Honourable Speaker
Honourable Premier
Members of the legislature
Members of the Executive Council
Executive mayors, mayors and leaders of our local municipalities
Director General and Heads of Departments
Our esteemed Majesties and Royal Highnesses
CEO's of our parastatals
Members of our boards
Provincial Secretary of the ANC, cde Joe Maswanganyi
Stalwarts and veterans of our struggle
Leaders of Chapter Nine and Ten Institutions
Leadership of various religious formations
Leadership of business and labour
Youth, women, community leaders and media representatives
Our honoured traditional leaders
Distinguished guests, friends and comrades
The people of Limpopo
Thobela
Theme: Taking the lead in developing the provincial economy
Once again we meet in this august occasion to account on the responsibilities bestowed on us and to pronounce on the direction we will take this financial year. We are mindful of the fact that millions of our people continue to look up to us to improve their lives, a responsibility we are on course to achieving. In doing so it will be appropriate for us to always reflect on how our past has shaped our current outlook. The celebration of 20 years after the release of our icon, a true statesman and humble leader of our people comrade Nelson Rolihlahla Mandela and the unbanning of political parties especially the oldest and most formidable force for change in Africa, The African National Congress was a turning point in our history. In celebrating this rich history we should acknowledge people centred and people driven strategy and tactics that Cde Mandela and his generation of brave leaders carried through pre - liberation and after 1994 and left as a legacy for us to pursue. We would like to reflect on how these people centred and people driven strategies and tactics have reaffirmed their relevance pre and post 1994 including during the recent global economic crisis.
Honourable Speaker
The building of the developmental state is one of the key thrust identified by the 52nd national conference by the African National conference held in Polokwane in 2007. The developmental state is an instrument through which you obtain a better life for all as well as addressing the legacy of apartheid, colonialism, patriarchy and acting as a driving force for socio-economic transformation. The above strategic approach is a key in the work of an ANC led government in the coming decade. The strategy and tactics document assets that the strategic orientation of the developmental state people driven, people centred change, sustained development based on high growth rates, restructuring of the economy and socio-economic inclusion. A developmental state enhances our ability to promote programmes of progressive socio-economic change in both the global and domestic settings and to assert a progressive vision of the world we want to live in.
Honourable Speaker
Despite recent world economic crisis skeptics still argue that a developmental state is not critical to strengthening democracies, creating world peace, eradicating poverty, dealing with unemployment and creating wealth. We have seen how public investment in infrastructural development, skills development, provision of incentives for developing industries and bailout packages has not only cushioned the loss of jobs but has also slowed down the economic meltdown and produced signs of recovery.
Now these skeptics should tell us if public investment is not a key aspect of a developmental state. Even though we are set on a path of recovery we should hasten to mention that the main impact of the global crisis, that is job losses and decline in production indicates that our economy suffers from serious structural weaknesses and imbalances. It is within this context and guided by strategy and tactics that Cde Mandela and his generation bequeathed to us as a legacy that Our President Cde Gedleyihlekisa Mhlanganyelwa Jacob Zuma marshalled the country into developing the medium term strategic framework and outcome based plans as key features of a performance oriented state. In addition to this, is the industrial policy action plan that serves to provide a comprehensive and integrated approach to strengthening the productive side of the economy.
The industrial policy action plan creates the basis for implementable programmes in the economic sector and employment cluster as follows:
* Rural development through interventions in a range of sectors such as agro-processing, bio-fuels, forestry, cultural industries, aquaculture and tourism
* Advanced technological capabilities through interventions in the nuclear, advanced
* Materials, aerospace and ICT industries
* A serious first step towards the systematic promotion of green and energy-efficient
* Goods and services
* Downstream mineral beneficiation
* Strengthened linkages between Tourism and Cultural industries
* Stronger integration between sector strategies, skills development plans
* Commercialisation of publicly funded innovation.
* Macro-economic stability through:
* Improvements in the trade balance
* Lowering of inflationary pressures through increased supply and competition
* In a range of sectors
* Contributing to medium to long-term diversification of the economy and
* Hence risk mitigation
* A substantial contribution to the creation of decent jobs, both directly and indirectly.
