Tourism Budget Vote speech by MEC Collins Chabane, Provincial Legislature
8 May 2007
Honourable Speaker and 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 (ANC) and other political
organisations
Stalwarts and veterans of our struggle
Our dignified traditional leaders
Religious leaders
Leadership and heads of our chapter nine institutions
Leaders from the labour, women and youth fraternity
The business community
Leaders and heads of our provincial parastatals
Director-General (DG) and other leaders of the public service
Media representatives
Distinguished guests
Ladies and gentlemen
Comrades and friends
Honourable Speaker, it gives me a great honour to announce that today we are
joined in this house by brothers and sister from sister countries in the region
and other parts of the world.
On 9 February 2007, the President of South Africa has delivered his annual
State of the Nation address (SONA) in the National Assembly wherein he outlined
a comprehensive government action plan which provided a roadmap towards a
journey to better the lives of our people. In the same address the President
posed a question, "What progress have we made in the quest to achieve the
objectives to which we honestly told the nation we were committed, as a result
of which our people gave us the overwhelming authority to govern our country
from 2004 until the next election in 2009?"
In an attempt to respond to this honest and yet noble question, our Premier
in his address on this same platform occasioned by the 2007 annual State of the
Province address (SOPA) made reference to a survey conducted by Afro-Barometer
which concluded that "72% of the respondents interviewed agreed that our
provincial government was indeed doing a good job". A good job indeed to
improve their lives for the better.
As if what the Premier said was not enough some few weeks ago, to be
specific 26 March 2007, one of the journalists in a daily national newspaper
wrote about his experience in Limpopo not knowing he was responding to the
President's question when he said in his article, "Many of us wonder why the
ANC is so strong in the rural heartland. Well it is always instructive to
travel. When I arrived at my grandmother's village, Mawa village in Greater
Letaba Municipality, I slept in my aunt's Reconstruction and Development
Programme (RDP) house and drank water in the village from a
government-installed tap. There is a new tarred road through the village. In
2009, when elections come those communities will vote for the ANC. For them
this party has delivered beyond expectations. That is the truth they can see in
front of them." The great deeds of our movement have been told, not that they
are a secret. What more can we say?
People driven development
Allow me to indulge and remind this august House about the naked truth that
we all know or supposed to that development is about people. People are the
real wealth of nations. At the heart of our development efforts lie the
multitudes of our people to whom we owe our loyalty, dedication and sacrifices.
Ultimately human development is about the realisation of potential.
It is about what people can do and what they can become, their capabilities
and about the freedom they have to exercise real choices in their lives. Just
like the Great Mahatma Gandhi once commented that, "The difference between what
we do and what we are capable of doing would suffice to solve most of the
world's problems." Our development work in this province is underpinned by our
determination to enhance the potential of our people to expand their frontiers
for human fulfilment.
Development is about people and people are the real wealth of nations. Any
development that is worthy of success, must be people cantered and people
driven. Mesmerised by the rise and fall of national incomes, as measured by
gross domestic product (GDP), we tend to equate human development with material
wealth. The importance of GDP growth and economic stability should not be
understated both are fundamental to sustained human progress as is clear in the
many countries that suffer from their absence. However, the ultimate yardstick
for measuring progress in people's lives is the quality of life they lead.
In the world of the 21st century national security looms large on the
international agenda, violent conflicts, concerns over terrorist threats, the
proliferation of nuclear weapons and the growth of illicit trade in arms and
drugs all pose acute security challenges. Against this backdrop it is easy to
lose sight of some basic human security imperatives such as poverty,
unemployment, deprivation and disease which directly and immediately affects
the quality of our lives. We all know that ours is a country of contradictions,
a country of multiple realities, a country of stark contrasts between the first
world technological advancement and high living standards on the one hand and
large areas of extreme poverty and deprivation on the other.
In the same speech we referred to earlier by the President, he went further
to point out that, "None of the great social problems we have to solve is
capable of a resolution outside the context of the creation of jobs and the
alleviation and eradication of poverty and therefore the struggle to eradicate
poverty has been and will continue to be a central part of the national effort
to build the new South Africa." It is primarily for this reason among others
that the economic cluster that we are privileged to be a member has adopted a
comprehensive plan of action geared to address these twin evils of poverty and
unemployment.
Having completed the first decade of democracy and now into the second with
13 years of experience at the heart of this new phase is the challenge of
promoting and accelerating sustained development and shared growth, spearheaded
by a democratic developmental State, guided and buttressed by an ANC led
popular movement and working in partnership with the people. Development is
about people and people are the real wealth of nations.
Economic overview
Our province, Limpopo, is South Africa's prolific province in terms of
economic growth outweighing the national average growth rate of 3,75 with 6,3%.
Between 1995 and 2001, the province has achieved a 3,8% growth rate the highest
nationwide. However, during the period between 1996 and 2005, the provincial
contribution to national GDP calculated at constant 2000 prices fell steadily
from 4,8% in 1996 to 4,4% in 2005.
This decline could be attributed to the fact that the structure of the
economy is heavily dependent on commodities which tend to be hugely affected by
developments within the global market forces. The other sector which has
affected the structural configuration of our economy has been the recent
decline of the agricultural sector, the food basket for our people. Obviously
we should be worried about this sunset trend bedevilling one of the most
critical sectors of our economy. This is further compounded by the shift in the
use of farms from mainstream agricultural activities to game farms.
