Modern, Growing, Successful Province

Department of Finance, Economic Development and Tourism Budget Speech 2013

Address by Mr John Block, MEC for Finance, Economic Development and Tourism to the Northern Cape Legislature on the occasion of tabling Budget Vote 6
24 May 2013.

Honourable Speaker

Honourable Deputy Speaker

Honourable Members of the Provincial Legislature

Madame Premier

Colleagues in the Executive Council

Chairpersons and CEOs of the Liquor Board, Gambling Board, NCEDA and NCTA

Distinguished Guests

People of the Northern Cape

Ladies and Gentleman

Honourable Speaker,

I would like to take this opportunity to honour ex-Premier Hazel Jenkins. I want to thank her for being a true leader of our Province; a woman that took on this journey with her heart and spoke for the men and women of her beloved Province the Northern Cape.  We welcome our new Premier; we look forward to support her as we continue to transform our Province as outlined in the manifesto of our party the African National Congress who held its 53rd National Conference in Mangaung December 2012.

The African National Congress resolved that the 2030 Vision of the National Development Plan (NDP) be embraced as the “platform for united action by all South Africans to eradicate poverty, create full employment and reduce inequality. These are critical building blocks towards a truly united, non-racial, non-sexist, democratic and prosperous society”.

The governing party resolved to work towards the implementation of the recommendations of the NDP as a long term vision. The President, in the State of the Nation Address, further emphasised the NDP as a roadmap to a South Africa where all have access to services and job opportunities.

Honourable Speaker, the shift to the NDP is a new growth path for the development of South Africa. It focuses our nation’s energy on attacking poverty and expanding into a robust, entrepreneurial and innovative economy. The Department of Economic Development and Tourism (DEDaT) sees its role as ensuring that it creates the environment, services and opportunities for skills and capacities of the people and organisations to improve their lives. Primarily, the people of the Northern Cape (NC) and its communities will need the environment, resources and capabilities to become their own engines of development, of which government will support.  As the first Black President of The United States of America Barack Obama once said: “Change will not come if we wait for some other person, or if we wait for some other time. We are the ones we've been waiting for. We are the change that we seek.”

Honourable Speaker, today I will firstly reflect on the past achievements of the Department and map out the future plans of the Department for this financial year. 

Economic Overview

Honourable Members, the South African economy is showing great resilience notwithstanding the prolonged economic recession in most parts of Europe. The economy expanded 2.5% in 2012 following growth of 3.5% in 2011. The national economy only experienced one year of contraction of -1.7% in 2009. Provincial economic growth has largely tracked national growth declining -1.5% in 2009, increased to 1.9% in 2010 and 2.2% in 2011.

In relation to other BRICS countries, the Chinese economy in the last quarter of 2012 gave rise to growth of 8.2%, resulting in overall GDP growth of 7.8% for that year. However, the momentum seems to be faltering as first quarter growth has since declined to 7.7%. The United States (US) experienced an unexpected contraction of -0.1% in the last quarter of that year, resulting in growth of 2.2% in the US economy. First quarter growth has since come in at 2.5% which was very positive. The United Kingdom skirted a possible “triple dip” recession, growing at 0.3% in the first quarter.

President Jacob Zuma recently said, and I quote “the importance of BRICS for South Africa is best reflected in bilateral trade relations at a practical level. In 2012 South Africa’s total trade with the BRIC countries stood at R294 billion, which is 11% higher than the 2011 figure of R264 billion.”

The recessionary conditions in the Euro Zone have resulted in their economic output declining, which has negatively affected the exports of our mining and agricultural products. The International Monetary Fund has revised global growth downwards to 3.3% from 3.5% in its latest outlook. According to the World Bank, it will not be until 2015 that global growth gets improves. Our continent seems to be the rising star, according to the recent discussions at the World Economic Forum in Cape.

Employment continues to remain static, with unemployment being at about 25%. The narrow measure of unemployment increased to 25.2% in the first quarter of 2013 from 24.9% in the last quarter of 2012, equating to 4.6 million unemployed South Africans. Year-on-year, however, total employment has increased by 199,000 from 2012 to 2013.

Provincially, the unemployment rate has increased from 28.4% in the fourth quarter of 2012 to 29.6% in the first quarter of 2013. Year-on-year, the picture is unchanged as the total number of employed stood at 286,000 in the first quarter of 2013, which is the same as the first quarter of 2012.

According to the International Labor Organization (ILO) the world is facing a worsening youth unemployment crisis with young people likely to be three times more unemployed than adults. Youth unemployment, as a measure of those aged 15-34 years, stood at 34.5% in 2011 in our province and 38.4% nationally according to StatsSA. This is an improvement in youth unemployment from 2001 when it measured 44.1%.

People of the Northern Cape, the gains we have made in youth employment are increasingly being challenged by the economy’s ability to absorb the unemployed; as a result we will place a greater emphasis on skills development in order to accelerate job creation. We welcome the national government’s plan to implement employment incentives targeting young work seekers, which will benefit the youth of the Northern Cape.

BUDGET ALLOCATION FOR 2012/13

Honourable Speaker, the Department has utilised R223.288 million (94.92%) of the allocated budget of R235.254 million for the 2012/13 financial year, which resulted in an under spending of R11.946 million or 5.08% of the annual budget for the year.

However, the Department submitted requests for roll-overs, to the Provincial Treasury on these unspent funds, to the value of R7.694 million and will be utilised as follows:

R735 000 to pay Department of Public Works for the paving done at the Maloof Skate Plaza;
R3.2 million to effect the final payment on the Maloof contract for the 2012/13 financial year;
R1.6 million for the establishment of a computer refurbishment centre which will train unemployed youth to learn how to fix and maintain computers, and the implementation of the e-Box digital information solution, all forming part of the INSPIRE project’s aim to build an inclusive Provincial knowledge-based economy;
R600 000 for the procurement of fleet vehicles for the newly established Consumer Authority and Consumer Court in the Province;
R600 000 to develop a Provincial renewable energy strategy;
R260 000 for the further development and implementation of a business plan for KIDJA;
R340 000 for the development of the Social and Accounting Matrix (SAM), which is a social, economic modelling tool with Development Bank of South Africa (DBSA); and
R359 000 for the payment on the business plan developed for the Clay Brick Project in Petrusville.

