Madam Speaker, Honourable Thandi Shongwe,
Premier of Mpumalanga, Honourable David Mabuza,
Deputy Speaker, Honourable David Dube,
Colleagues in the Executive Council,
Chief Whip of the Majority Party, Honourable Johanne Mkhatshwa,
Honourable Members of the Provincial Legislature,
The Director General of Mpumalanga, Dr Nonhlanhla Mkhize,
The Acting Head of the Department of Economic Development and Tourism, Mr Thulani Mdakane,
Other Heads of Departments in our midst,
Chairpersons of Boards and CEOs of our Public Entities,
Our social partners,
Members of the media,
Distinguished guests,
Ladies and gentlemen,
Good Morning.
Madam Speaker,
We meet just six days after South Africa and the world had paid tribute to one of our greatest liberation stalwarts, iSithwalandwe – uTata Nelson Rolihlahla Mandela, by dedicating at least 67 minutes of their time to make an imprint in the lives of the less fortunate, and particularly, by heeding the call of President Jacob Zuma to clean their neighbourhood in order to make South Africa a clean country.
It was the first year to celebrate the Nelson Mandela International Day without our beloved Madiba, and we were proud by the way our people continue to show their love and recognise his contribution and sacrifice towards humanity. Thank you South Africa! Thank you Mpumalanga! Indeed, akekho ofana nawe tat’u Nelson Mandela!
We, like Nelson Mandela, are assured of victory in the 2nd phase of the transition to push back the frontiers of poverty and under-development which continue to afflict millions of our people in the Province, and indeed our mother land. We must all re-dedicate ourselves to deepen the economic struggle for the wellbeing of all our people.
Madam Speaker,
The 2014 budget for the Department of Economic Development and Tourism is guided by the election manifesto of the Ruling Party, the National Development Plan (NDP) as adopted by the ANC in the 2012 Mangaung National Conference of the ANC, and takes Mpumalanga Vision 2030 and our Economic Growth and Development Path as its point of departure.
The budget we table before this August House seeks to set out our resource plan to re-affirm the commitment to build a democratic developmental state which is biased towards the working class and the poor. Upfront, I need to state Madam Speaker that the budget is about people not numbers. It is an opportunity for us to reflect on the principles of our collective heritage of struggle, conviction, commitment and resolve of the founding fathers of our liberation struggle, Chief Albert Luthuli, Dr Xuma, Dr JS Moroka, Zacharia Mahabane, Pixley ka-Isaka Seme, O.R Tambo, Nelson Mandela and many others whose visionary leadership many decades ago, guided that “the people shall share in the country’s wealth and the Land shall be shared among those who work it”. This visionary expression was later firmed up in the constitution of our country.
Even if there are still many more hills to climb, the milestones of social and economic transformation since 1994 are overwhelmingly evident.
Madam Speaker,
No one in this revered house can deny that South Africa is a different country from the one this House and the government inherited in 1994. The number of schools, clinics, roads, taps, sanitation, electricity connections, and houses we have built since then are the testimony to this assertion, and that our programme for radical economic transformation is well on course. Together we must move Mpumalanga forward! Global economic recovery provides positive backdrop for Mpumalanga growth.
Honourable Speaker, Honourable Members,
We present this Budget Vote at the time when the world economy is showing some signs of improved growth. Recent economic data points towards strengthened global economic growth, with expectations of even better performance in the medium term. What is delighting is that the recovery in the global economy would thus translate into higher demand for South African exports.
We acknowledge that the country’s economic outlook for 2014 has been revised downward as a result of economic contraction during the first quarter of 2014. This was mainly due to the decrease in the real value added by the mining sector, reflecting the impact of a prolonged strike in the platinum-mining sector. However in contrast to the decline in the primary and secondary sectors in the first quarter of 2014, growth in the real value added by the tertiary sector was maintained. As a result, the South African Reserve Bank (SARB) projects that the economy will improve from 1.9 per cent in 2013 to 2.1 per cent in 2014, reaching 3.1 per cent by 2015.
Mpumalanga’s economic growth prospects
Madam Speaker,
The outlook for priority sectors in the Province especially agriculture, mining and manufacturing is showing gradual improvement, and will benefit from commodity demand, low interest rates, infrastructure spending and government interventions in the sectors. The distinctive feature of the economy of the Province is the stable labour market and positive trade balance.
However, high levels of unemployment among the youth and the low contribution of Small Mediam and Micro Enterprises (SMMEs) in the economy remain a thorny issue, hence government interventions over the next five years will need to focus on addressing these broad challenges.