However, the sunrise trend has emerged from the general government services
and the mining industry which has contributed 27,7% and 23,2% respectively
which accounted for 50,8% of the total provincial GDP. Nevertheless, we draw
strength from our ever growing export trade which has expanded to R3,6 billion
in 2005 compared to R1,8 billion in 2004. When we cast our eyes into the
horizon, we are inspired by a future which guarantees us growth and
prosperity.
Honourable members, allow me to give you a synopsis of what our economy is
capable of. We grapple with the complex issue of the economy driven by the zeal
and determination to undermine and ultimately defeat the twin evils of poverty
and unemployment we referred to earlier. Strong growth performance has as well
been influenced by such sectors such as construction, wholesale and retail
trade, financial and business services including property developments and real
estates, transport and communication.
Agriculture
Despite the challenges we alluded to earlier, our climatic conditions in
this province allows for double harvesting seasons which ultimately translate
into Limpopo becoming the national food basket. Limpopo currently provides over
45% of Johannesburg fresh produce market's R2 billion annual turnover according
to Limpopo Business Magazine. It is therefore not surprising that we produce
about 60% of the country's tomatoes, 75% mangoes, 65% papaya, 33% oranges, 36%
tea, 25% citrus, bananas and litchis and 60% of its avocados. We have already
initiated a process to open market access for export of some of our fresh
produce to one of the biggest world market, the People's Republic of China. The
recent trade mission to Beijing has laid a solid foundation in paving a way for
our exporters to expand their export trade between Limpopo and China. In the
process of pursuing export market we equally need to take care of domestic
consumption and sustain the capacity of this sector.
Mining
During 2003, total sales of primary minerals amounted to R13,3 billion
making us the country's third largest contributor. Interest is developing in
Limpopo's mineral riches and has reached unprecedented levels with 396
prospecting and mining licenses having been issued in 2002. Limpopo has no less
than 136 operating mines producing 9% of South Africa's income from
minerals.
Our national public electricity utility Eskom announced plans to build a R26
billion coal fired electricity generation plant in Lephalale, in the vast and
relatively untapped Waterberg coalfield. The coal bed covers an 88 km by 40 km
area in north western Limpopo and extends to Botswana. The new 2 250 mega watts
base load power station will drive the expansion of coal mining in the region
and is expected to lead to coal to liquid fuel, gas to liquid fuel and other
related chemical plants in the province. This development has prompted Exxaro
Resources to expand operations in its Grootgeluk Coal Mine, which is the
largest coal mine in South Africa to the tune of R7 billion. The two
developments have stimulated other major investments, the Department of Water
Affairs and Forestry has launched a massive R1,3 billion De Hoop Dam on the
Steelpoort River to supply water to the mining sector and surrounding
communities. This is a major national Accelerated and Shared Growth Initiatives
for South Africa (AsgiSA) flagship project. A further R3,6 billion will go
towards bulk distribution works including a pipeline to carry water from the
Flag Boshielo Dam to Mokopane for rural community use and platinum mining
development. Another R3 billion will be provided by local municipalities for
water services treatment and distribution.
Furthermore, Transnet has recently announced that it will spent R10 billion
by 2025 on upgrading its Waterberg link line in order to increase the transport
of coal to serve the growing demand. There are plans in the pipeline to build a
new R8 billion line between Waterberg and Groenbult north of Polokwane. In
Vhembe, Vanetia has already initiated plans to expand its operations to the
value of approximately R1 billion, Potgietersrus Platinum Mine (PPL) is
investing R4,2 billion in expansions and FOSKOR is investing R600 million as
well. The announcement of a R3 billion injection into ASA Metal early this year
is another sign of the confidence foreign investors have in Limpopo.
The mining sector has opened a floodgate of the capital investment flow into
our economy contributing to its growth. Over and above the billions we have
just mention it is worth mentioning key developments in the area of Dilokong
Corridor. In this region, Anglo Platinum has invested R1,5 billion in
Mandagshoek together with a complimentary R1,5 billion smelter outside
Polokwane. Impala Platinum has invested about R1,7 billion in their
Winnaarshoek in Burgersfort. The Canadian Southern Era Group has set aside
about R550 million for the redevelopment of platinum mine at Lebowakgomo.
Obviously all these developments will inevitably in one way or another create
job opportunities, increase household income and subsequently contribute in
alleviating the scourge of poverty.
Our major concern is that information on procurement and involvement of our
people remains insufficient for them to take advantage of these opportunities
taking place right in their backyards. We will relentlessly pursue monitoring
procurement by the mining companies. The baseline of most of the big mines has
been determined to see what percentage of the total procurement remains in the
province. This has been a challenge as most companies were reluctant to
disclose the information but gave us their total national spent making it
difficult to determine the total provincial figure. Through negotiations with
management of the mining houses we are however reaching agreements and mining
houses now see the importance of supplying such information to government.
Manufacturing
The two sectors that we have just spoken about provide a springboard for the
development and flourishing of the manufacturing sector. Manufacturing lays a
basis for the beneficiation and value adding of our products and raw material.
It creates an opportunity for industrialisation, economic growth and
development. To this effect we have witnessed within the agricultural sector
the processing of timber into furniture, interior fitting and crate pallet
manufacturing for example. This sector has also attracted other engineering
operations to the province including footwear, brewing, bottling, packaging,
brick making, ceramics and jewellery.