Once the roll-over is deducted from the under-spending of the Department, for the 2012/13 financial year, the real under-spending for the year amounts to R4.252 million or a mere 1.81% of the allocated budget. This under-spending is due to the long processes to acquire additional accommodation for the department and the delay in tender processes for the Kimberley Diamond Centre.


ADMINISTRATION

Honourable Speaker, in the previous year we announced that we will undertake an organisational review to ensure better service delivery and effect administrative improvements. The review was undertaken and changes effected, where necessary.  Functions have subsequently been relocated to be under the strategic and administrative control of the Chief Operations Officer. In addition, the Human Resources Plan and Employment Equity Plans were approved to guide employment and recruitment practices in the department.

Honourable Speaker, in accordance with the Monitoring and Performance Assessment Tool (MPAT) of the National Department of Performance Monitoring and Evaluation (DPME), the departmental evaluation has been finalised and the Department is fully compliant in three key performance areas (KPAs) namely: strategic management; governance; and accountability.

The communication and legal services tasks were elevated to directorates, within the corporate services environment; all these were done to improve our capacity in these areas, especially to reduce reliance on legal consultants. Subsequently, we have developed internal capacity to institute and complete disciplinary processes within 60 days; relieving the department of any prolonged suspensions this financial year.

As required by the Department of Public Service and Administration, we completed the process of Persal clean-up. This resulted in our funded vacancy rate dropping to 14%. This represents 30 posts, whose job evaluations were completed by the end of April 2013. The vacancies will be filled within this financial year.

INTEGRATED ECONOMIC DEVELOPMENT SERVICES (IEDS)

Economic Growth and Development Fund (EGDF)

Mr Speaker, the current administration is not the first to utilise the EGDF for major projects that will curb unemployment, empower depressed areas and boost the economy of the Northern Cape Province. There were plans in the past to create jobs through the Fishing and Mariculture and Gold Chain Technology projects. Honourable members, we are still anxious to ascertain the quantity of jobs created and economic value conceived by the Guardians of 2004. Immediately after I took over as MEC the HOD told me that the failure of these projects smacked of irregularities. He then initiated a forensic audit. The forensic audit has now been concluded we will in due course, after studying the report, take the necessary course of action we deem fit and appropriate.

In my previous budget speech I mentioned that the The Diamond Bed Factory has been established and has 65 permanent employees. The Diamond Bed Factory production has been expaned to increase chair and couch production in addition to beds this has created 20 permanent and 10 temporary jobs. We also continued to support Eternal City Trading for their biscuit factory in Douglas, which has resulted in 15 permanent jobs created.

In addition the EGDF supported various micro and small enterprises in the province the majority of which are manufacturing enterprises.

One of the successful entrepreneurial stories is the pig farming project in Phillipstown called Chicaina Pig Farming. The department has been supporting this project and has seen it grow. The department has committed funding of R2 million to the project in the 2012/13 financial year, we have been able to proceed with implementation of Phase 2 and the existing stock has been sold. Fencing of the premises has been completed. Forty sows and three boars of genetically superior stock have been purchased to increase the reproduction rate. This is part of our effort to the War on Poverty Campaign championed by Deputy President Kgalema Motlanthe.

Furthermore, a pig feed mixer has been purchased. The project could end up supplying feed to cooperatives in the province. The department is providing mentoring services to the business over a twelve month period including training on finance, marketing and general administration. Five permanent and ten temporary jobs were created from these expansions.

Our efforts to improve the lives of all our people include the provision of space for micro enterprises; we have completed transforming the old taxi rank in Griekwastad into a trading centre for this purpose. The work is complete and operational.

These are some of the successes we have achieved in creating jobs utilizing the Economic Growth and Development Fund in partnership with the Frances Baard SMME Trust over the past term.

Enterprise Development and Empowerment

The programme undertook the Provincial SMME Pilgrimage between February-March 2012 under the theme: “Cooperative Enterprises Build a Better World”. The objective of the pilgrimage is to serve as a rural economic empowerment mechanism and “One Stop Shop” service for SMMEs operating in remote parts of the province. The main goal was to ensure broad information dissemination and sharing and improving accessibility. The attendance across the five districts was quite impressive with the highest attendance being in John Taolo Gaetsewe at 432 and the lowest in Pixley ka Seme District at 185.

Last year I reported that the province will be hosting the International Day of Cooperatives in Kimberley. I am pleased to report that was a very successful event.

Regional and Local Economic Development (RaLED)

The Department has instituted the Provincial LED Strategy and the key prerequisites coming from this were to have LED strategies in all municipalities, have competent LED officials in all municipalities, identify and support catalyst projects and activate public private partnership through the LED Forum system.  Key to all the above mentioned is anchoring all of this in Municipal LEDs and IDPs.

Honourable Speaker, My department undertook to train 40 municipal and provincial LED officials. I can report that 38 of the enrolments completed their training and were awarded certificates in November 2012. This is in terms of an agreement we have with the Development Bank of Southern Africa (DBSA) and the Local Government Sector Education Training Authority (LGSETA).

