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8 May 2008

Honourable Speaker and the Deputy Speaker
Honourable Premier, Mr Sello Moloto
Honourable Members of the Executive Council
Honourable Members of the Provincial Legislature
Leaders of the opposition parties
Executive Mayors, Mayors and leaders in our system of local government
Leadership of the African National Congress and other political organisations
Stalwarts and veterans of our struggle
Our dignified traditional and religious leaders
Leadership and heads of our chapter nine institutions
Leaders from the labour, women and youth fraternity
The business community
The Director-General, our Head of Department and other senior leaders of the public service
Leaders and heads of our provincial parastatals
Media representatives
Distinguished international and local guests
Ladies and gentlemen, comrades and friends

Introduction

We meet here today, a few months before the end of term of office of the current government. This penultimate presentation of the Department's policy statement marks yet another watershed since the beginning of this term in 2004. Over the last 14 years, we have embarked on a journey towards the realisation of the ideals, dreams, aspirations and a society that our people have yearned for over many decades. In continuation of our work and commitment to serve the people, we stand here today to bring them a message of hope for a people cantered wealth and people driven economy.

This message of hope and assurance finds expression in the gestures and postures of the ruling party, the African National Congress. The ANC, on whose mandate I stand before this honourable house as a messenger, has recently affirmed at its last national conference that the creation of a developmental state is the only sustainable way towards the realisation of the ideals enshrined in the Freedom Charter and the ultimate creation of a better life for all. The ANC has utilised its 52nd National Conference as a strategic platform to review its political and social transformation work of the past five years since 2002 and planned ahead up to 2012 and beyond.

In reviewing the work of the party executed through the democratic state it leads, the ANC conference noted that we can say with confidence that, over the past five years, which included the 10th anniversary of our freedom, the ANC has developed a keener understanding of the task at hand and what needs to be done to ensure faster transformation of South African society. There has been a general improvement in the conditions of life of all South Africans, including the poor. The high levels of poverty that we live with have begun to decline, especially since 2000. This has been the consequence both of accelerated growth, and also increase in government expenditure, especially spending which targets the poor, such as social security grants. This is indeed a message of hope and assurance which gives us comfort that tomorrow will be better than today.

Accelerated and shared growth

As we forge ahead towards completing the second decade of freedom and reaffirming the solemn commitment of the people's movement to the masses of our people, the 52nd National Conference of the African National Congress concluded as follows:

* That central to the country's economic challenges in the current phase is to build an integrated and growing economy from which all South Africans can benefit.
* We need to strive for macro-economic balance that supports sustainable growth and development.
* Government action will be guided by an industrial strategy and a corresponding programme which continually identifies and addresses constraints to investment. This will help build an economy that is characterised by high levels of manufacturing activity, modern services, expanding trade, cutting edge technology and a vibrant small business and cooperative sector.
* To ensure that benefits of growth are shared by all, there will be focus on creating decent jobs and ensuring an improving quality of life for workers.
* Government will intensify broad-based programmes to empower those previously excluded from mainstream economic activity, including women.

These are the fundamentals upon which we will realise an accelerated shared growth through an integrated and sustainable economic development path. This is a mandate to all of us to strive for the realisation of the economic aspirations of our people.

Global Economic Overview

After several years of robust growth, the world economy is now facing some serious challenges in sustaining its brisk pace. The end of the housing bubble in the United States of America, as well as the unfolding credit crisis, the decline of the US dollar vis-à-vis other major currencies, the persistence of large global imbalances and high oil and food prices will all threaten the sustainability of global economic growth in the coming years.

According to a United Nations (UN) Report on the World Economic Situation and Prospects 2008, the ongoing housing downturn in the United States became much more serious in the third quarter of 2007 with the sub-prime mortgage meltdown, which triggered a full-scale credit crunch that reverberated throughout the global financial system. Central banks of the major economies have adopted various measures to mitigate the financial distress, but these measures did not address the more fundamental problems rooted in the unregulated workings of the global financial system and its links with the world economy.

Most developing countries and economies in transition have felt the effects of the global financial turmoil, mainly through increased volatility in their local equity markets and measurable widening of the yield spreads on their external debts, but neither effect appears to have been long lasting. The relative resilience of these economies is partly due to their improved macroeconomic conditions and their large accumulation of foreign exchange reserves, along with vigorous growth over the past few years. Part of the strength can also be traced to their growing interdependence, driven by the sustained rapid growth in the two most populous emerging economies, China and India. Nevertheless, the growth in most of these economies has been far from self-sustaining and remains highly dependent on the wider international economies environment, which in turn is largely determined by the economic policies and performance of the major developed countries.

Provincial Economic Overview

With regard to the state of the provincial economy, our struggle for the realisation of a people centred wealth and people driven economy is on course. Limpopo province registered economic growth rate of 4,6 percent for 2006, following a growth rate of 4,1 percent in 2005 at market prices.

Our economy recorded a real annual economic growth rate at a decreasing rate of 6,8 percent, 4,4 percent, 2,6 percent; 3,3 percent; 4,1 percent and 4,6 percent for the years 2001/06 respectively, but the trend has since changed towards increasing growth of revised 3,3 percent in 2004; 4,1 percent in 2005 and 4,6 percent in 2006 which might change to a higher rate after revision later this year.