We are concerned that:
- 30,4% of the provincial population remains without work,
- The youth share of the total number of unemployed persons is above 70%,
- The skills-set of the unemployed is currently not necessarily matched with what is needed in the provincial labour market,
- In addition, an analysis of the education profile of the unemployed youth shows that 49% have not completed secondary education and quality education is at the centre of the labour market,
- The poverty rate shows that Mpumalanga was 36,9% higher than the national rate of 35,9%,
- Inequality remains high,
- We continue to experience sluggish growth of the Mpumalanga Annual Gross Domestic Product of around 2% in 2013 mainly due to Global trade which went into reverse,
- Mpumalanga Economy remains heavily reliant upon export of the primary sector without any beneficiation.
Madam Speaker, Honourable Members,
As captured in the 2014 State of the Province Address by Honourable Premier DD Mabuza, we need to focus on growing the economy to achieve high rates of labour absorption. To do this, it would require employment creation to increase faster than the labour force growth, and thus generate about 72 000 jobs per annum in order to reach the unemployment targeted rate of 16.5 per cent by 2019. For this to happen, the Provincial economy would have to grow by above 5 per cent per annum.
Madam Speaker,
Having outlined the challenges we are facing, the economic performance and the economic outlook of the country and Mpumalanga in particular, I now present our interventions.
Response strategy: Targets over the next five years
Over the next 5 years our interventions will prioritise:
- The creation of decent work which is the primary focus of an inclusive economy,
- The development of key economic sectors that have the potential to unlock growth and decent employment creation. These key economic sectors are mining, manufacturing, agriculture, tourism and ICT
- Investing in strategic social and economic infrastructure to support economic growth and development,
- Expanding opportunities for entrepreneurship and sustainable livelihoods through support for the development of co-operatives and micro enterprises,
- Prioritise coordination of the implementation of the Youth Employment Accord in the Province and investing in priority skills
- Strengthening partnerships with the private sector to implement the Mpumalanga Economic Growth and Development Path.
Programme of action: 2014/15
Honourable Speaker, Honourable Members,
This budget takes note of the reconfiguration of the department to position it appropriately to achieve its core mandate. We are assessing requisite capacity and reviewing the organisational design to align it to the strategic imperatives of the Growth and Development Path.
We further note that in the previous financial year both the Executive Council and this august House have raised serious concerns about the lack of clarity on roles and responsibilities between the department and its entities. In this regard, we will conduct a comprehensive diagnostic exercise which will be followed by a clear programme of action to address identified shortcomings and duplications. This exercise will include policy and legislative review, including the structure and content of the Shareholder’s Compact to address accountability deficiencies aimed at enhancing the performance of public entities.
Notwithstanding what I have just said, the department and its Public Entities remain committed towards steering economic growth and development in the Province, in order to address the triple challenges of poverty, unemployment and inequality. We will therefore continue to strengthen opportunities for the unemployed, especially to the youth who are the most affected, given that we are a youthful Province. Particular emphasis will thus be placed on building the economy in rural areas.
In achieving this, the department will in the current financial year focus on the following:
- Develop the job tracking system and facilitate baseline information to guide policy making. This will assist us to track the number of jobs created especially by the private sector
- We intend to further strengthen our support to municipalities in relation to the implementation of Local Economic Development Policies in line with the MEGDP (Mpumalanga Economic Growth and Development Path). This will include identifying municipalities without requisite business by8 laws to support growth of the local economy and assist them to develop such enabling bylaws which are essential in bringing about investment at the local level.
We will in addition produce socio-economic scoping reports of municipalities and identify the sectors each municipality has competitive advantages on. More importantly we will continue to support the work of the LED Fora in Municipalities to strengthen coordination and partnerships that promote Local Economic Development.
Madam Speaker,
An Industrial Development Plan (IDP) remains a significant enabler for economic growth and job creation, and as such, we will thus develop the IDP of the Province, to expand local industries across key sectors.
In facilitating the development of infrastructure required for economic growth and development we will:
- In collaboration with the Department of Trade and Industry (dti) we will conclude the work on the detailed feasibility study for the establishment of the first Special Economic Zone (SEZ) in Mpumalanga to identify opportunities for industrial expansion and investment.
- Conduct feasibility studies for the development of an industrial park and supplier park in the Govan Mbeki and the eMalahleni Municipalities respectively. In future we will explore prospects of developing these parks into fully fledged Special Economic Zones.