The Department in partnership with Department of Public Works and Department of Agriculture, secured R40 million for the Dikgatlong rural investment to build a bridge that will link Wildeklawer and Pniel and is expected to be completed over the next 3 years.  This investment will be a crucial catalyst for employment creation and retention, agricultural production and agro-processing.
The Department has been involved in the National Infrastructure Plan projects coordinated by the Presidential Infrastructure Coordinating Commission (PICC) which includes Sishen-Saldanha and the Hotazel-Coega railway Corridors.  The Black Women owned Kalagadi Manganese Sintering plant, which is the biggest in the world, was launched in December 2012.
Work on the Gamagara Mining Corridor Infrastructure Master Plan is on track, Phase 2 of the 3 phase process is complete.
Upgrades and maintenance of the Port Nolloth and Hondeklip Bay harbours and fish factories are being project managed by the Namakwa District Municipality and currently employs 107 people. It is foreseen that the Department of Agriculture Forestry and Fisheries (DAFF) will extend their footprint in this area.
Three project feasibilities have been finalised for the establishment of regional incubators. These studies are for the districts of Pixely Ka Seme, John Taolo Gaetsewe and Frances Baard.

The key outcomes in all these projects are to ensure advancement of localization in terms of employment; suppliers and broad-based black economic empowerment including ownership where possible.

Extended Public Works Programme (EPWP)

The Department created through the EPWP, a total 254 job opportunities, which were captured on the official national reporting portal. The scope and nature of these projects include destination promotion, enterprise development, building renovations, community projects and general maintenance.  One of the highlights was the launch of the Prieska Community cleaning projects after the Prieska Woodcraft Cooperative was restructured.

TRADE AND SECTOR DEVELOPMENT

Honourable Speaker, allow me to report the progress made by this programme on its undertakings last year:

The flagship departmental jewellery training academy, also known as KIDJA, graduated 96 students in November 2012 with mining qualification authority (MQA) accredited certificates. Construction of additional infrastructure for the Kimberley Diamond and Jewellery Hub has commenced.

We undertook last year to assist 20 companies with export readiness. Export readiness diagnostic has been completed on 15 companies and we facilitated export orientation accredited training for 15 SMMEs in partnership with the DTI. The course duration is six months and ends this month. We also assisted three companies to access DTI incentives to participate at the Italian Arts and Crafts Fair in Milan.

Two companies were assisted to take part in the Trade and Investment Outbound Mission to India in February 2013. We assisted four businesses to apply for their import-export certificates. Ten SMMEs were exposed to the international market at the South African International Trade Exhibition (SAITEX) in Midrand.

We managed to attract investment of R7 million for the Kimberley Sub-acute Hospital. This hospital will create additional bed space for post-op recuperation. Construction is underway, creating 30 temporary jobs and once fully operational, 50 full-time jobs. In addition, a license has been attained for a 20-bed sub-acute hospital in Springbok. Plans are underway to do the same for Kuruman, Posmasburg, Kathu, Hopetown, De Aar and Colesburg.

Business cases have been prepared for 17 priority projects identified in the Manufacturing Strategy. This will provide an indicative cost for each project and also the aggregate investment required for the province. This should assist the trade and investment agency in its efforts to attract both domestic and foreign direct investment into the province.

The department is working on the implementation of a manufacturing skills development programme. Six SMMEs are enrolled on computer aided design (CAD) and computer aided manufacturing (CAM) training programme in collaboration with Moremogolo FET College in Kimberley. The training commenced in November 2012 and was completed in March. Discussions have been held with the Rural FET College in Upington to introduce a similar programme in Upington and surrounding areas in the 2013/14 financial year.

A solar corridor that stretches between Upington, Groblershoop and Prieska has been selected as the location for the special economic zone (SEZ) programme focusing on solar energy, manufacturing, localisation and SMME development.

The Malt Production Plant is an investment of between R650 to R850 million into the province. The bulk of this has so far been carried by the shareholders consisting of FABCOS, Griekwaland Wes Korporasie (GWK) and the Industrial Development Corporation (IDC). FABCOS has already spent R7, 5 million on the project. The province has also made financial contribution amounting to R1, 5 million. This consists of R455, 000 for the geo-technical studies and launching of the project from the Department; SEDA contributed R853, 500 towards the environmental impact assessment (EIA), feasibility study on the identified barley planting farms as well as project launch; and Frances Baard District Municipality committed R216, 000 for training and development of emerging farmers that will be involved in the barley farming. The Malt Production Plant will create an estimated 200 temporary jobs and is anticipated to create 20 permanent jobs. In addition, about 2000 small farmers will benefit from this intervention.

Export volumes, destinations and prices have been finalised in January 2013 and these had an impact on the design and capital expenditure of the plant. Hence the construction of the plant is envisaged to commence during the third quarter of 2013/2014.

Honourable Speaker, localisation in the Northern Cape mining sector continues to be encouraged particularly as it has expressed interest to procure reflective gear, industrial overalls, headlamps and smart ports amongst others locally. A company, Sibahle Reflective Gear Co. has been registered to take up this opportunity, of which the majority of members are disabled persons. The business plan has been finalised and we are currently sourcing start-up capital from the mines for the establishment of the factory.

BUSINESS REGULATION AND GOVERNANCE

Consumer Protector

Honourable Speaker, to date, the Consumer Protector and Chairperson of the Consumer Court and the Registrar have been appointed. We managed to resolve 260 consumer complaints in the 2012/13 financial year.

Liquor Board

The Liquor Board received 397 new licensing applications and these were assessed in terms of the Northern Cape Liquor Act (2008) for completeness of application documentation. During the financial year 2012/13, the Liquor Board received 540 new license applications across the spectrum of different types of licenses. The Board approved 520 licenses, the balance being refused or postponed. The majority 351 (68%) were occasional license application and 91 (17.7%) were permanent license applications.

The Department will analyse whether the healthy balance point for competitiveness in the granting of permanent liquor license has been achieved, to ensure the market does not become saturated.

