D Africa: North West Economic Development and Tourism Prov Budget
2007/08

24 May 2007

"Accelerating the implementation of second economy interventions"

Honourable Speaker and Deputy Speaker
Honourable Premier
Honourable colleagues in the executive and legislature
Mayors and local government leadership present
Boemedi jwa ntlo ya Segosi mo Profenseng ya Bokone Bophirima
Ditlhogo tsa mafapha
Chief executive officers (CEOs) of our parastatals
Business leaders
Religious and faith leadership present here today
Leaders of other civil society formations and Non-Governmental Organisations
(NGOs)
Distinguished guests
Comrades and friends
Le Baagi ba Bokone-Bophirima

Introduction

"Why have you failed?" A World Bank expert asked Julius Nyerere, the former
President of Tanzania at a Washington meeting.

He replied, "The British Empire left us a country with 85% illiterates, two
engineers and 12 doctors. When I left office in 1985 we had 9% of illiteracy
and thousand of engineers and doctors. At that point our income per capita was
twice what it is today, after the structural adjustment programme. We now have
one third less children in our schools and public health and social services
are in ruins. During those years Tanzania has done every thing that the World
Bank and the International Monetary Fund (IMF) have demanded.

"So I ask you, why have you failed?" (From a book by Margaret Legum called
it doesn't have to be like this, a new economy for South Africa and the World)
South Africa will never have to be asked such a question. The initiatives we
have taken so far provides a firm basis for our country in general and our
province in particular to succeed and doing so with our own homegrown
solutions. The Provincial Growth and Development Strategy (PGDS), Accelerated
and Shared Growth Initiative for South Africa (AsgiSA) and a raft of the other
policy interventions are key if we are to eliminate the possibility of the
question, why have you failed?, posed to us by the masses of our people and not
the World Bank or the IMF.

Madam Speaker, tomorrow we will join millions of people across the African
continent to celebrate Africa Day. This year, Africa Day is even more
significant as it takes place against the backdrop of celebrating the 50th
anniversary of Ghana's liberation. Ghana's liberation in 1957 signified the
beginning of victories across the continent when many African States began to
break the yoke of colonialism, freeing their people from many years of bondage.
Africans have since never stopped searching for African solutions to their
development challenges. Some such solutions include the New Partnership for
Africa's Development (Nepad) programme aimed at bringing about economic changes
that will certainly fast track poverty-stricken nations out of the cauldrons of
impoverishment.

This is a totally different Africa from the one the World Bank and IMF
wanted to create.

Macro-economic indicators

Madam Speaker, our Department continues to take the leadership towards the
achievement of a 6,6% economic growth target by the year 2014. In partnership
and the spirit of co-operative governance with other clusters and departments
in our government, we are confident that this is achievable as long as we
continue to optimise the resource allocation and monitor its disbursement
periodically.

Economic indicators

In 2005, South Africa reported a 5,1% gross development product (GDP) and
that is R171,507 million which declined slightly in the 2006 GDP report of
Statistics South Africa (Stats SA) to 5%. The GDP for the North West province
in 2005 has been calculated at 5,1%, i.e. R69,9 million an increase from the
4,9% GDP of 2004. This is a 1,1% increase in economic growth from last
year.

We need to grow at approximately 5,3% per annum on average to achieve our
Provincial Growth Development Strategy (PGDS) economic growth target. These
growth figures show that we are on course towards achieving our goals, of
course with a little more effort. This significant increase in contribution had
placed the North West fourth following Western Cape, Gauteng and KwaZulu-Natal
provinces. This is a good improvement compared to its previous firth position
in the preceding year, indicating the right direction in which the provincial
economy is moving. It is encouraging to note the North West grew at the
national average in 2005, hopefully to surpass the 1,1% national decrease to
4,9% total average gross value added (GVA) in 2006. We eagerly await the 2006
economic growth indicators which are due to be released later this year.

Employment levels in the North West province

Unemployment in the country currently stands at 25,6%. The labour force
survey of March 2006 conducted by Stats SA, shows that the largest employment
in the North West province was in the trade/wholesale sector followed by
community services sector, private households and mining. This shows a positive
step towards diversifying the provincial economy away from dependence on
primary mining. Whilst challenges of absorption in other sector remain, we are
confident that we will succeed in dealing with the issues of unemployment and
poverty in the said period.

Sector specific indicators

The major economic sectors in the North West province are mining and
quarrying, tourism, manufacturing, construction and agriculture, accounting for
almost more that half of employment in the province.

The manufacturing sector accounted for approximately 7% towards the economy
of the North West province in 2005, after a 1,2% decrease in sector growth from
2004.

The insignificant increase in the manufacturing sector's contribution to the
national economy of 18,2% in 2005 to 18,6% in 2006, does not provide much
comfort for the future. The North West province will have to support this
sector better if it wishes to grow the sector with an average close to the
national average of 4,8% increase in 2006 growth.

Mining and quarrying, the flagship economic sector of the North West
province continued to contribute approximately 25% to the provincial economy in
2005. This sector contributed 7,3% and 7,9% in 2005 and 2006 respectively to
the country's economy, with a -0,7% growth rate in 2006. The North West hopes
to reduce its dependence on the mining sector, with an increased
diversification to tourism and non-mining related manufacturing industries,
evident in the 4,5% growth in the sector.

