Budget speech 2006, by Honourable MEC Darkie Africa
9 May 2006
Honourable Speaker/Deputy Speaker
Honourable Premier
Honourable colleagues in the legislature
Mayors and Local Government leadership present
Boemedi jwa ntlo ya Segosi mo Profenseng ya Bokone Bophirima
Heads of Departments
CEOs of our Parastatals
Business Leaders
Religious and faith Leadership present here today
Leaders of other Civil Society Formations and Non-Governmental
Organisations
Distinguished Guests
Comrades and Friends
Le Baagi ba Bokone-Bophirima
Introduction
Madam Speaker, as firmly emphasised in the earlier policy documents of the
ANC, the ruling party continues its assertion captured in the 1994 RDP
document, that:
�Small business development is a key strategy for the economic advancement of
historically disadvantaged individuals and communities�.
It is against this background that we have dedicated our attention and
programmes for the ending and the coming financial year to:
�Consolidating economic growth for the North West province through Small,
Medium Micro-Economic (SMME) development as the engine for growth�.
In his book titled �Season of Hope�, Alan Hirsch details economic reform
under the leadership of Presidents Mandela and Mbeki. Critical to our efforts
to halve poverty and unemployment by the year 2014, is Alan Hirsch�s
observation that
�� a very high degree of concentration of economic power � made conditions very
difficult for independent small businesses � with detrimental effects on the
rate of economic growth and, particularly employment creation�. (Hirsch
2005:193, 194)
The policy thrusts addressed in this submission, Madam Speaker, are aimed at
developing a strong SMME sector as a critical success factor in our quest to
achieve a 6,6% economic growth in the next eight years. For this reason, we
have directed our policies to creating an environment conducive for the
previously disadvantaged to organise themselves in a manner that will enable
them to reap the benefits brought by freedom and democracy, in this beckoning
season of hope.
This year marks the 50th anniversary of the women�s march to the Union
Buildings and the 30th anniversary of the Soweto students� revolt against the
unjust educational system of the past. Informed by these important historical
milestones, we confirm our commitment to ensuring that women, youth and people
living with disabilities partake in the economic mainstream of our provincial
economy through SMMEs�, cooperatives and Broad Based Black Economic Empowerment
(BBBEE).
The Provincial macro economic issues
Madam Speaker, allow me to paint to this August House a synoptic picture of
our Provincial economy and the challenges informing our strategic focus.� In
its 2005 GDP report, Statistics South Africa reported a 4,9% economic growth
rate for the North West Province. This is a 4% increase in economic growth
since 2001, and 0,5% increase since 2003. Data released by Global Insight, an
independent statistics and information agency, indicates that the North West
Province contributed 7% to the South African economy during both the 2003 and
2004 Gross Value Adds (GVAs). This increase in contribution had placed the
North West 5th among provinces, compared to its previous 6th position in
preceding years. For us in the North West Province, this is a positive
indication of the right direction in which the Provincial Economy is moving.
There is no doubt that the people of the North West Province are also reaping
the benefits of freedom and democracy in this season of hope.
A major challenge for the Provincial economy has however been the extent of
its dependence on the performance of few economic sectors. Data provided by
Global insight, shows a Tress Index higher than 50 points for the period 1996
to 2004, indicating provincial economy concentration. During this period, the
major economic drivers in the North West Province were mining, community and
government services. More data provided by Global insight shows that the
consolidated contribution of these sectors to the provincial economy fluctuated
between 55% and 62% in the period 1996 to 2004.
These indicators emphasis the urgency with which we should address the
diversification of the provincial economy, away from a concentration on primary
activities, but towards secondary and tertiary activities of manufacturing and
beneficiation. A partnership between the public and the private sector should
be firmly established to develop a strong SMME sector that will work together
with big business to take advantage of business opportunities resulting out of
the programme aimed at diversifying our provincial economy. It is this
partnership that will guarantee us a sustainable economic growth in future,
higher employment and a reduced level of poverty we so much yearn for.
The North West Growth and Development Strategy (PGDS)
The Provincial Growth and Development Strategy (PGDS) launched last year by
our Provincial Government go a long way in focusing our efforts to face the
challenges just outlined. Informed by the existing international conventions
and national policies, this strategy has clearly set targets for economic
growth, the meeting of basic needs and increasing investment levels.
Madam Speaker, we are proud to announce that, having identified the economic
sectors and pillars of this strategy, we have now identified the key anchor
projects we will pursue to make the PGDS a reality. These are as follows:
* Greater Mafikeng Development, with much emphasis on the development of the
(Mafikeng Industrial Development Zone (MIDZ)
* Taung Development
* Cattle Beneficiation, intended to create a hive of activity in the Bophirima
district in Agro-processing and manufacturing, latching onto the Mafikeng
Airport infrastructure
* Madibeng inland/dry port and logistics hub, aimed at creating infrastructure
for industrialisation within the manufacturing sector, including among others
the automotive sector
* Mining Supplier Park and Mineral beneficiation with an emphasis on platinum,
diamonds, gold and granite to create a cluster that will support SMME suppliers
to the mining industry
* Bio-fuels, with a specific emphasis on the production of Bio-Diesel in
Mafikeng in partnership with the Barolong-Boora-Tshidi and the Private
Sector
* Spatial Development Initiative (SDI) infrastructure development to ensure
ease, speed and low cost of investing and doing business in the North West
Province and
* the proper management of Provincial Assets.
Some of these projects will be our Provinces� contribution to AsgiSA, as we
will identify later in the budget speech. We will bolster the speedy
implementation of these programmes with a skills development and capacity
building programme intended to help the province acquire priority skills, along
the objectives of the national Joint Initiative on Priority Skills Acquisition
(JIPSA) programme.
Allow me therefore Madam Speaker to touch on some of the sector specific
realities of our Province, and how we hope to use their strength as leverage to
face the impending challenges.
Sector specific growth
Madame Speaker, the mining sector continues to be the flagship economic
sector of the North West Province. Mining currently contribute 25% to the total
Gross Geographic Product (GGP) of the North West Province. Even though the
sector remains strong amid the continued fluctuation of the Rand over the last
few years, a careful assessment of the performance of the sector does however
indicate a 1,3% decline since 2002.
Of note again is that, over the years, this sector has been hard hit by the
negative impact of the strong Rand on the Gold production sector, a phenomenon
that has contributed to unemployment in the Gold sector. Alternatively, the
Platinum sector remains bullish, with recorded prices exceeding the 1000 US
Dollar per ounce mark in recent months. The current levels of international
demand for the metal as a result of its numerous industrial applications, has
secured the future strength of this resource and thus the continued buoyancy of
the mining sector in the Province.
Currently, mining employment within the North West Province constitutes
approximately 30% of the total employment population in the mining sector in
South Africa (Global Insights Economists, 2005). The concentration of jobs in
this sector highlights the extent of the Province�s dependence on mining - a
socio-economic risk that will be mitigated by diversification of the
economy.
The Manufacturing Sector on the other hand, contributes 7% to the GGP of the
North West Province and, it is to a large extent dominated by mining-related
industries consisting predominantly of Metal Products and Machinery,
Non-Metallic Mineral Products and Chemical Products manufacturing in the
Province. In this regard, the economic structure of North-West differs quite
markedly from that of the rest of the country where, again, the dominance of
the mining sector comes to the fore.
