Speeches

NC ADJUSTMENT APPROPRIATION BILL 2017 AND THE PROVINCIAL MEDIUM TERM BUDGET POLICY STATEMENT

ADDRESS TO THE PROVINCIAL LEGISLATURE ON THE OCCASION OF THE TABLING OF THE NORTHERN CAPE ADJUSTMENT APPROPRIATION BILL 2017 AND THE PROVINCIAL MEDIUM TERM BUDGET POLICY STATEMENT BY MR. M.N. JACK (MPL), MEC FOR FINANCE, ECONOMIC DEVELOPMENT AND TOURISM

23 NOVEMBER 2017

HONOURABLE SPEAKER, Mr KENNY MMOIEMANG

HONOURABLE PREMIER, Ms SYLVIA LUCAS

HONOURABLE DEPUTY SPEAKER

MEMBERS OF THE EXECUTIVE COUNCIL

MEMBERS OF THE NORTHERN CAPE LEGISLATURE

MAYORS AND COUNCILLORS

THE DIRECTOR-GENERAL

HEADS OF DEPARTMENTS AND MUNICIPAL MANAGERS

LISTENERS AT HOME

MEMBERS OF THE MEDIA

LADIES AND GENTLEMEN

Honourable Speaker and Members, It gives me great priviledge to table the 2017/18 Medium Term Budgte Policy Statement (MTBPS) of the province and Adjusted Estimates of Provincial Revenue and Expenditure (APRE) for consideration of the House and People of the Northern Cape.

As I am about to present the medium-term budget, I am reminded of the journey that all South Africans, including the people of the Northern Cape will be embarking on, in the fight against the abuse of children and women when the 16 days of activism for no violence against women and children kickstart on Saturday

We strongly condemn the killing and abuse of women and children around the country. Several cases of murder and abuse have been reported in the media and according to the SA Medical Research Council, three women are killed by their intimate partner every day in South Africa.

News of the killing of women has sparked an outcry among South Africans and has also put the spotlight on the Gender Based Violence in the country. We call on South Africans to unite against the attacks and killing of women and children, as well as human trafficking.

The South African public, people of African continent and the international community are celebrating 2017 as the centennial of Oliver Reginald Tambo. Through O.R. Tambo’s advocacy on gender equality, our country has laid foundation for women to thrive in a democratic society. Speaker, improving our economic growth outlook over the period in advance remains our biggest challenge. If we are to overcome the triple challenge of inequality, poverty and unemployment in the Province, we have to grow the economy and create more jobs.

The National Development Plan commits the country to create 11 million job opportunities and tripling the size of economy by 2030.

Government is working to undo the structural unemployment problems created by apartheid.

South Africa’s unemployment problem has its roots in our divided past where the apartheid state deliberately excluded black people from opportunities in the labour market.

From the late 1970s through to 1994 the results were high levels of poverty and inequality, slow economic growth, falling investment and rising joblessness. In the early 1990s, the rate of employment had shrunk to under 40 per cent, leaving South Africa with one of the lowest employment levels in the world.

The new democratic government inherited this unemployment problem and began putting measures in place to address it. However, as it stemmed from deep rooted structural issues, there was no quick fix. In 1994 only 39.8 per cent of working-age adults had a job.

Through the Nine-Point Plan we are investing in job creation projects to improve the country’s jobs situation. We are also accelerating our infrastructure build programme to help bring more people into the country’s job market.

However, government cannot do it alone. People of the Northern Cape with an aptitude for business and entrepreneurship should start their own small business and assist government in creation of more jobs.

Kodwa ke, urhulumente asokuze akwenze yedwa oku. Abantu baseMntla-Koloni abanesiphiwo sezoshishino nakwezorhwebo mabaqale amashishini abo amancinci ukuncedisa urhulumente ekudaleni imisebenzi eliqela.

Privaat belegging is van kardinale belang om ons vaardigheidsbasis te laat groei en werkgeleenthede in die land te skep.

Die privaat sektor kan help deur leerlingskapsprogramme op te stel om jongmense te help lei.

Honourable Speaker, this speech provide a concise report and narrative on the composition of expenditure compared to the original approved budget tabled in this house earlier this year.Our budget preparation process takes place within a transparent medium term expenditure framework that enhances fiscal discipline, however, I also need to highlight that lack of proper planning limit our ability to accurately forecast on our revenue resulting in under collection of set targets.

Economic Outlook

Honourable Speaker, the IMF projected that global economic growth will increase steadily in the medium term growing by 3.6 per cent in 2017, and 3.7 per cent in 2018, with advanced economies being expected to grow at a slower pace than emerging market and developing economies. China’s growth is expected to slow down marginally from 6.8 to 6.5 per cent between 2017 and 2018.

Honourable Speaker and Honourable Members, the MTBPS is tabled at a time following recovery from a technical recession experienced by South Africa. Despite the recovery, the national economy remains weak and National Treasury indicated that the growth expectations of the country were revised downward from an initial expectation of 1.3 per cent growth in 2017 down to 0.7 per cent growth expected in 2017.

2015, the provincial economy grew at 0.9 per cent according to Statistics South Africa. The province should take advantage of the weak Rand to increase its exports and to boost the provincial economy.

According to Statistics South Africa, in the third quarter of 2017, the Northern Cape unemployment rate was 29.9 per cent, compared to the national unemployment rate of 27.7 per cent. The provincial unemployment rate did however decrease from 30.5 per cent in the second quarter of 2017. This high unemployment experienced in the province should serve as motivation for us as a province to come up with labour intensive initiatives that will increase the rate at which jobs are created. This is important as an increase in unemployment can potentially put more pressure on the fiscus as more people can become dependent on the state.

