mhlanganyelwa Zuma's pronouncement during the State of the Nation address wherein he unveiled an aggressive infrastructure development plan, a portion of which will assist in boosting the economy of Limpopo.
President Zuma announced that the infrastructure plan, which will be overseen by the Presidential Infrastructure Coordinating Commission (PICC) will develop and integrate rail, road and water infrastructure. In Limpopo, it will be centred on two main areas: the Waterberg in the western part of the province, and Steelpoort in the eastern part of the province. The President indicated that these efforts are intended to unlock the job creation potential of the province's mineral belt.
We welcome this announcement by the President and believe it will assist in driving the development of infrastructure to enable economic development and growth in the province. However, the challenge is what systems we are putting in place to account to ensure that every single cent spent remained in the province and what latent industries can be developed as quick wins but also launch additional upstream industries.
Poverty alleviation projects
Honourable speaker, poverty is multi-faceted and can be manifested in hunger, unemployment, exploitation and lack of access to economic opportunities. Therefore, there is a need for the department to intensify its efforts to ensure that the needs of the poor are addressed with the urgency the situation demands and to take corrective actions were insufficient attention has previously occurred.
a) Trading Centres
The completion of infrastructure in the Greater Giyani Natural Resource Programme for the development of indigenous industries over the past three years has proven to be very challenging. To date, the Hlaneki and Dzumeri projects are complete, and Eskom is finalising electricity connect.
While our province is predominantly rural, we are convinced of the huge potential available to turn the tide against poverty and become a hive of economic activity therein providing opportunities to many impoverished people in the province. We are also convinced that the vibrant Small Medium and Micro Enterprises (SMMEs) sector is key to economic development. The department has consequently taken a deliberate role in ensuring a conducive environment for SMMEs to operate.
New funding was provided last year for the revival of village and township economies through the promotion of trading centres, in which local entrepreneurs will be able to undertake their businesses offering a wide range of products and services within the township areas.
In November last year, an investment of R2,3 million came to fruition when we unveiled and handed over market stalls to informal traders in the Thulamela Local Municipality. The department handed over 28 market stalls which will accommodate 67 informal traders. The beneficiaries of these market stalls were previously trading at makeshift stalls which offered little or no protection against unforgiving extreme temperatures in the Vhembe District.
Honourable speaker, these market stalls are now fitted with electricity, running water and ablution facilities. As a department we proud of this achievement and the conditions which we provided for trading in this regard will go a long way in improving trading performance of all beneficiaries.
Improving of trading conditions for our informal traders is not only confined to Thulamela Local Municipality. The development of 14 market stalls with the investment value estimated at over R1,2 million is nearing completion at Fetakgomo Local Municipality in the Sekhukhune District.
b) Youth Economic Empowerment
A total of 60 000 youth between the ages 18 and 35 with matrix as minimum qualification from a previous disadvantage are going to be trained through Graduate Entrepreneurship Development Programme (Y-AGE). This is a public private partnership initiative that seeks to support government's efforts to create jobs through entrepreneurship. The programme aims to create 100 000 jobs in the next three years. We will also be ensuring that youth-owned companies should have a sizeable share of public sector work. This applies to both province and local levels.
The programme will be propelled by the following five pillars:
- Skills development
- Enterprise development support
- Funding facilitation
- Access to markets
- Mentorship support
c) Vibrant and dynamic cooperatives
Honourable speaker, co-operatives remain one of the critical pillars for economic development. However, we feel that we should change our approach to co-operatives. In this regard, we intend cultivating sector focused co-operatives as opposed to omnibus co-operatives.
In doing this, we will look at the strength of each sector and the analysis of the economic trends at the time. In order to ensure the viability of these co-operatives, we intend tightening our monitoring and support mechanisms so that these critical vehicles for economic development can yield the desired results.
This meant streamlining co-operatives, including other emerging enterprises towards sector specific as per market demand for their products and services. In this regard sector specific co-operatives will be continued to be formed. This will ensure that interventions are focused to the needs of the members of the co-operatives.
We have begun to create linkages with potential clients amongst established companies to urge them to procure goods and services from co-operatives as part of their subscription to empowerment practices. Our attention will be on agriculture, infrastructure, arts and crafts industries.
In a bid to help co-operatives grow their businesses, the department through its agency Limpopo Business Support Agency (LIBSA) will devote much attention to skills development, as well as the alignment and matching of co-operatives development with sectors that present more business opportunities than others.
d) Beneficiaries of land restitution programmes
The department acknowledges a complementary role on sustainable agricultural enterprise development towards restitution farms. Sustainable jobs can be created by enterprises expanding through greater investment in the upstream value chain agro-processing, packaging and distribution. Emphasis will be placed on the implementation of the agro-processing strategy which has been completed in collaboration with the Limpopo Department of Agriculture.
e) Skills development
Honourable speaker, as a department we have initiated programmes such as the resuscitation of the Tool, Die and Mould (TDM) sector, benchmarking of the manufacturing companies and the Mining Input Supplier Park with the sole purpose of improving the manufacturing capacity in the province. During the last financial year 47 students completed the TDM Empowered Programme training both in Lephalale and Steelpoort.