However, this is viewed as a natural consequence of the entrenched dominance
of the mining and quarrying sector in the Province where the manufacturing
sector has responded to the demand for certain goods and services by mining
producers. This is far from adequate, since the overwhelming majority of mining
producers in the Province continue to procure the bulk of their goods and
services from vendors beyond the borders of the North West, and specifically
from Gauteng Province, a trend which continues to undermine the empowerment of
our local entrepreneurs.
The Agricultural sector in the North West Province has continued a steady
decline from its 2002 high of 6,30%, to 2,60% in 2004. The dominant factors
influencing this decline in the sector can be attributed to declining producer
prices along with the strength of the Rand in recent years.
This sector�s production outputs are largely dependent on agricultural
products� prices and on climatic conditions, which have been unfavourable.
Recent droughts ravaged both crop and livestock producers in the North West
causing decreases of 12,5% and 17,5% in income generated from maize and
sunflower respectively. These statistics reported in the 2005 agriculture
report economic review conducted by the National Department of Agriculture, are
of concern, realising that these are our Province�s core agricultural
activities outside of livestock.
The Finance, real estate and business services sector in the Province showed
an increase in growth at around 2,2% since 2002, and currently contributes
13,6% to the GGP of the Province. This growth has been shouldered by the recent
boom in the Province�s property market, especially in the Rustenburg area. We
believe that this increased demand for both residential and commercial property
in the North West has presented the construction industry in the Province with
considerable opportunities for continued and expanded growth. A critical
success factor in this regard is to strengthen the participation of SMME�s,
especially those with a historically disadvantaged background, in this booming
sector.
Employment levels in the North West Province
Madam speaker, our efforts to increase employment levels in the North West
Province seem to be bearing fruit. The 2005 Labour Force Survey �(LFS) 2005�,
released by Statistics South Africa, reported a 1,4% decrease in unemployment
levels, from 28,8% in March to 27,4% in September 2005. The worrying factor in
these statistics is that women are consistently worse off in respect to the
problem of unemployment, a matter we will seek to address in this 50th
anniversary of their heroic act. Other statistics in the LFS 2005 show a 4%
increase in the labour absorption rate within the North West Province, from
34,8% in 2004 to 38,4% in 2005. This indicates that more people were employed
in our Provincial economy between 2004 and 2005, turning the tide against the
historical jobless economic growth. As we move towards the diversification of
our Provincial economy, we will aim at seeing more people being employed in the
secondary industries of manufacturing, beneficiation and agro-processing. The
creation of small industries in these sectors will result in a better skilled
workforce, guaranteeing us sustainability in this beckoning season of hope.
Critical constraints to growth in the provincial economy and interventions
identified in AsgiSA
The 2005 synopsis of the Provincial economy that we just gave, clearly
confirms the necessity for the North West Province to firmly locate itself
within the Accelerated and Shared Growth Initiative of South Africa (AsgiSA),
an initiative led by the Presidency. As indicated by the Presidency, �AsgiSA
responds to the binding constraints (to shared economic growth), which are:
* the volatility of the level of the currency,
* the cost, efficiency and capacity of the national logistics system,
* shortage of suitably skilled labour, amplified by the cost effects on labour
of the apartheid spatial patterns,
* barriers to entry, limits to competition and limited new investment
opportunities,
* regulatory environment and the burden on SMMEs, and
* deficiencies in state organisation, capacity and leadership.�
The extent of these constraints to shared growth, remain apparent in our
Provincial economy. Although AsgiSA is not �a sum total of all government�s
responses to issues of poverty and unemployment�, we hope that the selected
interventions identified by the Presidency will mitigate the constraints
relevant to our Provincial economy. Of critical importance to the North West
Province are interventions related to the challenges of inadequate skills
levels required by our flagship economic sectors, the currency volatility
affecting the mining sector, which accounts for a significant portion of our
economic activity, systematic limitations and burdens placed on SMME growth,
and infrastructure challenges, especially in respect to the road, rail and air
travel network. Our hope is that the challenge of infrastructure development
will be speedily addressed to ensure the ease of doing business in the North
West Province as well as easy access to markets by private sector partners
investing and ready to invest in the North West.
AsgiSA provides the North West province with a stronger mechanism to address
the historical inequalities manifested in the dualism of our country�s
economy.
We will build leverage on the strength of priority economic sectors relevant
to us and which are easily responsive to the second economy, being Tourism and
Agriculture, to build the bridge linking the historically disadvantaged with
those in the first economy. In the same respect, we will increase our focus on
Business Process Outsourcing (BPO), Clothing and Textile and creative
industries to ensure that business plans by SMMEs in the second economy create
a sustainable link with potential partners and mentors in the first
economy.
Madam speaker, as already indicated, we have identified that among the
priority sectors identified, we will focus our attention on the following to
contribute to AsgiSA:
* tourism
* minerals beneficiation with the following focus areas
* platinum jewellery manufacturing
* diamond and granite cutting and polishing
* madibeng inland/dry port for industrialisation
* greater Mafikeng development with the following key anchor projects
* bio-diesel production, and
* cattle Beneficiation
We will later unpack these projects to show the progress we have made and
the prospects they have for the future.
Policy implications for us to reach our targets
Madam Speaker, allow me to draw the attention of this house to the study we
commissioned in March 2006 on the investment and policy implication for us to
reach accelerated economic growth in the North West. This study shows us that
we need to invest heavily in education and training to acquire the skills
required to enable us to reach a 6,6% economic growth by 2014. We need at least
57 862 professionals, 24 928 technical and Associate Professionals, 10,662
Legislators, Senior Officials and Managers and approximately 33 793 Clerks to
be confident that we can reach our targets.
In order to achieve the target of halving unemployment by 2014, we require
an additional effort to create jobs. We have indicated in our PGDS that we will
introduce a Public Sector Employment Programme to augment the jobs to be
created in the Private Sector, of course with the condition that we develop the
requisite skills base. This, Madam Speaker, will ensure that we deliver on
second economy interventions identified in AsgiSA.
The SMME business environment
The SMME environment underpins the theme of the department�s programmes this
year. We can today confidently and proudly inform this august house that a firm
foundation has been created to develop the SMME sector and stimulate growth in
the second economy. We spent a month interacting with the SMMEs through
organised �Izimbizo�, listening to their challenges, advising them to take
advantage of opportunities arising from our current favourable economic
environment and motivating them to be entrepreneurial and innovative. During
these �Izimbizo�, we spoke to more than 10 000 people, three quarters of whom
own small businesses, with the rest being aspirant businessmen and women.
The Izimbizo culminated in a summit on SMME development, attended by at
least 900 participants from the private sector, public sector (National and
Provincial departments as well as local economic development units from
municipalities) and academics from various institutions. This summit confirmed
that the SMME sector is an engine for economic growth. The SMME Development
Summit emerged with a concrete program of action for the next nine years,
forming part of the provincial skills plan and the targets to be finalised
through a process managed by the PGDS working group on skills development. We
will interact with the Minister of Labour to discuss the weaknesses of some
Sector Education and Training Authorities (SETAs) to reach SMMEs in rural areas
in our bid to increase skills levels that can fast-track SMMEs out of the
second economy.