2018 MTEF Fiscal Framework

Honourable Speaker, the average growth of the provincial budget over the 2018 MTEF is 6 per cent whilst the equitable share grows with an average of 7 per cent over the same period, conditional grants shows growth of 2 per cent and own receipts grows with an average of 4 per cent over the MTEF.

The growth in the equitable share is mainly driven by additional resources earmarked to augment the historical shortfall in the Improvement of Conditions of Service and further additions are provided to the Department of Education to assist with the associated costs related to the growth in learner numbers in the province.

Similarly to the current’s year framework, the 2018 budget continues to be informed by weak economic growth. For the second quarter of 2017, growth rebound to 2.5 per cent, quarterly annualized from a previous contraction of 0.6 per cent in the fist quarter of 2017. In spite of the rebound growth, the economy remains fragile and this is reflected in the downward revision of the overall growth for 2017 to 0.7 per cent in the Medium Term Budget Policy Statement (MTBPS) from 1.3 per cent at the time the 2017 Budget was tabled in February of this year.

Over the medium term, growth average 1.5 per cent – a sluggish economic growth implies the same for tax revenue growth.

Moreover, new social spending priorities will require fiscal consolidation alongside additions to the budget. In spite of these pressures on the fiscus, efforts have been made to protect departmental baselines.

The changes to the 2018 MTEF framework reflect both fiscal consolidation that is kept at minimum and other adjustments made to departments are still catered for within the overall budget framework without compromising fiscal consolidation of the province.

Honourable Speaker, let me take this opportunity to explain to the house the revisions to the provincial equitable share formula. These revisions are informed by the change in methodology used to collect learner enrolment numbers i.e. Learner Unit Record Information Tracking System (LURITS). The system allows for detailed information to be collected on scholars including modules they are taking and their progress through the schooling system.

Revisions to the provincial equitable share formula are also informed by data from census 2011, age cohorts, District Health Information Services for patient load data, 2011 risk adjusted index, insured population as per the 2016 general household survey and 2010 income and expenditure survey. The new share across provinces will be phased in over three years.

These revisions have resulted in the province receiving an additional amount of R43 million over the 2018 MTEF. Over the same period, provision is also made for the following priorities:

• The Department of Social Development is provided with an amount of R5.3 million in the 2018/19 financial year and this grows to R21 million over the 2018 MTEF for the Prevention and Early Intervention Programmes to fight violence against women and children.

• The Department of Social Development is also provided with an amount of R11.6 million in the outer two years of the 2018 MTEF, towards the provision of social welfare services rended by Non Governmental Organisations in the province. This is in response to the National Association of Welfare Organizations and Non-Governmental Organizations (“NAWONGO”) Court Case Judgement. Flowing from this judgement, an expenditure review is underway which will assits in quantifying the gap between the funding of the various social services and the cost of these services.

• An additional amount of R256 million is also provided for the province in the outer year of the MTEF for the provision of wage inflation. This additional amount is not for new appointments but to compensate departments, especially Health and Education to deal with the historical shortfall in respect of Improvement of Conditions of Service.

• The Department of Education has been allocated an amount of R257 million over the 2018 MTEF, to specifically deal with increase educator numbers as a result of growth in learner numbers.

 

Honourable Speaker, there are various interventions across departments to optimise provincial own revenue, these interventions will improve our revenue targets in the medium term. Provincial own receipts will amount to R1 billion over the next three years which represents an average growth of 6 per cent.

Public Expenditure and Financial Accountability (PEFA): Assessment & Outcomes - Northern Cape

Honourable Speaker, allow me to share a synopsis of the Public Expenditure and Financial Accountability (PEFA) assessment and outcomes of the province.

PEFA is an internationally recognised and widely accepted methodology used to measure the performance of a public finance management system – by comparing the public finance system against international best practices used to determine if a country and in this particular instance the province has tools to deliver three main public finance management outcomes, namely;

• Aggregate fiscal discipline;

• Strategic allocation of resources, and

• Efficient service delivery.

Honourable Speaker, the province was assessed using the following Dimensions: (a) credibility of the budget, (b) comprehensiveness and transperancy (c) policy based – budgeting (d) predictability and control in budget execution.

Honourable Speaker and Members, the Northern Cape scored among the highest provinces in the budget comprehensiveness and transperancy Dimension, which relate to the comprehensiveness of the budget process and high quality of budget documentation.

However, we scored relatively low in the predictability and control of the budget execution dimension mainly due to challenges in payroll audits especially in Health and Education, coupled with lack of competency and insufficient capacity which was found to be the main cause of poor contract management and ineffective supply chain management processes.

Honourable Members, this finding correlate with our huge irregular expenditure in the province. We need to put extra ordinary measures to strengthen our procurement processes.

2017/18 Adjustment Budget Allocations

Honourable Speaker, we are extremely cautious and mindful of our fiscal position as a province, however, some emerging urgent priorities needed to be considered in this adjustment.

These proposals have been subjected to a thourough process of engagements by all stakeholders with the guidance of the Treasury Committee.

We have been clear that we will not consider pressures that are not palatable with our current realities as a province and hence we have managed to accommodate in year pressures amounting to R77.8 million only, this against a background of total in year pressures amounting to R1.2 billion presented by provincial departments.

Our original budget tabled in March this year amounting to R16.1 billion is set to be adjusted with an amount of R442.7 million. However, I need to provide context in this regard, of this total, an amount of R294.7 million or 66 per cent represent roll overs in respect of both national conditional grants amounting to R229 million and provincial equitable share constituting R65 million. This is not new money but unspent funds needed to finailse committed programmes that are over lapping into the current financial year.