The Provincial Growth and Development Strategy (PGDS) has identified seven
economic clusters which spread across the province's five districts. The
clusters are based on taking advantage of the provinces' competitive advantage
occasioned by the wealth of our resources in mining, agriculture and tourism to
turn the economy around. The burgeoning manufacturing sector holds several
investment opportunities that call upon us to provide an environment conducive
enough to enable it to thrive. It is for this reason that as a province we
strive to provide incentive packages to support this sector.
A number of niche manufacturing and service sectors have also contributed
strongly to regional growth. These include agro processing which increased from
0,6% in 2004 to 3,0 % in 2005 and community, social and other personal services
which increased by 5,4 % in 2005 compared with 1,8 % in 2004. In sum, only in
few sectors did output growth coincide with employment growth. Supporting these
growing sectors is the engineering sector, which, if left unsupported can bring
our manufacturing side to a grinding halt hence our call for the sector to
diversify and transform for more entrants.
Considerable attention will be focused on interventions that can boost job
creation and lower unemployment, a fundamental tenet of the accelerated shared
growth agenda. Amongst the intervention is the economic research commissioned
by the Department to identify gaps and constraints that can be exploited in
order to stimulate job creation. This will be achieved by identifying
opportunities for new production, expansion of existing production and
efficiency improvements along the value chain. The Department is also aiming to
identify labour intensive sectors with the potential to absorb the unemployed,
both old and new entrants into the labour market.
In our effort to revolutionise the manufacturing industry in the province
and promote innovation, we continue to support the industry and individual
companies to make the required contribution to our economy. Last year we
informed the honourable House how our Department assisted a precision
engineering company with its invention. We are happy to announce that our
intervention has secured an international patent against Australia, Europe and
the United States of America (USA).
Tourism
Since 1994, the tourism floodgates have opened and we have seen
unprecedented growth in an industry which is currently ranked as one of the
most important in the country. When we opened our doors to the world an
estimated 3,6 million international tourists entered our country. By 2006,
following years of steady growth almost 8,4 million people visited our shores
in a single year.
Limpopo represents a paragon of a premier international tourism destination.
Broad, boundless and beautiful ancient land of myth and legend that is Limpopo
beckons with a mystical allure that travellers all over the world find
impossible to resist. The land of the Golden Rhino, Mapungubwe, Royal Kraal of
the Rain Queen Modjadji, Kruger National Park and the proud and majestic Baobab
tree Limpopo is distinctive in its ample variety of attractions.
Cabinet has adopted the Provincial Tourism Growth and Development Strategy
to provide a guiding framework within which we can grow this sector of our
economy. The development of the tourism sector is steadily growing to reach the
desired goals despite its challenging nature. The development of the Waterberg
node which remains a strong linkage with Limpopo's primary tourism market,
Gauteng is gradually becoming a force to be reckoned with. Two major
investments have unfolded during the previous financial year worth more than R1
billion such as Entabeni Resort development and the Outdoor World Project near
Bela-Bela.
These two projects once completed will not only create the much needed jobs
but will create a unique tourism corridor that links Gauteng with major
destinations like Bela-Bela, Nylsvley, Doorndraai Dam and Makapans' Caves with
Polokwane enhancing our competitive advantage in terms of positioning Limpopo
as a leading tourism destination.
A golfing cluster has emerged within the Waterberg area comprising of six
championship golf courses, all within a 10 km radius. The distinguished Ernie
Els and Jack Nicklaus legends of South African golf and international sporting
ambassadors have consciously chosen Limpopo as the prestigious host for their
first joint venture and are the designers of a colossal and impressive
championship golf course to the value of R1,5 billion.
Tremendous progress has been made in the development of the Trans-Limpopo
tourism routes enhancing our strategic location within the Southern African
Development Community (SADC) region. The first product which will focus on
cross selling and packaging will be finalised and launched during the
international tourism fair to be hosted by South Africa, the Indaba Show that
will take place this month. The opening of Giriyondo Gate in August last year
within the Greater Limpopo Transfrontier Park provided a huge opportunity to
operators based in Phalaborwa to develop a well branded route called "Bush to
Beach", which already attracts many tourist both from XaiâXai and Phalaborwa.
All these are exciting developments in the light of South Africa's preparations
to host the 2010 Soccer World Cup. As Limpopo we will develop a range of
suitable and attractive tourism products aimed at this influx from abroad and
the continent through the established collaborations and linkages with known
destinations within our close proximity.
In the past year, we continued to make major interventions towards the
transformation of the tourism industry by assisting 65 new entrants into the
industry with market access and industry specific skills development.
Seventy-five tourist guides were trained in the translation of Spanish, German
and French in our quest to ready ourselves to benefit and also penetrate some
of these lucrative markets during 2010. This year we would like to focus on
Portuguese to further add on to the other three foreign languages.
Our province has a lot of adventure related experiences and the survey
conducted reflected a shortage of Limpopo based tour operators and adventure
guides. We will use the opportunity of the R22 million granted by the
Department of Labour through the National Skills Fund Programme to develop over
700 black people in the safari and hunting sector. This will further advance
our course to transform the sector.