Training of SMMEs in 2005
Madam speaker, we are proud to announce that at least 426 SMMEs were trained
through our department�s intervention last year. In keeping with AsgiSA�s
policy directive, we will work closely with women and youth, focusing on Human
Resource training for women, in a bid to ensure that they have access to
finance to fast-track them out of the second economy. Regarding the youth, we
will accelerate learnerships for unemployed graduates, helping them to prepare
themselves for possible job opportunities in the marketplace. We will also
intensify the Youth Co-operatives in the North West, strengthening our
relationship with national role players to ensure that they expand their reach
of business support to the most rural areas of our Province.
As this year marks the 10th anniversary of the enactment of the constitution
of the republic, we will closely observe part of its preamble which states that
as we recognise the injustices of our past, we �Honour those who suffered for
justice and freedom in our land�. As part of our SMME development programme, we
will work together with the ex-combatants from all political formations who
fought for our freedom, to help them identify economic opportunities, build the
requisite skills and meaningfully participate in the mainstream of the economy.
By the end of this financial year, we will have held a workshop with these
ex-combatants to ensure that we achieve this important objective. We owe so
much to them for delivering us our freedom. Madam Speaker, we will do this in
celebration of the 30th anniversaries of the youth struggle and persistence of
the class of 1976.
Small Enterprise Development Agency (Seda) roll out (incubation in the
province)
It will be recalled Madam Speaker that we had announced last year that we
hoped to establish the fifth Entrepreneurial Support Centre, (ESC) in Vryburg.
In the course of developing our SMME development strategy, we found it prudent
to incorporate our ESC program with the Small Enterprise Development Agency,
(Seda) programme established as a directive from the 2004 State of the Nation
Address.
In this regard we initiated a joint program with Seda to roll out its
structures in the Province. The first Seda branch office in the country was
launched in Naledi in the Bophirima district, followed by another branch in
Mafikeng together with a provincial office. Today there are five branch offices
in the province with full staff complements. We are confident that our SMMEs
will receive the full benefit of the Seda services that will include tender
advice, training, access to finance, access to markets and other related
support services. Our partnership with Seda has enabled us to establish three
(3) enterprise information centres in municipalities. Our target is to roll out
these centres in partnership with Seda to the rest of the municipalities by the
end of this financial year. This will ensure that our SMMEs receive business
information without travelling long distances.
Our present SMME incubation method emphasises technology research and
transfer. We will change this during the course of this calendar year to be
entrepreneur-oriented. This means SMMEs obtaining new technologies in the
manufacturing sector, will have them tested for financial viability prior to
implementation.
SMME access to funds
Madam Speaker, AsgiSA recognises that for businesses to flourish, �funding
is key�. We have increased the impetus on improving SMMEs� access to finance
through a joint fund established between the North West Provincial Government
and Absa. Our hope is that through this �Tsogang le Iterele Fund�, 50 SMMEs
requiring funds between R10 000 and R250 000, will have access to loans at
reasonable rates. The fund also aims to help a further 50 SMMEs requiring
funding between R250 000 to R1 million, to also access funds in the next twelve
months. Let us be reminded that the �Tsogan le Itirele Fund� is a partnership
resulting out of the PGDS Summit held in August 2004 where Absa agreed to
partner with the Provincial Government towards the establishment of the SMME
Incubator Fund, which would total R62 5 million by the end of 2008 with the
government contributing at least R25 million. We are proud to announce that
this partnership has been signed and sealed and by the end of May 2006 the Fund
will be fully operational.
Madam Speaker, we salute Absa for their commitment to this partnership which
declares an onslaught on the hardships that hindered the growth of our SMME
sector for many years. We will also in the course of the year approach other
financial institutions to come forward and also contribute to this noble cause
intended to eradicate poverty and joblessness in our Province.
In this season of hope, Madam Speaker, we will intensify our implementation
of the Preferential Procurement Framework Act within our department as an
intervention to further empower SMMEs. We will further interact with the
relevant departments within our government to establish an SMME service unit
located at the Central Credit Payment where through a hotline, the SMMEs can
report when they are not paid on time by public sector institutions.
SMME debt relief
In pursuit of provincial government�s drive to create viable and sustainable
SMME�s, the department will, through the North West Development Corporation
(NWDC), offer a debt reduction to those SMME�s currently indebted to the NWDC.
The debt relief, which will not be applied in retrospect will amount to R17 991
790, and will benefit 673 current NWDC clients, broken down in several
categories aimed at addressing each case on its merit. The details hereto will
be made available by the NWDC in due course.
Let us hasten to indicate that an interest moratorium has been placed on all
SMME accounts with the NWDC, for a six months period since 1 April 2006 to 30
September 2006. The value of this interest moratorium is calculated at R6 25
million. A notice will be issued out to the effect that, in order to qualify
for these concessions, those SMMEs� that are indebted to the NWDC need to visit
the NWDC offices before 31 May 2006 in order to make the necessary rescheduling
arrangements.
NWDC rental subsidy
Another intervention by the Department through the NWDC towards assisting
SMMEs will be to offer a start-up SMMEs rental subsidy with effect from the 1st
of June 2006. Details on the breakdown of the subsidy allocation will be made
available in due course. This will be linked to the number of jobs created by
these start-up SMMEs, in a bid to encourage employment creation and cooperation
between SMMEs in the same industries or lines of work. We hope that this
intervention will assist newly established SMMEs by easing cash flow pressures
during the start-up phase. An amount of R3 million, which excludes municipal
rates and taxes, has been set aside by the Department to effect these rental
holidays.
Ours Madam Speaker is a belief that the 2010 FIFA Soccer spectacular to be
hosted in South Africa, is an economic development opportunity, especially for
small businesses. In ensuring that our SMMEs are poised to benefit from this
event, we will commission a study to investigate opportunities that SMMEs can
take advantage of. Within a period of six months this information will be
available on the government website and at all Seda outlets in the
province.
Research in the department
Madam Speaker, our department is currently laying emphasis on the role of
research within the broader aspects of economic development in the province. In
this regard, the department has decided to conduct a number of critical and
in-depth studies in the province.
As a department, we intend to conduct a census on SMMEs in the North West
whilst taking stock of the impact government interventions have had on this
sector over the last ten (10) years. It is expected that this epic study will
provide us as Government with an unambiguous indication of what the challenges
to growth within this sector are, as well as subsequent recommendations towards
a suitable strategic development mode for SMMEs in the province. The study will
be conducted by our department in partnership with Seda. Offices of both Seda
and our department will be used to spread the collected information and
findings to relevant stakeholders within the province.
It is our opinion that this study is significant and urgent, towards
informing the growth and development of the SMME sector in the province. We are
also aware that the existence of a comprehensive database for all SMMEs is
essential � and this is one of the purposes of the study.
The vastness, complexity and large nature of this sector also pose
challenges, however, once this study has been concluded, the province will have
a comprehensive and accurate database of SMME�s. It will also have an accurate
understanding of the exact nature of the challenges confronting its
development.