An amount of R67.1 million or 15 per cent of the total adjustment amount represent Improvements on Conditions of Service (ICS) which is mainly allocated to the departments of Health and Education. Other adjustments sourced from provincial reserves amount to R80.7 million or 18 per cent of the total adjustment to fund numerous in year pressures. Furthermore an amount of R6 million has been received by the Department of Transport, Safety and Liaison from the Road Traffic Management Cooperation (RTMC) to deal with road safety programmes in the province.

An amount of R5 million represent self financing sourced through retained funds by the Provincial Legislature. Lastly, Provincial Treasury has declared savings amounting to R6.126 million mainly as a result of savings emanating from funded vacant posts.

I need to reiterate Honourable Speaker that factoring out roll overs amounting to R293 million, self financing of R11 million, ICS of R67 million and declared savings by Provincial Treasury, the nett actual addition to the original budget in terms of the equitable share is only R80.7 million which constitute 18 per cent of the total adjustments of R442.7 million.

Honourable Speaker, we are an interventionist economy and we need to always ensure that despite our constraints, certain tradeoffs are made to ensure that we respond positively to some of the urgent pressures as presented by various departments during the budget process.

I now turn my attention to the specific proposals included in this adjustment. The Department of Education has been allocated an additional amount of R38 million to cover the shortfall in respect of Improvements on Conditions of Service.

Similary an additional amount of R27.9 million has been provided to the Department of Health to deal with the shortfall in respect of Improvements on Conditions of Service. Furthermore, amounts of R144.4 million and R24 million have been approved as roll overs in respect of conditional grants and equitable share respectively.

Honourable Speaker, Department of Social Development has been allocated an additional amount of R6 million of which R3 million is meant to augment the shortfall in the budget of the substance abuse treatment care centre while another R3 million relates to social relief of distress.

A further amount of R45.7 million has been approved as roll overs in respect conditional grants and equitable share.

Department of Sport, Arts and Culture has been allocated an additional amount of R19.2 million of which R16.6 million relates to conditional grants and R1.8 million in terms of the equitable share approved roll overs.

Department of Agriculture, Land Reform and Rural Development has been allocated an amount of R14.8 million also in the form of roll overs to complete projects emanating from the previous financial year.

Honourable Speaker, a total amount of R23.5 million has been allocated to the Department of Roads and Public Works to address various priorities. Of this total amount, R12 million is earmarked to augment the Expanded Public Works Programme (EPWP) which continues to create job opportunities in the province. A further amount of R10 million is also provided for contractual obligations. An additional amount of R1.5 million relates to a conditional grant rollover.

Department of Cooperative Governance, Human Settlements and Traditional Affairs has been allocated an amount of R8.9 million in respect of a conditional grant roll over.

Honourable Speaker, Department of Economic Development and Tourism has been allocated an additional amount of R6.5 million. The Honourable Premier indicated during the State of the Province Address that there is a need for a Renewable Energy Summit to take place in the province and the objective is to share crucial information with the Northern Cape community and aspiring emerging SMMEs in the renewable energy space. It is important to indicate that the objective of the conference is to create awareness and promote integrated renewable energy planning in the province and across all spheres of Government. An amount of R3 million is allocated for this purpose.

Honourable Speaker, Special Economic Zones (SEZ) Programme is one of the tools meant to accelerate the implementation of government’s industrial development programme as indicated in the Industrial Policy Action Plan (IPAP). In order to expedite the implementation of the Special Economic Zones Programme, both technical capacity and financial constraints have to be addressed in the province. Department of Trade and Industry (DTI) is currently providing funding to assist with operational costs of this project.

However, Honourable Speaker and Members, this funding will be discontinued at the end of the current financial year and thus this funding will assist to ensure the sustainability of SEZ’s. An amount of R2.6 million in the current financial year and R35.9 million over the MTEF has been provided for Special Economic Zones (SEZ). An amount of R0.973 million is allocated to public entities for the ICS shortfall.

Department of Environment and Nature Conservation has been allocated an amount of R3.6 million. Honourable Speaker, the department is leading in measures to remediate the natural environment contaminated with asbestos within the province and as such R3 million is allocated for this purpose.

Honourable Speaker, Office of the Premier has been allocated an additional amount of R10.4 million, of which R4.2 million is in respect of approved equitable share roll overs from the 2016/17 financial year. An amount of R3.4 million relates to the contractual obligation.

Honourable Speaker, the President and the Cabinet chose Northern Cape to host the 2017 national women’s day which was a national event. The president graced the national event held in Kimberley.

Approximately 20 000 people attended the national event from all five regions of the province. The Office of the Premier was tasked with coordinating this event in the province.

As such an amount of R2.5 million is allocated to reimburse the Office of the Premier for the expenditure incurred in this regard.

An amount of R0.214 million relates to the Thusong Service Centres. This will assist the Office of the Premier to coordinate one stop shop centres for communities to have access to government services.

The Provincial Legislature is allocated an amount of R21.5 million of which R5.2 million is earmarked to augment the current allocation in the baseline for the rehabilitation of the Legislature precinct and R9 million is earmarked for political parties support. A further amount of R1.4 million is also made available to top up the oversight work and research requirements.

Honourable Speaker, Provincial Treasury has been allocated an additional amount of R25.1 million which relates to equitable share rollovers. An amount of R6.1 million has been declared as a savings and this amount has been redirected to other provincial priorities.

Department of Transport, Safety and Liaison has been allocated an additional amount of R28 million of which R6.6 million relates to conditional grants and equitable share roll overs in respect of 2016/17 financial year.

Honourable Speaker, Boegoebay is 70km from Port Nolloth and is part of our four key infrasture projects in the province, namely Upington cargo, De Aar cargo hub and Belmond.

The Development Bank of South Africa (DBSA) and the province will co-fund part of the project to the tune of R122 million over a period of three years.

