[ Home ] [ Speeches & statements ]

Honourable Speaker
Honourable Deputy Speaker
Honourable Premier
Honourable Members of the Executive Council
Honourable Members of the Legislature
Honourable Traditional Leaders
Representatives of the private sector and labour
Distinguished Guests
Ladies and Gentlemen

It is said that a vision without action is a dream.

The economic transformation process that the new government has embarked upon immediately after its inception in 1994 is on the right track.

Thanks to the democratic government for its people-centredness and growth through development approach to economics.

For the new government, economics is not only about the production, distribution and consumption of wealth in human society but it is also about people, their work, their ownership of productive assets or lack of it, their share of what they produce, what they buy and sell, their accommodation, their recreation, in fact every element which we describe as quality of life.

With most of the macroeconomic fundamentals in place, the challenge that is before us as South Africans today is to stimulate rapid economic growth and economic empowerment that would expedite the process of poverty alleviation and job creation for our people.

As a department charged with the responsibility of facilitating and stimulating sustainable economic development through the creation of an enabling environment for all people to prosper, we have ensured that economic growth features high on our priority list.

Looking at the financial year under review, according to an article in the Business Day of 9 January 2001, South Africa has sustained economic growth of about 3% and, according to the Reuters poll of economists, there is consensus forecast of 3,5% economic growth this year.

The positive economic growth projections for our Province have been repeatedly raised in this House and therefore, one would not have to elaborate on the statistics, suffice to say that we need to use all the means at our disposal to translate these projections into reality. These projections must, of course, bring hope to all of us in Mpumalanga, particularly the poor.

However, given the backlog of apartheid that still persist in the country and the challenges of globalisation, it goes without saying that this figure falls far too short of meeting those challenges. Therefore, the only true solution to our challenges is nothing but to expand the economy rapidly.

As we indicated in our previous year's policy and budget speech, we believe that a target of 6% economic growth by the year 2005 would go a long way in improving the quality of life of our people not only within the Province but the country as a whole.

We further noted that this target would be approached on incremental basis for each subsequent year, that is, 4% economic growth in 2001, 4,5% in 2002, 5% in 2003, 5,5% in 2004 and 6% in 2005.

The year 2001 has begun and we are expected to facilitate a 4% economic growth for the Province. Given our resource base as a Province and the current economic situation in our country, coupled with the determination of the national government to launch an economic stimulus package to boost investment, growth and job creation as reflected in the budget presented by the Minister of Finance in his budget speech delivered on the 21 February 2001, one is more convinced than ever before that this target is within reach.

What we need to do is to strengthen the relationship among all the economic players in that to propel the economy into sustained high growth, all the stakeholders would need to agree on a best path to growth and in travelling the growth path agreed upon.

In pursuit of our noble cause, we continue to employ all the policy instruments that are geared towards a competitive, fast growing economy and distribution of wealth, income and opportunities that accommodate the poor and the historically disadvantaged.

Mr Speaker let me take this opportunity to reflect on some of these strategies as to how far have we traversed in terms of the implementation process, focusing mainly on the year under review.

With regard to industrial development, as the new government, we are still convinced of the continued central role of industrialisation as the mainstream of growth world-wide.

Not only is industry responsible for creating sustainable employment but it is also the key generator of resources for further economic development. It opens opportunities for industry related services and enhances global linkages across economies through trade and investment.

It is in this context that President Thabo Mbeki in his state of the nation address this year called for an integrated overarching industrial strategy.

We also believe that the new Mineral and Energy Bill that is still under discussion currently will go a long way in opening up opportunities for the previously disadvantaged people to also participate in industry related activities.

Therefore, one of the policy instruments that we are employing to promote industrial development in this Province, as we indicated in the past years, involves the industrial cluster strategy, adopted in 1995 by the Province. And underlying this strategy is the element of beneficiation and value addition.

