Modern, Growing, Successful Province

Finance, Economic Development and Tourism Budget Speech 2012

23 May 2012

Address by Mr John Block MEC for Finance, Economic Development and Tourism to the Provincial Legislature on the occasion of tabling of the Budget Vote Speech

Honourable Speaker
Honourable Acting Premier Ms Griezelda Cjiekella
Members of the Executive Council
Honourable Members of the Provincial Legislature
Mayors, Speakers and Municipal Managers of our municipalities
Heads of Departments, Senior Managers and officials of the department
Chairpersons and CEOs of the Provincial Public Entities
Distinguished Guests
People of the Northern Cape
Comrades and Friends

Introduction

History is to society what memory is to the individual. It provides a sense of identity; helps us make sense of the world; provides lessons in right and wrong. We interpret from the surviving evidence of the past.

This month as part of our centenary celebrations, we wish to acknowledge the fifth president and founder of the ANC, Comrade Pixley ka Isaka Seme. In his seminal speech on 5 April 1906 entitled “The Regeneration of Africa”, he stated that:

“The regeneration of Africa means that a new and unique civilization is soon to be added to the world. The African is not a proletarian in the world of science and art. He has precious creations of his own, of ivory, of copper and of gold, fine, plated willow-ware and weapons of superior workmanship. Civilization resembles an organic being in its development - it is born, it perishes, and it can propagate itself. More particularly, it resembles a plant, it takes root in the teeming earth, and when the seeds fall in other soils new varieties sprout up. The most essential departure of this new civilization is that it shall be thoroughly spiritual and humanistic - indeed a regeneration moral and eternal!”

This is an expression that resonates with what we need to continue to do in the province towards building an inclusive, dynamic and shared productive relations amongst economic role players towards the development and growth of our province. This is the commitment of our government of hope and diligence for the betterment of our people. We want to salute all past ANC Presidents and say we thank you for your sterling work and contribution towards building a South Africa in which we all can live in harmony and prosperity.

Economic Overview

Honourable Speaker, this administration is in its mid-term. A term marred by the world economic crisis. By and large it seems the worst is over. Global output is expected to expand by 3.3% in 2012.

Recovery is also apparent in the national context with resurgent economic growth recorded in the last quarter of 2011 at 3.2%, which gave rise to an overall GDP growth rate of 3.1% in that year. This follows on growth of 2.9% in 2010. These developments have all the hallmarks of a gradual sustained recovery following the economic contraction of -1.7% in 2009 and growth of 1.8% in 2008. The 2012/13 budget announced by Minister Gordhan indicated planned spending of R1, 1 trillion, exceeding R1 trillion for the first time ever. Gross domestic product at current prices is estimated at R2, 964 trillion.

In responding to the recession, the South African government developed specific policies and strategies aimed at skills development and retention, stimulation of the manufacturing sector and new economies, i.e. knowledge and green economies, job creation and SMME development. This includes but is not limited to the frameworks for South Africa’s response to the international economic crisis such as IPAP 2, New Growth Path and the national development plan.

Though South Africa fared better in this crisis, the most affected sectors were manufacturing, construction and mining, resulting in the loss of one million jobs throughout the country. Currently the unemployment rate increased from 23.9% in the fourth quarter of 2011 to 25, 2% in the first quarter of 2012. A total of 107, 000 jobs were shed over the past year nationally with most of these in the construction and manufacturing sectors.

On the employment front, the Northern Cape unemployment rate has improved from 31.4% in the first quarter of 2011 to 24.9% in the first quarter of 2012. The province currently employs 25,000 more people than the same period last year. Majority of those are employed in the finance (9,000); trade (6,000) construction (5,000) and mining (5,000) sectors respectively. Utilities, which includes the electricity industry currently employs over 4000 and more jobs are expected to be created in this sector given the renewable energy projects submitted in the different windows of the calls by the Department of Energy to independent power producers. The 25, 000 jobs are an indication that the province is on track and has exceeded the target of creating 16,000 jobs for the previous financial year as set in the reviewed Provincial Growth Development Strategy.

The current administration adopted the 12 Outcomes-Based Approach and the Department of Economic Development is the lead Department on Outcome 4 “Decent employment through inclusive growth”. The Department has finalized the Delivery Agreement on the outcome. The agreement identifies and defines the interventions that will shape government’s response in addressing developmental and employment challenges. It identifies delivery partners and formalizes a working relationship amongst them to ensure resources are pooled in pursuance of the outcome. Principal to achieving the plans and targets as set in the agreement is the Northern Cape Provincial Growth and Development Strategy as reviewed.

The province will through the reviewed Provincial Growth and Development Strategy continue to concentrate on creating jobs in the agriculture and agro-processing, mining and minerals beneficiation, manufacturing, infrastructure development, tourism, knowledge economy and renewable energy sectors. These are sectors for growth and development and they are also aligned to the six job drivers identified in the New Growth Path. Focusing on these sectors will go a long way in addressing unemployment, poverty and inequality.

It is therefore incumbent on province and society to work together to confront the scourge of unemployment and increasing hopelessness of our young people. As has been alluded to by President Jacob Zuma in the State of the Nation Address:

“The work done last year indicates that if we continue to grow reasonably well, we will begin to write a new story about South Africa – the story of how, working together, we drove back unemployment and reduced economic inequality and poverty. We must not lose this momentum”.

It is in this context we need, together with social partners, to enter into a social accord on how to address the high level of unemployment in the province.