The agricultural sector contributed 2,9% to the provincial economy in 2005,
whilst its contribution to the national economy remained at 2,7% for both 2005
and 2006. The North West province should be able to increase the contribution
of this sector to the Gross Geographic Product (GGP), as a trade off against
mining. The 4,8% sector growth in 2005 provided positive signs that more can be
done if the plans in the pipeline for various agro-processing initiatives could
be given impetus towards the realisation of this goal. South Africa saw a
-13,1% growth of this sector in 2006, given the various price hikes that made
the sector less attractive amongst them maize, wheat and the price of
diesel.

The construction sector increased its contribution to the national economy
from 2,4% in 2005, to 2,6% in 2006. This saw a satisfactory increase of the
sector's growth rate of 13,3%. This sector however grew at 8,5% in the North
West province in 2005 contributing 1,7% to the provincial economy, a growth
rate that stagnated from 2004 to 2005. Hopefully the big increase on the
national average, will translate into a sizable increase for the province when
the 2006 figures are released later in the year.

The tourism sector accounted for 13.6% of the Provincial economy while the
sector's contribution to the national economy saw an increase of 0,7% from
21,4% in 2005 to 22% in 2006. The tourism sector showed an 8.,3% growth in 2006
nationally, a positive sign hoped to reverse the decline of the sector between
2004 and 2005.

Geagte mevrou die voorsitter, ons posisioneer steeds ons mandaat binne die
verskeie nationale belydsriglyne soos aangedui deur die ekonomiese bedrywighede
en werkersgroeperings asook binne die versnelde en gedeelde groei-inisiatief
van Suid Afrika ook bekend as AsgiSA en die provinsiale groei- en
ontwikkelingstrategie beter bekend as die PGDS. Soos reeds aangedui wy ons die
nuwe finansiële jaar toe aan ons doelgerigte pogings om die tweede
ekonomie-intervensies te implementer met die gedeelde visie en doel om
werkloosheid en armoede te verminder. Die departementele programme wat voor
hierdie huis gelê word, sal aandui hoe sinergie ons vooruitgang sal versnel ten
einde die doel te bereik.

Second economy interventions

Madam Speaker, in the previous financial year we paid greater attention to
small enterprise development. This was done as an attempt to ensure that more
people especially women and the youth are empowered. Various projects which are
currently at varying stages of development are going to benefit from the
Tsogang Lo Itirele Fund.

Our focus, between now and 2010 will be to give more support to small,
medium and micro enterprises (SMMEs) in the tourism and hospitality sector.
About R35 million over the medium term expenditure framework (MTEF) period will
be set aside to intensify our interventions in this regard. If we are to grow
the second economy we will need more to support emerging entrepreneurs. It is
evident that as government, our efforts in the second economy are not yielding
the desired result, because of lack of co-ordination and effective
monitoring.

We will also convene a summit entitled, "SMME development, local growth and
the second economy" to fully develop and formulate strategies which will help
us achieve our objectives to address challenges in the second economy and
respond adequately to the AsgiSA imperatives including the objective we have
articulated in the PGDS, especially those pertaining to our mandate.

Creation of a comprehensive SMME database in the province

The cross cutting nature of SMME responsibilities continue to pose a
challenge with regard to the co-ordination of activities and this also affect
access to important information to be used for planning purposes. An example of
this is the absence of an accessible SMME database for the province. With
regard to the creation of a comprehensive database, the Department through the
Small Business Development Unit managed to collect some business related
information from SMMEs and is in the processing of compiling the database. This
ongoing process requires that all stakeholders be engaged.

Financial assistance for SMME through "Tsogang Lo Itirele Fund"

Finance is one of the key issues facing SMME in the province and the efforts
of the provincial government to make direct intervention in this regard has
culminated in the establishment of the Tsogang Lo Itirele Fund. We are pleased
to inform this august House that the Tsogang Lo Itirele Fund we announced last
year is beginning to make strides in helping our small businesses. Although we
took time to implement this fund, understandably so, three beneficiaries were
awarded bridging loans of R285 000. We are currently considering 20 proposals
that would be receiving funding in the next three
months of which comes from Bophirima amounting to R1,9 million, seven in
central region amounting to R2,8 million four from Bojanala amounting to R1,6
million and four from southern region amounting to R2,5 million.

In order to improve accessibility of the fund, office space has been
allocated in the departmental building and will soon be operational.

Acceleration of project implementation

Madam Speaker, in order to strengthen project management in the Department,
a departmental project co-ordinating committee has been established to focus on
project planning, management and implementation in line with project management
principles. This direct intervention seeks to minimise challenges facing SMME
related projects as well as anchor projects funded by the Department. These
projects will also be updated on the provincial and departmental project
registers.

As part of our efforts to ease access to SMME services, the Department
re-engineered the small business unit to be able to directly deal with queries
on projects, funding and SMME support and officials have been dedicated to
handle all queries and referrals. A total of 343 enquiries were received and
recorded according the following categorisation:
* Business Plan Development: 165,
* Funding: 167
* Business Registrations: 65.