The Annual Limpopo Marula Festival, which we co-host with the Department of
Sport, Arts and Culture, now forms part of the PGDS prioritised projects. A
strong partnership with the Tourism Business and Ba-Phalaborwa Municipality as
the identified host municipality of the festival has been formalised. This is a
purposeful intervention to utilise the festival as a draw card to attract
domestic, regional and international tourists to Limpopo during the Marula
season as well as to develop the festival as a marketable brand for the
province. A fact-finding mission was carried out in Germany, at the Munich
Oktoberfest, in an endeavour to enhance our knowledge and skills on how related
festivals are conducted on a sustainable basis and valuable lessons have been
learnt from this sojourn abroad.
The idea is to explore possible linkages with our neighbours around the
celebrations of Mukumbi (Morula/Vukanyi), Vucema and Xikanchu home brewed
traditional beverages and build a strong brand that enhances tourism flow and
economic development within our rural communities. Furthermore, it is to build
on what has been started already and lifting the festival to the levels of
other food and beverage festivals celebrated both in the country and other
parts of the world like the well known German Beer Festival held in Munich
referred to as the Oktoberfest, the Oyster Festival in Knysna, the Cherry
Festival in Ficksburg (Free State province) and within our own province the
Grape Festival in Modimola and the Mokopane Biltong Festival.
Medicinal plants
The programme for conservation and sustainable utilisation of indigenous
medicinal plants has taken off the ground. Until recently the mushrooming of
indigenous medicinal plants markets has become the main visible threat to
conservation of these resources. Current developments leading to the
institutionalisation of African traditional medicine by the national Department
of Health are expected to increase the pressure on provincial stocks.
It is anticipated that with the current formal recognition and promotion of
traditional medicine, interest in the use of indigenous medicine will grow,
leading to increased harvesting of the plants. In preparation the Department is
engaged in collaborative efforts with the national Department of Health,
traditional health practitioners associations and research institutions to
preserve indigenous stocks.
During 2006/07, we were engaged in the facilitation of the development of
partnerships between Vhembe Traditional Health Practitioners and the Indigenous
Knowledge Systems of South Africa (IKSSA), the indigenous knowledge system wing
of The Freedom Park Trust, a national legacy project. The partnership is also
involving several research institutions to participate in the conservation and
research on medicinal plants. One of the outcomes of the partnership is the
indigenous medicinal plants nurseries project that was launched on 27 October
2006, at Ha-Maila village. We are grateful to Chief Nthabalala who offered a
substantial stretch of suitable land for the project. A proposal for Expanded
Public Works Programme (EPWP) funding has been lodged with the Department of
Environment and Tourism with the estimated budget of R32 million. It is our
plan to generate sufficient trees from this and other similar projects. The
trees produced at these nurseries will support the "Greening Limpopo
Programme".
A setback was experienced with the cross border exchange wherein of the
centres of excellence, the Hans Hoheisen Wildlife Research Station had to be
given over to the Mpumalanga province. Plans for the upgrading of this centre
were already at an advanced stage. However, the Department is currently
consulting with stakeholders on the establishment of a state of the art natural
science museum near the eastern Trans-frontier Park between Limpopo, Zimbabwe
and Mozambique.
Commercialisation of parks
As indicated during our budget speech in 2006 we have gone a long way into
making the commercialisation of provincial parks a reality. We are happy to
announce that tourism products within four provincial parks (Lekgalameetse,
Makuya, Nwanedi and Masebe) will be out in the market place during the first
quarter of the financial year. We look forward to roll out this process to a
maximum degree during the course of this financial year. We believe that this
programme could become a vehicle to empower the previously disadvantaged
individuals whilst at the same time creating the much needed job opportunities
for the rural communities.
We managed to go on a wider consultative drive with communities surrounding
the reserves, resulting in communities affirming their commitment to the
programme through community resolutions. We are currently working on the
development of master plans for each reserve where we secured resolutions. The
challenge has been land claims and delays in community resolutions. However, we
are working closely with the Regional Land Claims Commission, the provincial
Department of Agriculture, the Department of Water Affairs and Forestry, the
Department of Land Affairs and our implementing agency, Limpopo Tourism and
Parks leading the whole commercialisation facilitation drive to overcome this
challenge.
In our endeavour to fast track transformation within the wildlife industry,
we will be assisting 20 previously disadvantaged communities that claimed their
land back to be introduced to the mainstream wildlife industry this current
financial year. The Department will also dedicate 19 game reserves out of the
49 that are communal reserves for the same initiative since we view this as a
vehicle to empower communities to participate meaningfully in the tourism and
wildlife industry.
Parks and Integration Expansion Programme
We are fast tracking the Parks Expansion and Integration Programme. For the
past few months Limpopo Tourism and Parks has been hard at work to finalise
agreements with Entabeni Game Reserve in respect of Doorndraai and Kuduland
Safaris and Tshipise Honnet Reserve in respect of Nwanedi Nature Reserve.
Through consultative processes with role players we have carried out and we
envisage launching the partnership during the second quarter of the 2007/08
financial year. Good progress has also been made with Eiland Spa in respect of
Hans Merensky Nature Reserve. We would like to optimise the opportunity that
exists in this beautiful reserve en-route to Kruger National Park to develop a
unique eco-culture destination for the entire family market and nature lovers
alike.
During the 2006/07 financial year, an amount of R50 million was allocated to
Limpopo Tourism and Parks to initiate the infrastructure upgrading programme
within provincial parks. The programme started during the first quarter of last
year and all the projects are expected to be wrapped up during this financial
year.