BUDGET ALLOCATION FOR 2012/13

Honourable Speaker,

Please allow me to table the budget allocation of the department for the 2012/13 financial year amounting to R207, 281 million. This represents a nominal increase of R14, 503 million or 7.5% year-on-year, which amounts to a 1.2% real increase in the allocation once inflation (as measured by Consumer Price Index) is accounted for. The departmental allocation as a proportion of the total budget is 1.79%, representing a decline from the previous share of 2.04% in financial year 2011/12.

Programme 1: ADMINISTRATION

This financial year, we have allocated an amount of R34, 161 million to ensure a well-governed, effective and efficient administration of the department to drive our strategic plans to grow the provincial economy.

For the last three consecutive years we have received awards for best reporting from the South African Institute of Government Auditors (SAIGA) and have obtained unqualified audit reports for the fifth time in a row. This is an indication that our administration is now on sound-footing. We can therefore confidently state that the department is currently run in a sound and progressive manner, laying down administrative foundation for better service delivery.

At a recent Strategic Indaba held in Mier from 20 - 24 February we undertook a SWOT analysis of the entire department and concluded that there are operational improvements that must still be made in this financial year to be more effective and efficient. In this regard we will embark on the process of organisational review in line with our strategic plan to make sure that we are organised to give effect to our mandate of creating decent jobs in the province, as captured in Outcome 4.

We will also ensure that we fill all 56 vacant and funded posts in this financial year to enable the department to operate at optimal level to achieve its goals and objectives.

Our reason to take our Strategic Indaba to Mier was two-fold, firstly for our annual strategic planning, and secondly to assess the capacity of the region to host an event of a magnitude of Bloodhound. With the first firsthand knowledge of challenges and gaps; we discussed possible interventions we can make in the region to stimulate local economic development, around the Bloodhound Project and tourism potential of the area.

Programme 2: INTEGRATED ECONOMIC DEVELOPMENT SERVICES

Honourable Speaker,

This programme receives 27,4% of the departmental budget and is located as a catalyst to leverage a conducive environment to promote, support and facilitate integrated economic development through shared and viable partnerships in the province. It aims to achieve this through targeted interventions in enterprise development focusing on the SMME sector, stimulating regional and local economic development and economic empowerment in communities throughout the province. The budget allocation for the programme is R56, 763 million; this represents an increase of 5.4% compared to last year’s R53, 678 million.


About 69% of the programme’s budget is for transfer payments to entities in economic development, with 57.3% of that share allocated to the Economic Growth and Development Fund (EGDF) for the 2012/13 financial year.


The past financial year has seen the EGDF being utilised to support 51 SMMEs across different economic sectors, with ninety percent (90%) of the funds being channelled into projects in the manufacturing sector, as we will continue doing in the foreseeable future. Other sectors include mainly retail, services and tourism. Through these interventions 245 permanent and 285 temporary jobs were created.

The Bed Factory that has taken the bulk of the funds has been commissioned, is operational and has already received letters of commendation from clients regarding the quality of their products. They are already distributing their products throughout the Northern Cape, Free State, Limpopo, Mpumalanga and Botswana. Thus far, the factory has 65 employees. In this regard, we will brand the beds as Northern Cape produced and manufactured, indicating Proudly Northern Cape; Proudly South African. Twenty five (25) of these employees were employed earlier as semi-skilled labourers during the renovation phase of the factory and have now been skilled to operate the machinery utilised in the factory.

This year the Fund is allocated R32, 550 million and it will continue to be directed at the manufacturing sector and those enterprises that have been operational for some years and are showing a viable case for expansion.

Annual Small Ntataise Programme

In the previous financial year, the department successfully hosted the annual Small Business Ntataise Programme in partnership with Seda aimed at identifying prospective talent among existing businesses in the form of competitions and rewarding those that meet the requirements of the programme with financial incentives and non-financial incentives. The focus for the past year was on the creative industry and we would like to congratulate Ms. Keletso Sechogela, Ms. Nonkululeko Siyengu and Mr. Ronny Grynhoud. They were recognised for their efforts and dedication put into running their small businesses, as well as creating sustainable jobs.

SEDA has also held a business plan competition nationally. The provincial winners of the business plan competition who will be representing the province at the national event to be held later this year are:

Mr Motheo Seleke – My Northern Cape TV
Mr Melvin Beukes – Cazz Electronics and Computer Services
Ms Bianca Harker – Otxipangi Traders and
The winner, Ms Serita Swart – Kxoxo Leather Designs

We wish them well in the national phase of the competition.

Provincial SMME Pilgrimage

The Provincial SMME Pilgrimage is a programme initiated by the department in 2009, from which a total of 725 small businesses both emerging and existing received coordinated financial and non-financial support services from all small business support structures operational in the province. This programme is consistently supported by stakeholders both in the private and public sectors. More than nine public and private entities participated in it including SEDA, Khula, the Productivity Institute, Frances Baard SMME Trust, Department of Trade and Industry (the dti), the Construction Industry Development Board (CIDB), Department of Social Development, ABSA and municipalities. The programme focussed on the most depressed areas to stimulate economic activities in such areas as well as to ensure participation and on-going monitoring of previous beneficiaries.

Other achievements include:

49 existing SMMEs accessed support for business planning, funding; applications, business due diligence and market access opportunities;
Funding facilitation and due diligence provided to 46 small businesses;
15 cooperatives exposed to exhibitions such as international cooperatives day;
20 new cooperatives identified for interventions during the pilgrimage;
14 strategic partnerships for small business support were established with strategic partners during the Provincial SMME Pilgrimage and
A total of 53 small businesses accessed public procurement opportunities by supplying various services to the unit.

The Product Development unit will focus amongst others on the promotion of product development, investment, competitiveness and employment creation. In the previous financial year focus was on the development of business products through marketing and branding. In the coming financial year, the unit will facilitate the testing of products by South African Bureaux of Standard (SABS) and CSIR, with a view to enhance the quality and lifespan of these products.