Gross Domestic Product contribution per sector: (1995/06)
The provincial economy at current or rather nominal prices grew from R34,342 billion; R40,091 billion; R46,4 billion; R51,7 billion; R58,9; R68,9; R78,1; R83,6; R93; R104,4 and R118,8 for the period 1995 to 2006 respectively. This indicated an upward trend of the provincial economy, i.e. almost four times that of 1995. The largest contributing industries into the economy of the province are mining and quarrying (22,9 percent), finance, real estates and business services sector (16.5%); and the general government services (16,4%). The construction industry had the lowest contribution (1,5%) to provincial GDP at market prices

Average Annual Economic Growth: 1996-2006

Limpopo registered an average growth rate of 3,1% which is the third largest after Gauteng at 3,6% and Western Cape at 3,7% as well as lower than the national average of 3,2%. Limpopo province have been registering higher average annual growth rate of 4,0% above all provinces and the national average for the period 1996/05. This decline requires the province to exert more effort in implementing economic development programmes, such as actualising all the plans as per our Provincial Government Development Strategy (PGDS).

Contribution to the economy per sector

The contribution of the primary industry to the provincial economy increased from 24,9% in 2005 to 25,6% in 2006.

* Agriculture increased from 2,6% in 2005 to 2,7% in 2006. This might be attributed to improved climatic conditions with prolonged rainy season
* Mining and quarrying increased from 22,3% in 2005 to 22,9% in 2006. There is a steady increase in this sector due to the slow implementation of mining beneficiation programmes and the construction phase of mega mining and infrastructure projects
* The contribution of the secondary industry to the provincial economy increased from 7,4% in 2005 to 7,5% in 2006
* Manufacturing industries remained the same at 3,4% as in 2005
* Electricity and water had a minor increase of 0,1% from 2,5% in 2005 to 2,6% in 2006
* Construction also had a minor increase of 0,1% from 1,4% in 2005 to 1,5% in 2006.
* The contribution of the tertiary industry decreased from 56,9% in 2005 to 55,5% in 2006.
* Wholesale and retail trade, hotels and restaurants industry decreased from 11,2% in 2005 to 11,0% in 2006
* Transport and communication industry decreased from 7,7% in 2005 to 7,4% in 2006
* Finance real estate and business services industry decreased from 16,7% in 2005 to 16,5% in 2006
* Community, social and other personal services industry decreased from 4,3% in 2005 to 4,2% in 2006
* General government services industry decreased from 17,0% in 2005 to 16,4% in 2006.

We boast here of a stable and growing economy yet an economy under threat. Our economy is threatened by the persistent rate of unemployment which stands at 32,4% by March 2007, increasing prices of basic commodities such as food, fuel, electricity and interest rates hikes. We are also concern about the labour absorption rate of 26,7% which is below the unemployment rate. These challenges are further compounded by the ensuing power crisis and its attendant regular load-shedding experienced by Eskom subsequently affecting both household and industrial power supply. Another area of concern is the decline of the agriculture sector which is the food basket for our people. Nevertheless, with our combined collective efforts from the national government, provincial administration, and the business community, we remain confident that with time we will triumph over these challenges that are basically seasonal.

Macro-impact Assessment and Industrial Cluster Analysis

Limpopo Provincial Government has adopted the industrial cluster approach as contained in the Provincial Growth and Development Strategy (PGDS). The strategy is a culmination of various discussions with stakeholders from all sectors towards realising the dream of sustainable and integrated development that seeks to promote economic growth and development, improve the quality of life of its citizens, raise the institutional efficiency of government, attain regional integration and enhance innovation.

The government of Limpopo has committed itself to the general growth and development of the province. This commitment is based on a strategy of seven development industrial clusters following the value-chain approach adopted at the development summit, as a vehicle to create employment opportunities, raise the international competitiveness and investment rating of the province, combine public and private sector contributions to development and to align the interventions of various public development institutions for greater impact.

During the period under review, the provincial and national Social Accounting Matrix (referred hereto as SAM) were compiled in a collaborative effort between our Department, National Treasury, Statistics South Africa, the Reserve Bank, Department of Provincial and Local Government, and Development Bank of South Africa (DBSA). SAM is a comprehensive, economy-wide database that contains information about the flow of resources that takes place between the different economic agents that exist within an economy during a given period of time – usually one calendar year. The application of SAM was piloted in Lephalale Municipality whereby a macro-impact analysis was done on the construction of Grootgeluk Coal Mine and Medupi Power Station. The results of this assessment was positive and were used to assist in planning to support infrastructure development such as bulk water supply, improvement of major roads, building of houses and preparations on skill development to mention a few.

In January 2008, SAM was applied to all industrial clusters with the exception of the forestry cluster. The results of the analysis indicated that the successful development of clusters can make a huge contribution to the overall development of the province. The results also show that if the industrial clusters are successfully implemented, the province will be able to meet the Accelerated and Shared Growth Initiative of South Africa (AsgiSA) targets. During this financial year, we will conduct a comprehensive study on industrial cluster mapping and value chain analysis. The study will be based on the generic model of industrial clustering and include an intensive investigation into the feasibility of each industrial cluster.

Progress report on the Annual Performance Plan

It is a common cause that our departmental mandate is focused on three key focal areas, economic development, environment and tourism and cuts across three national ministries. Our report on progress made in the previous financial year and major plans for the current financial year will be located within the context of the three focus areas with the primary goal to stimulate and maintain an enabling environment conducive for sustainable economic growth, environmental justice and an improved quality of life for all.

Trade and Industry

Industrial development will be a pie in the sky if there is no policy framework at both national and provincial levels. Allow me to announce that the National Industrial Policy Framework (NIPF) has now been adopted nationally. Various sectors have been identified for industrialisation to take place. A key priority for implementation of the AsgiSA programme is the Business Process Outsourcing and Off-shoring (BPO and O). A provincial implementation structure for the BPO and O led by our Department has been established. We are currently developing a Provincial Value Proposition for marketing and developing a Talent Development Plan which will ensure that we have a pool of matriculants and graduates with the appropriate skills for the sector.