- Ensure that an Agro-processing Hub is established in the Dr Pixley ka-Isaka Seme Local Municipality, including identifying another hub for the Dr JS Moroka Local Municipality,
Public Entities as our implementing agents remain critical to our work. In this regard, we will:
- Strengthen our oversight role on them by monitoring and evaluating their activities based on shareholder’s compacts. A dedicated unit for monitoring and evaluating the performance of Public Entities has now been created for this purpose. Mpumalanga Economic Growth Agency’s (MEGA) role in terms of facilitating infrastructure required for economic development remains critical. In this regard, we will continue to facilitate:
- The establishment of the International Fresh Produce Market of Mpumalanga through a viable, supportive Agro-Hub network,
- The operationalisation and commercialisation of the Donkerhoek Water Bottling Plant with earnest.
Madam Speaker,
In order to propel economic growth we intend:
- To remove the most pressing constraints by reducing the costs of doing business and further address the needs of small businesses and co-operatives. To this end, we will provide general support including financial support to the value of R12.8 million to 38 SMMEs and co-operatives in various sectors through our agency, MEGA. Our mandate further entails facilitating economic beneficiation for businesses, especially small businesses and cooperatives. In this regard, we will:
- Ensure that local enterprises participate in the infrastructure build programme by identifying opportunities for them, including mentoring and nurturing them,
- Further identify and package opportunities for SMMEs and co-operatives in the agricultural value chain, manufacturing, mining and energy, and also link them with local and international markets,
- Our plan is to also develop a model for the establishment of One-Stop Business Development Centres and package services for them, this is intended to ensure that SMMEs and co-operatives have access to information and services at one central point.
- Implement both the Broad-Based Black Economic Empowerment (BBBEE) Act and the Preferential Procurement Policy Framework (PPPF) Act and monitor compliance in order to promote economic transformation in the Province.
Honourable Members,
For the economy to grow at a faster rate we need the injection of domestic and foreign direct investment, in this regard our International engagements will be geared towards facilitating foreign investment in key sectors and infrastructure development. It will also focus on creating export markets for local products.
We will continue to engage with Oman to conclude agreements on export opportunities for our fresh produce. We have already hosted delegations from Poland and Spain to explore new opportunities for investment.
Our government would like to see more people acquiring decent houses. In this regard, as one of MEGA’s Key Performance Areas, we will:
- Increase access to housing loans to support the development of integrated human settlements. Alongside this we will pay particular attention to strategic infrastructure investment to stimulate local economic activity where new settlements are established.
In order to boost tourism through the implementation of the Mpumalanga Tourism Growth Strategy, work will continue to:
- Diversify our tourism product offerings by investing in the development of liberation heritage routes. The Mpumalanga Tourism and Parks Agency (MTPA) will work with relevant departments and municipalities to capitalise on the rich history of the liberation struggle in the Province. The liberation routes will feature prominent names such as Nokuthula Simelane and Gert Sibande,
- Implement the Blyde River Canyon Cable Car and God’s Window Skywalk projects. These facilities will amongst others, increase the number of tourism products and create a diversified tourism experience in the Province, as well as increase the length of stay and tourist spend. The MTPA has already secured financial resources from the IDC in order to realise these two projects,
- Facilitate the establishment of an International Convention Centre which has the potential to attract the staging of huge events in the Province, and
- Increase the share of ownership in the tourism industry by the Historically Disadvantaged Individuals (HDIs), and further implement an incubation programme for SMMEs in this sector. As we implement all these interventions, we ensure that communities are empowered to participate meaningfully in the ownership and operations of these tourism establishments.
Honourable Speaker,
There is progress in turning around the Zithabiseni Resort and Conference Centre. We have since taken a decision to change the current operating and management model of the Resort in order to make it a sustainable and profitable business. This is after the realisation that this enterprise is neither sustainable nor profitable. To this end, the department through the MTPA is conducting a feasibility study which must be concluded within the next 3 months on the best operating model for the Resort.
Parallel to this we are conducting a due diligence exercise as a necessary pre-condition of the transfer of the resort. We will immediately thereafter consult the Executive Council and all affected stakeholders on the outcome of the feasibility study regarding the viable model which will address the management and business operations of the Resort.
In our endeavour to bridge the digital divide, the department will lead the process of developing the Provincial Information Communication Technology (ICT) Master Plan. The master plan will guide technological advancement which will result in job creation and the acceleration of economic development, as well as improving public service efficiency.