These students were placed in manufacturing and engineering companies throughout the Province for their "On The Job" (OJT) training for a period of three (3) months. Feedback from these companies indicates a resounding success of the programme. The students will be continuing to the next level in the next financial year and we strongly believe that some will continue to become Master Artisans, thereby be skilled to take up jobs in mining downstream and upstream value chain in years to come.
Manufacturing companies in the province have been taken through the benchmarking process using the United Nation Industrial Development Organisation (UNIDO) benchmarking tool to improve operational performance in order to ensure they are globally competitive. Through this programme, operational challenges are identified and continuous improvement plans are put in place to enhance performance. The programme will continue in the next financial year in order to continue to benefit participating provincial companies.
To this end, we have also issued 193 bursaries schemes for the financial year 2011/2012. 37 students will be graduating this year, 34 of which will be taking up internships in our department in 2012/2013. The three other learners will further their studies and then be absorbed in the department for internship positions for the financial year 2013/2014. We are proud to announce that of the 173 learners who participated in the department's internship programme, 36 learners have been permanently appointed within the department while others have taken positions in the private sector prior the end of the year-long programme. We are indeed proud of this milestone.
Honourable speaker, during the back to school campaign we visited Segolola High School in the Elias Motsoaledi Local Municipality. At this school of the 130 learners who sat for 2011 Matric examination only two passed. The rest failed dismally. Our assessment following the visit revealed that the culture of learning and teaching at the school was painfully at the very lowest. We had to intervene.
Following the discussions with the school leadership and the parents of the learners the department has subsequently provided full bursaries to the two learners. The two learners have been admitted at the University of Venda where both will be reading for Bachelor of Commerce.
Our intervention is aimed at encouraging learners at Segolola high School to take their education seriously and in so doing, demonstrate that this government is ready to assist those who work hard. We are hopeful that the two learners will inspire other learners and teachers at Segolola High School.
Review of the legislature framework to support enterprise development
The review of the implementation framework to stimulate enterprise development, in particular the procurement policy, should incorporate the imperative of speeding up service delivery and economic growth, thereby making sure that more rapid and equitable distribution of opportunities and benefits are promoted and supported for all SMMEs in the province. We seek to enable SMMEs to procure in a way that increases the competitiveness, capacity and capability of the local supply base, where there are comparative advantages and potential competitive advantages of local supply.
Honourable speaker, the primary objective of the review will be to create an enabling environment to stimulate economic growth through removing obstacles and constraints that prevent SMME from contributing to overall growth, to strengthen the cohesion between SMME, to overcome their isolation by promoting the networking of SMME to build collective efficiency, to address development obstacles, and to take opportunities.
Industrial capacity building
Some industries have shed jobs, and to mitigate against those adverse impacts, the department, in partnership with the Department of Trade and Industry (DTI), is facilitating competitive and productivity programmes to enhance the productive capacity of industries in the province. Through the workplace challenge programme we were able to assist companies to improve their organisational culture and entrench best business operating practices therein enhancing productivity and improving efficiency.
We have also introduced the turnaround solutions programme with the aim of preventing job losses in companies that were in economic distress. Despite the slow economic recovery, we are happy to announce that through the workplace challenge programme 769 jobs were maintained and 17 more jobs created. As a province and the department in particular, we took a bold step in creating productivity awareness and celebrating organisations that implement the best practices in productivity improvements. Our efforts did not go unnoticed, in 2011 Limpopo emerged a wining province by winning two out of three categories in the public and the emerging sector categories in the national productivity awards.
Honourable speaker, we have initiated programmes such as the resuscitation of the Tool, Die and Mould (TDM) sector, benchmarking of the manufacturing companies and the Mining Input Supplier Park with the sole purpose of improving the manufacturing capacity in the province. In 2011/12 financial year 47 students completed the TDM Empowered Program training both in Lephalale and Steelpoort. These students were placed in manufacturing and engineering companies throughout the province for their "On The Job" (OJT) training for a period of three (3) months.
Feedback from these companies indicates a resounding success of the programme. The students will be continuing to the next level in the next financial year and we strongly believe that some will continue to become Master Artisans to take up jobs in downstream and upstream industrial activities of the mining industry in years to come.
Manufacturing companies in the province have been taken through the benchmarking process using the United Nation Industrial Development Organisation (UNIDO) benchmarking tool to improve operational performance in order to ensure they are globally competitive. Through this programme, operational challenges are identified and continuous improvement plans are put in place to enhance performance. The programme will continue in the next financial year in order to continue to benefit additional participating provincial companies.
Regional economic integration
a) Special economic zones
Progress made so far in economic development has largely bypassed "underdeveloped" municipalities and most of those are largely characterised by lack of productive capacities to move out of the poverty trap of low income, low investment and low growth and are still struggling to overcome abject poverty.
Honourable speaker, against this backdrop, the department in the coming years, through its aggressive efforts in accelerating industrial development in those municipalities as part of the LEGDP's implementation plan will embark on a flagship project of Special Economic Zones in collaboration with the DTI, private sector and other government departments. Special Economic Zones will be primarily targeted for growing Limpopo regional economies and is envisaged to have a sustainable impact on shaping the new geography of industrial production and creating productive and competitive economies.
As gazetted in January 2012, new Bill for Special Economic Zones (SEZs) will usher in the industrialisation roadmap and pathway in the district municipalities where there is high potential for industrial development. This pathway aims to address unemployment, particularly among the youth and address high levels of poverty and inequalities.
