The issue of a single economic development agency to oversee the implementation of Limpopo’s economic development programmes has been on the provincial government’s agenda since the early 2000s. More recently, the provincial economic review conducted in 2009 spelled out the province’s economic challenges and prompted discussions around strategies to overcome those challenges. These challenges were clearly articulated in the Limpopo Employment Growth & Development Plan (LEGDP) — a five-year plan to guide economic development in the province from 2009 to 2014.
Unveiling the LEGDP in his state of the nation address in 2009, Premier Cassel Mathale introduced it as a frame- work not only for provincial and local government, but for the private sector and organs of civil society as well. It is aimed at getting these stakeholders to work together to improve the quality of life of the people of Limpopo through the creation of decent jobs and sustainable livelihoods, building of appropriate in- frastructure, comprehensive rural development, food security and land reform.
According to the plan, Limpopo has excellent agricultural potential, mineral reserves and tourism resources. In addition, there has been remarkable growth in the importance of the mining sector between 1995 and 2002 compared to agriculture and manufacturing.
The report identifies potential growth subclusters within the mining sector. These include platinum mining along the Dilokong Corridor in Sekhukhune and Mokopane; coal mining; the flagship Medupi multibillion coal-fired power sta- tion; and the planned Sasol coal-to-liq- uids petrochemicals industrial complex in the Waterberg District.
Mathale said the most pressing problem facing the province is the absence of sustained economic growth and job creation, which are essential in reducing poverty and improving living conditions.
Limpopo economic development, en- vironment & tourism (Ledet) MEC Pinkie Kekana believes the province has taken positive steps to turn the situation around. “Assuming optimum output of its sectors, the provincial economy is endowed with high yield. But it is risking sensitive multi-economic sectors, such as mining, agriculture, tourism and to some extent manufacturing.
“Central to the unique selling propo- sitions of the province as an economy and, by implication an investment des- tination, is that most of the sectors mentioned above have largely been ex- ploited as primary sectors. This means vast opportunities still exist in the de- velopment of secondary and tertiary sec- tors, with for instance, the development of a strong manufacturing base, mineral
beneficiation, innovation in untapped ar- eas such as information & communi- cation technologies, the knowledge econ- omy, the green economy and other emerging and globally competitive sectors.”
Following on the release of the LEGDP, the province spelled out its In- dustrial Development Master Plan, which provides a framework that is set to:
❑ Enable industries to be competitive, innovative and diversified into value- added products;
❑ Contribute to attracting both domestic and foreign direct investment;
❑ Generate higher income levels and raise the standard of living of the general population;
❑ Produce goods that include more value-added activities to complement its natural geographical advantages; and
❑ Has extensive linkages with the rest of the domestic economy.
The MEC is pleased with the progress made in advancing the province’s eco- nomic goals in general and the merger process of Limpopo’s economic development agencies to give them better focus in advancing these goals.
“My predecessor, MEC Pitsi Moloto, laid a solid strategic and operational foundation, which enabled me to take over with the requisite speed and agility. I have appointed an interim board and project executive to ensure swift and detailed implementation of the various work streams that are critical to the launch of a new agency.” She does not foresee any major glitches in the final phase of implementation of the new agency as due diligence has been done. “The amalgamation is not merely an institutional realignment exercise, but is the result of a carefully considered review process. “Key to this process has been the ongoing streamlining of the agencies’ mandates in favour of cost-effective and higher impact institutional operations and tighter departmental oversight. The Limpopo Economic Development Agency (Leda) will be subject to the normal corporate governance standards as all other state organs.”
It is envisaged that Leda will be pri- marily funded by Ledet as an agency of government responsible for discharging the department’s economic development mandate. However, it will also be in a position to raise capital from markets and other sources over and above the provincial treasury allocations. Central to the unique selling propo- sitions of the province as an investment destination is that most of the province’s growth sectors have largely been ex- ploited as primary sectors. This means opportunities exist in the development of secondary and tertiary sectors.
One of the areas in which Ledet wants the new agency to play a critical role is in halting the shipping of unprocessed run- of-mine ore offshore. “This will be achieved by creating an environment that is conducive to effective beneficiation and value addition through the formation of beneficiation clusters and supplier hubs. In the former, a pipeline of beneficiation opportunities in the resource industry will be identified, including energy and jewellery sectors. The latter will focus on hubs for the supply of goods and services to the mining sector close to the mining houses in order to localise procurement spend,” she says.
Agriculture is another area in which government believes the agency can make an immediate difference by expanding agroprocessing activities and en- couraging the active participation of pri- vate-sector companies in the agroprocessing industry. The province currently transports raw produce from its farms to big markets such as the Jo- hannesburg Market, meaning there is scope for more agroprocessing to happen within the province.The MEC says part of the plan to ensure that the new agency is able to deliver on its mandate is corporatisation of its strategic outlook, including target- setting and performance. Marketing and destination positioning will remain key as will return-on-investment benchmarks and ratios, regional co-operation and support of investors and enterprises. The agency will also be expected to focus more intently on research and market intelligence to inform the department’s planning and risk management inter- ventions.
Kekana believes that Leda’s plans are comprehensive and structured well enough to ensure visible results within the foreseeable future. “Success will be measured according to the stability and
sustainability of the Leda’s programmes and outcomes. Though teething chal- lenges are to be expected in a merger of this magnitude, sufficient checks and bal- ances have been put in place to address them.
“Also pertinent will be the quality and economic impact of investment projects that are attracted into the province, in- roads into new and emerging sectors. In addition, prudent but strategic manage- ment of financial resources, the nature and content of public-private partner- ships as well as the extent to which previously marginalised individuals and communities benefit from the agency’s programmes will be vital.” ■