Efforts to facilitate financial and non-financial support for SMME have been
intensified. Meetings were held with funding institutions to facilitate the
financial resourcing of small businesses. A dedicated team, the Micro Finance
Forum, has been set up to engage funding institutions on a regular basis
through forwarding business plans to potential funding agencies for joint
funding. This included the National Empowerment Fund (NEF) and Industrial
Development Corporation (IDC). This Micro Finance Forum has recently been
established and to this end, two forum meetings were held in the Central and
Bojanala districts. These two districts will join the southern district to
consolidate their business plans. We are committed to strengthening the Micro
Finance Forum.

The Wild Silk Project

Maano a rona a go tsweletsa pele projeke ya wild silk, a tswela pele sentle.
Re tla aga madirelo a go dira wild silk kwa Genyesa mo ngwageng ono wa
dichelete. Factory architectural designs have already been completed.
Geotechnical and civil work have been finalised. The marketing strategy and
business plan for small-scale operations have been finalised. Madi a tlaleletso
a kana ka R1,7 million a tla ntshiwa ke lefapha, Bophirima District
Municipality le Kagisano Local Municipality go tsweletsa kago ya madirelo a.
The process for the registration of the silk trademark is being pursued. An
expert from Namibia will be engaged in this process.

The Madikwe Sisal Project

The project was successfully commissioned in the year under review. The
Department assisted the project to draw up the project operational plans,
establish production control systems, come up with systematised production
process to determine production targets and discuss financial statements. A new
five-hectare nursery was developed and the plants will be used in the
development of another sisal plantation.

A total of 100 temporary jobs were created for the period ending November
2006 and when individual work contract expired, 20 of them were reabsorbed on
temporary basis on the commitment that as orders increase, more will be
reabsorbed on a temporary basis. Currently there are 28 full time employees in
addition to the 20 temporary jobs created.

SMME development interventions

The Department is part of the team that facilitated the securing of R98
million from the National Skills Funds to be used towards funding skills needs
of PGDS/AsgiSA projects earmarked to support the PGDS. The above skills fund is
earmarked to fund different projects facilitated by different departments. As
part of this fund, R17,5 million has been allocated towards skills needs for
the bio-diesel projects managed by the Department.

As part of interventions to strengthen skills development and build capacity
for funded projects, skills needs for projects have been packaged submitted to
Department of Labour for assistance.

The Department participate in the co-operative development and information
and communication technology (ICT) skills programme driven by the presidency.
The programme seeks to fund ICT training towards the development of ICT
co-operatives. A total of 40 North West beneficiaries are currently trained in
trenches by the Presidential National Commission on ICT (PNC).

The Department in conjunction with the Companies and Intellectual Property
Registration Office (CIPRO), managed to reach 350 existing and aspiring
entrepreneurs and disseminated information on company registration, protection
of intellectual property, registration designs and CIPRO branding. Several
workshops were held with the South African Revenue Service (SARS) on the tax
amnesty for SMMEs.

Merafong Relieve Programme

The unit led a delegation to the Merafong Relieve Programme meeting with the
Merafong Local Municipality. The meeting was intended to receive a report from
the municipality on the extent of damages to properties as a result of the
uprising in Khutsong when Merafong was incorporated into the North West
province. The unit established a task team that would address issues relating
to SMME development centre, relocation of hawkers and mobilisation of resources
for Khutsong businesses destroyed during the uprising.

Tourism development and 2010 approach

Madam Speaker, tourism continues to be a growth sector in our country and a
focus sector for AsgiSA. The number of international tourists visiting the
province declined from 780 000 in 2004 to 586 437 during the 2005 tourism year
but increased to 599 709 in 2006 and is projected to increase to 671 305 in
2007. This decline is dictated to by the following market fluctuation
factors:
* decline in visitor arrivals from Botswana, our primary source market within
SADC which has had an impact on shopping tourism in the province,
* the under-resourcing of the tourism marketing mandate which limits both
ability and spent to increase demand,
* collapse of the following air routes:
a) OR Tambo International to Pilanesberg International Airport
b) Cape Town International Airport to Pilanesberg International Airport
and
Hoedspruit
c) Cape Town International Airport to Pilanesberg International Airport and
Livingstone in Zambia.

Strategies will be developed to revive these routes looking at possible
benefits during the 2010 FIFA Soccer World Cup.

Challenges/interventions in tourism marketing

The national Department of Environmental Affairs and Tourism in partnership
with the province has commissioned a feasibility study to determine the
viability of tourism air routes including maximum utilisation of non-Airport
Company of South Africa (ACSA) airports in the promotion of tourism.

The following air routes in the province will be subjected to investigation
as part of the study destined to be completed in August 2007:
* Durban International to Pilanesberg Airport (scheduled flight)
* OR Tambo International Airport to Madikwe Game Reserve (scheduled
flight)
* Cape Town International Airport to Mafikeng International Airport and
Pilanesberg Airport (scheduled flight).

