Honourable speaker and deputy speaker
Honourable Premier
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 ANC and other political organisations
Stalwarts and veterans of our struggle
Our dignified traditional and religious leaders
Leadership and Heads of our Chapter Nine Institutions
Leaders from the labour, women and youth fraternity
The business community
The Director General, our HOD and other Senior Leaders of the Public Service
Leaders and Heads of our Provincial Parastatals
Media representatives
Distinguished guests
Ladies and gentlemen, comrades and friends
Introduction
It is a great honour to be accorded the opportunity to present to this August House, and the people of Limpopo the budget of the Department of Economic Development, Environment and Tourism. Our budget day comes in the background of momentous political and economic events of our time. Unlike the Chinese saying “may you live in interesting times” which means may your times be cursed, we live in real interesting times which blow the winds of hope and renewal.
We have witnessed on 22 April 2009 a history making renewal of the democratic mandate by the people of our country. The people of our country have reaffirmed in no unmistakable term that the pioneer of their freedom who has stood steadfast by them for over 97 years has a refined accumulated experience to lead them until the completion of the National Democratic Project. The African National Congress (ANC) is that pioneer, unmatched and unparalleled by its commitment to the ideals of a free, democratic, united, non sexist and prosperous society.
Our people have proven analysts wrong and debunked a myth and lie which sought to implant on our political life and discourse a false theory that “for South Africa to qualify to be a democracy there must be multiple and fragmented opposition to the ANC. The proponents of this doomed political theology assert that the democratic majority and the black community in particular must
germinate black multiple parties to win over power from the ANC.
We salute the leadership of our country under President Jacob Zuma and that we will follow his leadership as a torch bearer towards renewal and hope. We equally salute the leadership of our Province under Premier Cassel Mathale and we say where you lead we shall follow.
Honourable Speaker, Honourable Premier, Honourable Members of the August House
We believe that leadership is that one element and an ingredient that determines the rise and fall of nations, communities, institutions and regions. That is why also in the history of the human race philosophers and lay people have wondered what makes great leadership. In South Africa we descendants of Pixley iSaka Seme, John Dube, Moses Kotane, J B Marks, Braam Fischer, Albert Luthuli, Lawrence Pokanoka and Oliver Tambo and our other forbearers feel privileged that our land is sacred because great leaders inhabited the space we live in.
It is because we have imbibed from this repository of transformational leadership that we face the economic challenges of our times with sangfroid and serenity. We look at today’s global economic crisis conscious that our founders have seen the national and the global economy going through many boom and the bust cycles.
The global economic situation
Honourable Speaker, Honourable Premier, Honourable Members of the August House our economy in Limpopo is part of the national economy which is integrated to the global economic order. If we are integrated into the global economy, does it mean when Paris and Boston sneeze, Malamulela and Moutse catch cold? Does it mean when Detroit which has been the auto industry capital of the world slumps, Uitenhage collapses?
The current international economic order is marked by recessionary conditions which actors and analysts compare to the depression of the 1930’s. It is worth noting that a recession is not something new in the functioning of a modern economy, the phenomenon of recession has been rearing its head in economies for the past hundred and fifty years if not more. The recession is an intrinsic part of a boom and bust cycle which characterises a free market or capitalist economy. The famous classical economist Adam Smith believed in an invisible hand of the market operating through price signals, guiding the demand and supply of goods and services to a beneficial equilibrium and a level playing field.
However, economists down the ages have not found a cure to this phenomenon of periodic contraction and expansion characterising economies.
The simple reason why a panacea might not be discovered is because the boom and bust or expansion and contraction of the economy are a reflection of periodic shortages and surpluses. How to respond to this phenomenon of boom and bust has given birth to a contest in economic thought which has raged for more than hundred years. It is which approach to follow which has pitted economists and politicians into one camp believing that the state should control markets and other camp believing the markets can make a self correction. There has emerged also a middle approach which in some ways tries to smooth over fundamental differences between these two opposed schools of economic thought.
Honourable Speaker, Honourable Premier, Honourable Members of the August House
The greatest depression in world economic history has been the one of the 1930’s. In Germany of the 30’s it is the depression which led to the rise of fascism and Adolf Hitler. The depression of the 30’s was one of the key factors that led Germany into war and the subsequent Second World War. The post World War II period saw one of the biggest and longest economic boom or upswing in the modern history. There was growth in economic activity and consumption throughout the capitalist or western economy. This period also saw significant growth in the welfare state in the west. This post World War II boom was shaken in 1973 by the oil price hikes initiated primarily by Organisation of Petroleum Producing Countries (OPEC).