An amount of R15.9 million is allocated in the current financial year and R47.3 million over the next two years to the department of transport, Safety and Liaison to assist with costs associated with the feasibility study and other preliminary work related to technical engineering services.

Fiscal Consolidation Measures

Honourable Speaker, we can report some success on the process of the moratorium approved by the Executive Council. Whilst other departments continue to circumvent the process by appointing contract workers in permanent posts, Provincial Treasury has forced departments to implement better controls mechanism internally to manage appointments.

These interventions assisted the Province to stabilize the headcount growth during the 2017/18 financial year. The Province realized an estimated saving of R30.296 million excluding the department of Health and Education on compensation of employees up to the end of October 2017.

However, some of the departments continued to fill vacant posts without the necessary recommendation from Provincial Treasury and Office of the Premier.

As part of the fiscal consolidation introduced by National Treasury across Government three years ago, we have stabilised the overall growth in personnel numbers in the province.

Although there is marginal reduction in terms of overall numbers in the province, personnel expenditure continue to grow exponentionally mainly as a result of above inflation wage agreements especially on salary levels. Honourable Speaker, as at the end of March 2016, the province had 26 881 employees which decreased to 26 363 as at the end of October 2017, this represent a net reduction of 518 employees between the same period. We intent to maintain this trajectory over the next two years whilst allowing for posts replacement to happen due to natural attrition.

To enforce compliance with the moratorium on the filling of vacant posts, Provincial Treasury will recommend to the Treasury Committee and Executive Council that the Appointment Function on PERSAL be withdrawn and regulated at Provincial Treasury.

Honourable Speaker, as I indicated in my introduction that we need to take drastic action to normalise our cash flow position, Provincial Treasury will take a set fiscal measures to Treasury Committee in January 2018 for consideration and approval. I will provide the necessary details in the main budget in this regard. The budget office is currently doing work to ensure that these measures will not affect core programmes in government. These will include but not limited to the following:

• Discontinuation of slow spending programmes;

• Limit approval of roll overs to capital projects only;

• Withdraw and centralise the appointment function of PERSAL to Provincial Treasury;

• Possible reductions in baselines.

 

Honourable Speaker, these measures are meant to result in significant savings in the short to medium term period and will come into effect in April 2018.

Conclusion

Honourable Speaker, we are faced with hard choices, to continue doing more with less. That means we have to be sensible, calm and take a responsible approach that puts quality service first to our people. By living within our means, we will not burden future generations with debt from today’s everyday spending.

Honourable Speaker, an open and orderly Public Financial Management System contributes to positive desirable outcomes and in order to progressively realise the vision of the National Development Plan (NDP), we need a transformation path that enable access to inclusive participation in the economy.

Honourable Speaker, if we can not deliberately introduce measures that allow for inclusive growth, we will be perpetuating the inequitable patterns of wealth inherited from the past system, and in this regard, the budget should be used as a catalyst to improve the livelihoods of our people and to this end, this adjustment proposes additional spending requirements to boost spending in departments.

Lastly, Honourable Speaker and Members, we need to strengthen overall accountability processes which remain ineffective despite a solid legal framework to hold officials liable for the misuse of public resources which undermine and compromises the ability of the provincial administration to respond adequately in improving the lives of our people.

Honourable Speaker, I would like to express my appreciation and gratitude to the Honourable Premier Me Sylvia Lucas for the continued support and involvement leading to the tabling of this budget.

The role of the Treasury Committee and the Executive Council cannot be over emphasised in this process especially in the context of maintaining aggragate fiscal discipline which is a collective responsibility and should not be confined to the MEC for Finance, and I am ever grateful for the role they play in this regard.

The administrative and political interphase is of utmost importance in arriving at these proposals and I would also like to appreciate the efforts of Head of Departments (HODs) and Chief Financial Officers (CFOs) for their assistance and continued support.

Let me also extend my appreciation to Provincial Treasury staff for their commitment and dedication,under the leadership of the Acting HOD, and the ministry for their support.

Honourable Speaker, I hereby table the Provincial Medium Term Budget Policy Statement, Adjusted Estimates of Provincial Revenue and Expenditure and the Adjustment Appropriation Bill 2017 for consideration by the House.

I thank you

Budget Speech June 2017

Budget Speech June 2017
ADDRESS BY MACCOLLEN NTSIKELELO JACK: MEC FOR FINANCE, ECONOMIC DEVELOPMENT AND TOURISM TO THE NORTHERN CAPE LEGISLATURE ON THE OCCASION OF TABLING THE BUDGET VOTE 6: 27JUNE 2017

Honourable Speaker and Deputy Speaker

Honourable Premier - Mme Sylvia Lucas

Honourable Members of the Executive Council

Honourable Members of the Provincial Legislature

Executive Mayors, Mayors and Speakers of our municipalities present

Chairpersons of Boards and representatives of the Provincial Public Entities

Senior management and officials of the Provincial Government

Distinguished Guests

People of the Northern Cape

Ladies and Gentlemen

Good Morning, Dumelang, Goeie Má»™re, Molweni

Honourable Speaker! Thank you for this opportunity to table the Department of Economic Development and Tourism budget for the 2017/18 financial year.

We should admit that the economic circumstances we face at present are the most complex and the context within which we are to discharge our responsibilities to deliver goods and services will be badly affected.

Despite the recent down-grade by three rating agencies with a continuous negative outlook and the recent announcement of a Technical recession, we should be comforted by the fact that this is not just an ordinary year in the history of our country.

We are not only celebrating twenty three (23) years of democracy, Oliver Reginald Tambo’s Centenary, forty (40) years of Steve Biko’s  passing on, the year coincides with the sinking of the S.S. Mendi Troopship’s Centenary.