On liquor education and awareness programmes, my department through the Liquor Board managed to hold 19 education and awareness sessions, 17 in clinics and 2 school-based campaigns. We held Sobriety Week in conjunction with the Arrive Alive Campaign by the national and provincial transport departments, two such campaigns were held. The National Liquor Regulator Forum Compliance and Enforcement sub-committee meeting was held in Kimberley with representation by all nine provincial liquor boards, the SAPS, municipalities and other stakeholders.

Gambling Board

The Gambling Board revised the licensing conditions of operators and re-issued licenses to operators in the 2012/13 financial year. In terms of rolling out limited payout machines (LPMs), the department issued a request for proposals (RFPs), thus far six route operators have responded.

ECONOMIC PLANNING

Information Society

On the Information Society and information technology infrastructure enablement, the installation of equipment for the three remote site offices is complete. Installation at the FET colleges in De Aar, Kuruman and Upington has been finalised with installation at the municipality in Springbok scheduled for completion by April. These remote conferencing facilities are innovations that will promote the drive towards e-governance and thus ensure efficiencies are attained. Furthermore, it will go a long way towards lowering the carbon footprint of the province.

The department’s planned piloting of a wireless mesh network for the rural area of John Taolo Gaetsewe is jointly funded by the Department, Meraka Institute, which is a programme of the CSIR and Kumba Iron Ore Company.  The tender for the construction of the antenna towers was awarded in October 2012. The network is planned to go live in September 2013 which will bring much needed internet connectivity to the communities in the area.

The department has doubled its efforts at capacitating SMMEs in the province on IT training and improving their businesses through increased usage of IT technologies. Information sharing sessions were conducted with emerging IT enterprises to inform them on provincial IT opportunities emanating in the province in the light of all the initiatives being implemented.

The Knowledge-Based Economy is an aspiration for which the Department continues to strive and to this end, in cooperation with the office of the Premier, has concluded the Northern Cape Information Society Strategy. Going digital has demonstrated its contribution to economic progress in advanced economies and as such provides an experiential base from which we can bridge the digital divide and make our local industries more competitive.

TOURISM

The Northern Cape is becoming more successful to attract high level events. In this instance we can refer to the two- day long national Tourist Guide conference, Green Kalahari Canoe Marathon, Aspen Trans Karoo mountain bike race, Barney Barnato Golf Week, Ghaap River Extreme, Kalahari Speedweek, Kalahari Desert Festival, Kalahari All-Tar Speed Week, Maloof Money Cup and the Bloodhound event. In addition to these events, some 60 events were hosted at the Mittah Seperepere International Conference Centre attracting 32 408 delegates.

Some 74% more fans attended the Maloof Money Cup skateboarding championship in 2012 than the previous year, an indication that the event is continuing to attract more visitors to Kimberley and the Northern Cape. We would therefore like to thank Kumba Iron Ore mining group for their partnership to accelerate the impact of this international event.

The number of activities and small competitions held at the Maloof Skate Plaza has increased significantly with skate competitions held every weekend. The Midway Mayhem skate competition attracted 95 entrants, 70 of them being South Africa’s best skateboarders while the Maloof All Cities, the first ever team skate competition held in the world, attracted ten teams of which nine comes from outside of the province.

The Skateboarding for Hope events were staged in 8 South African cities and all regions of the province. In this we reached in excess of 2 000 youth skaters as we worked to promote the Maloof Money Cup championship.

Two community skate parks were completed in December, one in Kuruman and one in De Aar, to ensure that these towns also attract skate tourists. At the same time these parks are providing much needed recreational facilities for youngsters. Two more parks are under construction in Upington and Springbok and will be completed in June this year.

Honourable Speaker, the Maloof Money Cup Championship is unprecedented in its ability to attract publicity. This event generated 1 546 editorials, both in print and electronically, reaching an audience of more than 1.2 billion people.

Planning is on track for the Bloodhound Supersonic Car attempt to break the 1 600 kilometres per hour (KMh) speed threshold. At the same time we have completed the preparations of the track. The construction of the car is at an advanced stage and it is envisaged that testing will begin June 2013 in the UK, with testing in Hakskeenpan scheduled for March to April 2014. Telecommunications infrastructure is in place and fully operational as per the agreement, providing the first 4G mobile technology connectivity to Hakskeenpan and immediate surrounds installation, which is the first 4G installation in South Africa.

The hosting of the first ever Kalahari Speed Week event took place on 22-30 September 2012 at Hakskeenpan. Over 3,000 people attended with 60 local community members working as drivers, builders, security and cleaners during the event. Water purification and portable ablution facilities utilised during this event will be used for the Bloodhound SSC event in 2014. The Kalahari Speed Week generated 409 editorials in the media reaching an audience of 71 million people.

The second Green Kalahari Canoe Marathon staged in March 2013 attracted 79 paddlers, 34 more than in 2011. This event is well supported by previously disadvantaged paddlers with Zonele Mzuza being the highest placed of these paddlers coming in 12th place. We would like to congratulate Jasper Mocke and Michelle Eray as overall winners of the event.

Work on the Diamond Coast Route is nearing completion with route signs being erected along the way in partnership with South African National Parks. We have expanded accommodation on the Richtersveld Route by adding a campsite in the village of Lekkersing.

Domestic tourist arrivals marginally increased to 2% according to statistics from SA Tourism, which translates into 142, 000 tourists visiting the province last year.  They stayed an average 4.4 nights spending R204 million.  The provincial market share of international visitors remained static at 1.2%.

Meetings were held with 422 trade and media representatives during the Indaba of 2012 while 223 meetings were held during the Namibia Travel and Tourism Expo held in June last year.

The NCTA entered into 30 international joint marketing agreements during the past financial year thus promoting the province in the United Kingdom, Netherlands, Germany, Chile, Argentina, Brazil, Paraguay, Uruguay, Scandinavia, South Korea, Japan and Italy.