Honourable speaker, the importance of industrialisation as an engine of economic growth and development cannot be overstated. The impact of industrial development is evidenced by the fastest growing economies in the world, such as India, China and Brazil which have used SEZs as instruments to accelerate their economic growth.
The SEZs model is going to give full impetus to the Limpopo province to forge ahead with its industrialisation plan targeted on provincial growth nodal points such as the Lephalale, Burgersfort, and Musina. This will also enable the province to plan for new first class industrial parks in these areas as a way of deepening and diversifying the industrial base which are targeted for labour absorptive activities.
Honourable speaker, the department will work tirelessly to ensure that the Musina to Africa Strategic Supplier Hub Initiatives (MUTASHI) becomes the centrepiece of SEZs development in the province. We are through interdepartmental task team spearheaded by my department planning for a more a more integrated approach that aligns with the needs of the host municipalities.
b) Mining Input Supplier Park and Green Industry
Honourable speaker allow me to inform the house that the mining input supplier park in Steelpoort, which aims at localising manufacturing, is on course and will officially be opened within the next 2 months. Companies are taking occupation as we speak to start their operations. The project will develop local manufacturing capacity and programmes are being put in place to achieve that. I would like to acknowledge and applaud the tireless efforts of all the stakeholders involved in the project.
Honourable speaker, industrialisation can and does bring with it some are adverse impacts on the environment. It is in this spirit that the department is working to develop strategies to mitigate and adapt against such impacts. We are working closely and aggressively with industry in implementing our green economy strategy and implementation plan.
The department plans to develop a "Green Energy Centre of Excellence" at the University of Limpopo-Turf loop Campus and discussions are at an advanced stage with the university to encourage students to innovate and develop more green products.
Collaborative partnership with strategic partners
Honourable speaker, as we table this budget vote, I want to focus on the need for all of us government, and labour and business sector to view quite seriously the strategic partnership for a accelerating shared industrial development in the province. But more than this, we must develop a determination to ensure that all of our citizens benefit from the growth that our economy generates.
This strategic partnership I am referring to does not imply a reckless platform of engagement but a carefully planned process that gives impetuous to the development of our economy, expands all the necessary capacities for the growth process and takes our economy into the ranks of the world's leading economies. It requires both careful planning and a boldness of vision. Such partnership comes from maturity and a resolve not to be distracted by idle chatter and political sophistry.
Honourable speaker, there is no shortage of good and bad ideas. Our task is to find the good ones and move forward with policy articulation and implementation. However, our focus on government's contribution to reducing the costs of economic activity and expanding infrastructure needs to be matched by investment and productivity growth in the private sector.
There is room for policy emphasis in a range of sectors to facilitate investment in new businesses and growth in employment, particularly in network industries. New power generation, greater responsiveness to environmental needs, expanding our access to advanced telecommunications, the redevelopment of water and transport infrastructure, among others, imply fertile ground for private and public partnership and new economic activity.
As government we have to play an assertive and leadership role in working with the private sector and other stakeholders to ensure socio-economic development and transformation and to stimulate economic growth. We are mindful of the fact that government actions can positively influence active private sector participation in the economy, in particular through creating an environment of openness and transparency, ensuring effective governance and institutions and through investing in infrastructure.
As government we have made a firm commitment to the implementation of the LEGDP. However, its success depends on the active participation of all sectors, particularly business. One of our key challenges in ensuring the successful implementation of the strategy will be our ability to catalyse resources from our partners.
Establishment of the single development agencies
We have successfully completed phase one of the amalgamation of our parastatals in our effort to establish a single economic development agency and we are confident that the process will be completed by the end of 2012. I would like to thank the interim board and the chairmanship of Ms Nombulelo Mkhumane and the provincial advisory task team for the tireless and difficult efforts to ensure we have come thus far. I would also like to thank the staff of all our state-owned entities for the effort and commitment to excellence on this journey from.
Trade and Investment Limpopo
Trade and Investment Limpopo (TIL) has made notable inroads in reconfiguring its structural, strategic and operational outlook during the year under review and beyond. The restructuring was triggered by a number of factors, key among which was:
- Repositioning the institution to adapt and respond to current and fast evolving trends in a fragile global economy, characterised by strained currency availability and movement.
- Risk management through containing duplication of roles and resource allocations in organisational activities.
- Concerted efforts to seek greater involvement and alignment with local and global partners to unlock market access for Limpopo businesses in terms of exports and business contacts.
- Anticipation of the structural review of economic development institutions in the province at a macro level.
Honourable speaker, due to the conducive investment climate in the province, TIL has been able to track R7 858 billion worth of investment flows into the province by the end of January 2012. The investments tracked represent mixture of:
- Foreign Direct Investment (FDI) at R1, 268bn
- Local Investment at R1,511bn
- Expansions at R200m
- Government CAPEX at R4, 879bn
- Dedicated investor support services derived from viable business retention and expansion strategy, with adequate resources can assist companies to operate their businesses optimally as well as realise their growth potential through expansions. TIL has through its aftercare service managed to retain R1 billion worth of investment by resolving investor challenges ranging from water, power, permits, exemption certificates at weigh-in bridges and various other incentives. These interventions have ensured that three major companies, namely South African Breweries, Smokey Hills (Phoka Thaba Platinum mine) and Mikes Chicken continue to operate in Limpopo. TIL has also secured an investment for Manoutsa Resort in Mopani.