Most of those clusters, as we all know, are now off the ground but at different levels of development.

During May, June and July this year, we intend launching the Agro-food, Mining and Wood/Furniture clusters respectively. Preparation processes to this effect are already underway.

Mr Speaker, in the previous budget speech I reported that an incubator would be established in the course of the 2000/2001 financial year in Middelburg. I am therefore pleased to announce that this project is already in the take-off phase. If everything goes according to plan, we expect to officially open this facility by the end of June this year.

To complement the incubator, the Provincial Government, in partnership with the Department of Trade and Industry, CSIR, NPI and Danish International Development Agency, intend establishing a Manufacturing Advisory Centre in Witbank. Discussions to finalise the deal with the different involved stakeholders are at an advanced stage currently. According to our plan, we expect to see the project off the ground around June this year.

What must also be noted is that the existence of this Centre is extremely important for the Province, particularly for the highveld ridge since it is the industrial hub of the Province. There is no doubt in my mind that small entrepreneurs will benefit a great deal from the technical services to be rendered by this institution.

Work in the other operational Clusters, such as the Wood and Wool clusters, is gradually taking shape except that more financial assistance is required to ensure their sustainability.

It is important to stress that, as the Province, our commitment to the industrial cluster strategy is unwavering. Unfortunately, more financial resources are needed to expedite this strategy. The review workshop on industrial development, conducted at the end of March 2000, also confirmed this position.

Relating to economic trade, like the national government, the Province is also engaged in activities aimed at promoting trade with various countries or rather provinces by means of co-operation agreements. There were trade missions undertaken during the course of last year - missions to China, India and North-Rhine Westphalia in Germany. Those missions were simply the rolling out of the co-operation agreements that we established some few years back with those countries.

The trade mission to India was highly successful, especially considering that MII signed two Memoranda of Understanding Agreements with two of the largest Apex Chambers of Commerce in India. These agreements would assist in assuring that we have access to India businesses through their respective Chambers.

Export promotion has also taken-off. With the relevant institution to drive this aspect in place, coupled with the Export Strategy that this Province adopted late last year, there is no doubt that we are on track. What we would be finalising very soon is a comprehensive implementation strategy.

The new government has made some strides regarding export promotion.

Through its network of 41 foreign economic offices in 36 countries in the world, the Department of Trade and Industry assists existing and prospective exporters to obtain valuable market information as well as business contacts in all major foreign markets.

Export Marketing and Investment Assistance Scheme, Export Credit Finance Guarantee Schemes for SMME have been established to provide prospective exporters with financial assistance.

With the opening of the domestic economy to international competition by, among other things, abolishing exchange controls for non-residents and substantial reduction in that applicable to residents, and the availability of attractive investment incentives to enhance international competitiveness and technology transfer, it is evident that the government is committed to attract more foreign direct investment.

Many reports indicate that fixed direct investment has been gaining momentum since 1994. It is argued that starting from an amount of R4,7 billion FDIs in 1994, 1998 preliminary statistics put the figure at R7 246 billion. In addition, by March 1999, this country had signed 28 bilateral investment treaties.

As a Provincial Government, we are making visible progress in terms of attracting investment to the Province.

This is evidenced by the eight (8) new manufacturing projects that were established during this financial year. The total value of those projects is at the tune of R32.4 million and 658 jobs were created.

Additional five projects to the value of R18 million are being finalised and expected to be off the ground before the end of April 2001. These projects would create approximately 114 direct jobs.

Therefore, given the Province's resource base - mineral and otherwise - coupled with these opportunities and the hard work of MII, the chances of attracting even more investments to the Province are great. The challenge that is before us now is nothing but to sharpen our investment promotion strategy so that we could exploit these opportunities maximally to our advantage and the country as a whole.

With regard to tourism development, much ground has already been covered so far. As we indicated in the past years, one of the priorities that we set upon ourselves was to promote the growth and development of the tourism industry by ensuring that projects identified in the Tourism Growth Plan are implemented.

