Modern, Growing, Successful Province

Economic Summit Speech

2nd -3rd DECEMBER 2009

This auspicious occasion heralds a new era in our collective endeavours to grow and stimulate the main sectors of our economy. When we delivered our State of the Province Address, we committed ourselves to review the Provincial Growth and Development Strategy of the Province (PGDS) and define a new trajectory of growth and development in line with our new mandate. We are serious and determined about ensuring sustainable development and growing the economy of this province but we also understand that we as Government cannot do it alone.

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The private sector, civil society organisations and individuals must collaborate with government in addressing socio-economic challenges facing our country. Development, particularly poverty alleviation amongst women, youth, people with disabilities and the aged must be given top priority on the agendas of all organs of civil society.

We are all gathered here to set ourselves a new goal-directed path to contribute positively to the target of economic growth, job creation and poverty alleviation we have set ourselves as a country.

Despite the significant progress made in changing our economy to benefit our people, unemployment, poverty, underdevelopment and poverty remains serious challenges that we must confront with vigour.

This situation has further been aggravated by the world economic meltdown which has caused severe hardship for our people and shed a million jobs in the process. However, our government has committed itself to work together with labour, business and other sectors to develop practical solutions that will ensure that in the short, medium and long term economic prospects continue to improve and that job losses are minimised.

Compared to 2001, the economically active population of the province has decreased to just under 42 000. This said, from 2005 the economically active population has been growing and is predominantly male. Employment grew by 2.3% between the 3rd and 4th quarter of 2008 thereby bringing the unemployment rate down from 22.6% in the 3rd quarter of 2008 to 21.6% in the 4th quarter and 56% of the unemployed are females.

The NC unemployment was reported at 27.4% for March 2009. In March 2006 unemployment was 24.2%. For the third quarter of 2009, 53 000 jobs were lost: 24 000 was in Agriculture, 18 000 in Trade and 11 000 in the construction industry. In the second quarter 14 000 jobs were lost and in the first 28 000.

The economic base of the Northern Cape has evolved and developed upon a rich base of mineral resources over many years. However, it requires the introduction of a new approach to promote beneficiation programmes to ensure that the natural wealth of the country is shared and developed locally, and which accelerates the creation of decent work opportunities in manufacturing and services industries.

The development of the small-scale mining sub-sector in the province is of great significance for the industry.

Procurement is another issue that requires serious government intervention. The Preferential Mining Procurement Initiative (PMPI) calls for big mining companies to procure their goods and services within the borders of the province from historically disadvantaged individuals. We have billions of rands spent outside the Northern Cape by mining companies, and with such interventions in place we could have a situation of jobs being created in the province to develop and grow our economy.

The province also needs enabling legislation on mining that is specific to the needs and dynamics of the Northern Cape. There is also a need to review the current Mineral Strategy for the province. It has come to our attention, however, that most mining companies are not yet complying with their Social and Labour Plans (SLPs) commitments after acquiring their mining licences as required by legislation. As provincial government, we need to put into place new systematic monitoring and evaluation tools to ensure that companies do comply with mining legislation.

Agriculture is another important sector that contributes significantly to the provincial economy. We must look at how to increase its contribution to the gross domestic product through diversification and agro-processing.

As the Northern Cape Province we must enhance our agricultural produce to ensure that there is adequate food available for all, that we grow our own food and protect poor communities from ever-escalating food prices in order to stamp out hunger and deprivation. We will intensify our land reform programme and will improve the livelihood of the land reform beneficiaries (i.e. emerging farmers and farm workers) by providing them with the necessary farming and technical skills, production resources, education to farm worker’s children, decent on-farm housing as well as safety on farms.
The climate and availability of land makes the Northern Cape suitable for the growing of grapes and the expansion of the wine industry for which a tremendous global market exists.

Fishing and Mariculture is a priority as identified in the Provincial Growth and Development Strategy due to our tremendous stretch of 313Km of coastline which has huge potential for Fishing and Mariculture. The Provincial Government has invested in direct efforts to stimulate the sector due to community dependence on mining which is rapidly declining. Fishing and Mariculture is the sector that must fill the void left by mines with the aim of empowering local communities.

Programme Director, the world is facing a growing challenge of harnessing the earth’s resources effectively and efficiently. There is still a vast dependence on fossil fuels, and the use of this energy source is common to both developing and developed countries. It is well known that the excessive burning of fossil fuels does not go without a price as they release large amounts of carbon dioxide into the atmosphere thereby causing air pollution which inevitably contributes to global warming and climate change.

The Northern Cape Province will embark on an envisaged new growth trajectory to develop efficient and safe forms of alternative energy that is affordable and will ensure that the poor and the most vulnerable people of the province are protected.