Honourable speaker, TIL is, on an ongoing basis, engaged in the development of export markets for Limpopo entrepreneurs. The 2012/13 financial year includes special focus on agricultural and green economy related exports, investment in tourism infrastructure, as well as arts and craft products. Targeted export and FDI attraction markets include Brazil, Japan, China, India, as well as the United Arab Emirates.
Projected export and FDI values are as follows:
- Agricultural and Green Projects R500 million
- Agricultural Exports R50 million
- Tourism R150 million
- Arts and Crafts R20 Thousand
- Mining R180 million
- Business Services R190 million
- Green Economy R1.2 billion
Honourable speaker, Trade & Investment Limpopo (TIL) and Corridor Mining Resources (CMR) of LimDev, signed a Memorandum of Understanding (MOU) with the company (Coal India Limited), during the mission to attend the McCloskey India Coal Markets Conference 2011. Coal India Limited is an Indian-state-controlled coal Mining Company and the world's largest coal miner producing over 470 million tonnes of coal per annum in India.
The MOU is for the exploration of four (4) Coal Blocks in the Limpopo Province. Limpopo Province was chosen for this investment, amongst the world's competing nations, due to the quality of coal prevalent in the province and also its strategic positioning as a future coal hub of Southern Africa - with abundant coal reserves in the Waterberg Coal fields, Soutpansburg Coal fields and as well as the Springbok Flats.
TIL believes that the partnership of Limpopo Province (LimDev) and Coal India Limited (CIL), will realise more benefits of employment in Limpopo and of an increase in capital resources that will lead to economic development in our own Province.
Honourable speaker, Iron Mineral Beneficiation Services SA (IMBS Pty Ltd) has partnered with a Russian company to invest some R150 million in technology to beneficiate magnetite to iron ore in Phalaborwa. Phase 1 of the plant has been completed and construction is expected to be finalised by end 2012. It is expected that the plant will process some 50 000 tons of iron ore per annum.
Honourable speaker, Corridor Mining Resources (Pty) Ltd continued to impact significantly on the economy of the province by still sustaining its involvement in five (5) mining operations and six (6) prospecting projects. The company continued to empower HDSA in their projects, by involving affected communities and BEE entities. In the last financial year, 59 new jobs were created and 2750 existing jobs were maintained. In the financial year 2012/2013 Corridor Mining Resources has major plans in mining and further to ensure that mining indeed does empower our people and contribute immensely into our economy.
The company will continue with the following programmes:
- Management of mining operations and prospecting projects
- Invest in identified mining opportunities
- Facilitate BEE entrance in the mining industry
- Facilitation of investment.
More and more businesses are conducting their business activities on sound business principles and practice critical to business growth and expansion. Through the network of 20 LIBSA branch offices and 4 training centres, LIBSA has reduced the cost of accessing business development services to entrepreneurs in all the five districts of Limpopo Province.
Through stakeholder partnerships, LIBSA continues to secure procurement opportunities and business linkages to most SMMES that graduated from the business incubation programme. A typical example is the Moletji Multi-Purpose Co-operative which secured a construction contract valued at R2 million from Dwarsrivier Mine in Tubatse.
The combined access to procurement opportunities for SMMEs across the five districts amounted to R47 million in the 2011 financial year. Access to finance for SMMEs remains a challenge, however, 119 business plans were approved by different financial institutions to the value of R25 million.
Although this is a positive development, given the outlook of the economy, much still needs to be done to ensure that SMMEs are afforded the opportunities to expand and grow their businesses. With regard to compliance, LIBSA facilitated business registration to 9 000 enterprises in the whole province.
Our endeavour to promote the knowledge economy is well underway. The fruitful partnership between LIBSA and MTN SA Foundation resulted in the establishment of the Business Support Centre in Jane Furse to provide and increase the use of Information Communications Technology (ICT) facilities in business transactions.
Honourable speaker, the co-operatives development model remains the government's vehicle of facilitating mass participation of all the communities in the main stream economies. Through LIBSA Co-operatives Development Programme, Limpopo Province leads all other provinces in terms of facilitating access to Cooperatives Incentive grants from the national Department of Trade and Industry to leverage the seed capital provided to our co-operatives. LIBSA facilitated grant funding of R11,3 million during the 2011 financial year, resulting in the sustenance of 700 jobs. With more entrepreneurs aspiring to participate in the business activities, LIBSA experienced an increased number of women forming cooperatives.
Honourable speaker, in terms of business development support to enterprises, LIBSA continued to enhance the participation of entrepreneurs in the local, national and international trade to ensure that entrepreneurs contribute to the economic growth and development of the province, thereby creating job opportunities for local communities. The LIBSA Business Incubation Programme, which brings integrated business support services to SMMEs and co-operatives, enlisted 250 businesses in order to minimise business failure during their start-up phases.
We have successfully increased in the number of women and youth participating in the incubated program. Growth sectors of the provincial economy seem to attract entrepreneurs with 527 women owned businesses doing business in agriculture in the five (5) districts of the province. Although tourism and mining form the economic pillar of Limpopo Province, only 42 enlisted enterprises are doing business in these sector.