The story of the SS Mendi is that of supreme courage in the face of death and valour shown between brothers toward each other in dire circumstances. The courage displayed by these men should be the courage we display in this country during these difficult times.

Honourable Speaker! In memory of the June 16 Youth, the Department of Economic Development and Tourism, firmly believes that the fundamental changes in the structure of the economy can be achieved through youth enterprise development and support.

 

But this requires self-driven and brave young people who will take full ownership of radical economic transformation and drive it without fear. The future belongs to the youth.

 

Economic Overview

 

The provincial annual growth for 2015 was 0.9% measured at constant 2010 prices compared to national growth of 1.3%. This was a significant decline in provincial growth against 2.8% in 2014. The provincial GDP contribution to the South African economy in 2015 was recorded at 2.1% at current prices. The International Monetary Fund expects a modest recovery for South African national growth rate to 0.8% in 2017 as commodity prices recover, drought conditions improve, and electricity capacity expands. The World Bank on the other hand expects growth to come in at 0.6%.

These modest projections are likely to be further revised downwards, as the South African economy is officially in a technical recession.

The wide-reaching implications of these ratings will have to be overcome through collective action by all. Oversight over government spending should be prioritised, now more than ever to address the negative impact of the downgrading on investment and lending.

The latest labour force statistics from Stats-SA indicate a year-on-year increase in the working population from 773 000 in 2016 to 783 000 in 2017.

The Department will continuously strive to create an enabling environment for social and economic transformation through inclusive growth and job creation despite the current economic climate and related challenges.

 

2016/17 Highlights

 

Programme 1: Administration

 

During 2016/17, the Economic Technical Committee Secretariat unit compiled a position paper on the socio-economic effects of retrenchments on mine workers and their families.

A Memorandum of Agreement (MOA) between the Department of Economic Development and Tourism and the Sol Plaatje University (SPU) has been signed in terms of the knowledge partnership on research and Economy.

The analysis of the department’s performance indicates that we achieved 66% compliance in the MPAT 1.6 cycle, improving from 61% in MPAT 1.5. Although this is below the targeted 70%, it shows significant progress.

The draft organisational structure has been completed and the Department is going ahead with filling of vacant and funded post. We are following all relevant processes in terms of the provincial moratorium to ensure compliance.

 

Programme 2: Small Business Development

 

Honourable Speaker, I am pleased to announced that as promised in my 2016/17 budget speech, the department hosted a successfulSMME & Procurement Summit on 28-29 November 2016.

In forging closer relations with State Owned Enterprises a total of 32 SMME’s were linked with public procurement opportunities from Eskom,Transnet and ACSA.

During 2016/17, the Department completed the implementation of the NC SMME Capacity Building Programme which entailed training of 250 SMMEs/Cooperatives across the province on entrepreneurship, business management and financial management skills.

The Department also completed the training of 59 informal traders in Kimberley, Postmasburg, Kuruman and Upington on marketing and sales. They were provided with Flash machines that can sell prepaid electricity and airtime, pay Dstv subscriptions, place soccer bets, etc.

The Department in collaboration with the Companies and Intellectual Property Commission (CIPC) established a self-service centre in at the Umzimkhulu House in Kimberley.

Entrepreneurs register their businesses online and benefit from the ease of access to services provided by the CIPC.

Honourable Speaker! True to my commitment I made to people of the Province, in this august House in 2016, the beneficiaries of the Economic Growth and Development Fund (EGDF) were spread across the province.

An amount of R26, 908 million was disbursed to SMMEs and cooperatives.

A total of 32 businesses where funded across the province; Twelve (12) in the Frances Baard District; Three (3) from Z F Mcgawu District; Six (6) from John Taolo Gaetsewe District; Six (6) from Namakwa District; and Five (5) from Pixley ka Seme District.

Honourable Speaker! For the very first time in the history of the Fund, the Department ensured that it includes checks and balances to ensure proper monitoring of the funds disbursed.

Of the total beneficiaries, 32,1 % is women, 25% youth and 1% disabled.

Honourable Speaker! Five (5) companies were earmarked for support as Black Industrialists and their business plans were submitted to DTI for financial and non-financial support. Three of these five companies have already received support through the EGDF.

The feasibility and business plan on the renewable energy incubator as well as the business plan for the renewable energy virtual incubator have been completed in 2016/17. An application was submitted to Department Small Business Development for the Enterprise Incubator

 

Programme (EIP) for funding.

 

The Department implemented three EPWP projects directly and in total reported five projects which accounted for 239 work opportunities. These were:

  1. Hopetown Pollution Control Project
  2. Kimberley Big Hole Precinct Tourism Cleaning and Greening
  3. Port Nolloth Tourism Cleaning, Greening and Infrastructure Development.
     

The Economic Empowerment Sub Programme provided training in basic business skills for 20 women with disabilities. Twenty women in each of the following districts: Namakwa, Pixley Ka Seme and John Taolo Gaetsewe received ICT training and 20 women were provided with accredited Project Management Courses.

 

Programme 3: Trade and Sector Development

 

Honourable Speaker! The highlight for this programme was thefacilitation of the Bokpoort Concentrated Solar Energy investment project, to the value of R1.5 billion. The investment was part of the Department of Energy’s renewable energy independent power producer programme (REIPPPP).

Honourable Speaker! The department participated in the Chenzhou Mineral Trade Show and exposed five SMMEs at this international platform. Two companies namely Griquastad Semi-precious Stones and Jewellery as well as Prieska Loxton Hub received two exportorders from a Chinese company, Mervelous Gems MPT Ltd to the value of US$ 119, 000. This is an outcome of the BRICS Conference held in 2014 in Kimberley.