Mr Speaker, I am pleased to inform the House that we have already put in place a five-year implementation action plan of the Growth Plan - a product of the different stakeholders within the tourism industry.

The main pillars of the plan involve, among other things, development of a comprehensive marketing strategy of the Province locally, regionally and abroad; the establishment of credible institutional framework and organisational structures that will promote this industry vigorously; tourism infrastructure development to facilitate accessibility to tourism areas; and tourism awareness and service culture.

Let me quickly point out that this plan did not just end on paper but it is being rolled out.

To cite but few examples, on 21 August 2000, we launched the 'Provincial Integrated Information Management System' and the 'Tourism Route Road and Signage Project' whose primary purpose is to establish formal localised, high density tourist areas and routes that will encourage growth of the local tourism industry and create new opportunities for the previously disadvantaged people to become involved in the tourism industry mainstream.

The pilot project, which is the Highlands Trout Triangle Route, was introduced during the event. The Trout Triangle - one of the eight tourism development areas within the Province, was identified as the ideal place to implement this project. Mr Speaker, I am pleased to announce that this project would be taking off the ground tomorrow, that is, on the 16th of March 2001.

The restructuring process of MTA is almost complete. The sooner we enact the Mpumalanga Tourism Bill the better in that this will allow us to round off the restructuring process. And one must stressed that we are working around the clock to ensure that this Bill is being passed before the end of this current financial year.

To complement this delivery agency, we have also established a Tourism Development Directorate within the Department, whose primary work is to deal with tourism policy related issues, focusing mainly on bringing on board the previously disadvantaged communities to the tourism industry mainstream.
There is progress in this regard.

Eight black emerging tourism entrepreneurs will attend the INDABA Exhibition of this year- a historically white product owners' domain. Our aim is to ensure that they do not just become a window dressing exercise but are nurtured into real entrepreneurs that could compete in their own right in future.

There is also an ongoing Awareness Campaign driven by the Department and is unfolding extremely well. This campaign involves various activities such as the Welcome Campaign, Tourism School Initiative, Tourism month and other related tourism activities directed to the different communities, particularly the previously disadvantaged communities.

Central to all these campaigns is an attempt by government to sensitise the community at large about the importance of this industry towards our economy, especially relating to economic growth and job creation.

With regard to crime activities, we are working very closely with the South African Police Services and community structures on the ground to ensure the safety and security of our visitors. An after-care programme has already been designed for tourists directly affected by criminal activities.

The success of this action plan depends highly on sustained support from the key role players in government, private sector and the community.

As government, we are involved in all these activities because of our deep and unwavering conviction that we could; with all what our Province is endowed with and in a true partnership, offer a unique and differentiated products to tourists.

Mr Speaker, at the beginning of my speech I stressed that economics is not only about the production of goods and services but is also about people. Therefore, as government, we are committed to ensure that the economic growth that we generate has to lead to job creation and improve the quality of life of our people.

However, the government cannot tackle this challenge alone. The involvement of business, labour and other stakeholders is crucial. And this is the principle underpinning the Presidential Jobs Summit Declaration.

Looking at the unfolding process relating to the implementation of the Presidential Declaration at Provincial level, one could safely say that things are gradually starting to fall into place. Although there is still reluctance on some of the stakeholders to play the ball, there is however hope that the situation will improve as the process evolves.

Despite the few bottlenecks that we have, and still, experiencing since the launch of the Provincial Jobs Summit on November 1999, we have managed to put in place an implementation plan and institutions to drive the plan.

Fortunately, our endeavours are starting to pay dividends. Approximately 33 500 jobs have been created from the government programmes since 1999 to date. What one must quickly point out is that this figure includes both permanent and temporary jobs.