In 2005, the province recorded the largest net flow of total direct domestic
spend of R200 million in the third quarter (inflow was R650 million and outflow
was R450 million) placing the province in the third place after Gauteng and
Western Cape. In 2005 there was an estimated 36,2 million domestic trips. The
North West market share is 9,3% placing the province in the third position
behind KwaZulu-Natal province (35,9%) and Gauteng (70%). This represents an
increase of 3,3% domestic trips in the province compared to 6% in 2004.

The province remains on course to achieve the 2010 targets as agreed between
the Department and the board. This includes increasing international tourist
arrivals from 599 709 to 679 767 in 2007 and domestic trips from 3,3 million to
3,84 million in 2007.

The gaming and gambling environment

Madam Speaker, a new board of directors for the North West Gambling Board
has been appointed and is now fully functional. One of its priority areas is to
look into the manner in which levies are currently being paid by operators to
ensure compliance with legislation and ensure that outstanding levies are
recovered. It will be realised that this is one of the issues that have been
long outstanding and which need to be concluded. In this new financial year
following significant losses to our revenue base, we will review the current
casino levies and certainly engage the sector to ensure common understanding of
how and why we intend introduction increases and adjustments.

Another area that remains a priority of the board is to ensure that all
casinos in the province contribute to needy causes and projects identified by
the board. Contributions are made at the rate of 1% of after profits at the end
of each financial year. A total of R9,5 million was contributed by casinos to
various needy projects in the province as at the end of June 2006. Audits were
conducted as scheduled and reports and findings were communicated to the
licences accordingly. Revenue audits on totalises and bookmakers were conducted
on 24 Oct to 31 Oct 2006.

I regrettably have to inform this august house, Madam Speaker, that the
process of rolling out the Limited Paying Machines (LPMs) is a matter that
still has to be revisited by the Board. It has been my view to the Board Madam
Speaker that in considering the bids as submitted, the board must ensure that
government policy towards compliance with the Broad Based-Black Economic
Empowerment (BBBEE) policy to allow participation of the previously
marginalised members of the North West community in the gaming industry must be
a priority, especially the small operators in the industry. The roll out of the
LPMs should allow us to address the issue of illegal operations. This will
ensure further generation of revenue to the fiscus and additional resources for
development in the North West province.

One of the issues that also remain key is the need to maintain the necessary
awareness on the negative impacts of gambling on our society and to guard
against people in the province falling victim to gambling addiction. For this
purpose, I have directed that the gambling board should introduce a youth
education programme on gambling in our high and primary schools in the
province. As previously mentioned, discussions with the National Programme on
Responsible Gambling (NPRG) have since been initiated to discuss roll-out to
schools.

Illegal gambling activities remain one of our biggest problems in the
province, which continue to contribute negatively to the ability of the board
to increase its revenue collection. Our biggest challenge in this regard is
that the current North West Gambling Act does not lend itself adequately
towards the enforcement of compliance in the province. This discovery has
therefore necessitated the need to amend the current North West Gambling Act of
2001 to make sure that it is aligned with the promulgated National Gambling Act
of 2005. On the one hand, we will use legislation to deal with this matter
simultaneous to the use of LPM to create space for those who want to operate
openly and overtly.

Regulatory and governance

We are responsible to ensure that every citizen in the province has access
to basic consumer education and other services related to consumer protection.
The Department will embark on outreach programmes in an endeavour to reach out
and disseminate information to rural communities.

726 consumer cases were received in 2006/07 financial year, 643 of which
were closed.

Consumer clinics were held and workshops and advisory sessions continue to
be conducted to various consumer groups. We have reached over 10 000 consumers
through lectures and workshops. 70 consumer awareness lectures were also
conducted targeting mostly the central, Bojanala East and west, whilst the
southern and Bophirima districts were targeted on an ad hoc basis. This
awareness reached approximately 8 155 consumers.

The Department also conducts quarterly operation cleanup with other
regulators to inspect stores for non-compliant products. These types of clean
ups were intensified during March 2007 when we were celebrating the
International Consumer Rights Day.

Approximately 400 non-compliant sets of cellular phones were confiscated
around this date throughout the province.

One of the strategies adopted by the Department towards creating consumer
awareness and intensifying outreach programmes is through the establishment of
voluntary consumer bodies. Five such recognised voluntary consumer groups
are:
* the Atamelang Voluntary Consumer Group, central region
* the Tlhabologang/Coligny Voluntary Consumer Group, central region
* the Khunwana Voluntary Consumer Group, central region
* the Segwaelane Voluntary Consumer Group in the Bojanala region
* the Bojanala East Region Voluntary Consumer Group in the Bojanala
region
* the Huhudi Voluntary Consumer Group in the Bophirima District.

The major challenge for the Department is the usual capacity constraints. We
will, however, endeavour to introduce multi skilling programmes for all of our
officials with common areas of operations as a short to medium term solution
towards addressing capacity problems. The long term strategy is towards
increasing staff in order to be effective on the ground.