Honourable Speaker
Also in addition to the above mentioned national frameworks the provincial cabinet under the leadership of our Premier Cde Cassel Mathale developed and launched the Limpopo Employment, Growth and Development Plan (LEGDP). This LEGDP is guided by the same people centred people driven strategies and tactics that were carried through and bequeathed for us as a legacy by Cde Mandela and his generation of brave leaders. In the foreword of the LEGDP the premier writes “It is our objective to introduce to the people of our province to an economy which is able to improve their quality of life through, amongst others, the creation of decent jobs and sustainable livelihoods, erection of reliable heath care institution, building of houses of acceptable standard, provision of social development, comprehensive rural development, food security and land reform.”
Therefore as a department in tabling this budget speech we are guided by the same people centred and people driven strategy and tactics that were carried through and bequeathed for us as a legacy by Cde Nelson Mandela and his generation of leaders. In tabling this budget speech we are affirming that decent work and sustainable livelihoods are the foundation of the fight against poverty and inequality and its promotion and these should be the cornerstone of all our efforts. In tabling this budget speech we continue to affirm the central and strategic role a developmental state plays in developing and building our economy, hence our theme; taking the lead in developing the provincial economy.
Honourable Speaker, before venturing into a programmatic approach to tabling this budget speech allow me to announce to the house
that our department will be developing an economic growth plan 2010 to 2030 for the province, understanding that although the provincial employment, growth and development plan advocates for an economically driven growth and development as opposed to a socially driven one, the province needs a sector specific economic growth plan which amongst others will comprehensively and in an integrated manner cover the following:
* Industrial development programme
* Mining and minerals beneficiation/ downstream industries programme
* Broad based economic empowerment programme
* Tourism development and transformation programme
* Enterprise (Cooperatives and SMME) development programme
* Regional economic development and integration programme
* Wild trade development and Transformation programme
* Investor Promotion and Cultivation programme.
Let me also on the same breath submit to the house that in line the Premiers' announcement in the State of the Province's Address on the structural review of our parastatals, we have already developed a framework for such a review and a road map leading to a single economic development agency for the province. We will be approaching cabinet formally in this regard. Let me also take this opportunity to inform the house of the appointment of a new interim board for Trade and Investment Limpopo led by Mr Ndumiso Matlala and also wish them an eventful and successful term of office.
We have already finalised terms of reference for establishing a growth fund for the province. The process of appointing a transaction advisor is on course with a request for proposals issued out and closed. The growth fund will serve as a catalyst for infrastructural development in the province in general and economic infrastructure in particular. We want to appreciate the role played by treasury both provincial and national and the Development Bank of South Africa. Our treasury has already allocated R90 million for the Medium Term Expenditure Framework (MTEF) period for establishment and operationalising the fund. We appreciate this commitment.
I will be doing disservice to an outstanding example of economic development activity that is characterised by cultural tourism, environmental care, cooperatives and Small, Medium Micro-Economic (SMME) development, regional integration and local economic development.
Honourable Speaker I'm addressing myself to the house about a resounding success we registered as a department in the form of Marula Festival 2010. For the first time since the launch of the festival in 2005 we exceeded venue capacity numbers of 10 000 by 5 000 more, accommodation facilities in Ba-Phalaborwa were full to capacity and local business could not cope with demand of amenities from festival attendees. I want to also confirm Honourable Speaker that now the fruit marula is not only consumed as an aphrodisiac drink (which intervenes in family building), but its oils are also utilised to manufacture skin products and the fruits are utilised to cook different cuisines in the name of Ala Marula Cuisine so Honourable Members should not surprised if they come across an Amarula dessert in affluent restaurants.
We are going to have discussions with Ba-Phalaborwa municipality on developing plans to expand venues and also declaring the festival an international cultural, tourism and economic development event. We are confident that this will happen because the 2010 Marula festival was not a provincial event but a national one as we saw people from provinces such as Gauteng, North West, Free State, Mpumalanga and Kwazulu-Natal attending.
I must also indicate that we also had an opportunity to host our counterparts from Botswana, Mozambique, Zimbabwe, Namibia and Swaziland Let me take this opportunity to acknowledge the role played by the following stakeholders, the district municipality of Mopani and other municipalities in the district but more importantly our host partner Ba-Phalaborwa Municipality, Limpopo Tourism and Parks Board and other parastatals that fall under our department, Distell, Vodacom our platinum sponsors and the Department of Sport, Arts and Culture.