Our I Love Northern Cape campaign has been positively received in the market with complimentary responses from tourism stakeholders across the province, country and internationally. The heart branding is an iconic visual representing the five regions of diamond, quiver tree, oryx, Namakwa flower and the Karoo windmill. The campaign was launched to encourage a spirit of Northern Cape pride and to encourage service excellence within the province

As part of the rollout of our e-marketing strategy the new Northern Cape destination website, (www.experiencenortherncape.com) is progressing well with the first 3 phases launched during Indaba. The target was to have 60% of all Northern Cape product uploaded by then with the final phase and remaining product upload set for completion end September 2013.

Relevant social media platforms were identified resulting in 14 platforms being developed and branded for Northern Cape Leisure, Northern Cape Events and Maloof Skateboarding and include Facebook, You Tube, Twitter, Flickr, Foursquare and  Google Places.  Ongoing campaigns resulted in a combined audience of 3.1 million

A monthly newsletter is produced and distributed internationally, nationally and provincially highlighting events and new tourism product to the tourism industry at large. The database has grown by 24%.  We have partnered with Tourism Radio City Guides to produce a guide available on all mobile phone platforms, (android, istore, ipad). The guide was successfully launched during Indaba and features 360 points of interest, tourism product and attractions of the province.

BUDGET ALLOCATION 2013/14

Honourable Speaker, please allow me to table the budget allocation of the Department of Economic Development and Tourism for the 2013/14 financial year which amounts to R223, 028 million. This is a decrease of  R12, 226 million from the 2012/13 financial year.

Job creation is central to government’s efforts in fighting to eradicate poverty, create full employment and reduce inequality as emphasised in the National Development Plan DP. We will endeavour for efficient, economic and effective use of these resources in discharging our mandate.

PLANS 2013/14

Honourable Members, I present herewith the plans of my department for the 2013/14 financial year per planning and service delivery areas.

ADMINISTRATION

Honourable Speaker, this programme is tasked with providing leadership, strategic management and economic policy direction to the province in accordance within government legislation and regulations. We are allocating R42, 460 million to this programme.

In this financial year, in cooperation with the Office of the Premier and the Internal Audit unit we will focus on financial management and human resources management to become fully compliant with the Monitoring and Assessment tool (MPACT) of the National Department of Performance Monitoring and Evaluation.

Honourable Members, in addition to this the Department has committed itself to the 2013/14 Clean Audit mandate and ensure all SMMEs are paid within 30 days.

INTEGRATED ECONOMIC DEVELOPMENT SERVICES (IEDS)

Honourable Speaker, Integrated Economic Development (IEDS) is responsible for the promotion and support of sustainable integrated economic development through developing enterprises, local economies and empowering historically disadvantaged individuals. This is a very wide mandate requiring substantial resources and dedicated officials. The programme receives an allocation of R58, 387 million in 2013/14, of this amount, R34 million is committed towards the Economic Growth and Development Fund (EGDF). The EGDF is now effectively supporting enterprises that show great potential for creating employment particularly in manufacturing.

Economic Growth and Development Fund

Today we are proud to say that The Diamond Bed Factory is continuously growing and has expanded its market nationally and to our Neighbouring Countries namely Botswana and Lesotho. It is expected to create an additional 35 permanent jobs during this financial year bringing the total employment figure to 120 permanent jobs.

In this financial year a weaning house and farrow building will be competed at the Chicaina pig farm in Philips Town.

In the forthcoming financial year we will target the Black Business Supplier Development Programme (BBSDP) of the DTI in order to increase the pool of resources available to entrepreneurs in the province. This will assist our enterprises to prepare for large scale opportunities that may arise from the different Strategic Integrated Projects (SIPs) to be implemented in the province.

As a department, through measures like the EGDF and BBSDP, we are working on preparing entrepreneurs to be ready for those opportunities.

Enterprise Development

In the coming financial year, the Department together with its agencies will focus on the following services:

business skills and training;
access to business information;
business plan compilation and analysis;
acquiring commercial regulation documentations;
access to business resources;
access to business premises/small business incubators and markets;
government support programmes;
Information, Communication and Technology (ICT) to effect business requirements.
project Funding for Emerging Exporters
accessing of incentives such as the Cooperative Incentive Scheme

The Department will embark on a detailed SMME Baseline Study. The baseline study seeks to undertake a focused study of the SMMEs, their strengths and their challenges.


It is good to note that there is increased interest and accentuated focus on SMME Development through incubation. In this regard, a number of lessons have been learnt and these lessons form the basis for the development of the Provincial Incubation Strategy. The preliminary findings of the process of the development of the Provincial Incubation Strategy indicates that there is a general lack of understanding of Incubation in the province. The most common intervention is to set up trading places and stalls for SMMEs with limited or no capacity. In instances where there is incubation, it is riddled with challenges like a proper tenant take up system, a decent subsidisation mechanism and even a focused support process which will ensure decent exit opportunities. The conundrum in this regard, is the balance between making Incubation Centres viable and at the same time developmental. It is anticipated that we will hold an Incubation Indaba and share more of these outcomes with the various stakeholders and mobilise for more input.


The Department will continue to support SMME’s through business plans appraisals and facilitate access to finance with agencies such as KHULA, De Beers, ABSA, Standard Bank, National Empowerment Fund (NEF), IDC, Dti, Small Enterprise Finance Agency (SEFA).

SMME’s will also be assisted with new business registrations and business plans development through linkages with agencies such as CIPC, Frances Baard SMME Trust, SEDA and SARS for business tax compliance issues. Through our partnership with the Construction Industry Development Board (CIDB) we will on contractor business development and training.

Through the partnership with Frances Baard SMME Trust we will also assist SMME`s mainly through procurement of machinery and equipment for start-ups and expansion purposes.

As part of its collaboration with SEDA, the Department will pilot a cadet programme, for one year, directed at the placement of skilled graduates in each municipality to assist with SMME development. Through this programme, it is anticipated that the Department will increase its reach across the province and provide support to SMME’s in each municipality.