In order to ensure quality research outputs, the department has found it
necessary to request the participation of the provincial Seda. The objective in
this regard is also to ensure that as a major stakeholder in the SMME
development value chain, Seda will assume joint responsibility and co-ownership
of the final product towards the implementation of the research report findings
in the Province.
Madam Speaker, following our successful SMME Imbizo programme, this
department was able to publish the findings of a snap-shot survey conducted
with SMMEs during these Izimbizo. For those who will have the opportunity to
read this, I am sure they will find the initial findings of this study quite
interesting, as we did. We also want to indicate that the programme has had
this study academically evaluated and peer reviewed by the Business School of
the University of the North West, and final printing will be concluded in due
course.
Another research study has been conducted on the impact of existing and
discontinued railway infrastructure on the economic growth and development of
small towns in the North West Province. This study places emphasis on the
importance of infrastructure as a pre-requisite for economic development.
Recognising the economic impact that the railway system has had on the
development of the small towns, it goes without saying that it is urgent for us
to accelerate infrastructure refurbishing and development, especially of the
road and rail network on which small towns� economic activities so much
depends.
It is our opinion, which is shared by many, that most regional towns
countrywide have experienced a shrinking economy in the past 10 to 15 years.
Madam Speaker, in spite of all other efforts to counteract the persistent
shrinking local economies of these small towns that bring about job losses and
ultimately poverty, the observed phenomenon has continued to prevail. It has
therefore been our conclusion, Madam Speaker, without pre-empting the outcomes
of the study that, by and large, this shrinkage might also be attributed to the
discontinued or limited railway network services available to such
destinations. We will however avoid any speculations in this regard and allow
this study to be concluded so that we can have a more scientifically proven
assessment of the root cause of the shrinkage that will enable an informed
approach towards addressing the challenges of underdevelopment in our small
towns. We will also hasten to add that, lest we wonder what the significance is
of this study to the North West province, we should remember that our Province
is one of the worst affected provinces by joblessness and poverty, as well as
being one of the most rural areas in the country.
Local economic development support
Madame Speaker, in order to facilitate and encourage a holistic and
coordinated approach to economic development in the Province in line with the
dictates and targets of the Provincial Growth and Development Strategy, our
department had hosted a successful SAAMTREK Workshop in July 2004 which created
a platform for the establishment of a Provincial LED Coordinating Forum aimed
at ensuring better inter-governmental coordination. It is within this framework
that we will look at ensuring the direct participation of relevant
municipalities in implementing identified AsgiSA projects, as well as
identifying priorities for the future. Our emphasis is on local economic
growth, with our view being that Integrated Development Project (IDP�s) drive
the level of economic development, supported by the Provincial and National
Government. Madam Speaker, we therefore commit that our interaction with
municipalities will be strengthened to advance the strategic objectives of the
PGDS, Asgisa and our vision 2014, through identifying and implementing specific
economic development programmes at a local level.
Consumer affairs matters
Madam Speaker, consumer education remains one of the cornerstones in
Consumer Protection. We continue to intensify our programme to ensure that
every citizen of this province has access to basic consumer education and other
services related to consumer protection. We have also embarked on an outreach
programme in our endeavour to reach out to rural communities. We continue to
disseminate information on new products that enter the market, so that
consumers should not be taken off-guard.
In order to achieve the policy imperative of maximum access to consumer
information by consumers, we will implement the following consumer awareness
programmes in the new financial year:
* Departmental Radio Programme with Motsweding FM to disseminate critical
information to consumers.
* Feed educational articles in the print media.
* Conduct a quarterly operation clean-up in partnership with other regulators
aimed at ridding stores of non-compliant products, for example, the removal of
expired foodstuff and medicines, removal of cellular phones not complying to
International Education Association of South Africa (EASA) standards etc.
* Intensify our outreach programmes targeted at groups identified in our
strategic plan, i.e. pensioners, learners, educators, public servants, miners
etc.75 lectures and four workshops will be conducted per region.
Madam Speaker, our objective is to reach over 100 000 consumers through
lectures and workshops over this new financial year. This we will achieve
through being visible in all districts of the North West province. We have in
the past targeted learners and now intend to extend our focus to vulnerable
groups, especially pensioners and the unemployed, given the prevalence of
unfair consumer treatment cases relating to these two target groups.
Work has already begun on informing consumers about the pending consumer
protection bill. We have started conducting workshops and advisory sessions to
various consumer groups.
Consumer Court
Madam Speaker, we have noted with concern that the consumer affairs court is
not yet operational in the North West province, given that the Consumer Affairs
Act has to be amended before we can constitute the Consumer Affairs Court.
Several issues relating to this initiative have been brought to our attention,
and we hope to address them efficiently in this financial year to ready
ourselves for the establishment of a fully functional Consumer Affairs Court.
The Consumer Credit Bill will also be finalised within this financial year, an
intervention we will use to maximise our efforts towards consumer
protection.
Trade inspections
Our department continues to conduct trade inspection at supermarkets,
general dealers and caf�s. Trade inspections are conducted on regularly in the
various towns and cities, an activity through which we are targeting to cover
at least 40 business premises per district. We expect to ensure a 90% business
community compliance rate with the �Sale and services matters Act 75 of 1980,
Trade Metrology Act 77 of 1975 and Liquor Act 27 of 1989�. In order to achieve
this compliance rate, we will conduct unannounced visits to these premises.
Those found to be non-compliant will be brought to book. We sincerely encourage
those who are not formally registered, to do so urgently.
Liquor trade administration
Madam Speaker, there are currently 4 832 licensed liquor outlets in the
Province of which 2 173, i.e. 45% are Taverns. We have already approved 2 429
applications to date which are still to be licensed of which 1 171, i.e. 48,2%
are Taverns. During the current financial year, 1 643 applications were
considered of which 978 or 59,5%, were approved. A total of 791 new licenses
and certificates of removal and transfer of licenses were issued, which when
translated into jobs will result to approximately 6000 permanent jobs. We
participated in 36 joint operations with SAPS and other stakeholders throughout
the Province as part of Crime Prevention especially on unlicensed taverns. We
continue to hold workshops throughout the Province on anti alcohol and drug
abuse, to educate the public on responsible liquor trade and consumption.
Madam Speaker, we intend to gather adequate data and information on youth
consumption of liquor in our province. This information will help us identify
the most troubled areas of our Province, in partnership with the Departments of
Education and Social Development.
We have also noted with great concern, the informal nature of shebeens in
the Province, as well as the economic and social impact they have in our
communities. As a policy thrust, we will not allow the economic value of these
informal businesses to be eroded, while we also ensure that they are speedily
formalised and located in lawful and properly designated areas. The positive
impact of this sector of our economy will be maximised through
formalisation.
With regard to Liquor Administration, our biggest challenges range from
non-compliance with legislation to lack of cooperation between various arms of
state.
We therefore intend to host a �Regulatory Lekgotla� to address these
challenges, bearing in mind the impact that the liquor industry has on our
Province�s economy. Critical to this, will be our policy directive to
decentralise liquor licensing administration for ease of public access,
although keeping the adjudication with the Liquor Board. We envisage a
partnership with local government structures in districts to administer the
collection and quality checks of applications, and foster a closer relationship
with the Liquor Board for adjudication where applications have been received.
This will bring the Liquor Board closer to the areas and people for whom
licenses have been approved.