Madam Speaker, whereas previously our efforts were towards amending the
current Provincial Consumer Affairs Act (Harmful Business Practices) Act No 4
of 1996, it has since been observed that this Act requires a complete overhaul.
The intention is therefore to repeal this Act and substitute it with a new one
which should be ready by the end of July 2006 for consultation. One of the long
outstanding matters in the Department has been the functioning of a "Consumer
Court" in the province. Whilst this court was indeed launched, it has also been
found that this court is not established or recognised in terms of an Act of
Parliament. The new legislation will therefore provide for the consumer
tribunal which has special powers to adjudicate over case of prohibited conduct
or unfair business practice.

Madam Speaker, the Department has been successful in the implementation of
the BBBEE policy through licensing. At least eight out of 10 licences issued
were subject to BEE compliance. A total of 1 497 liquor licence applications
were received and recorded during the financial year under consideration.
During the year, 1 256 were approved, 452 applications were refused whilst 52
were postponed for inspections or appearance before the board. 878 new licences
were issued and 117 certificates of transfers and 12 certificates of removals
were issued.

Co-operation with the South African Revenue Service (SARS) was strengthened
with respect to the collection of liquor fees. A total of R2,3 million was
collected in revenues between April 2006 and March 2007 in respect of renewals,
new licenses, transfers and removal certificates. 105 inspections were
conducted by the liquor inspectorate and 27 joint operations conducted with the
South African Police Service (SAPS) for the period under review. Seventeen
complaints were received and dealt with by the board.

No less than 27 joint operations were conducted around Mafikeng,
Potchefstroom, Zeerust and Rustenburg, Mankwe, Madikwe, Bafokeng, Morokolong
(Moretele), Bothithong (Kudumane) areas with SAPS and other organs of
State.

Madam Speaker, while the Liquor Act 27 of 1989 provides for the legalisation
of taverns under the on-consumption license, shebeens remain illegal in terms
of this Act.

However, the Department is in the process of developing a liquor policy for
the province which will amongst others consider the process of legalising the
shebeen industry.

Service delivery improvements

Madam Speaker, in an attempt to increase internal capacity the Department
has increased its staff complement from 119 in the previous year to 145. All
key strategic management positions have been filled except the Head of
Department (HoD) and the director project management positions.

We are, however, at an advanced stage of filling these positions. This will
improve our service delivery and organisational effectiveness.

We are also in the process of strengthening our organisational structure
further by upgrading our existing regional offices to focus on all economic
development issues at local level. This effort will be further consolidated by
the utilisation of the recently acquired mobile office. A local economic
development (LED) unit will also be established within the Department.

This unit will deal aggressively with all economic development challenges at
local level.

There will be a close collaboration with municipalities and the relevant
departments. I must announce, Madam Speaker, that during the Small Business
Month (July 2007) we will be awarding certificates to the LED officials who
have successfully completed their 2006 University of South Africa (Unisa)
economics and public finance course. Due to the importance of this course, we
have sponsored a second group of the LED officials for 2007. We intend
establishing a long-term relationship with Unisa.

The national Department of Trade and Industry (dti) will also join us when
they award certificates to LED officials who have successfully completed the
2006 dti / Small Enterprise Development Agency (SEDA) co-ordinating course. The
above interventions are intended to address lack of capacity and to strengthen
LEDs as a way of addressing barriers to second economy improvements.

As we announced at the last year's budget speech that we will make strides
in enhancing employability of young graduates, we were able to fund bursaries
for five students who are currently doing a tourism masters degree programme at
the North West University.

After completion they will be absorbed in the regions to boost capacity in
the tourism sector for the first two years. We are currently engaging public
entities to ensure that skills acquired build tourism capacity. The challenge
for skills shortage has also been identified by the PGDS skills development
working group.

I am pleased to report that we are working on a strategy that will realise a
return on this investment. We are pursuing negotiations with the North West
University (Mafikeng Campus) to enter into a Memorandum of Understanding (MoU)
in areas of Entrepreneurial Development and Management Development
Programmes.

We have also managed to provide internships for 21 unemployed graduates and
we are proud to indicate that by the end of the last financial year 47,62% of
the internship programme learners have been absorbed into permanent jobs both
in the public and private sector. We have advertised for thirty learnership
positions for tourism guide and new venture creation for the 2007/08 financial
year.

Scarce and critical skills

We are facing challenges of competing with private companies in attracting
human capital with scarce skills in the province. It is a daunting task to find
qualified development economists, statisticians, project managers and
researchers in the Department. It has taken the Department a long time to
acquire these skills. There is, therefore, a need for government to be able to
retain such skills after acquisition by introducing incentive programmes. We
sincerely hope that the single public service approach will address these
challenges.

It must be noted that the problem of scarce skills retention is not only a
provincial one, but affects the national sphere as well. Recently the National
Tourism Skills Development Conference held in Gauteng, also highlighted issues
of scarce and critical skill as a problem facing human resource management in
the country. It is also has been highlighted by AsgiSA as a critical
limitation.

Lessons from the departmental imbizo programme

Madam Speaker, the last part of last year (2006) and the beginning of this
year (2007) was dedicated to imbizo's and road shows. In all the four regions
we also targeted business communities. The purpose of this was to look at our
budget and how we can address the challenges that are facing us. Also it was
critical to engage with different stakeholders to get their inputs for this
budget speech. Subsequent to this we did an audit of questions. There were more
about opportunities available in government and the information flow to
communities about programmes we have in government as a whole.