The Mpumalanga Gambling Board will continue to effectively regulate the gambling industry in the Province, and sustain the roll-out of responsible gambling and prohibited gambling awareness campaigns. We are cognisant of the need to carefully balance the mitigation of social ills as a result of irresponsible gambling and the positive economic spin offs such as job creation and the economic catalytic effects of the industry.
Honourable Speaker, Honourable Members,
Our people are not saving enough to prepare for rainy days. Given that July has been declared nationally as the Saving Awareness Month, we strive to inculcate the culture of saving which if successfully done, will boost our country’s economic growth and reduce dependence on the national fiscus for sustenance. Under the theme, “My Savings, My Future, Time to Build”, we are continuing to implement awareness campaigns through the mass media, workshops, and road-shows across the Province.
It is also our plea that, you as parents and Honourable Members, should just with us on this bandwagon and become Ambassadors of this initiative. It is said in the Bible in Proverbs chapter 22 verse 6-7 and I quote: “Train a child in the way he should go, and when he is old he will not turn from it. The rich rule over the poor, and the borrower is servant to the lender.” Our main focus therefore continues to be school going children who are easy to shape up. However as grown-ups, it is not too late to repent.
With regards to the protection of consumers from unfair business practices, it is our intention to strengthen our intervention in this area through the established two Consumer Courts in the Province, including strengthening consumer education and awareness programmes to empower consumers about their rights and responsibilities.
We have just recently established the second Court which will be dedicated to service both Nkangala and Gert Sibande District Municipalities. In addition, we will continue with the amendment of the Mpumalanga Consumer Affairs Act No. 6 of 1998 and hope to finalise it within this financial year. At this point, with your permission Madam Speaker, I will request the newly appointed Consumer Court members serving Nkangala, Gert Sibande and Ehlanzeni District Municipalities to take a bow.
The process of establishing the Mpumalanga Liquor Authority (MLA) which will be the fourth public entity reporting to the department is progressing very well. In this regard, we are in the process of fully operationalising the Mpumalanga Liquor Licencing Act, 2006 (Act 5 0f 2006).
This will thus give full effect to the establishment of the MLA in terms of section 69(2) of the said Act. The entity will assist to further streamline the regulatory processes of the liquor industry in terms of compliance and enforcement, including creating an environment for responsible liquor trading by licensees with the Province.
Madam Speaker,
As the department, we acknowledge the significant role being played by the private sector, development finance institutions and sister departments across all three spheres of government in job creation and infrastructure development, amongst others. In this regard, we will continue with earnest in this critical area of our work to ensure that the partnerships already signed produce fruit.
The Provincial Government, led by the Honourable Premier, Mr D.D Mabuza, has already signed Memoranda of Understanding with BHP Billiton, SASOL, SA Breweries and Eskom, and we are on the verge of signing with Broadband Infraco. The partnerships focus on human capital development, enterprise development, social and economic infrastructure, environmental management for sustainable development, research and development in order to explore more job creation opportunities in the identified sectors.
Contribution to the Millennium Development Goals
The department will continue to contribute to the attainment of the Millennium Development Goals (MDG)in the forthcoming years. Particular focus will be on MDG 1 which focuses on eradicating extreme poverty and hunger, and targeting to achieve full and productive employment, and decent work for all, including women, men, and young people.
In this regard, we are committed:
- To ensure the participation of HDIs (inclusive of youth, women, workers, rural masses, and people with disabilities) in the mainstream of the economy,
- To facilitate support and development of business enterprises including SMMEs and Cooperatives,
- To provide strategic economic development support to municipalities,
- To ensure the development of competitive growth sectors which have high labour absorbency, and as indicated above,
- To continue to implement consumer protection and awareness programmes which create an environment conducive to fair trade.
Budget allocation (per programme): 2014/15
Madam Speaker,
Having presented our plans, I now table the proposed budget for Vote 6: Department of Economic Development and Tourism, per programme, for the financial year ending 31 March 2015, which will enable us to carry-out our mandate.
Programme 1: Administration
In order to amongst others, continue to provide political policy directives, administrative, financial and other support functions to the Department, Programme 1 have been allocated an amount of R89 million, 774 thousand.
Programme 2: Integrated Economic Development
Programme 2 has been allocated an amount of R242 million, 956 thousand, to amongst others, continue to promote and develop small enterprises. Included in this budget, is an amount of R171 million, 605 thousand to fund the requirements of the MEGA.
Programme 3: Trade and Sector Development
An amount of R17 million, 711 thousand has been allocated to Programme 3 to amongst others, continue to ensure growth in exports and investment in the Province.