State of the environment
Last year, we undertook to distribute 7 000 trees to encourage a green
culture among our people. In 2006/07, the Department distributed and planted
11000 trees in the province. It is our plan to continue with this noble
initiative as we make our province green. We will also continue to encourage
municipalities to put proper waste management systems in place and further
utilise our cleanest town competition, which was won by Greater Tzaneen
Municipality in 2006/07, as a platform.
One of our major challenges is environmental offences committed by people in
the province. We have therefore extended our Environmental Education Programmes
to the learners and educators in schools. The Department will continue
expanding the State of Environment Reporting Competitions (SOER) with the
ultimate goal that the majority of schools actively participate in environment
related projects. It is in this spirit that we will work together with the
Department of Education to maximise the utilisation of the Schoemansdal and
Melkrivier Environmental Centres.
These centres will further play an important role in the co-ordination of
activities within the Waterberg and Soutpansberg Biosphere Reserve initiatives.
Not only will it serve as centres to facilitate skills development programmes
in the environmental field but will further focus on actively involving our
young people in environment and tourism related programmes. It will further
serve as nodal points to assist with our research agenda as mandated under
United Nations Educational, Scientific and Cultural Organisation's (Unesco) Man
and Biosphere Programme.
The Wetlands Management Programme has continued to transform the status of
wetlands in the province. Significant gains are visible in terms of community
commitment to participate in the conservation process. These positive
developments are easily attributed to a changed approach to the management of
wetlands issues, particularly in relation to communities that live around them.
The new approach guarantees that the constitutional rights of communities to
joint ownership of wetland resources be recognised, it decriminalises
indigenous life and provides support for conservation and benefit sharing
initiatives.
A total of 64 wetlands have been registered around the province. Twenty six
of those in the Greater Sekhukhune District Municipality have Global
Positioning System (GPS) information and are ready for mapping. Most of them
are under rehabilitation and several jobs were created through EPWP projects.
Other wetlands are being considered for rehabilitation and development, with
plans for Sambandou at reasonably advanced stages. As a Department we are proud
to be involved in the developments that are leading to the declaration of the
Makuleke wetland as the second provincial Ramsar site, in addition to Nylsvlei.
The Ramsar status is expected to be conferred soon. Not only will this status
confirm our standing as a conservation sensitive province, but it will promote
our profile as the leading eco-tourism destination for the country and the
region. Advantages of the new approach to conservation of wetlands includes the
integration with other major provincial programmes including "Greening
Limpopo", identification and description of sites of ecological, cultural and
heritage significance and the Limpopo Mukumbi Industries projects.
The environment is everyone's business and we would like nothing more than
to see each of us playing their part in making Limpopo one of the best places
on earth. To enhance the environmental literacy of our provincial population
the Department has embarked on the Community Environment Development (CED)
Programme to support formal capacity building programmes to local government
structures. This will also include environmental awareness and education to
communities, schools and conservation groups.
The recent United Nations (UN) Report (March 2007) by a team of experts on
climate change has concluded that, "far more also needs to be done in the face
of the threats to human development posed by climate change".
"This is not a future threat, global warming is already happening and it has
a potential in many countries to roll back human development gains achieved
over generations."
Consumer support
We live in a consumerist economy loaded with the will to expend and acquire
material possessions. While this is not to be lamented, it poses new challenges
for many with no redress for their problems. In the previous tabling of this
vote, we made reference to our processes towards the establishment of the
Consumer Court in the province which we successfully launched later in
2006.
The Consumer Court is a mechanism to give you and I as consumers an
alternative and inexpensive route towards resolving consumer complaints and
problems. Our expectation is that our people in the province and retailers will
vest their confidence in the court as an impartial body with capable minds and
an able administration. Through our campaigns we are positively changing the
attitudes and understanding of consumers towards key consumer responsibilities.
During the previous year we have reached 2,6 million consumers through radio
talk shows, workshops, road shows, print media and circulating information
brochures. We have introduced the school drama competition on consumerism which
intended to capacitate youth who in turn will impart the knowledge to their
parents and the community at large.
Although we are educating consumers, we also ensure that there is compliance
in the trading environment as well. The Department has eight trade inspectors
who conduct active and proactive inspection in all businesses. The Department
of Trade and Industry has repealed existing laws and promulgated the National
Credit Act. Through this Act we hope to promote a fair and non-discriminatory
marketplace for access to consumer credit, to provide for the general
regulation of consumer credit, improved standards for consumer information and
to promote Black Economic Empowerment (BEE) and ownership within the consumer
credit industry.
Business regulation
We reported in the previous year that a task team has been established by
both the Department of Local Government and Housing and ourselves to fast track
the implementation of the Limpopo Business Registration Act No 5 of 2003. This
team encountered a number of challenges and could not finalise the appropriate
assignment of functions to municipalities. Subsequently, the Department
developed an alternative functional interim model to implement the Business
Registration Act. We are in the process of finalising the regulations and the
repeal of the National Business Act No 71 of 1991 to give effect to the Limpopo
Business Registration Act. This Act will subsequently enable business owners to
register their businesses.
I have indicated previously that we intend to assist established and new
businesses to be wholly compliant with the necessary applicable legislations
and tax matters. I would also like to take this opportunity to remind small
businesses such as liquor license holders and other general business owners to
take advantage of the tax amnesty, register your businesses and apply for tax
amnesty as the Minister of Finance has pronounced during his budget speech on
15 February 2006. The deadline for the amnesty is the 31 May 2007 and we would
like to encourage business to use this opportunity.