Tourism
Madam Speaker, the importance of Tourism as a growth sector in our economy
and its priority position within AsgiSA cannot be overemphasised. Some of the
areas currently being pursued by the department and its agency, the North West
Parks and Tourism Board relate to:
* Addressing the accreditation and program development challenges faced by
the Hotel Schools.
* Implementing the Turn-Around-Strategy for the Hotel Schools as approved by
the Board of our Agency.
* Implementing the Highveld National Park Infrastructure Development Plan with
the R8 million received from DEAT. The Park will be officially opened in
October 2006 following the proclamation, product development and restocking
processes to be completed in partnership with Department of Environmental
Affairs and Tourism, SANParks, Potchefstroom Local Municipality, Barolong
Boo-Modiboa Community and our department.
* Implement the Parks Infrastructure upgrading through the effective
mobilisation of Poverty Relief Funding with the R10 million received from DEAT.
The Parks that has been primary beneficiary includes Vaalkop Dam, Bloemhof Dam,
Botsalano Game Reserve and Mafikeng Game Reserve.
* Complete the North West province product audit which has identified key
product gaps in order to prepare for the 2010 FIFA World Cup. We call on the
Private Sector to seize the opportunity to build high brand hotel products,
especially in the Rustenburg, Hartebeesportdam and Klerksdorp areas, where we
are convinced there will be good returns on investment linked to the FIFA
Soccer World Cup in 2010, and
* Intervene strategically with regard to Broad Based Black Economic Empowerment
(BEE) within the Tourism Sector in the province.
It is also encouraging Madam Speaker that for three years in succession, BEE
Tourism entities in the Province have received the ETEYA Awards. These entities
are the Mankwe Safaris, Gaabo Motho Cultural Village and Boga Legaba.
Tourism destination marketing
We are pleased to inform this esteemed house that tourism statistics reveal
that the Province has been able to increase its market share within the
International Tourist Market from 9 % to 12 % and to concomitantly defend the
6% market share within the domestic tourist market despite limited resources
available and the fierce competitive market environment. This came as a result
of:
* The effective execution of the Vodacom Soccer Challenge as a catalyst
event to revive the economy of Mafikeng for the past four years in succession.
It prides us to note that this event has been retained in the North West
Province, specifically Rustenburg, and will continue to help us market our
province�s tourism products en route to 2010.
* The successful hosting of the 2006 Women�s World Cup of Golf at Sun City. The
foot traffic recorded during the three days was 30 000 as compared to 14 000 at
Fancourt in George, Western Cape in 2005. An agreement has been finalised with
the Event Organisers to host the event up until 2010.
Madam Speaker, we believe that the economic outlook of the North West
province is positive. The following are among the initiatives that continue to
give us this hope:
* The successful trade workshops held with the Tourism Trade in China, India
and United Kingdom. Negotiations with the Tourism Trade in Russia are
continuing with regard to the charter market out of the Ukraine and
Russia.
* The creation of a New Tourism Brand Product, Jazz Africa Heritage (JAH) to
capture market share within the African Diaspora market.
* Our efforts to promote the North West Province as a destination in the
international media, among which are the Chinese observer, New York Times,
Fortune Magazine and Cities and Provinces publication.
With the completion of the North West province�s 2010 Infrastructure Audit
by KPMG, we will, in consultation with Tourism Industry stakeholders launch in
September 2006 the 2010 FIFA World Cup Tourism Marketing and Development
Strategy. The primary aim is to position the North West Province Tourism
Cluster/Nodal areas as viable MICE venues, in particular Rustenburg.
Key tourism priorities for 2006
Madam Speaker, emphasis on Tourism research will be one of the key
priorities of our department for the year 2006. We sincerely believe that we
need to build better tourism research capacity, in order to pace ourselves
better for this sector�s contribution to the Provincial Growth and Development
(PGDs) strategic objectives. We will develop a programme of Tourism Bursaries,
through which requisite capacity will be developed among the youth in this
priority sector. We hope to award at least five bursaries to tourism-centric
study areas, as a way of building ourselves a tourism research reservoir and
capacity for the future.
As part of the Greater Taung Development Process, a full feasibility study
will be completed this year with regard to the establishment of the 32 000ha
Taung Game Reserve.
In this financial year, we will also fast-track the development around the
Bloemhof Dam. The recommendations of the feasibility study on the Bloemhof Dam
Initiative have therefore been prioritised for implementation.
We have approved R5 million for the upgrading of the Lotlamoreng Dam. The
objective is however to develop Lotlamoreng into a unique recreation
destination that will attract visitors from areas around Mafikeng and still be
able to sustain itself. Phase one of the project which entails upgrading the
place will ensure that Lotlamoreng Dam is ready for recreational and
entertainment activities in this financial year.
By September of 2006, we will have refurbished the facilities at Cooke�s
Lake to be used by the public for leisure and recreation purposes. Our
intention is to leverage the resuscitation of this structure on the investment
made by the Provincial Government on these premises in 2003.
Our Province boasts a rich heritage which we will harness in the financial
year 2006/2007. We will intensify this social history tourism, to ensure that
we turn our social history into a tourism asset. We will therefore in the
coming year, spearhead the formation of Local Tourism Associations, to prepare
ourselves for the 2010 FIFA World Cup event and subsequent Tourism
opportunities beyond. This will culminate in the formation of the District
Tourism Associations, immediately thereafter.
Madam Speaker, notwithstanding the above, challenges facing the Province in
terms of tourism development remain:
* The completion of the 2010 FIFA World Cup Tourism Marketing and
Development Strategy by June 2006.
* The negotiation with the Gauteng Government with regard to the transfer of
the Ga-Rankuwa Hotel School to Gauteng following the demarcation process.
* The successful negotiation with Gauteng government with regard to the
transfer of the Abe Bailey Nature Reserve to the North West Parks and Tourism
Board following the demarcation process.
* The effective implementation of community based Tourism Strategy in this
financial year, with two pilot projects in Borakalalo National Park and Molopo
Game Reserve.
Programmes and project implementation
The Mafikeng Industrial Development Zone (MIDZ) Programme
Madam Speaker, we continue to be hopeful that the review and reformulation
of policy framework on regional industrial development, including the
establishment of Industrial Development Zones will turn out in favour of the
Mafikeng Industrial Development Zone. It is heartening to note that there are
no objections that we continue to establish industrial initiatives at the
Mafikeng Airport and we appreciate the consent of the Minister of Trade and
Industry that we should proceed in the implementation of these initiatives. We
can now confidently report to this house that infrastructure development
initiatives are advanced, appointments of contractors are being finalised, and
massive civil construction work will commence soon. An amount of R42 million
was approved last year for this work and an additional amount of R20million is
set aside for this financial year.
The department has also since strengthened the MIDZ Board with the
appointment of the Chairperson and Deputy Chairperson in the names Dr Modiegi
Sophia Mosime and Mr Siphiwe Ngwenya Chairperson and the Deputy Chairperson
respectively. Whilst the staff is currently utilising seconded staff members
from the Central District Entrepreneurial Support Centre for administrative
capacity, the board will soon be appointing its Chief Executive Officer and the
Chief Financial Officer from the short listing concluded. The positions of
Project Managers and other critical positions will also be advertised in due
course.