In response to this, as a department for this financial year 2007/08 we have
taken a decision, that above the radio programme that we have every week since
March 2006 we are going to embark on an aggressive outreach programmes
especially for the depressed areas such as in Bophirima, Central, some parts of
the Bojanala and southern regions.

Furthermore, Madam Speaker, as much as we are challenged in government to
empower our communities we cannot do this alone. There have been business
communities who are committed to assist us in pursuit of achieving the mandate
of the Department. National African Federated Chamber of Commerce (NAFCOC) in
one of the business road shows committed themselves to adopt one municipality
as a pilot and work together with the Department. We will be exploring this
commitment further and their first meeting will be with Greater Taung
Municipality around June 2007.

Madam Speaker, we have noticed that we have a very weak NGO sector that can
disseminate information to communities on our behalf. We will explore this
sector to see whether they cannot be encouraged to be of assistance in this
regard.

After these imbizo's we noticed that most people who are in business are
men, while women, youth and the disabled are excluded. This call for both the
disability desk and our Department to research what solutions could be
developed.

We have noted with concern the fear expressed by SMMEs in the province
regarding the high takeover rate of small businesses by the so-called
foreigners especially in the retail sector, (tuck shops). The Department will
embark upon a snap survey to asses the situation.

State owned and supported enterprises North West parks and tourism board

Madame Speaker, amongst its achievements the board records that:
* Between 2003 and 2005 the provincial tourism and travel industry supported an
estimated 72 800 direct jobs and 145 599 indirect jobs. It is estimated that 82
704 direct jobs and 165 408 indirect jobs were sustained in 2006.
* In 2005, R2,88 billion was realised in terms of total revenue through both
international visitor arrival and domestic trips in the province. The target
for 2006 is R2,93 billion.

Challenges/interventions to tourism development and investment approach

Some of the issues and challenges dealt with in this regard are:
* The purchase of the Taung Hotel School has been approved by Executive Council
(ExCo). Negotiations with the Provincial Treasury are ongoing to secure the
required R11 m to purchase the hotel and its related facilities. We hope for a
positive impact of this move on Taung and the local economy.
* The Dirapeng Subsidiary Company will finalise the consolidation of its assets
so as to increase the group asset base from R432 million to R490 million in
2007. This includes facilitating Black Economic Empowerment (BEE) and Previosly
Disadvantaged Individual (PDI) investment growth in group asset base by 2,1% in
2007.
* 83 applications for learnerships have been lodged with THETA for the 2007
tourism year ending in March 2008.
* The Highveld National Park will be launched this year. Key issues that
require finalisation include institutional framework and operational funding of
the park. R8,5 million has been spent to date to create the park
infrastructure.
* A comprehensive development plan at a cost of R1,2 million has been completed
for the Bloemhof Dam Nature Reserve. The plan will leverage investment in the
Waterfront development in anticipation of the World Angling Championship in
2008 to be hosted at Bloemhof Dam Nature Reserve.
* The first phase of the Lotlamoreng Dam was completed at a cost of R4,5
million. This included fencing of Lotlamoreng, collapsing of redundant
infrastructure and creating access road and gates. The second phase will
include finalising a comprehensive development plan for Lotlamoreng Dam and
other facilities.
* An Environmental Impact Assessment (EIA) report and comprehensive development
plan have been completed for the Taung Dam protected environment at a cost of
R2 million. The next phase is to finalise the site for construction of
infrastructure and tourism products in 2007.

Key policy/strategic interventions for the industry for 2007

Madam Speaker, some of the key policy interventions for the new financial
year will include:
* finalisation of the branding and repositioning strategy for the marketing of
the province as a viable tourism and investment destination,
* review of the Tourism Marketing Strategy for the province,
* finalisation of the tourism organising plan for the 2010 FIFA South Africa
World Cup,
* fast tracked tourism grading system in the province so as to meet the FIFA
accommodation and transport requirements,
* development and implementation of the tourism events strategy which will
explain the collaboration between the board and the relevant provincial
department in projects such as Jazz Africa Heritage (JAH). Finalisation of the
feasibility study to investigate social history tourism in the province.

The North West Development Corporation (NWDC)

Madam Speaker, the Department is facilitating the transfer of municipal
infrastructure and its associated liabilities with the Development Bank of
Southern Africa to the Moses Kotane Local Municipality and the Gauteng province
for Babelegi and Ga-Rankuwa infrastructure. The successful completion of this
infrastructure transfer together with its outstanding liabilities with the
Development Bank of Southern Africa (DBSA), will signal the completion of the
NWDCs financial turnaround.

Currently, we as a Department are in discussions with the provincial
governments of the Northern Cape, Mpumalanga and Gauteng in respect of those
properties that the NWDC owners in Garankuwa, Babelegi, Marapyane and
Mothibistadt. The position of the North West provincial government remains that
these properties will remain the assets of the NWDC. The areas affected by
demarcation accounts for 42% of the NWDC's income. The NWDC funded its entire
operations from own revenue, largely as a result of the income generated from
Garankuwa and Babelegi. Therefore, as a company the NWDC will not transfer
these assets but will rather sell them to realise revenue to meet its
liabilities.