Manufacturing remains the highest in terms of establishment with 495 women entrepreneurs and 182 youth entrepreneurs. LIBSA is reviewing the Business Incubation Programme to ensure that participants to both the business and technical training programmes establish businesses in line with Limpopo Employment, Growth and Development Plan. The co-operatives development model has been completed in this financial year and we will ensure that the model effectively enhances participation of communities in the main stream economies of the country.
Limpopo Economic Development Enterprise (LimDev)
Limdev has a total of 595 000m2 of lettable space in properties spread all over the province. These are developed with an aim to support SMME development initiatives in the province by providing lettable space for trading as well as manufacturing activities. The portfolio has provided business premises to 1 665 SMMEs as well as other major operators throughout the province thereby facilitating the creation and maintenance of a total of 10 000 job opportunities in the past financial year
Honourable speaker, Limdev has put plans in place to establish 5 additional industrial units in Seshego in the next year where demand has far outstripped supply. This project will increase total floor space by an additional 6 000m2. The additional space will facilitate the creation of 500 additional job opportunities. The enterprise invested a total of R9.5m into the maintenance and upkeep of the portfolio.
Honourable speaker, the portfolio was established in mid 80s and had aged considerably over the years through normal wear and tear which calls for a focused rehabilitation and refurbishment program. An amount of R420m has been set aside to rehabilitate and refurbish most industrial and commercial buildings in the portfolio in the coming year so as to revitalise development in Limpopo in line with the LEGDP.
Honourable speaker, Bopedi Shopping Centre is a joint venture project between LimDev and a local property investor established in 2008. The main purpose of the joint venture was to establish a decent shopping facility at Ga- Nkoana, Mashung in the Sekhukhune District. The centre is very successful and facilitated the creation of over 500 job opportunities in the first year of operation. The centre enjoyed huge growth since its establishment and an additional investment of R10m in 2011, created additional lettable floor space.
The extension houses national tenants, for example, Standard Bank, Ackerman's and Kentucky Fried Chicken. The extension facilitated the creation of 80 new jobs. Mokopane Mall is a joint venture between LIMDEV and prominent investors in the commercial property industry being C.P de Leew Properties and Costa Zervus Properties.
Plans are afoot to extend the centre by a floor space in excess of 1000m2 to accommodate the enlarged anchor tenant being Pick and Pay and also other smaller tenant shops. This extension will facilitate the creation of additional 35 job opportunities
Honourable Speaker, during 2011/2012 LimDev registered two projects with National Treasury for the purpose of accessing national funds i.e. the feasibility studies for the establishment of the Limpopo Technology hub and a shared broadband open access wide area network. These studies are scheduled to take place this year.
Limdev, through the INSPIRE programme, is piloting several projects in partnership with other departments to realise the vision of a knowledge economy. One of the key areas for development towards a knowledge economy is education.
50 schools (10 in each district) will benefit from the interactive classroom solution that is currently being rolled out. A total of R3m is being invested in this solution, which aims to:
1. Improve the delivery of the curriculum using ICT tools.
2. Improve learner participation through the use of ICT
3. Ensure equal distribution of attention to learners
Honourable Speaker, LimDev has also embarked on a project to train 150 farmers, 30 per district on ICT basic skills and providing the Department of Agriculture's Service centres with hardware to enable the farming communities to access and utilise ICT to work efficiently and effectively, to help them develop their businesses, to improve their supply chain management skills and to market their services online to get in touch with each other and with the whole world to exchange information and experience, to share knowledge and to discuss the latest developments in agriculture, to improve their productivity and find new markets for their goods.
Honourable speaker, the right for adequate safe housing as enshrined in the constitution is still a pipe dream for many of our people. Through Limdev's Risima programme considerable energy and strides continue to be made in order to provide housing to our people in the rural areas who ordinarily would not be financed by commercial banks.
Banks require guarantee on their investments, however, many people are disadvantaged about this requirement as do not have associated collaterals. Upon identifying the gap, Risima has so far provided home loan finances to many people in the rural areas. In the financial year 2011/2012 we disbursed loans valued at R52,2 million.
In the process we created 1 056 jobs while 2 641 jobs were maintained in the same period. We will continue to provide home loan finances to our people particularly in the rural areas to ensure that as government improves on its mandate of rural development, adequate housing is also provided.
Limpopo Tourism Agency, tourism is a leading economic sector worldwide and within the national economic strategy its position has been strengthened through the establishment of a National Ministry for Tourism. Despite the impacts experienced of the economic downturn worldwide the province succeeded in experiencing a growth in tourist numbers visiting the province.
In 2010, Limpopo's domestic tourist inflow increased to 16,9%, second only to Kwazulu-Natal. The facilitation and development of 21 tourism products and destinations in partnership with the Limpopo Tourism Agency, communities and the private sector enhanced the objective to develop Limpopo as a preferred ecotourism destination in southern Africa. More than R700 Million was invested in tourism infrastructure and 23 000 sustainable jobs were generated in the sector.
The implementation of a tourism transformation plan resulted in 376 emerging tourism product owners, 39 youth, 144 travel and tourism educators being capacitated through tourism awareness, training and capacity building programs.