Honourable Speaker
The department’s core functions as implemented both internally and externally through our parastatals Trade and Investment Limpopo (TIL), Limpopo Business Support Agency (LIBSA) and Limpopo Economic Development Enterprise (LIMDEV) continue to be the following: Economic development, environment and tourism. Let me also indicate that our plans and budgeted amounts since the financial year 2009/10 are aligned to the medium strategic framework and that the 2010/11 financial year plans and budgeted amounts give expression to the provincial employment, growth and development plan.
Programme 1: Administration
Honourable Speaker, the administration branch is responsible for the following programmes corporate services, information management and financial management. In the financial year 2009/10 through these programmes we were able to equip the department with relevant skills needed for us to perform our functions; we were able to also take existing staff to required training and development courses as per our skills development plan. In terms of financial management we were able to comply with required risk management practices in the public sector, we have also focused on consolidating our financial performance by putting up building blocks for an unqualified audit report as we did in the year 2008/09. We hope that our 2009/10 audit results will come out favourable as well. Let me also share with the house our pride in the departmental transformation unit in particular health and wellness for scooping both silver and gold prices on team work during the Premiers Excellence Awards.
Programme 2: Economic development
MTSF priority 1: Speeding up economic growth and transforming the economy to create decent work and sustainable livelihoods
Honourable Speaker one of our fundamental mandates and the most identifiable responsibility for us is to grow the economy of this province and create sustainable job opportunities. We are aware as a department that many of our people who remain rooted in the unemployment world look up to us to come to their rescue. We want to announce to this house that as much as this is an Achilles Hill given the unpredictable economic environment, we will face this responsibility with vigour and tireless efforts to realise our goal of a better life for all through sustainable jobs.
Trade remains a key area in the economic development. In this financial year we have attracted investments worth R2 billion. We have full confidence that these investments will add much needed growth in our economy. In our endeavour to strengthen our trade and be visible to countries of the world and our trading partners we have attended 62 trade promotions. Major ground has been covered through these trade promotions and many of the agreed concessions were implemented and are monitored. The national government in collaboration with provincial governments will be participating at the 2010 Shanghai Expo in China which will commence on 1 May to 31 October 2010. China is a strategic partner for South Africa and as a provincial government, we view the event as an opportune time for us to service the memoranda of understanding (MOUs) signed with Anhui, Jilin and Henan and thereby marketing the province and strengthening our economic diplomacy. It is within this context that we are also collaborating with the National Department of Agriculture to include more of our fresh produce especially the mangoes and avocados on the priority list of exports to China so as to increase the volumes of our exports.
Honourable Speaker, I spoke about the partnerships that we are having with China, which is in another continent. Charity begins at home by following the spirit and letter of New Partnership for Africa's Development (NEPAD). The province has entered into MOUs with the Gaza Province of Mozambique, Matabeleland South and North and the City of Bulawayo in Zimbabwe with the purpose of market collaboration. We are also happy to announce that we are active participants in helping the resuscitation of the economy of Zimbabwe and to date some strides have been made. We will also continue to engage and establish good working relationships with our continental counterparts where we don't have relations within the ambit of the national protocols framework. One of the key priorities for implementation of the ASGISA program is the Business Process Outsourcing and Off shoring (BPO & O).
The BPO & O sector has a potential to meet government's 2014 goals and beyond. An implementation structure for the BPO & O has been established provincially and the process of developing the provincial value proposition for marketing and the talent development plan will be finalised by the end of March 2010. We are also making strides in the mobilisation of the industry. The sector has the potential to create 56 000 decent jobs nationally over a period of ten years and, as for Limpopo in particular, we envisage to create 14 500 decent jobs as a contribution to national over the MTEF period.
Honourable Speaker, the main targets for employment will be mainly matriculants and unemployed graduates. In this financial year, we will facilitate the establishment of international convention centre. This much needed and awaited facility will to a large extent help in the growth of the provincial economy. In the past Limpopo struggled to host major events because of lack of such a facility. Though we have hosted events with distinction in the past the establishment of the ICC will put this province at an advantage to hosting major national and international events.