We realise that this figure is relatively far too small considering the high level of unemployment still existing in the Province but what is encouraging is that there are already strategies in place aimed at adding momentum to the implementation process of the Declaration. We expect the figure to increase as the implementation process gains momentum. In addition, 3 348 people were also trained in the various parts of the Province as a result of post Jobs Summit activities. With the launch of the National Skills Development Strategy some few weeks back, coupled by our Provincial Skills Plan that we would be launching very soon, we hope to accelerate our skills training programme, expanding the skills base that we so desperately require both as a Province and the country.

While increased economic growth and job creation is important for the enhancement of our economy, what should not escape our mind is that the historical evolution of the South Africa economy has been predicated on the domination, exploitation and marginalisation of the black majority.

To break the cycle of underdevelopment and continued marginalisation of our people from the mainstream economy, the new government took a conscious decision to ensure that our people are empowered. The new government, as we all know, adopted a National Strategy for the Development and Promotion of Small Business in South Africa.

According to ' South Africa Yearbook 2000/2001, small businesses in South Africa absorb more than half of the people formally employed in the private sector and contribute about 42% to the country's Gross Domestic Product. It is understood that the importance of small business within our economy cannot be over emphasised.

To show the determination of government to develop this sector, in February 1999, report the South African yearbook 2000/2001, the Minister of Finance, Mr Trevor Manuel, introduced measures to encourage the development of small businesses. The measures include a reduction in company tax, growing participation in government infrastructure projects and greater access to credit guarantees, loans, training and technology and market information. Even in the budget for the next financial year, more concessions were given to this sector.

Taking cue from the national government, the Province has also introduced some measures to foster Small, Medium and Micro Enterprise (SMMEs) development. To date, we have established a Provincial Strategy on SMME development and a directorate within my department to facilitate the implementation of this strategy. Six accredited Local Business Service Centres were established to promote local economic development and emerging enterprises.

With the limited financial resources that were allocated to this area of work in the year under review, we failed to augment and consolidate the achievements that we scored in the past years. Most of the Local Business Service Centres that we established in the previous years are currently under serious financial constraints.

Therefore, we need very bold steps to be taken to direct more and adequate resources to strengthen all the institutions whose main function is to support and promote small business development. We hope that the recommendations that are made in the mid-term evaluation of the National Strategy for the development and promotion of SMMEs document, if implemented, might salvage the situation.

Like national, we are also revisiting our Provincial Strategy. Together with UNOPS and other stakeholders, we have developed a new approach to local economic development. Inherent in this approach is the principle of integrated economic development. The new model will be tested around the Nkomazi area and if everything goes well, it would take-off around June this year.

Not only are we engaged in economic development activities but also involved in ensuring that the rights of the consumers are protected and advanced. We have already established the Consumer Court as we promised in last year's budget.

In addition, there are also vigorous campaigns on consumer education and awareness that my Department, through the Consumer Affairs directorate, is driving. And we intend intensifying such campaigns because there are still a lot of people who are vulnerable to unscrupulous business people.

Mr Speaker, South Africa's interests and objectives in the Southern African region, including the Province, are guided by the existence of strong linkages between the domestic and regional economy. Therefore, it is important, as a Province, to strengthen trade, investment and industrial linkages within the region since such interaction will provide a range of opportunities for industrial and tourism development.

The Spatial Development Initiatives (SDI) programmes, a concept that we are all familiar with by now, are recognised as effective means of stimulating economic growth by exploiting existing economic potential of the area. This is a project focusing on hard infrastructure provision, black economic empowerment, skills transfer and the creation of sustainable jobs.

With the opening of the Maputo Development Corridor, one of the SDI's projects, there was no doubt that business and communities living in the areas traversed by the highway stand to benefit. Realising that there is still a lot to be done, as a Department, in consultation with Cabinet, we will be looking at other ways and means of enhancing and strengthening the capacity of Dedicated Team to accelerate the Corridor project.