Liquor trade regulation
The liquor board has now moved to a position of strength wherein we have
administrative and compliance enforcement capabilities. It might be of interest
for members and the public to know that the liquor board has conducted 18
liquor board public hearings wherein non-compliance cases are heard by the
board.
Of the 18 cases heard, six liquor licenses were withdrawn and 12 are
awaiting judgment from the liquor board. There are 5 841 existing licensed
liquor outlets in the province that created 23 364 direct jobs.
It has been difficult for the Department to account for non-compliance
issues related to liquor matters because we mainly relied on South African
Police Services (SAPS) to deal with compliance issues. I am happy to announce
that, the Department has appointed nine liquor inspectors and we intend to
increase the number to 26. We have created a very sound relationship with SAPS
where we do hold operations and training jointly. We have conducted same
training to the designated police officers and liquor inspectors and in total
we have trained 95 compliance officers.
In line with the resolution of the Executive Council, where a concern was
raised of liquor outlets which are in close proximity of churches and schools,
the Department has embarked on a programme of consulting relevant stakeholders,
public and interested parties in order to find an amicable solution to this
problem. We will table before this House, the Limpopo Liquor Bill during the
course of this year to review the current National Liquor Act that regulates
retail sales and micro manufacturing of liquor.
Gambling industry
The gambling industry continues to contribute to the economic growth of the
province through job creation. Last year we spoke of the third gambling license
we intend awarding through the Limpopo Gambling Board which is destined for the
Sekhukhune District. Today we can report to the honourable House that all the
processes including public hearings are proceeding smoothly and the third
casino license will be awarded in the second quarter of this financial year. We
are currently busy rolling out the licensing of limited casino pay out machines
in the province. The aim of this process is to empower and create access for
small, medium and micro enterprises (SMMEs) into the gambling industry. The
co-operation we are getting from the law enforcement agencies as we deal with
the challenges of illegal gambling is commendable and highly appreciated.
We are encouraged that since the rationalisation of gambling activities in
the country, only a small percentage of the South African population are
problem gamblers according to the research conducted recently by the National
Gambling Board. In an attempt to go deeper in understanding the magnitude of
this problem we will conduct a focused research study on the socio-economic
impact of gambling in the province during this financial year.
However, we would like to warn our people against illegal and excessive
gambling that may result in various social problems which might even undermine
the integrity of the gambling industry. As a way of mitigating the challenge
faced by the victims of irresponsible gambling, we have introduced a programme
to support them through counselling. We will be tabling before this House the
Limpopo Gambling Bill during the course of this year.
International economic co-operation
Honourable members, you will remember that as a Department we are seized
with a responsibility to establish Limpopo as the most suitable and preferred
investment location in Southern Africa through the marketing of the province's
competitive advantages and its easy accessibility to the region's key
economies. We have as well been instructed by the PGDS to harness Limpopo's
strategic location as a gateway to Africa towards achieving the objectives of
NEPAD. We are humbled by the presence of our friends and partners from various
countries in this house today.
To this effect we have entered into Memoranda of Understanding (MoU) with
seven foreign regional States/provinces such as Gaza (Mozambique), Matabeleland
(Zimbabwe), Rhone Apes (France), Punjab (India), Anhui (PR China) and Henan (PR
China). We have also hosted four Japanese companies which were interested in
products of arts and craft. These companies subsequently bought 4 000
traditional African brooms and Venda traditional apparels, which was a huge
boost to our SMMEs.
Through the Limpopo Unemployed University Graduates Attachment Programme
(LUUGAP), three unemployed university graduates from our province were sent to
IJM Corporation in Malaysia for training. We also participated in the Namibian
Ogwendiva Trade Fair and our delegation included 12 business people who
interacted with their counterparts to seek and generate more business
opportunities to showcase what Limpopo could offer. It was a remarkable
experience when our province scooped two top awards of being the Best
International Exhibitor and the overall winners of the Best Stand. In March
2007 we also participated in the Japanese Annual Food Exhibition which was a
great success.
The inward delegation by Gem Granites (GM) of India opened opportunities for
Katlego Mineral Holding and other local stakeholders in the form of a joint
venture with GM. Furthermore, our mission to Botswana last year resulted in a
Limpopo company, Edge-to-Edge clinching a deal on livestock trading
technological device with a Botswana based company to the tune of R220 million.
The project which will also be extended to the rest of South Africa and beyond
will make a significant impact on government's endeavours to address
unemployment.
We are currently hard at work to create access for Limpopo's subtropical
fruits products into the Chinese market. Our recent March 2007 outward mission
to the People's Republic of China (PRC) has laid a solid base to unlock the
doors for our exporters. We look forward to the completion of the establishment
of a colour steel factory in Makhado by Chinese investors from the province of
Dandong. We commit ourselves to assist and support them in every step of the
way to grow our provincial economy.
Skills development
One of the major challenges that have hamstrung the capacity of our economy
is the issue of skills shortage. I must hasten to mention that this is a
worldwide trend as most economies are in an uprising. The provincial Human
Resource Development (HRD) Strategy was since developed in response to the
challenges partly presented by the current accelerated growth of the economy
and the slow pace at which the education and skills development institutions
are responding.