With respect to the turnaround of the NWDC, Madam Speaker, it can be
reported since the termination of the judicial management order on the 27 April
2005, the NWDC has recovered financially to a point where it resumed repayments
of its liability to the DBSA from 1 April 2007. This is remarkable bearing in
mind that the NWDC did not honour its DBSA loan repayment commitments between a
10-year period May 1998 and March 2007. We are indeed proud of recent
developments in the NWDC.

The Department is finalising the conversion of the NWDC's debt to the
government of the North West province into equity. This will together with the
above capacitate the NWDC financially to resume its rightful role as vehicle
for PDGS delivery within the manufacturing and trade sectors, including
industrial development. I will talk to my colleague in finance about these
particular matters.

Proposed merger between the invest North West and NWDC entities was put on
the back burner but we believe that the most rational approach is the merger.
We will engage with the Premier and ExCo in this regard to present our
position.

Madam Speaker, it also gives me great pleasure to announce the board of
directors for the NWDC. The Chairperson of the Board will be Mr Bheki Khumalo
and the Deputy Chairperson will be Advocate Vuyiswa Ramphele, other members are
Mr Richard Rahloa, Mr Solly Phetoe, Ms Mmathebe Moja, Professor Melville
Saayman, Mr Obakeng Khutsoane, Mr Farouk Ayob, Mr Pule Moutlane and Dr
Tumelontle Thiba.

These distinguished ladies and gentlemen will serve in this board for a
period of three years. We wish them all the best in their endeavour to be part
of the development of the North West province.

Madam Speaker, last year we promised the small businesses owing the NWDC
implementation of SMME debt relief. We are proud to announce that from the
amount of R2,6 million a total number of 34 SMMEs benefited. There were 25%
discount write backs amounting to R757 000 covering seven clients. Not all
SMMEs responded, hence we have extended the deadline to December 2007.

Over the year under review, the corporation sold 18 residential properties
amounting to R3 million. An amount of R579 000 in rental subsidy/SMME start up
subsidy, was written off and benefited 59 SMMEs. Total maintenance and
refurbishment budget amounted to R7 944 000,00. Rental on residential property
will be increased to market related prices, phased in gradually by August 2008.
Tenants will be given opportunity to buy these over a five month period ending
December 2008 after which houses will be sold to anyone in the market.

NWDC achievements

The following are among some of the highlights of the NWDC in the year under
review:
* 4 541 permanent jobs created for the year
* R148 712 609,89 was mobilised as public sector investment
* 1 353 temporary jobs created through its refurbishment programmes
* R504 152,62 was mobilised in private sector investments.

New planned programmes

Mafikeng Light Industrial Park

The NWDC will implement the development of the Mafikeng Light Industrial
Park due to the high demand for Industrial Space in Mafikeng and the fact that
all NWDC industrial space is being occupied. This will help the growing amount
of emerging SMMEs in the province. This project will be divided into three
phases and SMMEs will be invited to submit tenders in the areas bricklaying,
paving, plumbing, electrical, landscaping and storm water amongst others. The
estimated cost for phase 1 is R3 million with the completion date targeted for
the end of August 2007.

Projects allocated by the Department to project manager

Due to our Department being unable to transfer funds to the entities that
are not listed in the Public Finance Management Act (PFMA), we have thought the
best way to resource the programmes implemented with third parties to be
through the NWDC.

The following projects were allocated to the NWDC to project manage, during
the year under review:
Beef Beneficiation, NWDC Light Industrial Park, Platinum Jewellery Project,
Madibeng Industrial Project Feasibility Study, Relocation of NECSA tenants,
AIDCs Automotive Cluster, MIDZ Bulk Sewer Pipeline Project, MIDZ Bulk Water
Supply Project, Mafikeng Bio Diesel and Madikwe SISAL.

We thank Mr Hein Prinsloo for the excellent work done and the DBSA for
allowing us to use him to the benefit of our province.

Invest North West (INW)

During the year under review, INW continued to concentrate on the attraction
of investment and promotion of export trade as its core mandate. A total of
R1,88 billion of investment was attracted to the North West province, creating
at least 1 486 jobs valued at approximately R98 million. This has been a good
return on the R9,8 million funding that the agency has been receiving for the
last four years.

Invest North West continued to promote the province's AsgiSA and PGDS
projects for which we are hoping for satisfactory results in the near future.
These are high valued projects with intended high impact on job creation and
skills development currently project managed by the NWDC. The following are in
addition to the ones listed above, namely the Mining Supplier Park, minerals
beneficiation cluster, MIDZ projects and the innovation hub.

Amongst some of INWs highlights was the attraction of R2,1 billion
investment into the Ferrochrome Smelter called International Ferro Metals
(IFM), the largest single investment of its size into South Africa within this
sector. This is an initiative of South African, Australian and Chinese
investors outside Mooinooi, soon to be officially launched but currently in
operation, employing at least 2 000 people directly and indirectly.