The Department is also targeting to train 10 youths, from across the province in heavy machinery handling/driving. This project is being pursued in collaboration with the Department of Roads and Public Works, which will provide work experience to these youths in their district offices across the province.

We assist entrepreneurs with both financial and business development support services in partnership with Small Enterprise Finance Agency (SEFA) and other partners in the province. This year we target to assist 40 SMMEs through business plan appraisals and facilitating access to finance with agencies such as Khula, NEF, IDC, DTI, De Beers (Pty) Ltd. and commercial banks. In terms of business development support, we plan to train SMMEs in management skills, business finance, basic computer literacy and mentoring.

Through the partnership with Frances Baard SMME Trust we will assist SMMEs with procurement of machinery and equipment for start-ups and for expansion purposes. Ten cooperatives will be supported with grant funding applications to the DTI Cooperatives Incentive Scheme (CIS). They will also be supported through facilitation of participation at exhibitions and trade fairs. Through the Preferential Procurement Initiatives we plan to give 30 SMMEs access to public procurement opportunities. Currently there is further work underway to develop a strategy on how SMME’s may be assisted provincially to access more procurement opportunities in government, and to establish effective processes to monitor and evaluate progress in that regard

Regional and Local Economic Development

For this financial year, Honourable Members, the actual LED components for IDPs have been drafted and they are at a consultation stage.  


Wildeklawer is one of the biggest fruit and vegetable producers and packers in the country with output in excess of 6,000 tons and employing more than 1,000 people. The project requires R32 million for phase 1 and we have managed to facilitate funding in support of this initiative from the Department of Rural Development and Land Reform.  Our aim is now on Phase 2 that will entail the activation of the Pniel Community Property Association's land opposite the river to ensure it develops in tandem with Wildeklawer.  Phase 3 of the project will see expansion of this Pniel/WIldeklawer's production and processing capacity.


Honourable Speaker, I would like to thank on behalf of the Department the Sishen Iron Ore Company Community Development Trust (SIOC-CDT) for their funding and support with respect to the Gamagara Mining Corridor Infrastructure Master Plan. The Plan will be completed by June 2013.


We will partner with municipalities to improve the LED component in the Integrated Development Plans (IDPs). LED training to municipal officials will be maintained in order to improve this competency in municipalities. LED forums will be expanded and strengthened and EPWP support will be extended.


The LED team of the department will profile projects identified in the municipal LED strategies for which business cases can be prepared and funding for implementation sourced.  .


The Department facilitated in partnership with Siyanda District Municipality and Vaal University of Technology funding for the Northern Cape Innovation Station and welding training facility in Upington.  This project will be rolled out in the coming financial year to enable and advance manufacturing and providing skills for key investments in the province.

The Department, Anglo American and the Industrial Development Corporation (IDC) have partnered to finalise key investments for the establishment of the Kathu Industrial Supplier Park.

Local Economic Development is a bedrock from which we will strive to eradicate poverty, create full employment and reduce inequality, just as then President Honourable Nelson Mandela said: “It always seems impossible until it is done”.


Economic empowerment

Community-based economic empowerment will also be promoted through the development of small scale manufacturing hubs. We plan during Women’s Month numerous activities such as participation at the Parliamentary Session for Women and networking at the business breakfasts hosted by chambers such as FABCOS.

Youth economic empowerment activities will include presentation of economic opportunities to Grade 12 learners. We are also planning Youth Day exhibitions in partnership with other stakeholders such as the Department of Social Development. Exhibitions are planned for the Diamond Pavilion Mall, SAITEX and provincial exhibitions during public holidays. These initiatives will include distribution of pamphlets, exhibitions, question and answer sessions, availing registers for those requiring follow-ups and exhibition of crafts from SMMEs will also be facilitated.

People of the Northern Cape, one of the projects we will be focussing on for youth development is the Accounting Work Readiness Program run through the Guarantee Trust, a national organisation developing skills and employment in the accounting profession; in collaboration with FASSET; the Sector Education and Training Authority (Seta) for Finance, Accounting, Management Consulting and other Financial Services. The project is a fully sponsored programme for 20 unemployed, historically disadvantaged commerce graduates, who are trainee accountants, which will undergo workplace preparation and allocation of these graduates in learnerships after the course. The uptake of the first 10 successful applicants will be in July and the duration of the course will be 6 months, after which the second group will undergo their training.

The Department is also will also be approaching other SETA’s to roll out similar projects and expand existing projects to the Northern Cape. Through these interventions, the Department will contribute to an appropriate supply of competent labour necessary to address the skills shortages in the province.


Trade and Sector Development

Honourable Members, the Trade and Sector Development Programme is allocated R31, 879 million in the 2013/14 financial year, to focus on trade and investment promotion, sector development and identify strategic initiatives with the potential to have a high impact on economic growth and job creation. The department promotes trade and attracts investment principally through the Northern Cape Economic Development, Trade and Investment Promotion Agency (NCEDA). To this end, R 6 million of the programme allocation goes towards NCEDA, which will attract R60 million in investments before the end of the year.

The Kimberley Diamond and Jewellery Academy in support of skills development, will graduate, 38 learners, including 4 disabled learners in November 2013.

The Kimberley Diamond and Jewellery Centre have been refurbished to accommodate local and foreign diamond cutting and polishing companies. During this financial year potential companies will be placed in these premises potentially creating 150 jobs in a span of three years.

We have already secured one international jewellery manufacture company. This company will utilize 4 of their own instructors to train 20 Kimberley Diamond and Jewellery Academy graduates.