We are inspired by the private sector initiative called Tshipi Tooling
Limpopo Initiative which seeks to rehabilitate the South Africa Tool, Dye and
Mould Making (TDM) industry as a key growth stimulator for manufacturing and
technical skills development. This is a multi stakeholder provincial programme
providing a platform for achieving AsgiSA growth objectives for the
manufacturing industry. The economic importance of TDM cannot be overemphasised
especially in view of the provinces plans for value added manufacturing of
strategic resources and its potential for job creation. The national government
has undertaken to deal with the challenge of skills shortage through a Joint
Initiative for Priority Skills Acquisition (Jipsa) in partnership with business
and labour.
The Department is contributing towards the scarce skills development in the
province in line with the Limpopo Human Capital Investment Strategy. During
2006/07 we have managed to award 81 bursaries on various categories including
tourism, mining engineering, economics, environmental science, financial
management, small business development and information management. In
partnership with the Danish Development Agency and national Department of
Environment and Tourism we have enrolled 22 interns on Environmental Management
and Conservation Programme. In this financial year, we will also be embarking
on a learnership programme on info-preneurs that focuses on training youth in
the use of a software system called In-touch Africa, to capture SMMEs and
economic data in partnership with Council for Scientific and Industrial
Research (CSIR).
2010 Soccer World Cup
Honourable members, the window of opportunity heralded by the confluence of
the spiral economic growth and the advent of the FIFA 2010 Soccer World Cup
tournament has ushered in a new era in Limpopo and Polokwane in particular.
According to the 2007 edition of Limpopo Business magazine the following are
some of the major opportunities to benefit the province, R1 billion Peter
Mokaba Stadium, development of the two major hotels, development of the multi
million International Convention Centre (ICC), multi million regional shopping
mall and upgrading of local stadia for practice games. Our Department together
with Polokwane Municipality has moved a mileage with the process of the
development of the ICC. We anticipate kicking start with construction work by
July 2007 and completing before the end of 2009. In the last financial year we
spent R31 million on the planning phase of the project and we have been
allocated R102 million for the current financial year.
Limpopo has been allocated four matches in the spectacle and with practice
sessions in the townships, the second economy will experience rapid growth with
SMMEs as primary beneficiaries. Limpopo Business magazine goes further to
indicate that some of the developments which will benefit the province in the
long run are patrol fleet and traffic management equipments that will be
procured at a cost of R45 million, the 720 additional officers to be hired as
well as the French and Spanish language lessons in the offing as part of the
preparations. With the expectation of more than 100 000 visitors during 2010,
it is expected that the tourism industry will benefit maximally.
The tourists from various countries will go back as tourism ambassadors
marketing Limpopo across the globe which will bring more benefits beyond
2010.
SMMEs development
Our interventions to close the gap between the two economies through the
development of a thriving small and micro enterprise (SME) sector is beginning
to produce results. Our implementing agencies are hard at work against all odds
to uplift the downtrodden to occupy their rightful places in society. The
introduction of an incubation programme by Limpopo Business Advisory Agency
(LIBSA) has gone a long way towards rearing small enterprises to develop
capacity and achieve sustainability.
In the previous financial year, 180 enterprises have participated in the
incubation programme throughout our LIBSA branches in the province. In the
current year already 52 enterprises were registered to participate in the
programme in our newly established branches in Fetakgomo, Thabazimbi, Tubatse
and Aganang.
It is our great pleasure to announce that during the 2006/07 financial year,
LIBSA facilitated the sustenance of 1 030 jobs and created 111 new ones. The
co-operatives programme alone has created 480 jobs through the newly
established 15 co-operatives. However, the total number of co-operatives
created so far is 46. We do not only strive to help establish SMMEs, we also
provide training and capacity building to enable enterprises to run their
businesses along sound business principles and practices. During the period
under review, we have trained 514 enterprises.
In our endeavours to create access for the SMMEs to procurement
opportunities particularly in the mining sector, we have secured a commitment
from Anglo Platinum to assist our SMMEs. In the 2006/07 financial year, Limpopo
Development (LimDev) has approved 456 loans to the value of R106 million. This
intervention has helped create 2 100 jobs and maintained the existing 3 500
jobs. Our plans for 2007/08 is to create 3 500 jobs and furthermore maintain 4
500.
Our Department recognises a need for people in the deep rural areas to enjoy
the benefit of having a decent roof over their heads and therefore introduced a
rural housing finance vehicle to ensure that the people of the province can
have access to rural housing financial services.
Over the past financial year Risima Housing Finance Corporation, a
subsidiary of LimDev, delivered houses to 420 house owners at a value of R68
million. In the process 1 362 jobs were created and 3 406 jobs were maintained.
In the current financial year we expect to see these numbers grow by
approximately 10%.
LimDev has facilitated a total of R95 million private investments through
public private partnerships (PPPs) in the past financial year. These
investments are in projects such as Bopedi Shopping Centre, a PPP project which
established a shopping centre in Ga-Nkoana at a total cost of R55 million. This
project has created over of 350 jobs. The enterprise has facilitated an
investment into a company which created a shopping centre in Mokopane at total
cost of R57 million. This project has created 400 jobs. During this year the
enterprise will revamp the Thohoyandou Shopping Centre and Giyani Shopping
Centres to ensure that they remain competitive and create the much-needed
number of jobs.
