Economic Development and Tourism 2013 Budget Speech

Honourable Speaker
Honourable Premier
Cabinet Colleagues
Honourable Leader of the Opposition
Members of the Provincial Parliament
Head of Department and staff of the Department of Economic Development and Tourism
Entrepreneurs, small and large business owners and employees
Tourists and potential tourists to our province
Citizens of the Western Cape

It is an honour to address you today on the Western Cape Department of Economic Development and Tourism’s budget for 2013/14.

Before I begin, I would like to tell you the story of a young woman named Nontwenhle Mchunu who was born in Nkandla in rural KwaZulu Natal.

Nontwenhle’s parents, recognising the importance of providing their daughter with a good education made sure that she made sure made full use of her opportunity to get an education.

After matric, while working Nontwenhle made the bold move to start her own chocolate making business in her spare time. It was then that her future took a drastic turn.

Inspired by passion for baking and love of chocolate, which was exuded through her products, she began to sell large quantities to locals from her community, and it wasn’t long before she was running a thriving business from her home.

Three years later, she was noticed by the Raymond Ackerman Academy of Entrepreneurial Development who invited her to attend their small business development programme. It was then that she took her next big step – she moved to Cape Town to take up this opportunity to empower herself. She also sensed that it was here that her product would sell best.

Within a few years, Nontwenhle had made a name for herself by training further with international chocolatiers in the United Kingdom and Switzerland, and by winning several prestigious prizes, including an Africa SMME of the Year award. She recently achieved her biggest award yet… a tender to supply her products to Pick ‘n Pay stores across our country.

Mr Speaker, Nontwenhle is not lucky. She worked very hard to get where she is today. She also seized each and every opportunity that was provided to her.

It is for residents like Nontwenhle that we are building the Open Opportunity Society in the Western Cape, a society that is able to provide jobs to each and every citizen that is willing to work hard and play a meaningful role in growing our economy so that we all live better lives.

Speaker, while we understand that the policies we have put in place will only bring widespread benefits over the longer term, there is already evidence that they are beginning to work. According to the latest Statistics South Africa Quarterly Labour Force Survey, in the fourth quarter of 2012, the Western Cape created 18 000 employment opportunities, as opposed to a net loss of 68 000 in South Africa as a whole.

There are currently 573 000 people who are unemployed in our Province. It is these people that wake me up in the morning and it is for them that we do things differently.

What is it that the Western Cape doing differently?

Speaker, it is simple.  Our government is actively driving the establishment of a demand-led, private sector driven economy, and in turn, creating employment opportunities for the people of our Province – our number one Strategic Objective.

The Western Cape Department of Economic Development and Tourism is integral in this regard.

The Department’s key agenda is to deliver a Western Cape that is a better place to invest, to do business, get a job and earn a living, for everyone.

In 2013/14, the Department of Economic Development and Tourism has been allocated R389.451 million, a 23.41% increase on the adjusted budget of last year, to achieve the goals we have set for ourselves in our seven programme areas.

Speaker, in the coming year Programme 1: Administration, which houses the office of the Head of Department and Chief Financial Officer, is allocated R31.972 million to provide strong, innovative leadership to the DEDAT team, and to deliver clean, efficient, cost effective, transparent and responsive corporate governance to the department.

Speaker, the most sustainable and inclusive way to grow our economy is to create an enabling environment so that new and emerging businesses can flourish. In South Africa, SMMEs are the backbone of our economy.

However, Speaker, South Africa’s entrepreneurial rate is far below the average of comparable economies around the world. According to the Global Entrepreneurship Monitor, entrepreneurship involvement among people between the ages of 18 – 24 and 25–34 in South Africa is worrisome.

This is an untenable situation when one considers the very high levels of unemployment amongst our youth.

To foster an enabling business environment that supports the development of enterprises, and the reduction of business-blocking red tape, Programme 2: Integrated Economic Development Services receives an allocation of R48.634 million.

More than half of this funding will be devoted to the delivery of comprehensive business support services through amongst others, 20 economic development centres located across our province in areas such as George, Saldanha, Atlantis, Picketberg, Khayelitsha, and Oudshoorn.

This amount excludes the more than R46 million that we have leveraged from the private sector, local and national government partners, who have joined hands with us in the roll out of these services.

We thank these partners for their willingness to play a role in growing opportunities for Western Cape SMMEs to thrive.