Red Tape Reduction Programme

One of the programmes that has not been concluded and that will be continuing in the coming financial year is the Red Tape Reduction Programme being conducted in partnership with the dti. This programme is aimed at assisting the selected two municipalities identified in the Province, //Khara Hais and Sol Plaatje, in identifying potential constraints in their by-laws that may hamper business development and processes.

Local Economic Development

Regional and local economic development remains of strategic importance for economic growth and development. In this regard an allocation of R6, 285 million for the 2012/13 is earmarked for local economic development, with a view to capacitating municipalities and to improve policy and planning.

In the previous financial year, nineteen (19) municipal local economic development (LED) strategies were developed and a successful LED conference was hosted in Kimberley on 22 November 2011 and this supported the highly effective Provincial LED Forum that enables public-private partnerships to advance economic development.

An agreement was also reached between the Department, Development Bank of Southern Africa (DBSA) and Local Government Sector Education and Training Authority (LGSETA) to train 40 municipal and provincial LED officials and is currently being rolled out, with completion expected by October this year.

The implementation of township revitalisation projects will provide trading space for small entrepreneurs in four of the five districts.

The department has contributed to the development of the Provincial Spatial Development Framework (PSDF), to be concluded by the end of the year, by providing the provincial economic competitive and comparative profile for this Framework. The primary foundation for the Framework is sustainable development, which must balance economic, social and environmental factors as a guide for development in the province.

The Gamagara Mining Corridor which includes Joe Morolong-, Ga-Segonyana-, Gamagara-, Tsantsabane- and Kgatelopele Local Municipalities has the richest and most sought after iron ore, manganese, diamond and lime resources in the world. We are well aware of the expansion in the corridor and the risk exists that the development could lead to sustainability challenges in the future. To this effect, a detailed study is being conducted with funding and support from the Sishen Iron Ore Company and the Development Bank of Southern Africa and will yield a master plan which will include infrastructure, social and economic elements. This study will be completed by October 2012 and has already led to Kumba developing a feasibility study for a Gamagara Industrial Park and Incubation Centre.

In addition, these developments support the recently launched SIP 5, which is the infrastructure development project concerning the Sishen – Saldanha railway link. The Gamagara Industrial Park is but one of the projects that will drive industrialisation through manufacturing in the province.

Expanded Public Works Programme

In advancing the government’s priority of job creation the department created 168 Extended Public Works Programme (EPWP) work opportunities, and has obtained R22, 5 million from the National Department of Agriculture, Fisheries and Forestry to maintain and upgrade the Port Nolloth and Hondeklip Bay harbours and fish factory in line with EPWP principles. Through this project, a total of 238 jobs will be created; 170 in Port Nolloth and 68 in Hondeklip Bay in this financial year.

Enterprise Development

The enterprise development is allocated an amount of R11, 247 million. In this regard collaboration with Small Enterprise Development Agency (Seda) and Frances Baard SMME Trust will be continued to ensure interventions towards small businesses managed through Service Level Agreements, quarterly reporting and programme and project reviews.

Funding will be made available for the feasibility study on the establishment of incubation facilities in John Taolo Gaetsewe and Siyanda districts respectively.

Focusing on the youth, promotion of entrepreneurship through medium of radio will be prioritised with the aim to develop an SMME radio drama series. The final selection will be held in the third quarter of the 2012/2013 financial year.

One paramount objective of this initiative will be to re-iterate and tell a story about products and services of government, Seda and other role players within the sphere of Small Business Development. Other benefits that will be highlighted through this initiative will include opportunities in relation to export development, cooperatives and incubation.


The Drama Series will further give an indication in relation to how these products are linked to the broader economic value chain. Sixteen (16) episodes shall be aired using dominant languages of the province and broadcast in all local community radio stations and SABC radio. This communication channel will ensure that key messages are disseminated to the right target audience by further promoting access to government services, information and opportunities throughout the province.




Cooperatives Development

Cooperatives that were supported have created full time employment of sixty six (66) people in the Agro-processing, Retail and Food Supply, Woodcraft (Manufacturing), Services and Textiles sectors.

The United Nations General Assembly declared this year as the International Year of Cooperatives under the Theme “Cooperative Enterprises Build a Better World”. Preparations are underway to host the International Year of Cooperatives celebrations in July 2012, in Kimberley. The two day event will start on the 6th July 2012 and as a precursor, the department will launch the Northern Cape Cooperatives Movement in June 2012. A co-operatives strategy has been developed and the process to have it adopted for implementation by the Province has been initiated.

Economic Empowerment

We have allocated R2, 992 million for Economic Empowerment. We have also planned information sessions to inform businesses of B-BBEE legislation in all districts in the Northern Cape. It will target more businesses, particularly historically disadvantaged individuals and SMMEs, on the need for B-BBEE verification certificates. More importantly, the unit will focus on the strategic issues faced by our Province relating to economic empowerment.

Programme 3: TRADE AND SECTOR DEVELOPMENT

Honourable Speaker,

The Department’s Trade and Sector Development Programme is allocated R31, 425 million in the 2012/13 financial year. With these resources the focus areas are trade and investment promotion, industry development, strategic initiatives and sector development with the potential to have a catalytic growth impact on the province.

The trade and investment promotion mandate is carried out largely through the agency of NCEDA.

In 2012/13 an amount of R5, 625 million will be transferred to the NCEDA. Twenty businesses will be assisted with export readiness and work on the development of the Northern Cape Trade and Investment Strategy will begin. We are targeting R100 million investment flows into the province in 2012/13 and the realisation of four investment projects.