The NIPF further advocates that we need to develop sectoral strategies. Key to our province is the development of strategies for the sectors for which we have the comparative and competitive advantages. We have already finalised a Mineral Scan and have developed a Provincial Mining and Minerals Processing Strategy. This strategy gives the status quo of the available minerals and their marketing outlook and deals with an investment promotion strategy where specific programmes are recommended to increase both local and foreign investment. We are optimistic that this is a giant step in the right direction and that together with the industry role players we shall overcome any obstacle.

Our Department, in collaboration with the Council for Scientific and Industrial Research (CSIR), the Development Bank of Southern Africa (DBSA), Mopani District and Greater Giyani Municipalities, is involved in a pilot project for the development of indigenous industries. The project involves the commercialisation of Mopani worms, oyster mushrooms and developing bookkeeping skills. We have committed R6 million over the Medium Term Expenditure Framework (MTEF) period starting from 2006/07 as our contribution to finance the infrastructural development which is estimated at about R12 million. We are please with the progress made thus far especially that the construction of the warehouse is underway.

Last year we reported in this august house that our Department has assisted a provincial precision engineering company to patent a winch in USA, UK and Australia. In line with our vision of innovation and provision of solutions for economic growth, we are happy to announce that the Department has successfully negotiated with the National Departments of Science and Technology and Small Enterprise Development Agency (SEDA) to finance the establishment of a manufacturing plant estimated at a cost of R5 million. We are hopeful that this company will contribute towards the creation of the most needed job opportunities in the province.

Manufacturing

Manufacturing is a sector that has potential but has been lacking behind in its contribution to our Gross Geographical Product (GGP). The obvious reason has been that the province has been sending raw materials to be beneficiated elsewhere. Last year we highlighted that we need to make interventions, so as to boost our manufacturing sector. Among them we have introduced the following:

Limpopo Tooling Initiative (LTI): This is a provincial structure, which emanated from the national initiative to address skills shortages. The main objective of this initiative is to resuscitate the Tool, Die and Mould industry in South Africa. The provincial structure has been launched during the month of March 2008. It is through this initiative that we believe we will address the shortage of artisans that are normally needed in the mining and other industries.

Productivity Management Programme: As a means of contributing towards the Joint Initiative for Priority Skill Acquisition (JIPSA), the Department is undertaking productivity management for small, medium and micro enterprises (SMMEs), especially in the manufacturing sector in all the districts of the province. The purpose of the programme is to ensure that the SMMEs are productive and globally competitive in their business activities. The programme entails building capacity of SMMEs in the fields of entrepreneurship, personal management and finance, economic concepts and productive capacity building.

Input Supply Park: It is estimated that over the period 2007 to 2015 an investment of R41,3 billion will flow into the province for mining exploration, expansion and new mine developments. An estimated R300 million per annum of new demands for consumables and services from the local economy will be added to the procurement expenditure of mines as a result. These aggregate markets represent a significant draw factor for mining input suppliers to set up operations in the province. To this end, we have initiated the establishment of a Mining Input Supply Park in the Steelpoort area. We are pleased to announce that the outcome of the pre-feasibility study justify advancing to a more detailed study. The project is a product of collaboration between our Department, North West province and the industry.

Agro-processing: The Department has partnered with Tshumisano Trust and the Department of Agriculture to establish an Agro-Food Technology Station at the University of Limpopo. This is in response to the need to uplift the quality and standards of food produced in the province by small businesses and co-operatives. The station will assist in technology transfer and training on new technologies for processing, conduct product testing and advice on nutritional values on processing technology and processes. This will ensure that locally processed food products are ready to be sold anywhere as they will meet the requirements.

Prices for basics food products and household items have gone up tremendously. This has put a strain in the budgets of the ordinary people as well as the small retailers in the rural areas. In responding to the need for competitive pricing by small businesses, the Department has funded the first black owned buying co-operative in the form of a wholesale owned by small entrepreneurs and hawkers in Phokwane in the Sekhukhune District. General dealers, hawkers, retailers will no longer have to drive so many kilometres to Polokwane to buy their stock as they have their own wholesale. This initiative mooted by Africa Co-operative for Hawkers and Informal Business (ACHIB) will be replicated in other districts in our province. Partnerships are required from the private sector to fast track this initiative and give the cooperatives the power of bulk buying and thereby saving on prices.

Mining Industry

The mining industry continues to enjoy an unprecedented commodities boom fuelled largely by Asian and Eastern European countries' insatiable demand. This has created a unique climate of investor scramble for new opportunities both in the province and the rest of the continent. Some analysts estimate that more than $100 billion could be on its way to the African continent. If the figures are realised, it will dramatically change the status of this continent in foreign direct investment market. The current power shortages do create some serious anxiety in the market, but all the stakeholders are working tirelessly to find both short and long-term solutions to the problem.

We urge mining houses to reconsider their approach to the nature of partnerships that they have with communities. It is critical that these partnerships be beneficial to all involved parties so that the current tensions can be resolved amicably.

Last year we reported on Eskom's plans to expand their current Matimba operations in Lephalale at an estimated investment of R26 billion. To date that figure has escalated to the estimated investment opportunity of about R80 billion. The project was launched during the 2007/08 financial year with an estimated operational life of 50 years. It will be comprised of six units with 4 788 megawatts. As a direct result of the launch of the project, Exxaro is expanding its current Grootgeluk mine operations to push up production to 36 million tons a year. Opportunities have been created for the local SMMEs, national businesses and international investors.