Construction of the Kimberley Diamond and Jewellery incubation centre will commence in the first quarter of the new financial year. Funding to assist with setting up the incubation centre has been sourced from SEDA amounting to R4.2 million

Honourable Speaker, in order to promote industry development and manufacturing in particular, the establishment of manufacturing clusters is going to be a key intervention. Business plans for agro-processing and minerals beneficiation clusters as outlined in the Integrated Manufacturing Strategy will be finalised and implementation is anticipated to start in April 2014. A feasibility study for the clothing and textiles cluster will be ready in October 2013 and the business cases will be costed.

We will package all these opportunities as part of the direct investment portfolio.

A feasibility study on the meat processing plants will be completed by September 2013. This project is estimated at R570 million and will be located in Groblershoop and Kathu respectively.


NCEDA

Honourable Members, NCEDA takes into cognisance the economic sectors outlined in the PGDS and its high level spatial guidelines. A Provincial Trade and Investment Promotion Strategy will be developed in the 2013/14 financial year.

We will be hosting the BRICS Expo and Investment Conference in Kimberley during the month of November 2013. We will facilitate and organise two trade outbound missions to targeted markets in conjunction with the DTI and will distribute trade and investment marketing material and paraphernalia for the province. Provincial trade and investment opportunities will be published in two publications nationally, regionally in SADC and internationally.

BUSINESS REGULATION AND GOVERNENCE

Honourable Members, the programme Business Regulation and Governance is responsible for consumer protection and regulating the operations of liquor outlets as well as gambling and betting establishments. This is done through the Northern Cape Liquor and Gambling Boards and the Provincial Consumer Protector. The inspection services of these entities conduct effective monitoring of establishments to ensure that operators do not break the law.

Business Regulation and Governance is allocated R27, 393 million in the 2013/14 financial year. Included in this amount is an additional R5, 781 million which is allocated to the Provincial Consumer Protection Authority.

Consumer protection

Honourable Speaker, the entity will be targeting the establishment of all five regional service points with the additional resources that have been availed. The appointment of a Deputy Consumer Protector and staffing the authority will be prioritised in the upcoming financial year. We plan to host a provincial consumer protection conference with all relevant stakeholders in 2013/14.

With the appointment of the Inspectors/ Investigating Officers our aim is to investigate and mediate all consumer related matters and refer unresolved matters to the Consumer Court.  We will conduct inspections at business premises/auctions in accordance with the relevant acts and compliance notices will be issued for non-compliance.

The Consumer Protector will take all those unresolved matters referred to the Consumer Court.  It is furthermore the function of the Consumer Court to liaise with National Consumer Tribunal and other Provincial Consumer Authorities, in order to promote the consumer rights of the people of the Northern Cape as entrenched in Provincial Legislation.

Education and awareness programmes will be hosted throughout the Province, to educate the consumers about their rights and obligations in terms of the Northern Cape Consumer Protection Act.

Northern Cape Liquor Board

I have decided to table amendments to liquor legislation to ensure proof of age by way of identity document.

Gambling Board

We will continue to combat illegal gambling in 2013/14 and issuing additional bookmaker licenses. The certification of a third casino for the province targeting the John Taolo Gaetsewe district will also be accelerated. This casino will complement the Flamingo Casino and Desert Palace operations in Frances Baard and Siyanda regions respectively. The third casino in the John Taolo Gaetswe district is mandated to employ its staff compliment, 90%of which will be from within the Northern Cape Province and priority given to the JTG region. 70% consumables will also be purchased from local businesses. The Casino will also be complimented with a hotel and other recreational facilities, which will create more job opportunities for the people of the John Taolo Gaetswe Region

We are also planning to roll out limited pay-out machines (LPMs) in the Province , but in order to start the first phase, two route operator licences will have to be awarded, after completion of diligent probity investigations in order to ensure suitability and sustainability of its operations in the Northern Cape Province..

The third Casino and LPM operations will contribute greatly to the revenue of the fiscus, and economic climate and employment.

Economic Planning

Honourable Members, this programme is allocated R16, 234 million for this financial year. This is a reduction in the allocation to the programme as a result of the organisational review. In the 2012/13 financial year the programme received R18, 681 million of which IT Support was R3, 639 million. The programme is chiefly responsible for the promotion of effective and integrated economic planning and policies for economic growth. In support of the War on Poverty programme, a feasibility study is planned for a clay brick making project in Petrusville. The department is expecting commence with this project in this financial year.

Policy and Planning

Work on the Provincial Renewable Energy Strategy will continue as scheduled for completion in the first quarter. The strategy will bring much needed clarity and guidance on how we should plan the renewable energy programme in the province. This strategy will also complement the Provincial Climate Change Response Strategy and will ensure a greater role for the province in the ever growing clean and green agenda of the country and the world.

INSPIRE

The Knowledge Management unit will continue to lobby for the balance of funding for the wireless mesh network in John Taolo Gaetswe, as I have indicated, we have approached Kumba, CSIR and the Department of Communications for this. We plan to train 50 SMMEs from across the province on ICT skills. This will be to complement the business development support services training they will receive from the Enterprise Development unit.

We will partner with Office of the Premier to drive the institutionalisation of the Provincial Information Society Technical Committee to ensure implementation of the Northern Cape Information Society Strategy (NCISS). The Technical Committee must work hard to secure funding to implement the strategic thrusts of the NCISS towards building the knowledge-based society and economy.

Monitoring and Evaluation

Internal M&E has made gradual progress and has improved the monitoring of departmental interventions. It released a report in the last financial year that outlined the successes and challenges registered in departmental services to communities across the province. This work will continue in the forthcoming financial year to ensure increased accountability of departmental staff for the quality of their output and its outcomes.

The unit will conduct quarterly visits to identified projects, administer questionnaires to beneficiaries and prepare reports based on the visits.