Honourable Speaker
In line with our sector development programmes our department through TIL has assisted with approvals for an environmental impact assessment and mining license from the Department of Minerals and Energy for the first phase of a Phalaborwa magnetite beneficiation plant, with an estimated value of over R 1 billion, US$38 million has already been invested in the project, creating 45 jobs. In the financial year 2010/11 we will assist in conducting feasibility studies and stakeholder management, securing land, power and related project infrastructures in the development of capital projects as pronounced by the Honourable Premier in his State of the Province Address. These projects includes, a mining input supply park in Steelpoort involving Xstrata, a granite beneficiation plant in Capricorn (estimated value R30 million) and a possible steel manufacturing plant in Mokopane valued at R300 million.
We have also concluded a draft business plan for the establishment of a Polokwane fresh produce market with an estimated value of R300 million, this project will be implemented in collaboration with the Johannesburg Fresh Produce Market. The following projects will also take of ground in the year 2010/11 a bamboo production and processing project valued at US$135 million, a Blade Valley sugar ethanol plant estimated at R1 billion, as well as Molt juice concentrate processing plant (mango, orange, litchi and tomato) with an estimated value of R250 million. With regards to rural development, TIL has made major strides in identifying 17 nodal points for semi-urban and rural retail centres for retail investment. Engagements with potential investors include the geographical areas of Malamulele, Bungeni, and Senwabarwana.
Honourable Speaker
The implementation and support for SMME`s and cooperatives remain one of the vehicles that the province is using to accelerate rural development. In the financial year 2009/10 the department provided financial and non-financial support to 6 000 SMME`s and cooperatives. The focus of our support was on enhancing skills levels, creating and sustaining 2000 jobs. In the next financial we will increase the figure of supported SMME`s and cooperatives to 15 000. As government we are proud that our interventions are evidently improving the lives of our people. These achievements are an encouragement to us and are a call to ensure that we work harder to get even better result in our course to improving the lives of the people of Limpopo. We are confident that together we can do more to reach even greater heights and eradicate the scourge of poverty that continues that undermine the dignity of our people.
Support for SMMEs remains a key in growing our economy. There is a need to ensure that enterprises that are established in the province begin to be more creative and innovative in their approach of doing business and to this end we should as citizens of Limpopo begin to support and encourage the culture of buying goods and services produced in the province. In this way we will be able to ensure that money circulates within the economy of Limpopo.
As a government we are aware that there is a need to put more efforts in the support of cooperatives as a vehicle that will result in participation in the main stream economy by rural communities. There is a need to engage private sector stakeholders and other government institutions to mobilise resources both human and financial to ensure that the cooperatives which are supported become sustainable by opening up procurement opportunities for them.
Honourable speaker
Limpopo development enterprise continues to play a critical role in helping emerging business people and major inroads have already been covered through their efforts. Through Risima housing development a subsidiary company of Limdev it has managed to build houses for professionals living in rural. The company has a current total investment of R255.8M being liquid finance injected into housing properties and this, has catered for the home loan market gap between the RDP Housing and the commercial banks in Limpopo.
Honourable speaker
The enterprise is negotiating with reputable developers to redevelop 5 of its major shopping centres at a total cost of R 400M. After completion, the centres will be of modern standard and will have facilitated in excess of 2000 permanent jobs. The following are the shopping centres which will benefit from this initiative: Thohoyandou shopping center, Chachulani shopping center in Giyani, Makhoma shopping center in Giyani, Pinzulani shopping center in Nkowankowa, Akanani shopping center in Lulekani. Our property portfolio continues to provide infrastructure to potencies investors in all sectors. Currently the portfolio is host to 1800 entrepreneurs and has helped create 10 000 jobs.
Honourable speaker
In terms of the Limpopo Gambling Act, Act no. 4 of 1996 as amended, the Limpopo Gambling Board is charged with the responsibility to licence and regulate all matters relating to gambling such as casinos, limited payout machines, horseracing, bingo, bookmakers, etc. It is also charged with the responsibility to eradicate all forms of illegal gambling. Furthermore, the Board has the responsibility to ensure that the National Responsible Gambling Programme that has been established in the country gives treatment and counseling to persons that become addicted to gambling.