Last year we reported the ASA Metal's plan to expand at an estimated investment of R3,2 billion. We are delighted to report that to date the company has spent R600 million on the project and the expansion is on course. Limpopo Development (LimDev) is attending to the restructuring of the shareholding of ASA Metals (Pty) Ltd to accommodate a Black Economic Empowerment (BEE) shareholder in the business, through the disposal of a portion of LimDev's shares to an identified and approved BEE consortium. Transaction advisors have already been appointed to attend to the disposal process.

Our Department, through Corridor Mining Resources (CMR), a subsidiary of LimDev has initiated various mining initiatives worth multi-billion rands, which will contribute in creating job opportunities and enhancing BEE. These projects include among others Attaclay, Tameng Mining and Exploration, Smokey Hills, Sefateng Chrome, Tshepong Chrome, Khumong Chrome, Mokopane Kodumela Mining Investment, Fumani, Greenstone and Rock Island.

Enterprise development

During the period under review, our province hosted national and international small business practitioners at the National Small Business Summit 2007 in Bela-Bela. The summit looked at best practices on small business development, funding models, increasing market access, promoting entrepreneurship, regulatory issues, etc. The Integrated Strategy on the Promotion of Entrepreneurship and Small Enterprises was finalised by the Department of Trade and Industry (DTI). The strategy guides provinces and local governments as well as institutions on the support mechanisms that must be put in place to support small businesses.

Our Department held its second Youth-Bis Competition and awarded five young entrepreneurs funds to start and operate their businesses. The competition gives young people a chance to think about their future and make plans to achieve their goals. This time around, all districts had winners and they are all currently undergoing training and preparing to establish their businesses. The previous five winners are operating their businesses already and get support continuously.

Small, medium and micro enterprises (SMMEs) Finance

A total of 442 business loans amounting to R56 million were approved during the financial year 2007/08 as well as R5 million for Performance Guarantees, making a total of R61 million of financial assistance to SMMEs. This investment has resulted in the creation of 1 216 new jobs and maintained a total of 2 027 jobs in the provincial economy. LimDev managed to collect a total of R60 million from SMME loans against a budget of R64 million for the same period. In terms of the current financial year, a total of R50 million has been put aside to finance approximately 200 SMMEs and to facilitate the creation of 1 000 new jobs whilst maintaining 1 667 jobs into the economy. As part of our financing programme, a total of R49 million was approved for 298 housing loans during the period under review. This resulted in the creation of 989 new jobs and sustained approximately 2 468 jobs during the same period.

However, we are concerned about entrepreneurs who are not willing to service their loans despite the fact that their businesses are thriving. This tendency deprives other entrepreneurs to benefit from our services. As a custodian of public funds, we have a moral and political obligation to ensure effective and efficient utilisation of public funds and to extract maximum value out of every cent we invest supporting SMMEs. As a result we are compelled to go an extra mile in recovering unpaid loans, particularly from reluctant debtors who are capable of servicing their loans.

SMME Support

Compliance to statutes and legislation has always been a challenge to businesses due to the proximity between entrepreneurs in Limpopo province and Companies and Intellectual Property Registration Office (CIPRO) in Pretoria. Since our collaboration with CIPRO, entrepreneurs and enterprises are able to register their businesses without travelling out of the province. We are glad to report that over and above the 4 232 registered businesses Limpopo Business Support Agency (LIBSA) has facilitated the registration of two trademarks and one patent in Limpopo province. These developments are indications that we are gradually reaching our objectives of bring all CIPRO products and services in the province.

Capacity building remains one of the fundamental areas of business development and through LIBSA we have broadened our client reach over the past year in providing critical business skills to enterprises across the province. Through our in-house training programmes we managed to provide training to 1 283 entrepreneurs. Capacity building programme included Effective Financial Management, Basic Bookkeeping, Practical Costing and Pricing and Practical Marketing. With the incorporation of NTT into LIBSA, we will further provide both business management and technical skills to aspiring and existing entrepreneurs.

As a developing economy, Limpopo province regards entrepreneurship along the co-operatives model as vital to encourage communities to participate in the economic mainstream at the local level. Through LIBSA we have facilitated the registration of 67 co-operatives and development of 53 co-operatives that created 166 jobs through a diverse range of intervention during the period under review. To date, 160 members underwent training on technical capacity building offered by Department of Labour through the Extended Public Works Programme (EPWP) which seek to broaden employment in labour intensive co-operatives in collaboration with LIBSA and Department of Labour. One of our key breaking grounds for entrepreneurship is the incubation programme. Over the last 15 month LIBSA incubated about 246 selected businesses and already 80 of them are showing signs of maturity in terms of doing business on sound business principles and practice.

As part of our plans to support SMMEs, LimDev owns a total factory space of almost 700 000m2 across the province. Occupancy rate stands at 83 percent, representing 575 719m2 taken by a total of 1 617 tenants. Total rental collection for the period under review amounted to R39 million. The property portfolio maintains a total of 9 196 jobs in the province. The 2008/09 plan is to raise occupancy rate to 87% and to increase the number of clients by 10% to increase revenue while maintaining a total of 10 116 jobs within LimDev industrial space.

Public Transport

LimDev provides public transport services in the Limpopo province and in parts of the Mpumalanga province, through Great North Transport (Pty) Ltd (GNT). GNT remains the major passenger bus transport in the province and operates 499 busses on 494 routes. By the end of March 2008, GNT has transported approximately 32 million passengers in the province and generated revenue amounting to R342 million. For the current financial year, GNT plans to transport 39 million passengers with a total bus fleet of 520 and aims to generate R485 million of revenue.