The new approach that the national government has introduced, as an attempt to take forward the SDI's programme will assist the Dedicated Team to add impetus to the Corridor Project. Among others, this involves the handing over of some of the aspects of the SDIs to Provinces - an exercise that would be finalised soon. It is said that 'the secret of success is constancy to purpose'. And our purpose is clear - to create a better life for all South Africans, particularly the previously disadvantaged.

It is this fundamental objective that has informed the priorities that we have set ourselves for the 2001/2002 financial year.

Without exhausting the entire list, let me just highlight some of them.

With regard to industrial development, we intend to see the Stainless Steel Incubator up and running, including the Manufacturing Advisory Centre.

Attraction of foreign direct investment also features high on our priority list. We are targeting investments to the value of at least R100 million in the upcoming financial year.

Tourism promotion is also crucial given that we are one of the top tourist destinations within the country. If we could facilitate the establishment of at least ten (10) new tourism products from the previously disadvantaged individuals, we believe that it would be the beginning of the end.

As an attempt to build capacity within the tourism industry, we have set in motion plans to establish a Tourism Academy. Talks between the Department of Education and my Department are underway regarding this issue. Since unemployment is a thorn in the flesh, we therefore intend to fast track the implementation process of the Jobs Summit Declaration.

The establishment of the Nkomazi Economic Development Agency (NKEDU) is also another area of focus. This an institution that will co-ordinate and promote regional economic development in the area following an involved process that started with a resource analysis in the area whose findings identified Agriculture and Tourism as key sectors.

We will launch both NKEDU and the Agro-food Cluster around Nkomazi in the second quarter of this year. A similar process, with the assistance of the United Nations Office for Project Support (UNOPS), would be replicated in the western Highveld Region.

We also intend facilitating the establishment of two Local Business Support Centres and three Retail Financial Intermediaries.

We intend launching the Furniture Cluster in the White River, Graskop and Sabie area before the third quarter of this year.

Obviously, we need human resources to drive these objectives. Therefore, as a department, we take human resource development extremely serious. To date, we have put together a draft Human Resource Development Policy. Coupled to this policy is a Performance Management Policy that is in the process of being finalised. We are also ensuring that all laws that affect personnel are administered as required. Already steps have been taken to develop the Department's Skills development plan, including an Employment Equity Plan.

Therefore, to cater for these priorities and other related activities, the provisional budget allocation for the Department is distributed as follows among the various programmes:

* Administration: R11.4 million
* Industry Promotion: R3.2 million
* SMME development: R1.5 million
* Trade and Gaming: R4.9 million
* Share Capital: R50.6 million
* Tourism Promotion: R2 million

The total allocation for the Department is R73.552 million. What must be pointed out is that this figure includes R3.675 million for rural development, which represent 6% of the R61 million Grant set aside by the National Treasury for infrastructure development.

Relating to clean governance, we welcome the introduction of the Public Finance Management Act (PFMA). The department is on track with regard to the implementation of the PFMA.

Internal controls and procedures are already in place to ensure efficient and effective utilisation of the limited resources at our disposal and maximum collection of revenue.

In addition, the Department is ready to get the Basic Accounting System going on the 1st of April 2001.

In conclusion, let me reiterate that, as the new government and the Department, our commitment to create a better life to our people is unwavering. Translating our priorities into a reality would be one step in the right direction.

We therefore call upon business, labour, community organisations and other stakeholders to join us in our fight against poverty and unemployment. As Niccola Machiavelli noted, "Where there is great willingness there cannot be great difficulty."

Having said that let me take this opportunity to thank all the people, across the spectrum, who contributed to the achievements of the Department: The Premier; Members of the Executive Council; business; labour; NGOs such as UNOPS and many others. Most importantly, I wish to thank my staff who worked so tirelessly to ensure that this ship of economic transformation remains on course.

Issued by: Office of the MEC for Economic Affairs, Gaming and Tourism, Mpumalanga, 15 May 2001