This year, to stimulate innovative business ideas amongst our youth, we have partnered with Stellenbosch University and the University of the Western Cape to launch a programme called Innovate Western Cape.

Innovate Western Cape will provide students with opportunities to conceptualise and even commercialise their ideas by pitching them to fellow entrepreneurs and angel investors. In the coming year, R1.4 million will be allocated to this new project.

Another national first to be launched this year is our very own entrepreneurship monitor along the lines of the Global Entrepreneurship Monitor.

In partnership with the UCT Graduate School of Business and the London School of Economics, entrepreneurship levels in the Western Cape will be monitored.

This measure will compare entrepreneurial levels on a provincial and district level with the rest of South Africa and the over thirty-four countries that participate in this annual survey. Through this exercise, we will also investigate and, where possible, eradicate the blockages faced by our entrepreneurs.

More importantly, we will be able to measure the impact of our efforts in growing local SMMEs.

Speaker, the reduction of red tape in all spheres of our economy is crucial if we are to build a Western Cape in which it is cheaper, faster and easier to do business.

R8.895 million has been allocated for the 2013/14 financial year to our Red Tape Reduction Programme.

For the 2013/14 financial year, businesses in the Western Cape will continue to have access to a business support helpline. In addition, the Unit will roll two new projects:

• The Provincial Red Tape Challenge: This project will seek to involve Western Cape Government employees in themselves becoming innovative in finding ways to reduce red tape and at the same time encouraging behavioural change in how we do things.
• Provincial Economic Index:  Conducted In partnership with the Western Cape Economic Development Partnership (EDP), the index will not only measure our progress towards becoming a resilient, inclusive and competitive economy, but the extent to which we making it easier, cheaper and faster to do business in the Western Cape.

Speaker, other critical aspects to growing our economy is industry development, trade stimulation and investment promotion. For this very purpose, Programme 3: Trade and Sector Development will this year receive an increase in their budget of 40 per cent from R103.269 million in the revised estimate of 2012/13 to R145.306 million in 2013/14.

The Department will continue to focus the support it offers on four sectors of our economy: Business Process Outsourcing (BPO), ICT, Oil and Gas and the Green Economy. Other key sectors that we will support include clothing and textiles, agri- and aqua-processing and the creative and design sectors.

By placing our strategic focus on these sectors, we aim to facilitate 400 000 new jobs by 2025.

Speaker, Wesgro has received an increase in budget to R18, 864 million for trade and investment promotion. This reflects its expanded role as the region’s Trade and Investment Promotion Agency

In respect of investment promotion Wesgro achieved R1.8 billion of new investments into the Western Cape in the 2012/13 financial year, far exceeding their targets.

The international trade environment has been challenging, with a slow down across our major trading partners in the EU.

In the upcoming financial year, Wesgro will focus on providing support to emerging and existing exporters by assisting them in accessing new and dynamic markets. This will include a major strategic focus on Africa and our fellow BRICS countries.

Speaker, infrastructure plays an important role in promoting growth. A lack of adequate infrastructure can hinder potential growth, weaken international competitiveness and adversely affect poverty reduction rates.

That is why in the year ahead, we will enhance strategic infrastructure in our province with an allocation of R 78.826 million. This amount includes earmarked allocations of R 52.746 million for the Broadband Initiative and R 5.280 million for the establishment of the Saldanha IDZ.

Our other infrastructure development projects are steadily progressing.

The department has completed a Western Cape Design Strategy and will use this to formulate a Design Policy Framework for the Province. 

Following an agreed-upon common vision for the Port of Cape Town and surrounds, business cases will be developed during 2013/14 in order to determine the viability and sustainability of any infrastructure projects related to the vision.

Final decisions will be made on the Cape Health Technology Hub, upon which we hope that funding will be secured this year from National Government and land transfers will be initiated to allow for construction for our Health Technology Hub in the Pinelands/Oude Molen area.

Also, the construction on the expansion of the Cape Town International Convention Centre (CTICC) will begin in earnest this year.

Speaker, Programme 4: Business Regulation and Governance – has a critical role to play in economic development by ensuring the realisation of an equitable and socially responsible business environment. This programme’s aim is to ensure that legal liquor traders operate according to the laws of the Province, and consumers are educated on their rights.