We also wish to report to this august house about the restructuring process that we spoke about the previous year. The National Department of Transport has embarked on a process to review the national framework guiding the restructuring process. We therefore had to put the process on hold pending the finalisation of the guiding framework.

Tourism Development

Limpopo province has continued to observe a year on year increase on the total share of tourists visiting our country, both national and international. In 2006, Limpopo province recorded 22,5% growth rate in the number of national tourists (i.e. from 3,1 to 4 million trips). On international arrivals, Limpopo province recorded arrivals of 509 577 between January to September 2007. This is almost 9,2% growth as compared to the same period last year. A total of 2,2 million bed nights were spent in the province during the same period last year.

Our work to intensify the implementation of the Provincial Tourism Growth Strategy (PTGS) is on course and gaining momentum consistently. During the period under review, we have succeeded in developing three new tourism routes (Seraka, Land of Legends and the Bush to Beach) through a partnership with Open Africa and funding from the European Union.

It must be noted that Limpopo has not only succeeded in increasing the number of established emerging tourism enterprises from zero to 150 over the past six years since 2001, it has also produced competitive tourism SMME products that won national awards three times since the inception of the Emerging Tourism Entrepreneur of the Year Award in 2001 which continues to grow:

* 2002 – VEVISA Lodge in Polokwane and Thohoyandou (National Winner)
* 2004 – Karibu Lodge in Tzaneen (National Winner)
* 2006 – Mambedsi Lodge (National Winner)
* 2007 – Vuwa Travel and Tours (Masana Lodge in Polokwane - National Second Runner-up).

All these accolades are an indication of the success of the Provincial Tourism SMME plans implemented over the years. A total number of 773 tourist guides were registered in the province to contribute towards improving the quality of tourist guiding practices and the tourism industry.

In our endeavour to enhance and strengthen tourism partnerships within a regional context, Memoranda of Understanding were signed with the following Southern African Development Community (SADC) countries: Mosambique, Simbabwe, Botswana and Zambia with Namibia underway. We are pleased with the successful Soccer Challenge Tournament hosted by Limpopo Tourism and Parks in partnership with the Department of Sports, Arts and Culture and the private sector, to leverage on the marketing value as part of the Tourism 2010 plan. Another platform was presented by the successful hosting of the third Annual Marula Festival in March 2008 in Phalaborwa. This festival has attracted over 10 000 people including foreign visitors from neighbouring countries such as Botswana, Namibia, Zimbabwe and Mozambique. The tourism sector has also benefited tremendously especially the SMMEs.

The previous year we reported about a programme of upgrading and refurbishing some of our provincial parks. A great amount of work has been covered on the first phase of the Infrastructure Upgrading Programme. This programme has seen a major facelift in the look and feel of many tourisms facilities within nature reserves with many tourist facilities becoming accessible to the public. These include the upgrading of Masebe, D'Nyala, Nylsvley, Kwariehoek Camp, Makuya and Nwanedi.

For the last three years we have been reporting on the commercialisation of the government owned game farms and its related challenges. We are pleased to announce that after thorough consultation with all the relevant stakeholders the commercialisation process is on track. During November 2007, National Treasury issued an exemption from Treasury Public Private Partnership (PPP) process to seven community based provincial parks and immediately thereafter bids were advertised and successfully evaluated in March 2008 and thus securing an estimated prospective investment of about R1 billion.

The Expansion and Integration Programme as well as the People and Parks Programme have seen the twin signing of the Memorandum of Agreements with private landowners and Co-management Agreements with 15 communities owning nature reserves respectively. The Expansion and Integration Programme expanded Doorndraai nature reserve from 7 00ha into a 22 000ha Safari conservancy with Entabeni Private Game Reserve. Equally, the 9 300ha Nwanedi Nature Reserve joined up with Kudu Land Safaris and Tshipise Honnet to form another 25 000ha big five conservancy. Hans Merensky nature reserve partnered with Eiland Spa and Muti Wa Va Tsonga to form an Eco-cultural destination en route to the greater Kruger National Park.

Environmental Trade and Protection

In our endeavour to realise a people cantered wealth and a people driven economy, we strive for sustainable development by protecting and preserving the environment. During the period under review, 1 399 applications were lodged for environmental impact assessment and only 599 had complete information. From the 599 applications, 452 environmental authorisations were issued which translates into 75% success rate at a value of R3,7 billion worth of infrastructural development. The percentage breakdown of the EIA authorisations per district is as follows: Greater Sekhukhune 51%, Mopani 10%, Vhembe 7%, Waterberg 16% and Capricorn 16%. We are aware that the issue of the Environmental Impact Assessment (EIA) authorisation and the turnaround time processes are an area of concern for the business community; however we remain firm in complying with the law and protecting the environment.

In terms of the implementation of the Convention on International Trade in Endangered Species of wild Fauna and Flora (CITES), Limpopo province was allocated a quota of 50 leopards; 50 elephants and one black rhino. The Department has issued 1 496 CITES permits. Of these 95% is for the exportation of CITES listed species. This is an indication that Limpopo is primarily an exporting province. 80% of all exports consist of sport hunting trophies. The numbers of CITES permits issued are steadily increasing by 100 permits per annum. The Department received 15 783 permit applications for the utilisation of fauna and flora. During the period under review, 15 600 permits were issued and an amount of R1,6 million was generated. One hundred and eighty three incomplete permit applications were carried over to the 2008/09 financial year.