Honourable speaker, it is worth mentioning that Limpopo is driving a cross-border initiative aimed at developing cross-border tourism packages with Botswana, Mozambique, Zimbabwe, Zambia and Namibia. The Limpopo-Zambezi initiative has was aggressively marketed in November 2011. The partners will be launching the packages at the international tourism show commonly known as ITB in Germany (Berlin) in March 2012. This is one of our marketing drives to enhance positioning of Limpopo as the preferred destination within Southern African Development Community (SADC).
The development of new national tourism legislation, policies and strategies will also drive the provincial agenda and ensure the development of provincial tourism strategies and plans aligned with the National Tourism Sector Strategy.
Honourable speaker, in the financial year 2012/2013, a major focus for the department will be to grow this sector. As a department we have identified growing of visitor numbers to South Africa with emphasis on domestic markets. The largest constraint as presented by the Tourism Business Council of South Africa is the poor demand from overseas visitors and the strong rand mainly due to factors that emanated from the economic downturn. Therefore, the implementation of a domestic marketing strategy will receive priority attention.
We will concentrate our efforts on the further development of affordable and accessible tourist facilities offered to the domestic market. Current facilities need to be prioritized and upgraded to ensure that the required service standards are met. With Limpopo expanding its borders towards creating larger tourism destinations through the Zambezi/Limpopo SADC Brand initiative, numerous opportunities exist to grow the sector in Limpopo. In realising this, the development of cross border tourist routes and the provision of supporting infrastructure will receive necessary attention.
Honourable speaker, another priority focus area will be transformation in the industry. Transformation of the tourism industry has been highlighted as an important strategic initiative in the national tourism strategy which will be monitored through the implementation of the Tourism BEE Scorecard and Charter. Supporting community tourism owned initiatives, tourism capacity building and skills development will assist us in achieving the transformation objectives.
Honourable speaker, Limpopo Tourism Agency (LTA) has inaugurated a new board chaired by Mashilo Matsetela. We congratulate and wish Mr Mashilo Matsetela and his fellow board members all the best in their new responsibility. We are pleased to announce that LTA has completed its expansion of Tambotie Ridge Lodge with additional 40 beds at a value of R7 million in partnership with national Department of Environment through the social responsibility programme. LTA has further concluded negotiations for Lekgalameetse resort concessions contract to the value of R350 million with an estimated 400 permanent jobs to be created.
Limpopo Wildlife Resorts (LWR), a subsidiary of LTA, increased revenue by 13,5% from R11,1 million to R12,6 million. For the financial year 2012/2013 we are projecting to increase Limpopo Wildlife Resorts revenue to R13,5 million. Through LWR, we will increase sales and marketing efforts and ensure that Limpopo Wildlife Resorts works diligently to increase duration of bed-night stays in the province.
Honourable speaker, part of the mandate of the new board is to turnaround the financial management of the agency. The house will recall that the agency for the past three years have been receiving disclaimers, a worrying factor indeed. We have full confidence in Mr Matsetele and his team of capable board members whose interest in taking LTA to greater heights is unquestionable. We are convinced that they will change the fortunes of Limpopo Tourism Agency and inculcate a culture of clean governance, high levels of accountability and move in the same direction as the entire family of LEDET, that of moving from "Good to Great".
Honourable speaker, during the presentation of our budget last year, we announced that the third and final casino license for the province was awarded for the Greater Tubatse Municipality. However, subsequent to that, one of the developers in Tubatse has instituted legal proceedings in the High court challenging among others, the establishment of the township called Burgersfort Extension 46 on which the Thaba Moshate Casino is intended to be developed.
As a result, the whole project has been put on hold pending the finalisation of the matter in court. We have been assured by the casino licensee that every effort is being made to address the matter with the litigant and all other affected respondents.
Honourable speaker, the release of the report of the Gambling Review Commission by the Department of Trade and Industry very favourably indicated the existence of a very well regulated gambling industry in our country compared to the rest of the world. Most importantly, it found that the approach taken by the government to encourage limited forms of casino-based gambling rather than allowing for the proliferation of gambling activities throughout the country, has worked well.
The commission further commented favourably on the considerable capital investment that has been made by the gambling industry and the consequent benefits that have accrued to the tourism and entertainment sectors. On the challenges in the gambling industry, it found that the incidences have remained constant despite the significant growth in the size of the gambling industry.
This suggests that the measures undertaken by the Responsible Gambling Foundation to minimize the harmful effects of gambling have been very successful so far.
Honourable speaker, our Limpopo Gambling Board continues to regularly audit the gambling operators in the province to ensure compliance with the gambling legislation as well as to satisfy themselves that the levies and taxes paid over to our provincial treasury are accurate. Furthermore, over the past year, half a million rand was used on a campaign to encourage communities to gamble responsibly. The law enforcement unit of the Board, working in collaboration with all other security agencies, has performed well in the arrest and prosecution of illegal operators in the province.
With the support and active participation of community leaders in the province, we hope to eliminate all forms of illegal gambling in order to protect the punters from such unscrupulous practices.
Honourable speaker, in addition to the licensed casinos in the province, the board has licensed two (2) route operators to roll out limited pay-out machines at some licensed pubs in the province as well as at totalisators where bets on horseracing are placed. On both the international and continental levels, the board continues to play a leading role in ensuring that common norms and standards are developed to create uniformity in the regulation of gambling activities.