The need for the extension of consumer education campaigns has become even more necessary with the implementation of the Consumer Protection Act. The Act has altered the manner in which business transactions are concluded in our country both for consumers and business and as such the need to educate all relevant parties on this legislation is critical.

The Western Cape Office of the Consumer Protector receives R840 000 in 2013/14 for this purpose.

The Western Cape Liquor Authority is now a fully-fledged and independent entity. R30.936 million will be allocated in 2013/14 to the Authority for the purposes of overseeing the provincial liquor industry, the administering of liquor applications and monitoring compliance of liquor licence legislation and regulations.

Speaker, Programme 5: Economic Planning provides strategic support to the Department in facilitating and promoting integrated economic development planning.

The programme receives R34.151 million in 2013/14 financial year.

A new element has been added to Programme 5 - Economic Development Integration.

This sub-programme will primarily house all interventions related to the Green Economy. An allocation amounting to R 8.325 million has been earmarked for these interventions.

Last year we launched the Western Cape Economic Development Partnership (EDP). To date, the EDP has the support of and input from 134 organisations and partners across six sectors of the regional economy.

Over the past year, the EDP has driven the formation of the OneCape 2040 Vision, a policy document aimed at developing “a resilient, inclusive and competitive Western Cape with higher rates of employment producing growing incomes, greater equality and an improved quality of life.”

To implement this vision, the Department is already involved in a number of key EDP projects and programmes focusing on employment, investment, enterprise and innovation.

In 2013/14, Programme 6:  Tourism, Arts and Entertainment receives an allocation of R48.981 million for tourism marketing, development and regulation, and film and craft.

Through this programme, we aim to increase visitor arrivals and spend in the Western Cape by maximising international and domestic marketing opportunities.

The function of marketing the Western Cape as a tourist and film destination lies with Wesgro.

For the 2013/14 financial year, Wesgro’s strategic focus in increasing tourism numbers will be:

• Significant tourism destination marketing campaigns focused on service offerings to outbound operators;
• Dedicated engagement with airlines for direct flights to Cape Town International;
• Emphasis on Business Tourism; and
• Events.

The Convention Bureau will prepare twenty bids for conferences and conventions worth an estimated economic value of R360 million. During the same period, three Joint Marketing Agreements will be secured, and support will be provided to 27 events with an estimated economic value of R1.2 billion.

Through these initiatives we aim to increase international tourist arrivals to 1,300,000 and domestic arrival to 2,000,000 resulting in direct spend of between R8 billion and R13 billion in our region. This increase in direct spend will benefit the people of our province in general including service providers of meals, accommodation, shopping, tourist attractions and vendors.

Speaker, a growing economy requires skills. In the year ahead, Programme 7: Skills Development and Innovation receives R37.987 million, a 40.67 per cent increase from 2012/13 to drive skills development so that supply meets demand in our Province.

The Department’s skills development programme will be co-ordinated in a three-pronged strategy.

Firstly, the Provincial Skills Forum (PSF) will co-ordinate stakeholders within the national, provincial and local skills ecosystem to overcome the fragmented manner in which skills development has been managed in the past. The skills environment is highly complex and meaningful co-ordination of the wide variety of role-players is a necessity.

Secondly, to facilitate support for access to employment opportunities for our youth the Work and Skills Programme will continue to facilitate youth employment, especially in rural areas of our Province. R50 million has been leveraged over three years towards the Work and Skills Programme in partnership with the Jobs Fund for 3000 youth to gain work experience.

In 2013/2014 the programme will accommodate 1000 learners in manufacturing, hospitality, wholesale, retail as well as across sectors where there is a demand required for appropriate skills.

Thirdly, in terms of Artisan Development, 200 trainee artisans will be placed with host employers, for 18 months to gain workplace experience.

Speaker, through this budget we aim to create a Western Cape in which every person can realise their true potential, escape poverty and live a better life.

This Budget also requires every single person to roll up their sleeves and build a Western Cape we can all be very proud.

As Nontwenhle recently remarked, in order to succeed, one needs to give 110%.

I would like express my sincere gratitude to the Head of the Department of Economic Development and Tourism, Mr Solly Fourie, as well as all his chief directors and staff for consistently working hard to create a Western Cape that is that is a better place to invest, to do business, get a job and earn a living, for everyone.

Speaker, I hereby table the Department of Economic Development and Tourism’s 2013/14 Budget for the consideration of this house.

I thank you.