It is on a sad note that communities adjacent to the Kruger National Park boundary fence continue to be haunted by the damage causing animals that escape from the park and destroy properties or kill livestock. To alleviate the problem, the Department has deployed its officials in problem areas to manage the situation. Furthermore, the Department has also taken further steps by engaging the national Department of Agriculture (Veterinary Services) as well as the South African National Parks (SANParks) to co-manage the problem.

Community Environment Development
In compliance with the mandate of the Limpopo Environment Management Act, a Provincial Environmental Advisory Body composed of representatives from the hunting industry, conservation bodies, farmers, environment action groups and other role players has been established and is fully functional. We appreciate the valuable efforts of these role players in assisting us to care for our environment which is our wealth and the future.

As a Department, we have conducted an assessment of municipal Integrated Development Plans (IDPs) in the province and found that environmental sustainability issues are not yet in the mainstream of integrated development planning. We have therefore developed a comprehensive Environmental IDP Toolkit for municipalities with the intention of firstly providing clear guidelines on how to mainstream environment sustainability and secondly to present to municipalities an easy to use set of tools and checklist in the integration of environment sustainability in the planning process. We continue to encourage municipalities to put in place proper waste management systems through the Cleanest Town Competition. In this regard, we wish to congratulate the Greater Tzaneen Municipality for being nominated the cleanest town in the province and Ba-Phalaborwa Municipality for obtaining second position.

During the period under review, a Memorandum of Understanding for an exchange programme was signed between the Kruger 2 Canyon Biosphere and The Rhon Biosphere Reserve in Germany. This arrangement will surely see the two provinces benefiting from each other around areas of environmental education, tourism promotion and marketing and environmental research projects. It is in view of these developments that our province is preparing to host an International Biodiversity Day on the 17th of May 2008 in partnership with the Germans. Our work will also be placed under the international spotlight as we shall be sharing our experiences on Biodiversity Management with the world on the 22 May 2008, during the International Biodiversity Conference in Bonn, Germany.

We have continued to implement the environmental education and awareness programmes with more focus on learners and educators. During the previous year, 230 schools have gone through our Schools State of the Environment Report Competition and Eco-Schools programme. As a result, 90 schools in the province have received Green Eco-Flags as an acknowledgement that indeed they are taking issues of the environment serious. Workshops and seminars were held in all districts on days of environmental importance such as the World Wetlands Day and World Environment Day.

Trade and Investment Promotion (TIL)

Trade and Investment Promotion has, through its investment co-ordination and facilitation mandate, continued to assert its voice among the provincial, regional, continental and international investment promotion agencies and investor communities. This ongoing work has been critical in changing perceptions about Limpopo.

On the trade side, Limpopo's trade with other countries in 2007 showed a huge improvement as compared to 2006. Limpopo achieved R15,5 billion worth of exports as compared to R6,8 billion in 2006. Imports for 2007 totalled R13,8 billion, giving Limpopo a favourable trade balance of R1,67 billion. The most frequently exported products were: edible and processed fruits, nuts and peel of citrus fruit, works of art and antique, copper and vermiculite, compound of precious metals, coal, platinum, other commodities and agriculture products during this period (2007).

Among initiatives that TIL took in developing emerging businesses were the formation of the Limpopo Exporters' Advisory Committee whose main aim is to grow quality exporters; capacity building programme which seeks to capacitate both exporters and potential exporters across all the sectors. Success has been recorded also in the following areas:

* Linkages and strategic co-operation with Association of South East Asian Nations Trade Exhibition (ASEANTEX), Swiss Organisation for Facilitation of Investment (SOFI) and World Association of Investment and Promotion Agencies (WAIPA), to position Limpopo as an investment destination (also leveraging on Limpopo as a 2010 FIFA World Cup host province).
* Promoting intra-Africa trade through working with SADC countries in particular Botswana, Zimbabwe, Namibia, Mozambique and Ghana.
* Promoting Limpopo as a destination for investment in retail and a petrochemical hub of the future.
* TIL has signed a Memorandum of Understanding (MoU) with Mozambique's Centre for Promotion of Investments (CPI). These alliances have resulted in joint venture partnerships – thus strengthening the regional economy. Limpopo business people can now do business with ease and vice versa.
* Already, investment commitments of approximately R4 billion worth of projects have been made which were realised with TIL's involvement. These investments emanated from both Greenfield's and Brownfield's – especially in the provincial mining sector.

In our endeavour to promote trade and investment, during the period under review we have undertaken several outward missions and interacted with the following countries: Namibia, Mozambique, Lesotho, Swaziland, Egypt, Switzerland, Germany, Canada, Sweden and Saudi Arabia. We also hosted inward missions from the following countries: Japan, Brazil, Namibia, China, Korea, USA and Mozambique.

Incorporation of Parastatals

Members of the House will recall that the Department was mandated to incorporate Trade and Investment Limpopo (TIL) and Limpopo Support Agency (LIBSA) into Limpopo Economic Development Enterprise (LimDev). Furthermore, the Department was also mandated by The Executive Council (EXCO) to incorporate the Northern Training Trust (NTT) into LIBSA and to deregister NTT.

The incorporation process is geared to address service delivery, systems and institutional challenges facing the provincial parastatals under the jurisdiction of the Department. The aim of this incorporation process is in line with the pronouncement of the Premier and seeks to realise the streamlining, redefining and refocusing the parastatals to improve on processes, efficiency, effectiveness, services delivery and contribution to economic growth. The Department has completed the legal due diligence of all the parastatals. This was necessary to ensure that all foreseeable legal requirements are met including all regulatory matters which may impact on the process. We have also completed the financial due diligence and asset verification of all parastatals.