The oil price hikes in 1973 ushered a new era of slow growth and rise in inflationary pressures or a phenomenon economist call stagflation. The environment of sluggish growth and inflation in the United State (US) and the Western world led to victory in the political arena to political parties which favoured unfettered or uncontrolled markets. In the US the Republican Party under Ronald Reagan defeated Democratic Party and in the United Kingdom (UK) Conservative Party under Margaret Thatcher defeated the Labour Party. The similar pattern was observed in continental Europe in the beginning of the eighties.
The eighties saw a crusade to implement fundamentalist free market economic policies. There was massive deregulation in the Telkom, financial services industries and banking, a push towards privatization and liberalisation across sectors of the industries and drive to have developing countries to follow suit. It is these set of policies and others which ushered the era of globalisation.
With the collapse of the Soviet bloc, the rise of the Asian economies, China and India in particular, there seemed to be no part of the globe that was not fertile for the free market economics and capital inflows and outflows.
The eighties saw the making of big economic upswing which just punctured yesterday. As we entered the 90s, the world seemed to be expecting a big upswing with economies of China and India showing year in year out record growth.
Honourable Speaker, Honourable Premier, Honourable members of the August House
The appetite of China for raw materials and other commodities seemed insatiable like any other boom period in the economy, many started believing the boom and the good times will last forever. This belief in good time’s never ending, leads to speculative frenzy and a creation of a bubble in the market. The boom saw the record price of commodities and raw materials.
World in a recession
Honourable Speaker, Honourable Premier, Honourable members of the August House
What started as seemingly a crisis in the housing market two years ago in the United States snow balled into the world banking industries and the financial services sector in general, finally exploding into the main stream economy. The very financial institutions which drove globalisation and rapid inflows and outflows of capital across sectors of industries and countries were in mortal danger.
The very pillars of World financial markets like Lehman Brothers filed for bankruptcy. The other big pillars had to be taken over like Merril Lynch and many other blue chip financial institutions had to go to their governments cap in hand, asking for financial rescue packages. The world stock markets dropped in values. The demand for commodities dropped affecting developing countries like ours. There were drops in industry and consumer spending. The world auto industry is experiencing a worst crisis. There are job cuts across the board and investors losing their investments and many home owners losing their houses. The exuberance and over optimism associated with the boom years of globalisation has plummeted into gloom outlook.
While we are part of the global economy because of the import and export dimension of our economy, our growth trajectory does not mimic global trends. This is so because there is no monolithic world economy. The world economy is made up of regions, countries, sectors and individual actors.
It is worth noting that our national economy experienced the longest boom in the post apartheid era. This was a result of many factors including the integration in the global arena after the lifting of sanctions, the healthy global economic outlook, especially the demand of our raw materials and their rising prices and our sound macroeconomic policies. As the global economy gets into recession, this affects us too because of our export exposure to commodities.
Honourable Speaker, Honourable Premier, Honourable members of the August House
The national leadership has reminded us that South Africa has been spared of the worst features of the global economic crisis due to our prudent macroeconomic policies and legislation and with specific reference to National Credit Regulator and a modest exchange control regime.
The national leadership has reminded us that despite a cushion which our policies has provided we are in recessionary conditions and we too feel the bite of the financial meltdown.
Our response as a country to the economic crisis has been hope generating and confidence building. The President in his State of the Nation Address has reemphasised the importance of infrastructure expenditure and skills development as critical stimulus to see us beyond the recessionary conditions. The massive expansion in infrastructure, including constructions in preparation for 2010
ensures that our economy does not grind to a halt.
History has shown that infrastructure expenditure, including massive public works programmes are critical catalysts which the public sector can leverage to get out of a recessionary environment. We believe that the hand of our President and our leadership is steady to steer the national ship of out recessionary seas. This steady hand ensures that in prosperity the poor reap benefits and in crises the negative impact on the vulnerable is mitigated.
Limpopo the Heartland of Southern Africa Development is about people
Honourable speaker
The provincial government under the leadership of Honourable Premier Cassel Mathale is that steady hand to steer the provincial economy off stormy winds to stability, growth and development.
The leadership attributes of accessibility, interactiveness, firmness, timeliness, inclusitivity and empowerment, delegation and confidence building, so much exemplified by our Premier are a critical ingredient to a prosperous province. These traits are not just attributes of our Premier but are rooted in the leadership practices of icons like Albert Luthuli, Moses Kotane, J B Marks, Oliver Tambo, Braam Fischer, Flag Boshieloand other stalwarts of our glorious movement.
Our provincial economy is rooted in mining, tourism and agriculture. This is not to say these are the only sectors that make our economy to move. There other critical sectors like manufacturing, utilities, construction, trade, transport, finance, community and social services and private households that ensure that our economy is vibrant, dynamic and has great potential.