We have also officially launched the new interim MIDZ Offices in December
2005 at the North West Development Corporation�s (NWDC) Small Industries Site
in Montshioa. The Mafikeng Industrial Development Zone Company (MIDZ) is
expected to relocate to the new Minerals Park Building to be constructed at the
MIDZ Zone at the Mafikeng Airport once the proposed Minerals Park building has
been completed.
MIDZ Infrastructure Development
Tenders were issued for the appointment of 5 consultants (Civil Construction
Works Designers and Project Managers) for the Minerals Park Building, Western
Site development, Eastern Site Development, Lokaleng Industrial Site and bulk
internal services. The MIDZ is finalising cost estimates for consultants� work
and they are expected to provide milestones linked quotations for the work to
be executed.
Minerals beneficiation programme
The North West Provincial Government established the Millennium Development
Fund which has since been transformed into the Platinum Jewellery Trust of
South Africa. The Board of Trustees led by Mr Mashudu Ramano have made
excellent progress in advancing the beneficiation of platinum in the production
of Jewellery from this Province. We take this opportunity to congratulate this
Board of Trustees and express our appreciation in their commitment to making
the North West Province the hub of Platinum Jewellery and related mineral
beneficiation initiatives, for the entire country.
Madam Speaker, we are proud to announce that we will soon be launching the
Djadji range of Platinum Jewellery, an effort of the Trust and the North West
Provincial Government. Subsequent to this launch, we will be moving speedily
towards the establishment of a Platinum Beneficiation Park, which will include
the Platinum Visitor Centre, Jewellery Training and manufacturing hive as well
as the mining supplier park. We will dedicate an amount of R8 5m to this
initiative, which is aimed at augmenting the R6m committed by to this
initiative over the next three (3) years.
We have just returned from a trade mission led by the Deputy President to
the East, specifically Japan and Indonesia. Our hope is to consummate a
relationship with Japan in making the Platinum Jewellery initiative work, given
the strides in development and the market offered by the Japanese economy.
There are many other economic initiatives of value that we hope to pursue with
Indonesia for the growth of the SMME sector in the North West, especially
regarding opportunities related to the FIFA 2010 Soccer Spectacular. Very soon
a delegation led by the Premier will visit Japan and Indonesia to conclude
agreements on areas of cooperation.
Car wash projects
Madam Speaker, our department has during the course of the 2005/06 financial
year made R8 million available for the establishment of the Youth Co-operative
Development Centres in identified Local Municipalities. The centre will have a
Car Wash Outlet as an anchor project to kick-start the operations of the
centre. It has been our observation over time that some of the problems
overwhelming the currently mushrooming car wash projects relate to the lack of
proper planning and facilitation, which has resulted in such projects being
informal, not paying for services utilised, disregarding environmental impact
issues and some being located at unauthorised or non-designated premises. The
project is currently enjoying a partnership of the following organisations,
namely:
* Umsobomvu Youth Fund
* Telkom;
* Municipalities Local Economic Development (LED) Units
* Provincial Youth Commission
* The Department of Social Development; and
* The Department of Local Government and Housing.
More than 50% of these centres will be operational by the end of November
2006.
The Bio-diesel project
It will be recalled, Madam Speaker, that one of the sectors identified by
AsgiSA within the context of the Micro-Economic Reform Strategy is the Bio-fuel
Sector. Our department is therefore happy to bring to your attention the
success of one of the project recently launched, which is the Bio-diesel
Project. This is a large scale rural job creating Public Private Partnership
project using underutilised and marginal land for the production of bio-diesel
from indigenous or alternative trees with oil bearing seeds.
Significant progress has been made in this flagship project which is among
the priority sector projects implemented by the North West Province as a
contribution to AsgiSA. We are proud to announce that the North West Province
is the leading Province in this bio-fuels sector, having made significant
strides in the implementation of the Mafikeng Bio-Diesel project in partnership
with the Barolong-Boora-Tshidi, the Universities of North West and Pretoria as
well as private sector partners.
Owing to the need to support and ensure the success of this project, we have
once more committed another R10 million to the project, which will bring the
total amount invested by the provincial government to R 14 7 million, whilst
the Barolong-Boo-Ratshidi have contributed land in this regard. In its final
stage, this project promises to create some 13 000 job opportunities within the
district of Mafikeng. We continue to engage investors around the globe to take
interest in this great model of Public Private Partnership, which promises to
help us reduce poverty and unemployment.
Wild Silk Project
Madam Speaker, after a long period of study through a pilot operation of
producing Wild Silk in Ganyesa, we can confirm today that Ganyesa will be the
hub for wild silk production in the North West province. We are now getting
into the new phase of the commercialisation of the project. This initiative was
able to sustain at least close to 800 temporary and eight permanent jobs during
the pilot phase and there is a potential to double this number when the plant
starts operating. We however need to indicate that the break from a state
supported project to the commercialisation of the project was not without
problems. We are working very closely with the Kagisano Municipality and other
relevant stakeholders to find common ground for the speedy commercialisation of
this initiative. The Wild Silk Project in Ganyesa has the potential to promote
trade within the SADC, region especially with the Namibia Kalahari Silk Project
and Botswana.
Madikwe Sisal Project
During this financial year we will be commissioning commercialisation of the
Sisal project in Madikwe. As with the Wild Silk Project, this is one of the
projects we initiated to demonstrate the potential of beneficiating indigenous
raw materials in the province together with our partners. We are grateful to
the partnership extended by Department of Agriculture, Conservation and
Environment, Moses Kotane Local Municipality, National Development Agency,
Seda, Developmental Social Services and the Traditional Offices and the Madikwe
Agricultural Cooperative and their contribution in nurturing this project.
During the project stage, this project was able to sustain 30 temporary jobs,
17 of which will be retained as part of the cooperative. In addition, the
people of Madikwe and surrounding villages would have an opportunity to 120
more in the first year of operations and we anticipate more additional jobs to
be created in subsequent years.
Community funded projects
Madam Speaker, the market failures arising from low investment levels in the
second economy, which is characterised by a very poor rural setting in our
province, continues to receive attention. In attempting to address the problem
of lack of access to productive capital facing poor communities, we funded 37
community enterprises to the tune of four million one hundred and fifty
thousand, six hundred and thirty five Rands (R4, 150, 635.00) for the past four
years. 282 beneficiaries, 148 of which are women, benefited from this
initiative. Challenges related to the collapse of 13 of these enterprises will
be addressed through the revamped national SMME Development Strategy and the
introduction of Seda. These are significant interventions that would ensure
sustainability of many of these enterprises. Going forward, all enterprises
benefiting from government funding would be registered with Seda for incubation
and hand holding until they reach full commercial operations.
Gambling
Madam Speaker, gambling has a significant role in the economy of the North
West province. Spin-offs from regulation of this industry contribute
significantly to various socio-economic imperatives on the provincial agenda
such as job creation, investments, creation of business opportunities, revenue
and tourism promotion. The five casinos currently licensed in the province
account for approximately R2 billion in investments within the province and
jointly employ in excess of 3000 people. The Board has collected in excess of
R200 million in levies, taxes and license fees from gambling operations in the
province in the past five years. Following the resignation of two members of
the Gambling Board, three additional Board Members have been appointed. The
Gambling Board will resume its duties before the end of May.