In order to complete the incorporation process the boards of the affected parastatals are in the process of passing and adopting the required resolutions to legalise the incorporation process. We are now ready to complete this assignment before the end of the first quarter of this financial year.

Regional integration

The successful participation of Limpopo in the 2007 Ongwendiva Annual Trade Fair in Namibia has created an impetus and laid a basis for the two parties to sign the co-operation agreements. This is informed by the fact that already there are business activities taking place between Limpopo and Namibia, the northern regions in particular which emanated from our participation in the 2006 Trade Fair. Furthermore, during the course of the 2007 Trade Faire, discussions were held with the Namibian Tourism Authorities and the four regional councils towards the inclusion of Namibia in the Trans-Limpopo Tourism Development Route which already covers countries such as Mozambique, Zimbabwe, Zambia and Botswana as we prepare for 2010 and beyond.

It is an indisputable reality that we have travelled a relatively long distance in reaching out to our neighbouring countries in pursuit for a goal for regional socio-economic integration as instructed by the PGDS. We pursue this goal with vigour primarily because we appreciate and attach great value to the common history, socio-economic challenges and a future that confronts all of us as a people. In the same vein, we are pleased with the intervention by the leadership of member states to ease the burden on free movement in the region caused by visa requirements.

Business Regulation and Governance

Gambling Industry
As honourable members may be aware, our province has been allocated a total number of three mega casino licenses. Two of these licenses are held by the Meropa Casino and Entertainment World and Tusk Venda Casino and Hotel in the Capricorn and Vhembe Districts. With regard to the third and final casino license for the Greater Sekhukhune District, the Board evaluated the only two applications and which were found to be lacking in a number of areas. Consequently, the decision was taken not to award the license. New proposals will be invited during the course of this year and it is hoped that these will meet all the criteria that will be set in the "Request for Applications".

With regard to the two casinos operating in the Province, we are indeed satisfied with the fact that they continue to comply with their bid commitments in so far as it relates to the provincial growth and development strategy. To date, 740 people are employed at the two casino complexes. In addition to the direct jobs created, the two casinos continue to procure goods and services from companies based in the province. For instance, during the period under review, Tusk Venda Casino and Hotel spent on average 78,11% of their total expenditure on the procurement of goods and services from the local SMMEs. On the other hand the Meropa Casino procured goods and services totaling R47 million during the same period. About 88% of this amount was used to procure goods and services from previously disadvantaged individuals and SMMEs in the province.

In addition both the Meropa and Tusk Venda Casinos paid levies to the amounts of R19,6 million and R4,7 million respectively to the Provincial Treasury. It is hoped that with the licensing of the third casino, more job opportunities will be created during both the construction and operational phases.

Limited payout machines

The national government allocated a total number of three thousand limited payout machines to the province. To date, 83 sites with a total number of 302 and two machines have been licensed in all the districts of the province. The licensing of additional sites and machines will continue during the current year. To date, 290 jobs have been created for people in the province, as a direct result of the rollout of these machines. Levies collected by the Board on behalf of the Provincial Treasury in the previous year amounted to R1,6 million.

Illegal gambling

Illegal gambling activities continue to take place at a number of areas in the province. However, the Board, assisted by the South African Police Service (SAPS), Home Affairs and other security agencies continue to deal with this menace continuously. To date, over 789 raids were conducted throughout the province at which 38 illegal gambling machines were confiscated and 203 illegal operators arrested and charged.

As a way of sensitising communities against the illegal gambling activities, the Board is engaged in the process to erect billboards at strategic locations in all the districts of the province persuading people to refrain from these illegal gambling activities. In addition, inspectors of the Board have joined forces with the Department of Safety, Security and Liaison and the SAPS to spread the message at most crime prevention activities.

Horseracing and betting

The Board has licensed Phumelela Gaming and Leisure to operate nineteen betting outlets in the province. These outlets have created job opportunities for 103 previously disadvantaged individuals. Total Levies collected and paid over to the Provincial Treasury in the previous year amounted to R4,7 million.

Responsible gambling programme

It is indeed our pleasure to report that our South African National Responsible Programme ranks among the very best in the world. Gambling does at times lead to problem gambling behaviour which creates social problems for the affected families, the National Responsible Gambling Programme under the auspices of the South African Responsible Gambling Trust, continues to counsel and give treatment to addicted persons.

Our province, compared to others, is doing well in the sense that there are very few gamblers that are addicted to gambling. While we remain highly appreciative of this phenomenon, an appeal has been made to the public and more specifically, to the families of the addicted persons to inform the Board accordingly in order that counselling and treatment may be given to such people.

Liquor Administration

The Liquor Board continues to adjudicate application for liquor license as prescribed by the Liquor Act. The Board has in the past financial year successfully adjudicated 1 240 applications brought before it. The Department is also continuing to ensure that license holders comply with the conditions of licenses and with the help of the SAPS prosecute those who contravene the conditions of their licenses or trade without licenses.

We are liaising with other stakeholders and role players including civil society to raise awareness on responsible drinking. We have launched a public campaign that says "Save Limpopo, drink responsibly" during our liquor conference that took place in April this year. It is our intention to take this campaign to communities across the five districts. With regard to the amendment of the Limpopo Liquor legislation, we have completed the draft of the Limpopo Liquor Bill and consultations with stakeholders. During the course of this financial year, the Department will present the Bill to the House for consideration and adoption.