Honourable Speaker! In 2016/17, the Sector Development continued with the implementation of the Metals Industrial Cluster which will be anchored around Steel Manufacturing. This will ensure that we build an industrial base which  is  an imperative for radical economic transformation.

The achievements are the acquisition of 50 hectares of land in Ga-Segonyana Municipality, identification and securing of firms that will locate in the park for manufacturing activities, the completion of the business plan for the next MTEF for the Cluster, as well as the completion of the environmental impact assessment (EIA), geo-technical Studies and Land Survey.

Seven firms have been secured to participate in the Clothing Manufacturing Cluster and a Cluster Management Company has been established.

Our Strategy on diamonds and semi-precious stones in terms of mineral beneficiation enabled us to provide skills training in diamond cutting and polishing through our Kimberley International Diamond and Jewellery Academy (KIDJA). Nineteen students initially enrolled at KIDJA in the 2016/17 financial year with an additional seven registering later for training in a short course on rough diamond evaluation. This training enables people to acquire a diamond dealer’s licence.

 

KIDJA also applied for a learner-ship from the Mining Qualifications Authority (MQA) and was awarded 61 NQF level 4 learner-ships.

KIDJA also managed to achieve its MQA accreditation in 2016 which means that they no longer require using service providers to conduct their training.

Honourable Speaker! The establishment of the Special Economic Zone in Upington has been moving swiftly in terms of its targets. The application for designation was completed and is due to be submitted for evaluation and approval.

The project has been fully funded by DTI at this stage to an amount of R28,6 million over the last 3 years. Three (3) definite investors have committed to invest in the SEZ, which are ACSA, Solar Africa Investment and CAMAC. 

One of the mandates of NCEDA is the Craft Customised Sector  Programme (CCSP) which  has three elements namely product development, enterprise development training and market access Fifty seven craft enterprises were supported to showcase their products

at the following platforms namely.

  1. Decorex Cape Town – 10 crafters
  2. Grahamstown Art festival – 5 crafters
  3. Gariep Kuntefees – 14 crafters
  4. Decorex Johannesburg – 7 craters
  5. Macufe Art festival – 10 crafters
  6. Heritage day – 6 crafters
  7. Womens day – 5 crafters
     

Honourable Speaker! The occupancy rate in Witsand Tourism Nature Reserve has increased thus seeing attraction of tourists to the Nature Reserve. Seventeen (17) groups were hosted at Witsand Tourism Nature Reserve during the year.

Programme 4: Business Regulation and Governance

Honourable Speaker the report on the rationalisation of the Gambling and Liquor Boards has been completed, and its recommendations are currently being implemented.

The Consumer Protection Authority conducted 274 inspections for the financial year. A total of 673 cases were resolved from 852 cases received and 37 cases were adjudicated (heard) by the Consumer Court for the financial year.

Speaker a total of 53 Education and awareness programs were conducted throughout the Province.

I am proud to announce that we’ve influenced the curriculum of the Department of Education. Consumer Studies are now taught as an elective subject in schools.

The Province will be hosting the World Consumer Rights day which will be held on 15 March 2018.

During the 2016/17 The Northern Cape Liquor Board conducted 1,415 compliance inspections at licensed outlets,  including awareness campaigns to the youth, liquor traders and pregnant women.

During 2016/17, the Gambling Board was dissolved because of an inability of them to discharge their fiduciary responsibilities.

Compliance inspections were conducted at casinos, bookmakers and totalisators and have expanded to Limited Pay-out Machines (LPM) sites throughout the province.

A Committee dealing with illegal gambling operations, which comprises of the Northern Cape Gambling Board; the National Prosecuting Authority (NPA); SAPS and all licensees has been established to tackle illegal gambling.

It must be noted that most illegal gambling nowadays is conducted online. This Committee is currently developing strategies to combat this new problem.

 

Programme 5: Policy, Research and Innovation

 

Honourable Speaker! In our endeavour to implement the Nine Point Plan, District Economic Symposia were held. These focused on implementation of the Provincial Nine Point Plan.

I am happy to announce that the framework for the development of the Economic Blue Print was developed and presented to EXCO.

Research was also conducted on local procurement opportunities presented by SIP 3 (South Eastern Node and Corridor Development) and SIP 5 (Saldanha-Northern Cape corridor).

Furthermore, a basic synopsis was done relating to shale gas extraction and plans to extract shale gas in the Karoo region of the Northern Cape.

Knowledge Economy & Innovation conducted a number of ICT training sessions during 2016/17 to build an information society in order to promote a knowledge economy.

We received funding to the value of R5.9 million from the Department of Science and Technology (over the MTEF) for the establishment of a mobile applications development laboratory (mLab) in Sol Plaatje Municipality.

The upgrade for the 80km gravel road to the SKA project resulted in 213 local persons out of a total of 280 being enlisted, this includes 32 subcontractors. Over R91.14m (45.5%) of the total project value of just over R200m has been spent on local procurement of goods and services.

 

Programme 6: Tourism

 

Honourable Speaker! Departmental funding contributed to the building of Tree Top chalets in Mokala National Park, bird-hide in the Kgalagadi Transfrontier Park and a chalet overlooking the iconic Augrabies Gorge at Oranjekom.

This diversification of tourism offerings will impact positively on domestic and international arrivals to the province.

Tourism facilities at the Witsand Nature Reserve have been extensively upgraded thus improving facilities resulted in encouraging occupancy rates and an increase in publicity for the reserve.

 

Working with Open Africa, we not only achieved improved tourist route management, but also generating significant benefits for the youth and employment creation in the province. A total of 20 interns have been appointed on three routes over the course of 2016 with 11 of these youth finding permanent employment and four graduating to an Enterprise Development programme to help them start their own enterprises.