As a result of the leadership role that our board has played internationally, the annual convention of the International Association of Gaming Regulators was held for the first time in twenty years, in Cape Town in October 2011. Over two hundred delegates from across the globe converged at the Cape Town International Convention Centre for this purpose thereby increasing the number of tourists to our country.
On the African continent, our board continues to be a member of the committee of technocrats of the gaming regulators Africa Forum. The annual convention of the Africa Forum will be held in Tanzania in May this year.
Honourable speaker, the challenges presented to us by global warming on the one hand and the need for sustainable development on the other cannot be given a passing attention. LEDET has therefore taken a conscious decision to support the establishment of three (3) UNESCO registered Biosphere Reserves – Vhembe, Waterberg and Kruger to Canyon - as they present an appropriate vehicle through which sustainable development can be pursued in the province. Biospheres are intended not only to conserve biodiversity, but also, and importantly, to ensure socio economic development for communities in a sustainable way. Limpopo's three (3) UNESCO biosphere reserves will play an important role in local environmental planning and management agendas.
Partnerships will be strengthened with the affected three district municipalities with the aim to strengthen the Man and the Biosphere (MaB) program as an integral part of local economic development and environmental management. To this end, cooperation agreements will be signed with the three District Municipalities where the provincial biospheres occur thus ensuring that the benefits of this programmes spread across the districts.
Honourable speaker, LEDET will continue to communicate with the people of the province regarding the significance of conserving and protecting our natural resources. 2011 saw our environmental education and awareness programmes benefiting 449 schools, 800 educators and all our local municipalities. We hope to increase the coverage from this year for our environmental education programme as we are planning to utilise both our electronic and print media in all the languages of our province. We are certain that this approach will go a long way in educating the people of our province thus reducing the number of environmental offences committed.
Honourable speaker, notwithstanding the infrastructure and resource challenges in nature reserves, 36 of our nature reserves were managed satisfactorily. We have made tremendous strides in ensuring that communities living adjacent to nature reserves benefit from natural resources such as wood, Mopani worms and thatched grass and access to conduct cultural activities.
Furthermore our permitting process allows for the collection of medicinal plants and hunting where such is appropriate. The province continues with the implementation of the People and Parks Programme that promotes the relationship between protected areas and adjacent communities. The improvement of infrastructure in the nature reserves has a potential to facilitate job opportunities mainly for our communities in rural areas. In this regard, 20 green jobs were created through the expanded public works programme at Lekgalameetsi Nature Reserve during the process of erecting about 17 km of the peripheral fence.
The department is concerned about the wellbeing of its workers and is in the process of procuring about 15 park homes for staff accommodation. This will go a long way in improving the living conditions of field rangers in the nature reserves.
Honourable speaker, lack of human capacity in the management of our precious ecosystems health and biodiversity has been a challenge in the past. The department has consequently appointed 33 field rangers and 2 reserve managers who are all youth, younger than 30 years of age. The department will persist in hiring of young, qualified staff, because we are aware of the role of ecosystem services and natural resources in socio-economic development and service delivery.
Some of the values and services derived from these ecosystems and natural resources include job opportunities, clean air, clean water, and plants for food and medicinal use. The river health assessments were completed for the Crocodile and Groot Mariko rivers. Beyond providing the insight into the status of the catchments and ecological functioning of these rivers, information collected through these assessments provide invaluable assistance in decision making processes pertaining to water quality and quantity.
Such information assists key stakeholders such as the Department of Water Affairs and water users (residents, farmers, mining houses, industries etc) in their role towards archiving the sustainability of water resources.
Honourable speaker, the department is extremely conscious of the threats to biodiversity and ecosystem services. Our approach has consistently been about promotion of sustainable development and ensuring that the ecological, social and economic interests of the province are as far as possible, balanced.
We therefore view the Integrated Environmental management processes or EIAs as tools for advancing sustainable development and not as barriers to development as some may suggest. We have pushed hard to ensure that development applications are processed within reasonable timeframes. We are also making strides in finalising proactive environmental management tools such as environmental management frameworks and conservation plans.
Honourable speaker, for the financial year 2012/2013 we will continue to create green jobs through the development of infrastructure in the nature reserves. We will improve effectiveness of management in the nature reserves; among other things we will develop 28 protected area management plans.
The management plans will outline:
- Protection and conservation objectives of fauna, flora and cultural heritage in nature reserve
- Expansion of nature reserves to include areas that currently require protection and are not under formal protection
- Improvement of infrastructure in nature reserves and
- Mechanisms to involve adjacent communities in the management of nature reserves through conclusion of co-management agreements and establishment of relevant committees where communities can participate in the co-management of nature reserves.
We will increase the province's conservation estate by declaring an additional six nature reserves in the province, which include Luvhondo, Welgevonden, Mokolo private nature reserves, Bothasvlei, D'nyala and Haenertzburg public nature reserves. We will monitor biodiversity in the province so that ecosystem services are improved and eco-tourism is enhanced. In the words of the great First Nations Chief of the Squamish First Nation in Seattle Washington and I quote, "We did not inherit the earth from our ancestors, we merely caretakers for our children".