Consumer Protection

In terms of our obligation to protect consumers against unfair business practices, our Consumer Court continues to adjudicate cases referred to it by the Consumer Protector. During the period under review, the court has adjudicated over 20 complaints and the majority of these judgments were in favour of consumers. In view of the fact that the newly introduced National Credit Act is a concurrent function between national and provincial government, our Consumer Court will henceforth adjudicate consumer related matters in line with the National Consumer Act.

Skills development

In an endeavour to promote the quality of life of our citizens whilst contributing to economic growth, the Department continues to make skills development a priority both internally and externally. In the previous year we indicated that as part of the Departmental contribution to the Provincial Human Investment Strategy we have awarded 81 bursaries to youth in the province to study in various fields relating to the core objectives of the Department and we report this year that all the students are doing well.

Of the 81 students who were awarded bursaries in 2007, 9 will be graduating during September 2008 and subsequently be placed on an internship programme. This year we are continuing to address the skills gap in the province and we have awarded 124 (74 males and 50 females) bursaries in the following fields of studies: Environmental Economics, Mining Engineering, Tourism, Nature Conservation, Ecology, Economics, Business Management and Archival studies.

Last year the Departments appointed 112 interns and we are pleased to announce that to date of the 112 who have graduated 75% of them have secured permanent employment in both public and private sectors. The Department has appointed a further 143 interns for the financial year 2008/09 in the different fields of exposure. In addition, the Department formed a partnership with South African Breweries to place three interns within Business Regulation and Governance who will be exposed to private sector environment brewing industry. In an effort to deal with the Departmental skills shortage on environmental management, the Department will be embarking on a Nature Conservation Learnership Programme targeting 75 officials in our provincial nature reserves.

Service delivery

In this year we will focus more on improving and strengthening the evaluation of performance through the implementation of the performance management system and recruiting the required skills especially for the core functions of the Department. We will continue to place emphasis on effective management of the Department's internal processes so as to create and sustain high levels of service delivery and staff morale with an intention of creating best practices in the province.

The Department has currently achieved 32,5% women representation and we are confident that we will be able to reach the target of 50% by the end of this financial year. We believe that people living with disabilities have got an important role to play in growing the economy hence the Department has put in place consultative forums and targeted programmes for empowerment of this sector. The continuous implementation of Batho Pele programmes and principles highlights the centrality and importance of the manner in which we deliver services to our clients.

Budget allocation

During the tabling of the 2008/09 Budget Speech, the MEC for Treasury has allocated the Economic Sector R4.9 billion of the equitable share. Of this amount, Economic Development, Environment and Tourism accounts for R654 million declining from R759.6 million in the previous financial year. Based on our annual performance plan for 2008/09, this is how these funds have been allocated according to programmes:

Programme 1: Administration: R178,466 million
Programme 2: Economic Development: R267,219 million
Programme 3: Environmental Affairs: R127,115 million
Programme 4: Tourism: R81,245 million

Transfers to public entities have been allocated as follows:
Limpopo Development: R50 million
Limpopo Business Support Agency: R65 million
LGB: R28,153 million
LTP: R60 million
Trade and Investment Limpopo: R40 million

As we said in the beginning, ours is a struggle to create a people centred wealth and people driven economy primarily because development is about people and people are the real wealth of nations. Any development that is worthy of success, must be people centred and people driven. It is our considered view that these allocations are poised to give effect to people centred development.

Towards 2010

The countdown to the 2010 FIFA Soccer World Cup has begun and this spectacular event provides a unique opportunity for Limpopo. To ensure that these opportunities are optimised not only during the World Cup but beyond 2010, the Limpopo Government established a provincial 2010 technical committee which is headed by the Premiers' office. The Department partakes through the tourism sub committee and the economic beneficiation and volunteerism sub-committee.

We have already conducted road shows in the province educating affected and interested parties in the tourism industry on all related 2010 plans and opportunities. A co-ordinated effort was initiated to develop a focused 2010 marketing strategy which was launched in the province and at the Indaba Tradeshow in May 2007. The initiative was enhanced through the signing of cooperative marketing initiatives with our SADC neighbouring countries.

The Limpopo Soccer Challenge in 2007, initiated by the Limpopo Tourism and Parks, created a platform to enhance awareness and participation in 2010 not only by tourists but also local soccer teams. A detailed plan to enhance economic benefits and volunteerism towards 2010 was developed. The programme aims at building capacity towards addressing the eminent need of skilled individuals and SMMEs in the tourism, transport, safety, security and emergency services sectors.

Conclusion

On this august occasion we have extended an invitation to learners from various schools in the province that are in grade 12 studying economics. It is our intention to involve young people and the public in general in a debate on the state of our provincial economy. We are indeed committed to building a people centred wealth and a people driven economy. In the people driven economy we are driven by a vision to realise equitable distribution of wealth and ensure that no child go to bed hungry. This is a type of society wherein poverty is a thing of the past.

Since 2004, we have embarked on a hard and long journey guided by the seal to realise the aspirations of our people as contained in the Freedom Charter and reaffirmed by the Reconstruction and Development Programme (RDP). In the beginning we were crawling, with time we started walking, and as of now we have engaged on a higher gear and are running in our endeavour to realise a dream for a better life for all. We are conscious that the struggle for the realisation of human fulfilment is like running a race without a finishing line. This is the year of mass mobilisation to build a caring society. We remain confident and optimistic that we shall triumph and victory is certain.

Thank you.

Issued by: Department of Economic Development, Environment and Tourism, Limpopo Provincial Government
8 May 2008