Last year the Department set an investment inflows target for the province of R80 million and export readiness diagnostics on ten companies were completed. Direct investment achieved last year is estimated at R87 million across five projects, exceeding the target by 8.75%.The Diamond Bed Factory received an injection of R53 million, Riemvasmaak Agricultural Project R24 million, creating 280 permanent jobs and 280 seasonal jobs, the Vaalharts Catfish Project received R6 million with an estimated projection of 200 jobs to be created in the first five (5) years, Lower Majeakgoro Pecan Nut Project received R2 million, creating 15 permanent jobs and 30 seasonal jobs and the Riemvasmaak Trust Tourism Project received R2 million, creating ten (10 ) permanent jobs respectively.

The Riemvasmaak Agricultural Project is a partnership with the Industrial Development Corporation (IDC). On-going engagements with potential investors and financing institutions are taking place with the aim of increasing investment inflows.

Manufacturing

The contribution of manufacturing to the provincial economy is 2.3% and to the national economy is only 0, 4%. In order to address the underperformance of the manufacturing sector, we have finalized the Northern Cape Integrated Manufacturing Strategy in March 2012. This strategy is in line with the Industrial Policy Action Plan (IPAP). The strategy will be implemented in this financial year, with particular focus on the strategic interventions on procurement, value-addition / beneficiation, investment, exporting and skills development. These interventions will boost the economic performance of this sector and therefore the GDP of the Province.

In attempting to grow strategic sectors of the province, the department will set aside half a million rand towards the development of an Agro-processing Cluster and a Minerals Beneficiation Cluster by the end of March 2013. A model for these two Clusters has already been developed as part of the Strategy. The development of Clusters will also prevent the current leakage within this sector where raw material from the province gets processed outside the province and inputs to final products that are consumed in the province get imported from outside the province.

A Memorandum of Understanding has been signed with the Urban FET College for the provision of students and utilization of the training facility. A service level agreement has been signed with the service provider during the last quarter of the financial year 2011/2012. A Skills Development Indaba in Manufacturing was held in the 2011/2012 financial year to map a programme for skills development within this sector.

By the end of September 2012, the Department will have implemented a manufacturing skills development programme, namely Computer Aided Design (CAD) and Computer Aided Manufacturing (CAM) as a strategic intervention to address the skills challenges in the sector. This skills development programme will target unemployed graduates with the intended outcome of placing them for job opportunities within the sector or developing them into local business entities that will service the province with the provision of locally manufactured products.

Feasibility studies have commenced on the location of special economic zones (SEZs) in the province. Consultations with the Department of Trade and Industry are already underway for the Province to be allocated two designated areas as SEZs. A business case for the Province has been finalised in March 2012 and submitted to the Department of Trade and Industry for consideration.

The Department is facilitating the development of a commercial malt production plant in Kimberley on the banks of the Modder & Riet Rivers, in a joint initiative between Provincial Government, Industrial Development Corporation (IDC) and business in the form of GWK and the Foundation for African Business and Consumer Services (Fabcos).

The bankable feasibility and business plan has been completed. A geo-technical investigation as well as an Environmental Impact Assessment has also been done during the past financial year.

The construction of the malt plant is expected to commence in May 2012 and should be completed over a period of 18 months. Once completed, the facility will have the capacity to produce 100 000 tons of malt per annum (t/a) for mainly the beer brewing industry using barley as the main raw material.

Since the type of malt suitable for identified customers is not readily available in the country, an opportunity therefore exists to roll-out a Barley Development Programme by end of June 2012 which will entail developing local farmers and enhancing their skills in the field of barley farming and in the process opening an opportunity to introduce new emerging black farmers to barley farming. Approximately 10 000 jobs will be created by this plant.

We are in the process of launching the Northern Cape Mining Desk to render assistance to miners across the province in the first quarter of 2012/13. We hereby call on all established mines in the province and other relevant stakeholders, to participate and commit to this process in order to help grow our small mining sector.

The mining desk will seek to address the development of the mining sector in creating a conducive environment to stimulate and promote growth through:

Assistance to small scale miners, both financial and non-financial
To implement mining legislation e.g. Social and Labour plans of the mines
The role and responsibility of mines in the province towards economic development
The promotion of economic relationships with the private mining community
The social development and empowerment of local communities
The development of precious and semi-precious stones

Preferential mining procurement

Information obtained from the Northern Cape Mine Managers Association (NCMMA) indicated that although mines comply with the Historically Disadvantaged South African (HDSA) procurement targets set in the Mining Charter, not much is spent locally. One of the concerns from the mines was access to local suppliers.

It is for this reason that a Procurement Portal was launched on the 30 November 2011 to enable access to Provincial suppliers. The Portal is in electronic and physical phases. The second phase will be implemented in the current financial year 2012/2013 resulting in 10 jobs being created. The portal was advertised on all free local newspapers in the province and is being utilised by the sector.

Four (4) manufacturing products linked to mining procurement have been identified and are reflective gears, Industrial Overalls, Cap lamps and Smart ports, and efforts will be made that these be produced and procured locally to stimulate local manufacturing.

Procurement Forums and linkages

The department facilitated the establishment of mining procurement forums in the Province. These procurement forums consist of the mines, local suppliers and municipal LED officers. The objective is to focus on increasing the utilisation of local Historically Disadvantaged companies and develop clear capacity plans for local suppliers.

Two companies have been linked to procurement opportunities, namely, Riedt Trans linked to a waste opportunity in KUMBA and Kalahari Geo Science – Engineering group linked to engineering opportunities in Afrisam and Kolomela mine.