Tourism partnerships and industry development

The Tourism Programme is allocated R46.657 million to continue to develop attractive tourist experiences and promote the province as a domestic and international destination. The amount allocated to the Tourism Programme includes an amount of R16, 427 million which will be transferred to the Northern Cape Tourism Authority (NCTA) to promote the province as tourist destination to nature, adventure and cultural heritage lovers.

In an effort to further fine-tune the tourism development and promotion strategy of the province we have commenced to review the Tourism Master Plan and we will consult widely throughout the Province.


A number of events are planned for the 2013/14 financial year that will ensure our goal of the Northern Cape as a competitive tourist destination is realised. The testing of the Bloodhound SSC is probably among the highlights as all the testing data will be made available on the project website and related social media to the delight of petrol heads, learners and engineering students alike. The department is undertaking a LED that will lead to ensure local opportunities.

A series of test run by the Bloodhound Supersonic Car – which in themselves nay break the sound barrier – will take place when April/May 2014. There will also be rerun of the very successful Khalahari Speedweek coupled with the first ever eco-motor sport event from 1-6 October 2013.


Tourism infrastructure development will see the erection of road signs for Quiver Tree, Karoo Highlands, Richtersveld and Cape-to-Namibia. We have about R2 million of funding for this and want to ensure that the project is as labour intensive as is possible. We anticipate doing as much as possible within this resource envelope.

Infrastructure will also be improved for the Maloof Skate Park and landscaping the Maloof Precinct. The funding requirement for this project is approximately R13 million and we will approach NDT to contribute resources in the matched funding basis.


Furthermore on infrastructure development we have completed architectural drawings and quantity surveying for the SKA Science Visitor Centre planned for Carnarvon. We are still seeking funding for the implementation of this project and have approached NDT for assistance. In support of the War on Poverty campaign, we are planning the construction of hiking and mountain biking trails in Renosterberg.


The unit will host a Tourism Research symposium in the 2013/14 financial year. It will also produce a Tourism Sector Indicators Report and Maloof Money Cup Impact Survey before the end of the new financial year. Furthermore, the unit will produce two visitor profile reports. It is important that we have relevant information on the visitors to our province so that our marketing strategies can be targeted for this clientele.


NCTA

Honourable Members, in order to improve both international and domestic arrivals to our province, we will continue our task to position the province as a desirable holiday destination within Southern Africa.

We have attended the International Tourism Indaba and Expo in Durban on 11-14 May, due to severe budget constraints it was on much smaller scale this year. Indaba is an important marketing event on the South African industry calendar and it is envisaged that a larger African contingent will be attending this year.


We have placed greater focus on the development of our key market segments namely the young and fun loving, adventure- and adrenaline seekers, Mzansi families and the over fifties. Emphasis was on each of these segments across the seasonal campaigns spanning Easter, Winter, Summer and the Spring flower campaign.


Technology is continuously developing and changing and the NCTA’s strategic and comprehensive online marketing strategy will utilise all available and appropriate platforms to give us a competitive advantage and increased market share. The website will be completed with the final completion of Phase 3 by November 2013. There will be an emphasis on search engine optimisation which will drive more visitors to the site and increase their knowledge and conversion to actual visits.


Northern Cape Mobi Guide second phase will continue with a further 390 points to be loaded by November 2013. the NCTA will enhance its online marketing and promotion strategy to target international source markets. This will be achieved through e-learning courses. Partnering with Travelution we will produce and upload a 15 pages e-learning module about the province on their e-learning platform:www.etravellearning.nl. The Northern Cape e-learning course will not only be uploaded on the general platform (www.etraveltraining.eu), but also on the intranets of all large Dutch Partner travel companies. Further, the NCTA will and launch and promote an Experience Northern Cape application to Apple iStore and Android Plat Store users.


In the upcoming financial year we will attend strategic road shows in core markets in order to continue our work of meeting face-to-face with industry players and also exposing our local operators to negotiate much needed business at these events. We will target the core markets of the BRICS, UK, Germany and Italy amongst others.

Business tourism will also be prioritised in particular the lucrative meetings, incentives, conferences and exhibitions market. This will be achieved through the implementation of a provincial conventions bureau (PCB) to actively promote and sell the province as a business tourism destination. We will be the first province outside the Big 3 of Gauteng, KZN and Western Cape to do this.

The national conventions bureau has already secured 38 conferences that would bring more than 57,000 delegates to the country this year alone. It is expected to inject R680 million into the economy of SA with all the current initiatives inter alia SKA, renewable energy projects, expansion of mining activities the province has a major advantage to host international conferences. It also affords us the opportunity to get greater exposure to the international conferencing circuit.

The main goal of the PCB will be to enhance the success of hotels, venues and convention suppliers and other provincial business events stakeholders. We have conducted a product review to establish the province’s business event tourism offerings. We will commence the process of identifying a professional advisor with international meetings experience to assist with the process towards the establishment of the bureau.

In conclusion, Honourable Members, the people of the province and the country have placed great trust in this administration to improve their livelihoods. We cannot and shall not betray that trust.

We will continue to put our shoulders to the wheel to ensure a better life for everyone. There are exciting prospects on the horizon that will ensure that our beloved province makes measurable strides in the fight against poverty, unemployment and inequality. The establishment of the Northern Cape University forms the foundation of that progressive step of development and growth. It will enable us to retain our most talented people in the province to contribute towards building their and our futures here in the place of their birth.

We can take a page from Barack Obama’s experiences as he inspired people to charge of their own destiny “The best way to not feel hopeless is to get up and do something. Don’t wait for good things to happen to you. If you go out and make some good things happen, you will fill the world with hope, you will fill yourself with hope.”

I thank the HOD Mr Seboko and the staff of the Department for their hard work and dedication. To the staff in my office, I thank you very much for putting in the extra hours and ensuring that my schedule is well managed.

I now table the Economic Development and Tourism Budget for consideration by this august house.

Thank you

 

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Office of the Premier 
Private Bag X5016 
Kimberley 
8301

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