Honourable Speaker
To this end, eight hundred and thirty six jobs have been created at the Meropa and Khoroni Casinos as well as at all the limited payout machine sites that have been rolled out by Vukani Gaming in the province. Furthermore, as these licensed operators have committed themselves to contribute towards Social Investment Programmes, for the past financial year, all three operators contributed about seven hundred thousand rand towards community projects and bursaries. In the financial year 2010/11 we will invite potential casino operators to apply for a casino licence for the Burgersfort �" Greater Sekhukhune District. It is hoped that the licensing of the casino in that area will create more direct and indirect job opportunities for people in the District as well as to attract more tourists.
Programme 3: Environment and tourism
MTSF priority 9: sustainable resource management and use
Honourable speaker
The department has managed, through its environmental education programmes of eco-schools, state of the environment reporting for schools as well as the Limpopo Youth Enviro Explorer Programme, to empower 378 schools. We are looking at expanding this awareness programmes. This financial year we will expand the number of schools to 400. This in a long way will help our young generation in protecting the environment and ensure that even generations to come have an environment in which they can prosper.
We are glad to announce that our municipalities also lend a hand in ensuring that their residents live in a healthy environment. Twenty two (22) municipalities participated in the cleanest town competition and we are looking at expanding the number to 25 this financial year. We hope our municipalities will participate in this competition to ensure that we promote healthy environment where they operate. Two biospheres were registered and this financial year the number will be increased to three and will be properly managed.
Honourable Speaker
Tourism is one of the major pillars of our economy in Limpopo and plays a critical role in the economic growth of this province. We are elated as a department that the numbers of tourists visiting our province shows impressive growth from three years back even in the midst of economic recession.
The total number of foreign tourists who have visited Limpopo has increased from 7.8 percent in 2006 to 10.1 percent in 2008. However, Limpopo province has welcomed more significant visitors in Q3 of 2009 (9.1 percent) than we had in Q3 2008 (5.9 percent). The number of bed nights spent in the province by foreign tourists increased by 9 percent between 2006 and 2008.
In 2008, Limpopo accounted for 5percent of all bed nights spent by foreign tourists in South Africa. Limpopo saw an increase in the number of bed nights in Q3 2008 from 11.1percent to 12.7percent in Q3 2009. Africa is the major source market of foreign tourists to the province, followed by the Americans. The provincial revenue for Limpopo in Q3 2009 was R1.1 billion, an increase of R0.1 billion when compared to Q3 2008 which was at R1.0 billion.
Honourable Speaker
On the domestic front, Limpopo received 2.4 million (7 percent) domestic trips from the source market in 2007 and 2.1 million (4 percent) in 2008. Limpopo ranked number five in total number of trips to the province. The average domestic trip lasted about 4.5 nights, fairly similar to that of 2007. Limpopo saw a net inflow of revenue of R468 million from domestic tourism in 2007 and R652 million in 2008. To add further impetus into our domestic tourism drive we launched the wild life through tourism community mobilisation and media campaign in the 2009/10 financial year. The campaign is meant to encourage our people to tour our nature reserves especially during peak seasons.
Through the Limpopo Wildlife Resorts brand, we already made remarkable progress in uplifting lives of our rural inhabitants through ecotourism. We paid in excess of R1 million in levies to communities owning nature reserves within our Province and are on course to consolidate outstanding levies for the year under review. We trained over 53 community members on hospitality and conservation and introduced 200 learners to ecotourism programmes in various reserves during the year under review.
We continue to work closely with the Regional Land Claims Commission in respect of game farms that are reinstated to the respective new owners. We provide technical expertise to ensure that new owners can be well equipped to navigate through the wildlife industry and thus setting their new acquired assets into profitable business ventures.
With the annual revenue of R10 million currently, Limpopo Wildlife resorts is expecting to generate in excess of R30 million in the next five (5) years.
Honourable Speaker
Limpopo Wildlife Resorts are ready to host visitors in all its destinations during the 2010 FIFA Soccer World Cup event. In Polokwane, the Limpopo Wildlife Resorts is collaborating with the Department of Sport Arts and Culture and other agencies, under the leadership of the Premier Office's 2010 Unit to set up the African Cultural Village. The village has already attracted 14 African countries and preparations are already underway to bring in the local arts and crafters to showcase and sell their talents and products to the soccer fans, visitors and locals between 11 June and 11 July 2010. In Phalaborwa, Limpopo Wildlife Resorts will be hosting thousands of local and international visitors during the World Cup.