Diamond Strategy

Kimberley Diamond and Jewellery Hub

In 2011/12, we managed to operationalize one cutting, polishing and jewellery manufacturing facility for the Armenian Diamond Company (ADC) to be completed by the end of this financial year. The company registration is done, both the diamond dealer’s license and diamond beneficiation licenses have been acquired and we are in the process of acquiring the jewellery permit. The Armenian Diamond Company (ADC) will be operational by 30 June 2012.

Over and above the local company operating at the Kimberley Diamond and Jewellery Centre, two additional local diamond cutting and polishing companies have moved into the Centre.

Funding allocated will support the construction of additional infrastructure for the Kimberley Diamond and Jewellery Hub. This will include an Incubation Centre to exit KIDJA students.

In support of the Kimberley Diamond and Jewellery Centre, the European Union has made available R25 million in this financial year towards the realization of this hub. To date, the official development assistance from the European Union to the Province amounted to R38 million.

Kimberley International Diamond and Jewellery Academy (Skills Development)

In addressing the skills gaps within the diamond value chain within South Africa and the Southern African Development Community (SADC) region, the Kimberley International Diamond and Jewellery Academy (KIDJA) was launched on 4 November 2011 and a trust that will manage KIDJA’s affairs was registered. The media coverage the Academy received has resulted in over 400 enquiries with the majority coming from outside the province. KIDJA has created 102 temporary employment opportunities and 5 permanent opportunities, namely the Principal, two lecturers and two administrative staff members.

The Academy received an International Standards Organization (ISO) 9001:2008 accreditation, assuring its quality. High-tech surveillance equipment and Information and Communication Technology (ICT) equipment has been installed. Accommodation for twenty four (24) students has been secured at a local school hostel. Fifty students, of which seven are from the Southern African Development Community (SADC) countries, received training in Diamond Cutting and Polishing. The Academy envisages enrolling a further 50 students in MQA-accredited skills training courses such as Introduction to the Diamond Industry for SMMEs; Diamond Sorting and Valuation and Occupational Health and Safety.

Branding

The Kimberley Diamonds and Jewellery Brand Logo has been developed for marketing Kimberley Diamonds and Jewellery, both nationally and internationally.

Programme 4: BUSINESS REGULATION AND GOVERNANCE


Honourable Speaker,


Last year the department announced the intention to have all entities operating independently and being responsible for their management and attainment of operational efficiencies. This objective will continue to be pursued during the coming financial year with the extensive work that needs to be done to ensure consumer rights protection and also effective and efficient regulation of the gambling, betting and liquor industries. This function will be performed through Business Regulation and Governance, to which an allocation of R22, 015 million is set aside.


Gambling and Betting

Gambling and betting is an important industry in that it provides recreational activities for the population and creates jobs with relatively low skills requirements. However, care must be taken to ensure responsible gambling and that the operations of such establishments are within the law.

An amount of R10, 118 million is allocated for Gambling and Betting, of this R8, 268 million will be transferred to the agency to carry-out its priorities, including the review of license conditions of all licensees in the Province, the licensing and rolling-out of LPMs, eradication of illegal gambling, monitoring and auditing of all license holders to ensure licensees compliance with B-BBEE requirements and fulfilment of their social responsibilities and appointment and training of staff.

Consumer Protection

I am pleased to announce that the Northern Cape Consumer Protection Act has been assented to by the Honourable Acting Premier, Ms. Cjiekella and it is effective from 1 April 2012. This will assist the consumer with the effective means, relatively cost-free, to adjudicate and resolve their complaints. To this end an amount of R3, 383 million has been allocated for Consumer Protection in the Province. Additional funding will be sourced to facilitate the incremental establishment of the Office of the Consumer Protector as an entity, the Consumer Court and the regional service points. To this effect the Office of the Consumer Protector is operational effective from 1 April 2012.


Liquor Regulation

In the province there is a plethora of challenges we face as a result of alcohol abuse, such as foetal alcohol syndrome (FAS), unemployment and crime.

The national government, through fiscal policy taxation measures is doing its best to promote responsible alcohol consumption. Such demand side measures need to be reinforced through effective regulation on the supply side and this is the function of the Liquor Regulation in the Province.

In 2012/13 an amount R4, 841 million will be transferred to the Liquor entity, amongst others, to hold 60 Education and Awareness Programmes in schools based, clinics and two Social Responsibility campaigns by October 2012 at old age home and HIV/Aids orphanages.

A Liquor Indaba will be hosted by August 2012 involving all Stakeholders in the province. It is planned that 2000 liquor licenses will be inspected by the end of the financial year to ensure responsible trade practices, in addition to improving the licensing system.

We also plan to hold a Sobriety Week in conjunction with Arrive Alive Campaign of the Department of Safety and Liaison and participate in criminal justice cluster forums to address prosecuting challenges. This campaign is targeted for December 2012.

Corporate Governance

The resources allocated to this sub-programme amounts to R 1,793 million. The unit is responsible for monitoring and evaluating the activities of the entities in order to comply with the prescripts governing them. The entities are already complying with their reporting and corporate governance requirements. The Department will continue its quest to adequately resource the entities so that they operate optimally.


Programme 5: ECONOMIC PLANNING

Honourable Speaker


This financial year an amount of R18, 681 million is allocated for Economic Planning functions in the Department. We are central in the process of developing provincial economic policies and strategies over the medium to long term. This is captured in the Provincial Growth and Development Strategy (PGDS) vision and the developmental targets that must be achieved, as approved by the Executive Council in 2011/12.


In addition we outline the approach for the department to lead the implementation of Outcome 4 in terms of the Economic Cluster. It is critical that all stakeholders in the cluster pool their resources to ensure that progress is achieved on the outcome.