Honourable Speaker, Honourable Premier, Honourable members of the August House
Our department carries three core functions which are Economic Development, Environment and Tourism. The functions are translated through the following strategic goals:
* above average economic growth rates
* increase in investments
* thriving SMME’s in all sectors
* healthy and fair trade
* sound provincial fiscal policies in line with national macroeconomic strategy
* positioning Limpopo as the preferred eco tourism destination in South African Development Community (SADC)
* sustainable development through sound environmental management
* job creation.
These strategic goals are in line with the priorities of the African National Congress and the priorities said by our President in his State of the Nation Address and in the context of the Medium-Term Strategic Framework (MTSF). The work and the mandate of the department are carried through three branches namely Administration, Economic Development, Environment and Tourism.
The branches are linked to Parastatals which play a critical role in ensuring that the department fulfils its mandate. The business finance, mining, property and project management are housed in Limpopo Economic Development Enterprise (LimDev) and its subsidiaries; the non financial technical assistance is housed in Limpopo Business Support Agency (LIBSA) and the investment promotion and tourism development in Trade and Investment Limpopo (TIL) and Limpopo Tourism and Parks Board (LTP) respectively. Our regulatory functions within the Gambling board, Liquor Board and the Consumer Court. We are finalising the incorporation of our development finance and technical assistance institutions under LimDev.
Honourable Speaker, Honourable Premier and Honourable members of this house
Limpopo Department of Economic Development, Environment and Tourism during this fourth legislature will continue to build on the foundations of the past 15 years. We will continue building on flagship projects in mining, co-operatives, tourism and environmental affairs.
We will continue on the work already done around our industrial clusters and growth points.
The economic strategic framework over the past fifteen years has been sound but what we want is faster delivery, more qualitative impact of our work and the ability to align the plans of the Parastatals with the governmental thrust of creating decent jobs, liveable environment and a prosperous and growing economy.
We want to be accountable to this legislature for the resources entrusted to us.
In turn we want to hold our Parastatals accountable for the achievement of our socio-economic goals. We want to hold the officials of our department accountable for achievements of the goals in the Annual Performance Plan.
We want reiterate what President Jacob Zuma said there cannot be wastage and roll over funds. As the MEC of the Limpopo Department of Economic Development, Environment and Tourism I am appearing before this August House and the people of Limpopo asking this August House to finance our Annual Performance Plan. We hold this house in high esteem and cannot connive in its reduction to a rubber stamp. We will work cooperatively with the house and its committees. From this rostrum I call on all the employees and officials in the department to have a sense of pride in serving the people of the province.
Progress report on the Annual Performance Plan Administration Corporate
* to provide leadership and strategic management in accordance with legislation regulations, policies and to ensure appropriate support to business units.
* building a developmental state including the improvement of public services through provision of support on corporate services in accordance with legislation relevant policies and regulations.
* improve capacity skills of the department to deliver efficient public services.
Information management
* to enhance the ability of the department to deliver public services by providing leadership in areas of Information Technology, Records Management and Communications Services in accordance with legislation and relevant policies and regulations
* to support the core business of the department by developing effective communication strategies and providing efficient communications services.
Financial management
* to provide budgetary planning, implementation, monitoring advice and support services and compliance to the Public Finance Management Act (PFMA) and
Treasury Regulations
* to ensure sound risk management audit and compliance in the department
* to ensure compliance with financial legislations and treasury regulations
* to ensure sound asset management
* ensure maximisation of departmental revenue
Economic development
LED Planning and Research
* To facilitate research and planning to ensure growth, transformation and creation of decent work and sustainable livelihoods
Trade and sector development
Based on the Investment Tracking System, Trade and Investment Limpopo (TIL) has recorded investment flow to the province to the value of R12,10 billion mainly in mining (10,5 billion), retail (40 million) and utilities (1,814 billion) sectors. Provincial Mining and Mineral Resources Development and Mining Input Cluster Strategy have been developed and implemented to ensure that mining communities benefit from mining activities in their areas.
Business regulations and governance
* To ensure a healthy and fair trading environment
The business Regulation and Governance has recorded over 90,83% success rate in the resolution of consumer complaints, 146% of liquor applications were received, the department commits itself to consider all received liquor license applications timeously and has put measures in place for the Liquor Board to meet on a regular basis. Over 4 365 business premises were inspected for compliance.
Over the past year the unit has worked tirelessly to ensure that the Limpopo Business Regulation Act is adopted by the legislature, to this extent. Thus far, the Regulations have been advertised in the provincial gazette and newspapers for public comments.
Enterprise development
* Over 450 enterprises were incubated resulting in the creation of 237 new jobs and sustenance of 797 jobs
* 92 SMME’s were assisted to access tenders to the value of R21,3 million
* 45 SMME’s assisted to get donors worth R24,2 million
* LimDev disbursed loans to enterprises totalling R48,2 million
* The market stalls in Senwabarwana and Makhado were completed and handed over to the Municipalities
Economic research
The Economic Research Unit has completed ten research projects over the last six months. These projects are important to give a sense of direction in key economic programmes to ensure that departmental projects remain targeted and specific to meeting basic economic needs.