Honourable speaker, as we meet in the third year of the current five year electoral mandate the capacity of the department is important to deliver with a heightened sense of urgency and re-prioritisation.
It is imperative that LEDET is capacitated and strengthened through:
- A skilled, resourced, empowered and motivated workforce.
- A financially compliant and accountable department
- Integrated, accessible, reliable and responsive Information Management systems.
- Sound financial management and a clean audit plan for the department and all its subsidiaries.
In 2009, the department was sharply criticised by this august house for our failure to fill funded vacant posts. We announced last year that we would work vigorously to fill critical funded vacancies. Posts were prioritised and indeed we are proud to announce today that all advertised SMS posts have been filled.
We went further to fill other critical posts in our regulatory functional areas as we realized that unfilled funded vacancies were affecting service delivery. We are pleased to announce today that 142 posts were filled exceeding the annual target of 75 by 67.
Honourable speaker, in order to ensure that Limpopo plays her part in realising the objectives of the Industrial Policy Action Plan, New Growth Path and the LEGDP, the department must break a new frontier wherein we clearly articulate how the province will be turning the tide through the re-industrialisation of the South African economy and migration away from the Minerals and Energy Complex to the value-added and knowledge-driven and enabled economy. As we chart the labour-intensive industrialisation pathway we must strike a balance that we are not left behind and miss niche opportunities in the knowledge and future economies.
Through the mandate of economic development, the department will use the allocated budget to speed up growth and to transform the economy to create decent work and sustainable livelihoods. This programme should place Limpopo on high growth trajectory.
This trajectory can be achieved the following activities:
- Facilitate sustainable development and job creation in targeted interventions as espoused in the LEGDP by 2014. This noble goal can be achieved through the development customized and priority sector growth strategies and plans
- Develop the economy through sustainable SMMEs and cooperatives in all the priority growth sectors. This will be achieved by engendering the establishment and growth of competitive job creation through the 26 000 SMMEs and 800 cooperatives.
- A regulated, equitable and socially responsible business environment ensured. In this regulated environment the target that can be realised is 17260 businesses through licensing, business registration, monitoring of compliance and conducting business awareness campaigns.
- A sound Economic Planning capability underpinned by Economic Development Information Database, Economic Development Indicators, Updated Geo-Spatial Platform updated, The 20 Year Industrial Master Plan and the importance of Number of Micro Enterprise Development Initiative (MEDI) Programmes implemented and number of micro enterprises reached as key catalysis for the development of our future industrialists.
Honourable speaker, as a department we have taken zero tolerance against corruption and looting of public funds. We are of the firm view that fraud against our fiscas is stealing from the poor and we reject with the contempt it deserves. The department is currently investigating 30 cases of fraud, corruption and theft. We have received 10 whistle blowing cases and they are under investigation. We will leave no stone unturned to ensure that officials who are found to be selfishly enriching themselves from the public funds face the full might of the law.
Honourable speaker, Steve Jobs, well-renown entrepreneur, inventor and co–founder of Apple Computer says and I quote. "A lot of companies have chosen to downsize, and maybe that was the right thing for them. We chose a different path. Our belief was that if we kept putting great products in front of our customers they would continue to open their wallets." Steve jobs believed in greatness and achieved such in his short lifetime. We too have chosen a different path on our journey from "Good to Great".
I must admit that our journey of moving from "Good to Great" will not be easy.
A lot of "good" and "great" has been achieved by this government led by the movement of the people, the African National Congress. We will, however, never rest until we achieve the highest levels of greatness particularly in our economy where each one of us black and white benefit from the wealth of this country. Some of us who have been called to serve in public office are mindful of our responsibilities and have entered into a lifelong contract of achieving greatness for the benefit this great nation. We believe that through the right attitude we shall achieve great results which translate that into highest levels of service provision, corrupt free governance and a better life for all. This year, Honourable speaker team LEDET pledges to do more, with less, faster!
Honourable speaker, I would sincerely like to thank all staff members at the department for their dedication and positive attitude towards their responsibilities. Together we can do great things for our people and so far I'm convinced that team LEDET is heading towards the right direction. I would like to further extend our appreciation to the portfolio committee for their continued support in executing their oversight function over the department and its entities. I will be making a cardinal mistake if I do not appreciate and express sincere gratitude to the head coach of Limpopo Premier, Cassel Mathale for his unwavering support and leading us with wisdom.
Among us here we have heroes and heroines of our struggle who daily guide, support and advise us to never go astray and take for granted the freedom we are enjoying today. We are fully aware that for us to be here and in the leadership of our government, many lives were lost, families shattered and loved ones disappeared never to be heard or seen again. Under no circumstances shall we take this freedom for granted. Invaluable thanks go to Mma Lydia Komape, Bra Ike Maphoto, Mothupi Pharephare, Rashaka Ratshitanga, Ntate Morule and of course our emerging veteran Tintswalo Goodwil George Mashamba for always showing us the way when we are tempted to go astray. Let us continue on this journey of Moving from "Good to Great".
Together we shall arrive at our destiny having achieved a great world in which all people live in harmony, peace, security and prosperity. Happy centenary to our glorious movement the African National Congress. We are looking forward to many more years of a better life and prosperity for all. Victory is certain
Re a leboga
Issued by: Limpopo Economic Development, Environment and Tourism
23 Mar 2012
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