The department has been collaborating closely with the Department of Land Affairs in the development of the Provincial Spatial Development Framework (PSDF), which is critical as it dovetails with the PGDS and locates the economic growth and development objectives of the PGDS in a spatial dimension. The Provincial Spatial Development Framework and the Provincial Spatial Planning and Land Use Management Act (SPLUMA) are currently being finalised. This is important as it takes into cognisance the different locational comparative advantages of the regions. It allows for decisions criteria of where to locate development, state-led infrastructure investment as well as private sector investments. The SPLUMA will also provide a legal framework for planning processes in the Province.

I should also inform the House that in support of the War on Poverty, the department is in the process of contracting a service provider to conduct a feasibility study on the quality and quantity of clay found in the Petrusville area, to establish the potential for setting up a clay brick-making project for the impoverished community members.

As part of Inspire and building an information society in the province, the project of establishing an Operations Room, equipped with electronic systems to monitor the economy of the province has already started and I am pleased to announce that, the installation and commissioning of remote video conferencing as the first phase of this project has been completed. This phase allows the province to be able to communicate and video conference directly to its stakeholders in the districts resulting in efficiencies reducing distances and travel times. This innovation is commendable as it reduces the provincial carbon footprint as a direct result of minimised road travel.

The overall objective of this initiative is to ensure a centralised economic planning system for the province is implemented and operational to assist the Department in growing the economy. The programme also facilitated the implementation of a “Smart Classroom” at the Moremogolo FET College. This initiative is to expand and enhance the use of ICT tools to improve education and learning delivery.

A conceptual Service Delivery Improvement Platform was developed to bring about efficiency gains in schools at both academic and administrative levels. To test the efficacy of the platform, a Proof of Concept was rolled out in six schools, five in Frances Baard district and one rural school in Douglas (Ikageng Primary). The positive response from the survey of the Proof of Concept has shown that the project is welcomed and can enhance teaching and learning. The Department has submitted a proposal for funding support to the Broadband Intergovernmental Committee to support implementation of the e-services platform.

We live in the era of a knowledge economy and society, with great opportunities for growth and development. To take advantage of these opportunities we have allocated an amount of R9, 567 million for Knowledge Management to, among others; capacitate SMMEs in information technology (IT) management and training. The department with the Centre for Scientific and Industrial Research (CSIR) have been planning a Wireless Mesh Network for the rural area of John Taolo Gaetsewe. This is to enable connectivity in rural schools and communities. A project plan for implementation of this initiative has been developed and the next phase, the construction of masts to house wireless network infrastructure is currently underway on site.

Let me indicate that department has lobbied funding from the private sector in order to realise the objective of developing a knowledge society to promote economic development in order to fund the planned Wireless Mesh Network. To this effect I am pleased to announce that our efforts have been rewarded through a R5 million commitment from Kumba Iron Ore. The Meraka Institute of the Centre for Industrial and Scientific Research (CSIR) has been appointed as project manager and the construction of the masts has started in January already. It must be noted though that additional funding is required in order to fast track the project’s full implementation.

According to the General Household Survey of 2011, released by StatsSA (2012), a total of 437 000 of the 1,159 million of the population in Northern Cape receives social relief, social grants or relief assistance. Given that the Economic Sector receives 25% of the provincial budget and with the lion’s share going towards social development, this presents an opportunity for productive economic activity. It is therefore imperative to identify strategies to utilise such resources to create economic opportunities and an enabling environment for sustainable job creation and economic growth. It is against this background that research on “A spatial Economic analysis focusing on how social grants could be turned into economic activities in the Province” will be conducted. The departmental research agenda will also be aligned to new government policies and strategies with an increased focus on job creation.

We will also prioritise the completion of developing a Monitoring and Evaluation (M&E) framework for the department. Project monitoring and evaluation including EGDF projects through project visits will be undertaken, thereby advising implementing units on the challenges faced and improvements required for successful projects. We will ensure compliance with the national Department of Performance Monitoring and Evaluation’s (DPME’s) Monitoring Performance and Assessment Tool (MPAT) to improve departmental governance and service delivery. This will also strengthen monitoring and reporting on job creation.

In the 2012/13 financial year the priority interventions of the Department are clear and targeted. With the limited resources at the department’s disposal it is important that planning, resourcing, implementation, monitoring and reporting, and project evaluation are executed properly. This is in support of the promotion of the efficient, economic and effective use of resources as demanded by the Constitution.

Programme 6: TOURISM

Honourable Speaker,

To implement the vision for tourism development and promotion we have allocated an amount of R46, 492 million to the Tourism Programme. This includes an amount of R15, 771 million to fund the operations and activities of the Northern Cape Tourism Authority.

2011 marked the year in which the Department and the Northern Cape Tourism Agency (NCTA) enhanced our brand pillars through staging the first of a number of mega extreme adventure events, namely the Maloof Money Cup.

In the aftermath of the glory of the FIFA 2010 Soccer World Cup, tourism industries across the globe are licking wounds inflicted by the world-wide recession, while the Northern Cape grabbed attention in the same vein as the proverbial phoenix rising.

We staged the first ever Maloof Money Cup Skateboarding World Championship to be held outside of the United States, an event attended by 15 000 fans over three days. The national minister of Tourism, Mr. Marthinus van Schalkwyk, remarked that with the staging of Maloof Money Cup in the Northern Cape the province cemented its reputation as worthy of being considered for mega and international extreme sports events.

The Maloof Money Cup provided momentum for a global media reach, the province never before achieved. According to the reputable NewsClip Meltwater and US-based Limelight media monitoring agencies, the Maloof Money Cup South Africa event was broadcasted in 60 different countries and in 14 different languages. The value of the publicity generated on the back of this event totalled no less than R2.5 billion.