Programme 4: Business Regulation and Governance
Business Regulation and Governance is allocated the total amount of R82 million, 495 thousand to amongst others, continue to ensure compliance with applicable liquor, gambling and consumer laws. Included in this amount is R54 million, 500 thousand to fund the requirements of the Mpumalanga Gambling Board, and a further R5 million to fund the Mpumalanga Liquor Authority.
Programme 5: Economic Planning
Programme 5 has been allocated an amount of R14 million, 989 thousand to continue to formulate provincial economic policy priorities, and co-ordinate the implementation of the Mpumalanga Economic Growth and Development Path (MEGDP), amongst others.
Programme 6: Environmental Services
Madam Speaker, Honourable Members,
You will recall that when the Honourable Premier re-constituted the Executive following the general elections in May, he announced that the mandate of environment will shift to the re-configured Department of Agriculture, Rural Development, Land and Environmental Affairs.
However this happened after the provincial budget was tabled, and thus in terms of section 42 of the Public Finance Management Act (PFMA), the budget for this mandate can only be transferred to the relevant department during the budget adjustment process later this year. As such the allocation for Environmental Services will be appropriated under Vote 6 until that time. In this regard, Programme 6 has been allocated an amount of R81 million, 208 thousand to continue to amongst others, facilitate sustainable development through environmental planning and governance, render environmental awareness programmes, pollution and waste management.
Programme 7: Tourism
An amount of R332 million, 639 thousand has been budgeted for Programme 7 in order to continue to enhance sustainable tourism growth, conservation and bio-diversity, amongst others. This amount includes R310 million, 941 thousand to fund the Mpumalanga Tourism and Parks Agency, and a further R19 million to fund the Zithabiseni Resort and Conference Centre.
Proposed total budget 2014/15
Madam Speaker, Honourable Members,
The total amount proposed to be appropriated to fund the requirements of Vote 6: Department of Economic Development and Tourism for the 2014/2015 financial year is R861 million, 772 thousand. Of this amount, a total of R556 million, 46 thousand will be transferred to the public entities reporting to the Department and the Zithabiseni Resort and Conference Centre. These transfers represent almost 65 per cent of the proposed budget allocation to the department.
I therefore request this august House to consider and approve the proposed budget of R861 million, 772 thousand for Vote 6, for the financial year ending March 2015.
Conclusion
As I close, may I take this opportunity to thank the leadership of the ANC, under the able leadership of the Honourable Premier, Comrade D.D Mabuza, for continuing to take the interest of our people at heart. We commit that we will do whatever it takes Honourable Premier, to ensure that we rekindle our economy in order to stop the suffering, especially of the less fortunate. We dare not falter, in our quest to continue to provide a better life for all.
To my colleagues in the Executive Council and the Legislature, thank you very much for continuing to support us. My appreciation also goes to the chairperson of the Portfolio Committee on Office of the Premier, Finance, Economic Development and Tourism, Honourable Pat Ngomane, and all the Honourable Members of this Committee for overseeing our work.
My gratitude further goes to the Acting Head of Department, Mr Thulani Mdakane, Chairpersons of the Boards and CEOs of our Public Entities, our partners in the private sector, and the staff members of the department.
To my family, thank you very much for being there and supporting me while I serve our people.
Madam Speaker, Honourable Members,
As we stride into the third decade of the democratic South Africa, we do so with confidence because we know the ruling party will not be deaf to the voice of those in pain, it will not be blind to incompetence and laziness because our people deserve better.
One of the profound Marxist-Revolutionary theorists of note, a humble visionary who was assassinated for his ideas, the late President of Burkina Faso, Thomas Sankara, in an interview with a Swiss Journalist in 1985 said and I quote:
“I would like to leave behind me the conviction that if we maintain a certain amount of caution and organization, we deserve victory. You cannot carry out fundamental change without a certain amount of madness. In this case, it comes from non-conformity, the courage to turn your back on the old formulas, the courage to invent the future. It took the madmen of yesterday for us to be able to act with extreme clarity today. I want to be one of those madmen. We must dare to invent the future.”
Business unusual is at the heart of madness of transformation as we test different kinds of solutions to the problems confronting humanity. History will respect those who tried and failed as opposed to those who never failed because they never tried to do anything to better the lives of our people. The assassins of Thomas Sankara didn’t realise that you may be able to kill a person, but you can never kill his ideas which continued to unite the African continent.
Together we move Mpumalanga forward by striving to reducing poverty, unemployment and inequality.
I thank you!