The promotion of renewable energy in the Province will contribute towards integrated sustainable rural development and promote the development of small, medium and micro enterprises (SMMEs). The utilization of renewable technologies, particularly in remote rural areas, where clinics and households will depend upon solar electricity for their power, will play an important role in improving the quality of life of our people.
The Northern Cape Province boasts some of the highest solar energy capacity in the world and has the potential to become the “Solar Energy Capital” of the world.

We will continue to accelerate and expand investment in public infrastructure and in the process create additional but decent work opportunities whilst meeting the basic needs of society. This includes construction of housing, roads, energy generation capacity as well as education and health infrastructure, etc. The infrastructure of a nation supports the fabric of modern living, which is taken for granted until something fails or no longer provides the expected service.

We also plan to revitalise and renew the rail and road networks which promises to stimulate local economies and bring with it many opportunities to benefit local communities and address the challenges we face with respect to reducing unemployment and poverty. We will be specifically targeting districts that are now referred to as the poorest districts in the province, and transform them into socio-economically vibrant and beautiful Towns. The Northern Cape has an extensive railway network operated by Spoornet.

The provincial government has identified tourism as one of main economic drivers with the potential to meet some of the priorities of government which relates to job creation, economic growth and poverty alleviation. The Province has the potential to become a popular destination for niche tourism products and attractions. Here we refer to niche events such as cultural festivals and extreme sports, as well as developing attractive tourism routes and tourism products with high socio-economic impact. This will attract enough visitors to build sustainable local economies of scale.

It is worth noting that the Northern Cape Province has been selected to host the bloodhound project- in Hakskeen Pan in the Kalahari. This project is an attempt to break the world land speed record with a car capable of achieving 1,000 mph (1600km/h). Mr Richard Noble (Project Director) and Andy Green (current land speed world record holder) from Britain head the team for this exciting endeavour. The project will inspire future generations to pursue science, technology, engineering and mathematics by showcasing these subjects in the most exciting way possible at schools, colleges and Universities. There are obviously other economic spin-offs that accompany such a world class event.

The winning of the 2010 soccer World Cup bid has created opportunities for a R17 million upgrade to the terminal building including parking facilities and the new car rental building at the Kimberley Airport.

There are plans to transform the Upington airport into a cargo hub which will have enormous economic opportunities for the province and will also assist the export market of the Province. All the main national roads are being upgraded and maintained and this enables job creation and easier access for tourists to the Province.

Ladies and Gentlemen, the contribution of the manufacturing sector to the Northern Cape provincial economy is very low and most of the time stagnant. Therefore economic diversification and the addition of value to the province’s agricultural and mineral output have been accorded a high priority by the provincial government. In addition, the manufacturing sector provides a locus for stimulating the growth of activities such as services, employment creation and economic empowerment.

Not withstanding the difficulties and constraints of the manufacturing sector, the provincial government is committed to promoting the manufacturing sector in the context of the Micro-Economic Reform Strategy. This strategy seeks to remove obstacles to competitiveness and promote economic efficiency and equity. In addition, the Integrated Manufacturing Strategy is an integrated set of interventions related to competitiveness that enhance prospects for the processing of natural products into manufactured goods and all associated and related services.

Skills development is critical in preparing our people for the needs of a modern economy and a democratic society. We need to produce technically skilled learners with skills that are required for the development of a new society. We have to ensure that training and skills development initiatives respond to the requirements of the economy.

This can only be achieved by having a fully fledged University that will cater for the much needed scarce skills in the Northern Cape Province.
The New National Youth Development Agency will be focusing on access to funding and employment creation, which will be linked to skills development opportunities and build decent work opportunities for young people.

The finance sector is another key sector that could serve to stimulate the provincial economy. I also want to take this opportunity to urge the banks and other financial institutions to use this opportunity to assist in making a tangible but positive difference in the development of the Northern Cape Province. Through such joint partnerships, we can also assist in the promotion of Black Economic Empowerment through development of small, medium and macro-enterprises. I am pleased to appreciatively acknowledge that some partnerships already exist with certain banks.

The Information, Communication and Technology (ICT) sector has been recognised by Government as being of strategic importance to the future growth and prosperity of South Africa’s economy. Improving access to information has an impact on the awareness, education, health, cultural and socio-economic development of the country, especially within rural areas. The inclusion of telecommunications as a basic infrastructure service could close the communication gaps currently being experienced by most of the province’s people.

The enhancement and development of the ICT infrastructure of the Province can undoubtedly serves as a catalyst for growth and development that will forever change the economic landscape of the province.

Ladies and Gentlemen, let us ensure that the decisions to be arrived at during the course of this summit will seek to steer our province in the right direction and towards the crafting of a common vision for job creation, economic growth opportunities and poverty reduction as its key areas of focus.

I thank you

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