Publicity of the Northern Cape as destination outside of the Maloof Money Cup continues to increase and in the past financial year reached a total value of R74, 99 million.

In April this year, we announced to the world that we have extended our agreement with Maloof Skateboarding for another two years and therefore eliminated any chance of other provinces pinching this prestigious event from the hands of our Province.

On 28 - 30 September this year we will host the second Maloof Money Cup skateboarding competition.

The first ever Green Kalahari Canoe Marathon was staged over a distance of 99 km lasting three days and attracted 45 paddlers, all indicating that they have simply been bowled over by the excellent organisation and legendary Green Kalahari hospitality. Our congratulations go to the conquerors of the event, Messrs. Lance King and Heinrich Schloms who were overall winners. A special word of congratulation also goes to Messrs. Michael Mbanjwa and Eric Zondi for coming second overall winners.

The Mittah Seperepere International Convention Centre was launched in February this year. This facility with a capacity of 2 500 seats indoors and 3 500 seats in the Open Air Arena will be our main instrument to drive business tourism to the province. The MSICC is already popular with 25 event confirmations leading up to November 2012 already confirmed.

The Province and Mier area in particular, continue to attract world-wide attention as the Bloodhound Supersonic Car and Haakskeen Pan are being prepared for the onslaught to break through the unimaginable 1 600km or 1 000 miles per hour mark.

We are proud to announce the first ever annual Speed Week Club event in Africa for both vehicles and motorcycles. It will be officially known as the Kalahari Desert Speed Week and will be held on the same Hakskeenpan from 5 to 18 August this year. This demonstrates that all bodes well to establish a long-lasting legacy for the Bloodhound project and offering a greater variety of extreme sport events in the province.

Never again will our province be treated by the tourism trade and visitors as the forgotten or secret province. Never again will our province be regarded as a destination worthy to be visited only in winter to collect a few bags full of Springbok biltong or when the Namaqualand flowers bloom.

Through my department’s and the NCTA’s efforts, some 1 930 employment opportunities were created in the past year. Some 487 tourism enterprise owners and their employees benefitted from tourism skills development workshops, 181 more than targeted as a direct result of our joint venture with the Tourism Enterprise Partnership. Ten new field guides were also trained.

Tourism Management

I am pleased to announce that construction of the brand new Frances Baard Flagship Visitor Centre, an initiative funded by the department and supported by Frances Baard District Municipality, is completed. This facility will open in July this year and will render a tourism service for the benefit of the entire province.

The national IPAP2 strategy calls on government to assist small tourism enterprises in a drive to enhance their market access, in line with which and in a drive to enhance the global reach of the province as a destination, emerging tourism small enterprises were included in delegations to the Durban Indaba and Tourism Expos in Germany, United States and the Philippines.

Our supported emerging small tourism enterprises demonstrated that they are both productive and effective to bring business to the province as they collectively had 1 539 expo contacts, made 457 strong leads, entered into 69 partnerships and closed 136 deals at these International expos. This is 35 more deals than in the previous budget year, an indication that our emerging small tourism entrepreneurs are coming of age in a highly competitive market.

As a direct result of attending the New York Times Travel Expo, our supported client, Ed Smith of Tata ma Tata, hosted six American travel journalists to show them the Quiver Tree Route and Kimberley. A further group of American-based travel media will visit the province in August this year.

Both the national Tourism Sector Strategy and Domestic Tourism Strategy compels the government to maximise the utilisation of existing products and introducing new travel experiences, hence our involvement in developing new tourist routes. To demonstrate the value of tourist routes, Open Africa, our partner in route development conducted two baseline studies on the Quiver Tree Route and Richtersveld Route which revealed the following:

The Quiver Tree Route sustains 381 permanent employment opportunities and 260 temporary employment opportunities, as well as 54 volunteers. Some 43% of the employment opportunities are taken up by women.
The Richtersveld Route sustains 191 permanent and 78 temporary employment opportunities with women taking up 67% of all employment opportunities.



Let me report that as it was announced that we will create a FIFA 2010 Soccer World Cup event legacy in the province by establishing five Public Viewing Facilities in all Districts, community-based broadcasting screens have been installed in Pixley ka Seme, Namakwa and Siyanda districts. The remaining two will be installed in this financial year.

Destination Marketing

I now want to turn my focus on the main highlights for our destination marketing in the foregoing financial year.

In preparing the people of the province for participating in the Maloof Money Cup competition, the Skateboarding for Hope campaign was launched. This campaign not only created maximum awareness of the staging of the first ever Maloof Money Cup world skateboarding championship outside of the United States, but it also created a high degree of tourism awareness in 47 towns in the province while the campaign was also spread to Soweto, Johannesburg, Durban, Cape Town and Bloemfontein.

We are proud to highlight that as a result of the above campaign 30 South African and provincial amateurs participated in the amateur leg of the Maloof Money Cup and we have seen the interest in skateboarding throughout the province growing daily.

The Skateboarding for Hope campaign also created a number of opportunities for local up-and-coming hip-hop and rap performing acts and DJs to strut their stuff, entertaining skateboarders and fans. Justus Kotze, winner of the amateur championship of the Maloof Money Cup South Africa event, used his prize money to settle his student loan in one go, saving him from five years of debt.

In a joint venture with Maloof Skateboarding LLC, Michael Koroczynski was appointed as Maloof Skate Plaza facility manager to develop a team to manage activities at the plaza, as well as develop an attractive programme of skateboarding, thus strengthening the social value and legacy of the Maloof Money Cup championships. Mr. Koroczynski will leave South Africa at the end of October 2012 and the programme will be transferred to the Department of Sport, Arts and Culture.

