Efficiency the main focus

Pinky Kekana

Pinky Kekana

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.

A strong base The importance of the mining sector has been growing in the past decade

A strong base The importance of the mining sector has been growing in the past decade

“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.” ■

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