Honourable Speaker I would like to table the Department of Economic Development Environment and Tourism allocations for the financial year 2010/11 as follows:
2010/11 budget summary
The total budget is R874,9 million including 90 million allocated for the growth fund
Administration:
R248 million
28 percent
Economic Development:
R395 million
45 percent
Environmental Affairs:
R138 million
16 percent
Tourism:
R93 million
11 percent
Budget per economic classification:
Compensation of employees:
R314,7 million
35 percent
Goods and Services:
R248,2 million
28 percent
Transfers to departmental entities:
R291 million
33 percent
Capital:
R14 million
4 percent
The transfers to entities, R291 million, are as follows:
Limpopo Economic Development Enterprise (LIMDEV):
R69 million
23 percent
Limpopo Business Support Agency (LIBSA):
R73 million
25 percent
Trade and Investment Limpopo (TIL):
R34 million
11 percent
Parks Board:
R67 million
23 percent
Gambling Board:
R48 million
16 percent
Conclusion
Honourable speaker
As a department we value the strategic focus and responsibilities bestowed on our municipalities in delivering services to our people hence we are going to utilise the quarter of the financial year to convene a colloquium with all councillors responsible for economic development, environment and tourism to refine our strategies and harness our resources to the benefit of our people. We will also conduct sessions to consult with our stakeholders including chambers of commerce, businesses organisations, SMME and cooperatives movements in the province.
Honourable Speaker, we are convinced that the Limpopo Growth and Development Plan is the loadstar that illuminates the march of the people of Limpopo towards a sustainable and shared growth. Though the economic recovery brings much needed hope after a torturous spell of economic meltdown we are fully aware of the myriad of challenges that lie ahead.
We, however, want to assure this house and the people of Limpopo that for us no mountain is too high to climb. Limpopo Economic Development, Environment and Tourism (LEDET) will assume its rightful place in the implementation of the LEGDP. LEDET will work with dedication towards enhancing the cohesiveness of the provincial government.
Honourable Speaker, let me take this opportunity to express a word of gratitude to this august house of representatives of our people for the unwavering support and nurturing it has accorded me over the years, let me also thank the portfolio committee for being spot on in executing their oversight function over the department and its entities. A word of gratitude also goes to the departmental staff and the staff of our entities for their work in carrying always the departmental mandate forward. We would like to thank members of the economic cluster. We further would express a word of gratitude to members of the executive council for ever fostering the spirit of collegiality and team work.
I will be making a cardinal mistake if I forget to mention the pillars we lean against, the shoulders we stand on; veterans of our liberation struggle, when nights are dark, when the burden is heavy, when our feet are weary, when we stray of the path you give us strength and hold our hands to be firm to continue on the road which was charted by John Libangelele Dube. I'm thinking of our living legends, General Bra Ike Maphoto, Poo Pharephare Mothupi, Mma Lydia Komape Ngwenya, Rashaka Ratshitanga, Ntate Marule and the emerging veteran Tintswalo Mashamba.
Honourable Speaker I want to also thank the staff in my office for their consistent and quality service in particular Mr Joshua Kwapa our media liaison officer and Ms Chantal Wagner our acting appointment secretary who is recovering from a car accident. A special thanks goes to Mr Samuel Thobakgale, the Acting Head of Department and DDG for Economic Development who`s invaluable experience in the public service contributes to steering the department in the right direction. We also want to thank past heads of department, Ms Jackie Shibambu and Martin Sehlapelo for their contribution in the department.
Honourable Speaker, the department is the integral part of the provincial government, we want to appreciate the continued guidance, nurturing and encouragement by the head coach of the provincial leadership team, the honourable, Premier Cassel Mathale, we shall work side by side until the vision of the LEGDP is realised.
Baie Dankie
Mucha gracias
Hi khensile
Rho livhuwa
Pula
Department of Economic Development, Environment and Tourism, Limpopo Provincial Government (http://www.ledet.gov.za)