I now would like to focus on the tourism development and promotional plans for the financial year 2012/13.

In order to grow the provincial tourism industry’s present contribution of 6% to the provincial GDP and create a greater number of employment opportunities, we will focus in the short and medium term on building the provincial tourism industry around events, rural tourism experiences and niche tourism.

The National Tourism Sector Strategy emphasises that the Department should focus on ensuring the “geographic spread of tourism with more emphasis towards supporting tourism growth in rural areas, in particular with more involvement of rural communities”.

Many of the Northern Cape’s top tourism destinations such as national parks, transfrontier conservation areas, the Richtersveld World Heritage Site, Namaqualand flowers and the large telescopes are located in rural areas. Thus tourism is already an important feature of the rural economy in the province.

My Department will therefore engage in the development of rural tourism products that respond to market needs. Such initiatives will be supported by declaring the following areas as nodes for rural tourism development: Riemvasmaak and Mier in the Siyanda region; the greater Richtersveld and coastal area of the Namaqualand and John Taolo Gaetsewe region.

Special attention will be paid to the further development of tourism infrastructure in the Pixley ka Seme region as we seek funding for the construction of the SKA Science Visitor Centre in Carnarvon. I am pleased to inform the house that the conceptual designs of this all important tourism facility has been completed.

Rural tourism development and promotion will also be boosted with the signing of a Memorandum of Understanding between the Department and South African National Parks to jointly develop and promote community-based tourism in the areas impacted on by our six national parks and six provincial nature reserves.

Research, Planning and Quality Management

An amount of R4 821 million has been allocated to activities for research, planning and quality management.

It gives me pleasure to announce that work on the review of the White Paper for Tourism Development and Promotion in the Northern Cape and the Tourism Master Plan developed back in 2005 has commenced. A review of these remarkable documents has now become critical as we have to align our own policies, strategies and plans with new national directives recently published.

Partnerships and Industry Development

An amount of R35, 999 million has been allocated to activities for tourism enterprise and destination development, R20, 228 million of which will go towards funding departmental projects for the development of the provincial tourism industry.

The state of municipal-owned holiday resorts continues to represent a missed opportunity for the development of affordable travel thus denying young families the opportunity to travel in their own province. Last year the department had preliminary meetings with the Development Bank of South Africa and the Industrial Development Corporation who provided advice on the matter. My department will engage the Department of Co-operative Governance, Human Settlements and Traditional Affairs to look at ways of developing a turn-around strategy for these valuable tourism assets in an effort to stimulate more affordable domestic travel in the province, particularly reaching out to the untraveled market.

A tourism infrastructure and product development master plan for Haakskeen Pan will be developed in this financial year.

A tourism product plan will be developed for the community-owned Khuis farm near McCarthy’s Rest in the Joe Morolong Municipality.

Following from a visit to Cornwall in the United Kingdom in November last year, a delegation of the Living Eden group will visit the province to assist us in reviving the Kamiesberg Charrette initiative with the specific aim to stimulate tourism and enterprise development in the rural areas bordering the coast.

In a drive to develop niche tourism products as recommended in the National Tourism Sector Strategy my department will develop a tourism experience plan focusing on the Galeshewe Uprising.

Northern Cape Tourism Agency

The transfers and subsidies to the NCTA amount to R15, 771 million for the 2012/13 financial year.

These resources should allow the Agency to expand on web-based and social media marketing with the completion of the new Northern Cape destination website and expanding the “My Northern Cape” campaign.

The Agency will also focus on developing more cooperative agreements with South African and international tourism trade and travel media to continue to push Destination Northern Cape into the itineraries of travellers to South Africa.

At the same time it will enhance efforts to get Northern Cape people to travel for short breaks inside the province and attract more domestic tourist arrivals to the province.

CONCLUSION

Honourable Speaker,


In this centenary year of our glorious movement, we want to accelerate the programme to better the lives of our people, so that freedom means jobs and sustainable livelihoods for the people.


With the budget R207, 281 million we intend to improve the administration of the department; build and grow small businesses and co-operative movement and ensure that our people gain access to the mainstream economy; promote trade and inflow of investments in the province; support the public entities we have created to meet their mandate; provide economic planning and advisory services to the province; and promote the province as the destination and a venue for extreme sports and business tourism, including the promotion of local tourism.


All the above represent the fertile soil onto which the seed will fall and new possibilities will sprout. With this budget we seek to take full advantage of these possibilities with a view to build a better life for all, as we look forward to championing the second transition of economic freedom in our body-politic.

Our hard work should continue to harness our efforts to build needed capacities, skills towards achieving our set targets, operational plans and our strategic outlook. We need to continue to build synergies, cohesion and implement all our plans without fail.

We need to innovatively grow our economy and build linkages, through strategic collaborations in the province and in the region in the spirit of Ubuntu and love for our continent for a better world as envisioned by Pixley Ka Seme. He concluded his seminal speech poetically:

“O Africa!

Like some great century plant that shall bloom

In ages hence, we watch thee, in our dream

See in thy swamps the Prospero of our stream

Thy doors unlocked, where knowledge in her tomb

Had laith innumerable years in gloom

Then shalt thou, walking with that morning gleam,

Shine as thy sister lands with equal beam”


Let me take this opportunity to thank the Premier, Me. Hazel Jenkins, in her absence and the Acting Premier, Ms. Cjiekella, for leadership and guidance; and to thank the Head of Department, Mr Patrick Malamlela Seboko and his team of dedicated professionals in the department for their continued service to the people of the Province, and to the Head of Ministry and the support staff in my office for the continued support they gave me throughout this term.

Thank you. Ke a leboga. Baie Dankie.

 

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Kimberley 
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