Environmental affairs
Environmental trade and protection
* To ensure the development, promotion and management of environmental activities in the province
* To promote a safe and healthy environment by managing environmental and land use development assessment programmes
* ensure sustainable development in the province.
Biodiversity and Natural Resource Management
* To ensure conservation, sustainable utilisation and development of biodiversity in the province
* Sustainable resource management and use
* Enhancing biodiversity and preservation of natural habitat
* Encourage sustainability through integrated planning.
Tourism and Community Environment Development
* To make the Limpopo the preferred eco-tourism destination and ensure the development and management of community environment programme
* Create a favourable environment for growth and investment by maintaining a stable macroeconomic environment and addressing the constraints to growth.
Budget
A total of R743, 905 million has been allocated for Economic Development, Environment and Tourism during the Financial Year 2009/10. Based on our Annual Performance Plan for 2009/10, this is how these funds have been allocated to Programmes:
Programme 1: Administration: R260,506 million
Programme 2: Economic Development: R248,645 million
Programme 3: Environmental Affairs: R147,734 million
Programme 4: Tourism: R87,020 million
Transfers to Public Entities have been allocated as follows:
LIMDEV: R50 million
LIBSA: R65 million
LGB: R28 million
LTP: R60 million
TIL: R40 million
Administration
Economic classification: Compensation of employees
Amount: R125,319
Economic classification: Goods and services
Amount: R93,597
Economic classification: Unauthorised expenditure
Amount: R27,311
Economic classification: Transfers and subsidies
Amount: R493
Economic classification: Payment for capital assets
Amount R’000: 13,786
Total: R260,506
Economic development
Economic classification: Compensation of employees
Amount: R39,371
Economic classification: Goods and services
Amount: R25,621
Economic classification: Transfers and subsidies
Amount: R183,153
Economic classification: Payment for capital assets
Amount: R500
Total R248,645
Environmental Affairs
Economic classification: Compensation of employees
Amount: R97,015
Economic classification: Goods and services
Amount: R19,213
Economic classification: Unauthorised expenditure
Amount: R27,612
Economic classification: Transfers and subsidies
Amount: R855
Economic classification: Payment for capital assets
Amount: R3,039
Total R147,734
Tourism
Economic classification: Compensation of employees
Amount R’000: 18,238
Economic classification: Goods and services
Amount: R7,686
Economic classification: Transfers and subsidies
Amount: R61,070
Economic classification: Payment for capital assets
Amount: R26
Total R87,020
Honourable Speaker, Honourable Premier and Honourable members of this house
The people of the province have given us an unquestionable mandate to meet their demands for a better life and delivery of services.
We have translated the mandate into actionable Annual Performance Plan. We then in no uncertain terms demand that the employees and officials of the department adhere unwaveringly to the service as stipulated in their various performance instruments. Serve with diligence a leadership that has been given to you and do not worship any false gods. The majority of our employees and officials are loyal and competent and want to make a difference in people’s lives.
We would like to appreciate the role played by the members of the boards of Parastatals. We appreciate a growing breadth of experience in our boards. We expect you to exercise your fiduciary responsibility to the highest ethical standards. We expect you to uphold higher standards of corporate governance. The department will be of assistance to individual board members to ensure that they develop themselves in the execution of their responsibilities. We call on you to bring your experience to bear in the shaping of economic landscape of the province. I call on the business leaders of the province, leaders of financial institutions, academics, professionals, professional bodies, the trade unions, NGO’s, the talented Limpopo diaspora and investors to come to the round table so that Limpopo a province of legends can become an economic legend. Let’s make Limpopo hot, vibrant and a place to do cool deals.
Honourable Speaker, Honourable Premier and Honourable members of this house
I would like to take this opportunity to thank you the Premier of the province for the support you have given me from the day of my appointment. I would like to thank Members of the Provincial Executive Council for being a supportive collective and fostering a collegial and nurturing environment. I would like to thank the Members of the ANC Party Caucus and the broad ANC family for nurturing me over many years.
I would like to pay tribute to the spirit of excellence as exemplified by Mihloti Hetisani. A tribute to the veterans and heroes who have shaped my political outlook in particular the lifelong commissar Jack Simon, to the Chief Whip of our people France Mohlala, to lifelong cadres of the movement Ephraim Mogale and Seolo Makwela.
Khotso ha e be le lena.
Pula
Mucha Gracias
Source: Department of Economic Development, Environment and Tourism, Limpopo Provincial Government (http://www.ledet.gov.za)