 

A survey done on the Richtersveld, Namaqua Coastal and Kalahari Red Dune routes revealed the creation of 102 new jobs since 2013 which includes 63 new jobs for the youth. Dirk Pienaar, a member of the Khomani San community in Mier travelled to Switzerland to participate in the Swiss Import Promotion Programme (SIPP).

Ten route representatives attended the Indaba 2016 international tourism expo in Durban while support was rendered to the Richtersveld Wildrun, Williston Winter Festival, Namaqua Trail Run and the Naba! Food & Wine Festival.

Road signs were erected on the Richtersveld, Karoo Highlands, Quiver Tree and Cape-to-Namibia routes. This will increase awareness of the routes and what is on offer, as well as to improve the visitor experience offered.

Honourable Speaker! The department opened the Frances Baard Flagship Visitor Centre in the Big Hole precinct which services the most visited destination in the province.

The department in collaboration with the Kalahari Red Dune Route Forum completed the visitor information office in Askham. Furthermore, the department funded the development of visitor information centres in Port Nolloth and Kakamas working in partnership with the respective municipalities.

Honourable Speaker! Our efforts to scale down on the Kimberley Diamond Cup  as promised,   as  a  result of government reprioritisation exercise and cost cutting measures had unintended consequences.

As a result, the event did not take place, and the matter is currently a subject of litigation.

Honourable Speaker, the Douglas Resort was registered with the Provincial Treasury as a public private partnership (PPP) in an attempt to revitalise municipal resorts in partnership with municipalities.

 

The Coastal and Marine Tourism Strategy has been completed.

The study will assist the province to enhance policy intervention with regards to operation Phakisa and oceans Economy processes which are strategic in diversifying the economy on the West Coast from mining to tourism.

The study has been registered with Provincial and National Treasury as a Public, Private Partnership (PPP). This strategy will be supported by the implementation of the Small Harbours and State-owned Coastal Property Development initiative targeted for Namakwa District.

 

This is an effort of the national Department of Public Works (DPW) which is planning investments in three coastal municipalities in the Northern Cape, Eastern Cape and KwaZulu Natal respectively starting in the 2017/18 financial year.

Speaker, allow me to congratulate the Northern Cape Tourism Authority (NCTA) on their sterling effort to promote the Northern Cape, culminating in them scooping manyprestigious awards in the process:

  1. “Best Local Destination” awarded by the Cape Getaway Show.
  2. Gold Award - Provincial Authorities awarded by Indaba.
  3. Bronze award at Namibia Tourism Expo.
     

With regards to the agreement signed with the Hunan Province in China, NCTA liaised with South African Tourism China office to co-host Hunan buyers to attend the Indaba which was held on 16-18 May 2017. NCTA also hosted a Chinese tour operator on a three day visit to explore partnerships in the province.

Cross boarder partnerships established include the Eastern Cape Parks and Tourism Agency; Wesgro’s co-promotion of the Cape Namibia route and flower offering; and the Namibia Tourism Board to enhance and expand the provincial footprint.

Honourable Speaker, NCTA’s Tourism School Awareness Program was presented to tourism students at three schools in Colesberg.

A school group from Boitumelo Special Needs School in Kimberley visited the Mokala National Park; NCTA partnered with Frances Baard District Municipality Schools program targeting schools as well as hosting the 20 winners on an excursion in November 2016.

Honourable Speaker! I would like to congratulate Brown’s Manor, our National Winner of  the 2016 Lilizela Awards for the 4-Star Accommodation Category.

I would also like to congratulate The Big Hole and Oleander Guest House on their nominations for the National Award for the visitor experience and 5-Star Guest House category respectively.

Budget allocation and implementation plans 2017/18

Honourable Speaker, please allow me now to table the budget allocation of the Department for the 2017/18 financial year which amounts to R296.518 million. This is an increase of R18, 603 million and therefore 6,7 per cent in nominal terms.

Honourable Speaker, I now provide a programmatic exposition of the departmental 2017/18 budget.

 

ADMINISTRATION

 

The  administration programme provides leadership, strategic management and ensures good governance in accordance with government legislation and mandates. The sum of R61, 897 million is allocated to administration.

 

Small Business Development (Integrated Economic Development Services)

 

The allocation to the programme for this financial year is R84, 174 million. Of this amount a total of R28, 165 million allocated to the Economic Growth and Development Fund.

Honourable Speaker! In the 2017/18 financial year the focus of the EGDF will be assisting SMMEs and cooperatives. This fund will be used as a catalyst to accelerate and support our efforts in the development and revival of the Township Economy.

Further funding of R1, 5 million has been committed to a youth business entity for a Toilet Paper Manufacturing and Bottled Water Plant in Colesbergone of the economically depressed towns in the province.

This is a commitment that was made in 2016/17. But because of certain compliance issues and urgent competing priorities, it was not done.

The SMME Development Unit will in this financial year increase its foot print to reach out to SMMEs and Co-operatives based in remote areas, through the implementation of the Unstructured Supplementary Services Data (USSD) services model.

Honourable Speaker! This Programme will also put significant emphasis on the revival of the Township Economy.

In supporting the development of Secondary Towns and Cities,in terms of their strategic location and economic activities Postmasburg and Colesburg were identified as pilot projects.

This initiative will also support the Municipalities identified in the roll-out of the Integrated Urban Development Framework (IUDF), such as in Sol Plaatje, Dawid Kruiper and Ga-Segonyane.

The Regional Economic Development Services unit will focus on assisting municipalities to improve their LED planning, implementation and stakeholder coordination.

 

Trade and Sector Development

 

The budget allocation to this programme is R36, 567 million and its key mandate will be to promote trade and investment, sector development and implementing strategic initiatives with the potential to have an impact on provincial economic growth and job creation.