The enterprise has a total of 600 000 m2 of lettable space in properties
spread all over the province. This is aimed at supporting SMME development by
providing space for trading and manufacturing activities. These facilities has
created 700 new jobs in the past financial year and has maintained another 8
000. Our parastatal LimDev has got holdings in a number of mining activities
estimated at around R1 billion in value in the province through its subsidiary
Corridor Mining Resources (CMR).
These holdings are in projects that are aimed at exploiting the rich mineral
resources in the province for the benefit of the local people. The intention is
also to ultimately have this in private hands in line with the mandate and
vision of the enterprise. However, these are some of the projects which will be
subjected to the unbundling process which I will talk about later.
Restructuring of parastatals
Honourable members, the Premier has pronounced during his SOPA that, "We
undertook to initiate the process of redefining and refocusing parastatals to
equal the task at hand. Work has been done in this regard and we are now at a
point where a viable option has been agreed upon and has to be implemented.
This option entails the amalgamation of LimDev, TIL and LIBSA in order to
reinforce their productive capacity and contribution to the provincial economic
development."
To this end we have put systems in place to fast track the process and bring
to finality the restructuring of our provincial parastatals. We hope to
complete this process by the end of the year and begin the next financial year
under a new regime governing the newly established amalgamated entity. We
commit ourselves to roll out this process in the most professional, caring and
humane manner to avoid any undesirable consequences.
Unbundling of LimDev assets
It is critical to mention before this house that Great North Transport, a
subsidiary of our parastatal LimDev, has transported a total of 36 million
passengers in the province in the past year most of whom are workers in the
provincial economy and students. It has also provided about 1 200 jobs. This
service has provided a critical backbone for economic development in
Limpopo.
However, in line with the Executive Council resolution our Department has
been spearheading the processes towards the commercialisation of Great North
Transport in the recent past that has proven to be more complex than we had
expected. This has resulted in a challenge to meet targeted time frames to
complete the process. However, we are proud to announce that we have firmed up
our efforts in partnership with the national and provincial departments of
transport, labour and professional transaction advisors and therefore ready to
invite potential bidders by the second quarter of the financial year.
Over and above GNT, LimDev owns a variety of assets which some we made
reference to earlier that must be unbundled in line with the Premier's
announcement. These assets include among others mining shares and commercial
properties which must be commercialised to create an opportunity for Broad
Based Black Economic Empowerment (BBBEE). We are also proud to announce that
before the end of the first and during the second quarter, we will go public to
invite bidders to seize these opportunities to benefit historically
disadvantaged citizens of Limpopo. We have drawn great lessons from the process
of commercialising GNT and it is our considered view that we are more ready and
sufficiently competent to be equal to the tasks ahead.
Budget allocation
During the tabling of the 2007/08 budget speech, the MEC for Treasury has
allocated the economic sector R4,296 billion or 18% of the equitable share. Of
this amount, economic development, environment and tourism accounts for R759,6
million.
Based on our annual performance plan for 2007/08, this is how these funds
will be allocated and utilised to achieve our plans:
Administration: R210,667
Integrated economic development services: R131,784
Trade and industry: R154,329
Business regulation: R35,790
Environment and tourism: R227,010
Parastatals:
LIMDEV: R80 million
LIBSA: R24 million
LGB: R26 million
LTP: R42 million
TIL: R30 million
As we said in the beginning, 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.
Service delivery
In making us a true service arm of the government, we constantly reaffirm
our obligation to the Batho Pele principles and all other related service
delivery instruments at our disposal. We have and continue to encourage our
staff to regard service excellence as a major driver for service delivery in
the public service. This is not a position that can be compromised or whose
battle lines can be realigned in compromising the services that our people are
entitled to. We have taken the battle beyond the confines of our offices into
the coalface of service delivery in numerous ways, assisting community groups
and entities to better manage and contribute to the provincial economy.
In an effort to revitalise the Batho Pele programme and inculcate service
delivery culture in the Department, we managed to train 70% of our staff on
change engagement programme. This was not a once off programme but will remain
a way of doing things for the Department as we are striving for service
delivery improvement. We are continuing to strengthen our capacity and
capabilities, through employment of people with relevant skills. Although the
Department is still facing challenges on meeting the equity targets, we have
strengthened the recruitment mechanism through the developed human resources
plan and revised our equity targets which will ensure that we have
representivity in the workforce. We are also continuing to create awareness and
to have an informed workforce on HIV and AIDS as part of our Employee Wellness
Programme.
The Batho Pele programmes and Service Delivery Improvement Programme were
fully implemented and the Department was awarded a prize for best service
delivery team during the recent Premiers Excellence Awards. These awards are an
inspiration to us and we will continue to participate in creating models of
best practice in the province.
Conclusion
If indeed it is true as indicated in the UN Human Development Report 2006
that "just over a hundred years ago London, New York City and Paris were
centres of infectious diseases with diarrhoea, dysentery and typhoid fever
undermining public health" then we have no reason to doubt our capacity to
exceed their current state of development. We are more fortunate and better
placed, because for our development to become a success, we do not have to rely
on imported and exploited slaves from other parts of the world. Our development
is about people and people are the real wealth of our nation. Any development
that is worthy of success, must be about and be driven by the people.
Our resolve to empower our people in any possible form remains unshakable,
our commitment to the broad objectives of the PGDS unrepentant as we seek new
and innovative ways to bring to our people, a better life that they certainly
deserve. Victory is certain.
I thank you!
Issued by: Department of Economic Development, Environment and Tourism,
Limpopo Provincial Government
8 May 2007