The department will also look into the manner in which levies are currently
paid by certain operators to ensure that it is in line with applicable
legislation and that any outstanding levies are recovered. We will also revisit
our legislation to enforce this approach.
Impact of the municipal demarcation process on gaming revenue
The cabinet resolution regarding cross border municipalities will have a
bearing on provincial revenue collected from some casinos. The area of
Mabopane, in which the Morula Casino is situated, has by law become part of the
Gauteng Province. Morula Casino and Hotel will therefore fall under the
jurisdiction of the Gauteng province. The effect of this reality will prove
adverse to the North West province, given that the Morula Casino is one of the
four biggest casinos in the province and contributes significantly to gaming
revenue collected by the Gambling Board annually. It is estimated that the
province will lose approximately R141 million in gaming levies and license fees
collectable from this casino over the next 10 years. There will also be
significant losses in relation to the Community Social Investments that the
casino was required by the Gambling Board to make in the province annually. The
casino has an investment value of about R400 million and was spending
approximately R5 million per annum on procurement of goods and services from
SMMEs in the North West province.
Black Economic Empowerment within the gambling industry
As an important part of our provincial economy, the gambling industry within
the province has been undergoing transformation. As part of broad based black
economic empowerment, the Gambling Board has imposed conditions of license on
the five casinos in the province relating to black economic empowerment
imperatives.
These measures are aimed at ensuring that the socio-economic benefits of the
gambling industry also filter through to PDI�s in the province through equity,
skills transfer, procurement of goods and services and contribution to needy
causes in the province.
The Gambling Board is currently monitoring compliance with these conditions
by all gambling establishments in relation to the time frames given for
compliance. Considerable progress is being made in relation to various aspects
of the conditions of license imposed. An empowerment group based in the
province recently acquired a substantial shareholding in Sun International
Limited, one of the biggest casino operators in the country, pursuant to the
conditions of license imposed by the Gambling Board. The Tusk Resorts
consortium, another casino operator in the province, has an empowerment equity
ownership of more than 40%.
All casinos in the province will, as at the end of the current financial
year, contribute 1% of their after tax profits to needy causes and projects
identified together with the Board, as part of the Community Social Investments
required in terms of the conditions of license. The casinos are further
required to procure at least 30% of their goods and services from suppliers and
service providers in the province.
The conditions of license providing for this procurement will soon be
amended to increase the minimum procurement target from 30% to 50%.
As a critical part of the transformation process, the Gambling Board has a
policy related to transformation inherent in its licensing requirements. This
policy forms a core yardstick in the determination of the suitability or
otherwise of every applicant for a license in the province.
The Roll Out Of Limited Payout Machines
The Gambling Board commenced the process of inviting applications for the
much anticipated roll out of limited payout machines last year. Application
notices were widely published for route operator licenses in the province.
Probity investigations have been concluded on applications received and await
final adjudication by the Gambling Board. Final resolution on this matter will
be accomplished once we conclude the appointment of more members to the
Gambling Board. Once concluded, the roll-out of limited payout machines will be
done in a phased manner, ensuring establishment of an industry that is socially
responsible, publicly accepted and that will yield all the intended results for
the province.
Given their small scale type, i.e. five to forty machines per site, these
machines will be more affordable for small businesses to own and operate
compared to casinos. The objective for introduction of these machines is to
provide opportunities for small businesses and previously disadvantaged
individuals to participate meaningfully in terms of ownership and profit
sharing in the gambling industry.
Youth gambling in the province
The National Gambling Board recently commissioned a base study on youth
gambling in the country. The study focused mainly on youth perceptions of
gambling in the country and revealed a higher level of propensity in relation
to specific modes of gambling in certain provinces. The study found that
students in Mpumalanga and the North West are more likely to gamble than
students in other provinces.
The most common form of gambling according to the study are the national
lottery (9,1%), sports betting (5%), scratch cards (4,5%), flipping coins
(3,5%), informally organised card games (2,7%), cellular phone gambling (2%),
dice (1,9%), internet gambling (1,4%), and casino gambling (1,4%).
Many of the types of gambling referred to above (e.g. lottery, scratch
cards, card games, flipping coins and dice) either fall under the jurisdiction
of the national lotteries board or constitute social or informal type of
gambling which is generally not regulated by gaming boards. The study further
noted that many of the youths who participated in the interviews were above the
age of 18 years and therefore legally allowed to gamble.
The study however reveals a need for education to the youth about gambling
and its social and other undesirable consequences. The Gambling Board is
already in discussions with the National Responsible Gambling Programme with a
view to introducing a youth education programme on gambling at high schools and
primary schools, in partnership with the Department of Education, in order to
educate school going youths about gambling and its potential social perils.
The Gambling Board will also, together with the department, conduct a more
comprehensive research on actual youth gambling habits in the province. This
research will involve more schools and will be aimed at gathering more
comprehensive and empirical data on actual youth gambling practices in the
province.
Illegal gambling in the province
Illegal gambling has continued to be a serious problem in the province. Many
illegal gambling operations in the province have been in existence for a number
of years and have systemically entrenched themselves into the industry with an
extensive network around the province.
There are approximately 30 illegal gambling operations at present,
interspersed in various areas of the province. The operations are jointly in
possession of approximately 1 500 illegal gambling machines, generating
millions of rands in profits. These operations have taken a large slice of the
gaming market in the province resulting in grave concern by licensed
casinos.
The North West Gambling Board has continuously strived to eradicate illegal
gambling in the province in order to ensure an environment conducive for
optimum operation of our licensed casinos and the collection of maximum revenue
for the province. A total of 18 operations were raided in various areas of the
province within the past 13 months. About 964 illegal machines and 4 poker and
black jack tables were confiscated in these raids. Amongst these machines were
various brand new high technology video based machines of the type not even
known to many licensed casinos in the country. This points to an abundance of
new machines readily available to illegal gambling operator�s in the province.
The Gambling Board is currently in possession of 1 426 illegal gambling
machines confiscated from illegal gambling operators in the province over the
past twelve months. A total of 23 criminal cases are pending against the owners
and operators of the machines confiscated in the raids.
A strategic shift will be made to partner with local municipalities in the
fight against illegal gambling in the province. Illegal gambling operators
mostly conduct business in rented premises and do not comply with business and
town planning laws applicable within municipalities. Municipalities will
therefore be requested to look into these operations and take appropriate
action against any transgression of municipal by-laws by these illegal
operators.
Amendment of North West Gambling Act, 2001 (Act 2 of 2001)
Madam Speaker, as an immediate priority in the next financial year, the
North West Gambling Act of 2001 will be amended to align it with the recently
promulgated National Gambling Act of 2005, which sets national norms and
standards to be applied by all provinces in the regulation of gambling. These
norms and standards are meant to ensure uniformity across all provinces with
regard to matters pertaining to the control of gambling activities.
The amendments will also include such amendments as may be necessitated by
developments in the industry within the province, including the proliferation
of illegal gambling and the need for introduction of new mechanisms to deal
with this problem.