Honourable Speaker, Northern Cape Economic Development Agency (NCEDA) has been allocated R5, 664 million for the financial year. This allocation will be increased further with an additional amount of R5 million in the Medium Term Expenditure Framework, to support the focus on the establishment of the Special Economic Zoneand investment attraction in Upington.

The application for the designation for the Special Economic Zone will be submitted to the Department of Trade and Industry (DTI) during this financial year 2017/2018.

In the financial year 2017/18 the department will follow up on all agreements signed between the Province and Foreign Governments.

This will include the Friendly Cooperation Agreement with Hunan Province in China and the //Kharas Region in Namibia.

Honourable Speaker! The Province recently undertook a successful outward Trade and Investment Mission to Sao Paulo and Curitiba in Brazil.

Meetings with the International Trade and Foreign Affairs Council of Parana, and the Federation of Industries of the State of Sao Paulo (FIESP) identified and agreed on collaboration on the following projects and Sectors,-

  1. SEZ- Potential partnership agreement between NCEDA and the Development Agency of Parana’
  2. Boegoe Baai Port Development
  3. Production of Solar Panels
     

Honourable Speaker, the implementation process for both the Clothing and the Metals Clusters will continue in 2017/2018. The Cluster Management Company of the Metals Cluster will be fully operational by the end of 2017/2018.

Honourable Speaker, in August 2017 we are co-hosting an Investment Conference on Small Harbours and State-owned Coastal Property Development Investment Conference targeted for the Namakwa District Municipality.

This will be followed by the postponed Provincial Mining Indaba in September in Kuruman and Renewable Energy Summit in October in De- Aar.

The Kimberley International Diamond and Jewellery Academy (KIDJA) has received grants from the Mining Qualification Authority (MQA), and will therefore pay monthly stipends to the 58 students currently enrolled for the NQF level 4 programme.

The Kimberley Diamond and Jewellery Incubation Centre (KIDJI) will continue to provide support services to established and emerging SMMEs in diamond and jewellery manufacturing.

Honourable Speaker! On the Boegoe Baai Port Development project:

The approval of scope of the Transaction Advisor has been granted. And, the following is expected to be completed in the next coming six months:-

  1. The Technical feasibility study
  2. Request for proposals on the Port Development
  3. Securing of investors
     

Business Regulation and Governance

 

This programme is allocated R36, 748 million for the 2017/18 financial year. Of this amount, he Northern Cape Liquor Board is allocated R11,341 million and Gambling Board R13, 423 million.

Honourable Speaker, I am pleased to announce that I will be appointing the new Northern Cape Gambling Board Members soon.

This process will not materially affect the rationalisation of the Gambling and Liquor Board, as its full implementation still requires legislative review and amendments.

Honourable Speaker, the Department will further explore the possibility of securing a further two new casino licenses and Bingo operating License.

The Consumer Protection Authority plans to implement 40 education and awareness programs and 300 compliance inspections this financial year.

The Liquor Board will continue to intensify awareness programmes and compliance inspections during 2017/18.

We will give attention and impress upon the Liquor Board, to manage the number of new liquor license approvals so as to militate against the abuse of alcohol and Foetal Alcohol Syndrome.

 

Policy, Research and Innovation

 

The budget for the programme is R20, 059 million for the 2017/18 financial year.

The departmental research agenda outlines the research priorities over the MTEF and will consolidate all priorities into an annual research agenda.

The department will continue to participate in the SKA Steering Committee meetings and seek to identify opportunities for local businesses to benefit from the project.

 

Tourism

 

The budget allocated to tourism is R57, 073 million. The Northern Cape Tourism Authority is allocated R21.43 million for marketing and promoting the province as a competitive and sustainable tourism destination.

Honourable Speaker! In this financial year, Township Tourism will be prioritised. We will establish Tourism Visitor Centre in Hanover as promised in my 2016/17 budget vote speech. The other areas will follow in the near future.

The Department will focus on facilitating the process of building Mini conference centres in the John Taolo Gaetsewe and Pixley Ka Seme District Municipalities.

We will revive, support and promote Tourism Activity Routes; Tourism establishments and Historical Monuments throughout the province suchn as the Galeshewe Activity Route and other historical routes in other parts of the province will be developed promoted.

Honourable Members! The Department of Economic Development and Tourism’s budget of R295, 6 million is a tool for ensuring an environment that is conducive for investment by private enterprises for stimulating economic growth.

It is imperative that we redouble our efforts in this regard without increasing regulation or impeding private sector investment and activity.

 

In conclusion,

 

Honourable Speaker, in order to achieve more with the little that we have, we will therefore devise strategies to strengthen the fight against corruption and random life style audits for public representatives and senior managers.

I thereby, urge everyone who has information on any corrupt activities, be it private or public sector, to blow the whistle.

We will also embark on a review of all government contracts which have been issued, and those in the process of been issued. We need to ascertain if the allocation of the contracts was in compliance with the law.

There is a strong need for the review of the criteria by IDC and DTI for companies to participate in the Black Industrialist Programme.

In order to strengthen the secondary economic activities and create the much-needed job opportunities, we need to put in place a local beneficiation quota of at least 30% of minerals produced in the Province.

Honourable Speaker! Allow me to express appreciation to the Acting Head of Department, Mr. Darius Babuseng and the team he leads for their dedication and efforts.

Let me also thank my dedicated team in the Ministry, led by Acting Head of Ministry Ms. Sharon Plaatjies for their hard work and commitment.

I hereby table the 2017/18 budget of the Department of Finance, Economic Development and Tourism for the consideration of this house.

Ladies and gentlemen, I wish to thank you.

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