INW received several awards for its professionalism and service excellence,
reminiscent with its high ranking by World Association of Investment Promotion
Agencies (WAIPA), albeit challenges posed by its low levels of funding. Its
fifth unqualified audit opinion from the Auditor-General (AG), speaks volumes
of the observance of good corporate governance and tenacity in pursuit of its
mandate.

We have appointed additional board members namely Kgosi Moshe Mabe, Ms
Keneilwe Letselela, Mr Gopolang Makokwe, Ms Nthabiseng Matsobane, Revevered
Dimpho Gaobepe, Mr Piet Smith and Ms Suzette Volschenk.

Mr Gaba Tabane, the current CEO of INW will be leaving the agency soon. We
thank him for his service to INW and wish him the best in his new
endeavours.

Mafikeng Industrial Development Zone (MIDZ) company
MIDZ infrastructure

The infrastructure plan (phase 1) for the MIDZ has commenced and the
provision of bulk water will be completed under the current financial year. A
process to acquire land was facilitated and land has been leased by the MIDZ
for 99 years and the rezoning has been completed. Tenders for internal service
where 50 industrial sites will be constructed were advertised. The designs for
bulk water supply were completed. The northern access road has been put in
abeyance due to the cost factor raised by Treasury.

MIDZ projects

Madam Speaker, the MIDZ has several projects in the pipeline, key amongst
which I would like to mention the following:
* town planning for the rezoning and sub-division of the land
* environmental impact assessment (EIA) process
* internal Services and civil works
* internal safety programme for various projects
* bulk water supply pipeline on which 38% of the work has been completed
* bulk sewer pipeline project which is nearing completion
* construction of the minerals cluster building.

The successful implementation of MIDZ projects depends largely on government
funding. These projects will require approximately R200 million over the MTEF,
of which only R130 million has been allocated over the MTEF period under review
and this will create a shortfall of R70 million. A staff complement that is
competent, compatible, responsive and sensitive to operational requirements of
the industrial development zone (IDZ) will be required. I also the pleasure,
Madam Speaker, of announcing the appointment of the CEO in the name of Mr
Tebogo Kebotlhale. It is expected that this appointment will accelerate
implementation of outstanding matters necessary to make the MIDZ a success.

Operator permit and schedule 3c listing

The MIDZ is in constant communication with the DTI to deal with and close
gaps in the application for the operator permit. Significant progress has been
registered to date. At the level of the Department, processes are in place to
ensure that the schedule 3c listing applications are given the necessary
attention within our inter-governmental relations structures. In the same
breath, the MIDZ will be facilitating the signing of service level agreements
with some government departments and other agencies as part of stakeholder
management.

As previously motioned, the international status of Mafikeng Airport is key
to proper functioning of the IDZ. To this end we await with expectations
Cabinet pronouncements on the international status of the Mafikeng Airport.

Budget appropriation for 2007/08 financial year

The Department's budget for the 2007/08 financial year is R273 million, a
reduction of R24 000 on last year's budget due to the cross boundary
imperatives. The budget will be allocated according to programmes as
follows:

Corporate services and administration: R28,440 million
Small business development: R77,882 million
Economic development, planning and research: R23,062 million
Governance and regulatory services: R26,410 million
Tourism development: R116,902 million
Total: R272,696 million

An amount of R197,328 million representing 72,3% of the budget is earmarked
to be transferred to and for activities of the following economic
activities:

North West Parks Board: R111,141 million
North West Parks Board: R12,277 million
Invest North West: R9,956 million
Mafikeng Industrial Development Zone: R5,208 million
NWDC infrastructure refurbishment: R6,500 million

Spatial Development Projects`

Madibeng Dry Port: R3,200 million
Beef beneficiation: R3,000 million
Mining Suppliers Park: R10,000 million
Light Industrial Park: R3,000 million
Madikwe Sisal Project: R1,000 million
Afthatch Project: R2,000 million
Transfer to PSETA: R0,046 million

An amount of R48,993 million or 18,0% will be used as compensation of the
employees of the Department and 9,7% or R26,375 million will for administrative
activities.

Conclusion and closing remarks

Honourable Premier, may I please take this opportunity to express our
gratitude to your able leadership that continues to hold us together through
the trying and difficult advances towards furthering 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. Ka re Nko ya Kgomo mogala tshwara thata, e se re gongwe
go utlwa sebodu wa kgaoga. Bafowethu le a thesha man!

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 Mokaila with his insightful and thought
provoking interventions. May our intentions receive unwavering support from
yourselves, in word as you have done and in deed through the approval of this
proposed budget appropriation.

"Team Economy", my sincere gratitude to all of you for your hard work.
Without exception I would like to thank all staff members in the Department for
their dedication to ensure that we realise our goals, from the cleaners,
security to the highest in the structure. Thank you.

To my wife Thandi and the family, thanks for your continued support and
understanding.

Madam Speaker, we continue our commitment to better the lives of the people
of the North West province. Our hope is that in partnership with other spheres
of government, the North West province will succeed in its steadfast goal of
halving unemployment and poverty by the year 2014. Presenting this budget is
confirmation our commitment to achieve our objectives.

Re a leboga, thank you and baie dankie!

Issued by: Department of Economic Development and Tourism, North West
Provincial Government
24 May 2007