The NWDC
Madam Speaker, the institutional and financial problems experienced by the
North West Development Corporation (NWDC) since 1994, are by now common
knowledge. The NWDC was placed under Judicial Management in 1999. During the
Judicial Management period, the NWDC had a strong inward focus which saw it
drifting away from the Reconstruction and Development Programme objectives of
Government.
Since the Judicial Management Order was lifted on the 27 of April 2005, the
NWDC changed its emphasis away from property management to Provincial
development needs using, amongst others, its vast property resources to
leverage private sector funding for purposes of job creation in the
manufacturing and retail sectors. In order to support these sectors in the
North West through the developmental focus of the NWDC, focus will be given to
ensuring stability with the corporation�s current client base, as well as
addressing the political baggage the past has imposed on the corporation and
its clients. We are pleased to announce that 10 months after the lifting of the
Judicial Management order, the NWDC had leveraged R85 4 million of private
sector investments resulting in 1258 permanent jobs created. We will later on
announce our plans for a more coordinated and growth focused agency, involving
the NWDC and Invest North West.
Although the NWDC has been affected by the demarcation process, its
properties will not be affected. The NWDC is a company registered according to
the South African Companies� Act and can have trans-Provincial boundary
operations, managing the properties in their portfolio located in other
provinces for the benefit of the people of the North West province.
Invest North West
Our Trade and Investment Promotion Agency, Invest North West (INW), played a
significant role in attracting investment to the North West Province in the
past year. To date, Invest North West has attracted over R1, 8bn of investment,
linked to the creation of over 1400 jobs. This average to a ratio of R10m of
investment to eight jobs created.
This agency also played a significant role in moving the following projects
forward, through the investment and trade facilitation programme:
* The Calibrated Diamonds project, which aims at the cutting and polishing
of diamonds with leading technology developed in South Africa, which reduces
the loss of production from 40% to less than 10%. The cutting and polishing of
diamonds provides a great opportunity for SMMEs, who can be trained to engage
in operations within 5 weeks. The project is valued at approximately R97
million with the potential to create at least 400 SMME businesses in polishing
operations.
Some operations have already been established in Pelindaba in February 2006,
where the intention is to process up to 8 000 carats of diamonds per month. The
project further intends to expand its production with another 10 000 carat of
diamonds per month in the Minerals Cluster within the MIDZ over the next 18 to
24 months where they will need some 30 000 square meters of custom built
facilities. We have already given our undivided support to this initiative and
view it as an important role player in the development of the Mafikeng Minerals
Cluster.
Agreement was facilitated by INW for a Granite Beneficiation project with a
Belgian company. This project involves the cutting and polishing of granite
slabs and tiles in the North West province, for both the local and the export
market. The partnership will be made up of a Belgian company and a 35% BBBEE
partner, still to be finalised.
The IDC has committed to partially funding the project within the framework
of the MOU signed with the Province. Factory space is being considered in
Marikana and Rustenburg with the intention to commission the project before the
end of the year on condition that premises are available and that a secure
supply of granite can be obtained. The project is currently valued at R272
million (�34 million) with the potential to create 750 new job opportunities
during phases one and two and a further 250 new job during phase three and
four.
Madam Speaker, these are some of flagship beneficiation initiatives in which
investment is being facilitated by INW, towards the diversification of our
economy away from primary mining to beneficiation and value addition.
We intend to synergise the operations of Invest North West and the NWDC in
this calendar year, to leverage on each agency�s capacity and strength and
reduce the extent of duplications in their operations.
The future of NWDC and INW
Madam speaker, allow me to announce that the NWDC and Invest North West will
in this calendar year, be merged to form a single agency that will focus on
Investment attraction, economic growth through Industrialisation and making
productive use of government�s industrial property to stimulate growth in the
SMME sector. This agency will be the driver of Manufacturing Development in the
Province, shouldering the responsibility to coordinate efforts towards
implementing the flagship projects identified in the PGDs and those prioritised
by AsgiSA. The merged agency will be expected to also be responsive to the
needs of the second economy, in terms of implementing the intervention
identified by AsgiSA. We believe that this merger will create synergy between
investment promotion and leverage private sector investment in the
manufacturing, beneficiation and agro-processing sectors. The name and Board of
Directors of the merged entity will be announced before the end of May
2006.
The newly merged entity will champion the sale of the residential housing
portfolio from May 2006. This involves selling off 130 houses, which are valued
at approximately R9 8 million. The current tenants, if in possession of a valid
lease agreement, will be afforded the first option to buy these houses,
provided that their municipal accounts are paid up to date. These sales will
demonstrate good governance and responsible citizenship, which are two
important cornerstones of our democracy.
The allocated Vote 6 Budget
The department�s budget for the 2006/2007 financial year is R196 911
000.00.
This budget will be allocated as follows:
R146 106 000.00 which is 74% of the total budget has been allocated for
transfers to and for the following entities and activities:
* North West Parks and Tourism Board: R80 589 000.00
* North West Gambling Board: R11 977 000.00
* Invest North West: R9 956 000.00
* NWDC: Rental subsidy: R3 000 000.00
* Seda: R6 000 000.00
* MIDZ company: R20 208 000.00
* Spatial development projects: R17 333 000.00
The projects identified to be funded with the above funds are:
* the Madibeng Dry Port: R3 200 000.00
* Beef beneficiation: R5 000 000.00
* Light Industrial Park: R3 000 000.00
* Madikwe Sisal project: R3 000 000.00
The budget allocation for the merged institution between Invest North West
and NWDC will be revised accordingly once the Board is appointed and management
has done the requisite submissions.
An amount of R27 905 000.00 which is 14% of the total budget is for salaries
to 119 employees.
The remaining 12% of the budget which is R22 900 000.00 is allocated for the
department�s operating expenses, of which:
* R2 933 000.00 is for the rental of buildings
* R2 580 000.00 is for outsourcing of professional services
* R4 000 000.00 for the annual Provincial trade Expo; and
* R13 387 000.00 for administrative costs
It is our hope that this budget will advance us closer to reducing poverty
and unemployment among the most needy of our people.
Conclusion and closing remarks
Honourable Premier, may I please take this opportunity to express our
gratitude to your able leadership that steered us through the stormy waters of
development in our province.
I would also like to thank members of both the Political and Technical
committees of the Economic Development and Infrastructure (EDI) cluster of our
government, for the tenacity with which they pursued a better life for the
millions of our people. Ke nnete gore � Sedikwa ke ntja pedi ga se thata�.
Madam Speaker, I also thank this august house for its support to our
programmes, through the leadership of the legislature�s oversight committee
under the leadership of Honourable Mahumapelo.
�Team Economy�, my sincere gratitude to all of you for your hardwork.
Without exception, I would like to thank all staff members in the department
for their dedication to ensure that we realise our goals.
To my wife Thandi and the family, thanks for your continued support and
understanding.
Madam Speaker, we pay tribute to the women of 1956 and the youth of 1976. We
hope that their hopes and aspirations and those of their children and future
generations, will be further advanced by the programmes we detailed here
today.
Re a Leboga,
Thank You,
and Baie Dankie.
Issued by: Department of Economic Development and Tourism, North West
Provincial Government
9 March 2006
Source: North West Provincial Government (http://www.nwpg.gov.za/nwpg/)
