Speaker, we are delivering this speech against an economic situation with many stresses. An economy hit by continuously rising cost of oil, electricity and above all, food and basic foodstuff. This challenging picture has to a large extent been brought about by some external factors as well as a response to substantial growth of the South African economy.

These factors have put continued upward pressure on the inflation rate. The CPIX is now for the 13th month out of the 6% inflation target of the Reserve Bank and it is widely expected that interest rates will increase further this year.

The Northern Cape with its majority of middle to lower income households is bound to be severely affected by the upwards spiralling costs of servicing household bonds, higher purchase payments, ever increasing food costs as well as transport costs.

In the national council of provinces last week I called on the Department of Trade and Industry and our national minister to research and develop incentives, innovative solutions and meaningful interventions that can practically be applied to support our poorer communities when the full effects of the rising costs of especially basic foodstuffs and other essential commodities impacts on us in the months to come.

Speaker, in like fashion I wish to repeat in this house today, the call to my colleagues, the legislature, our departments and businesses to apply our minds on ways to reducing the effects of these costs. We hope that Eskom will adhere to the calls from national and provincial government as well as representatives of organised labour and the private sector to be moderate in their increases so that our poor communities can cope.

Government, speaker, has to make a meaningful contribution towards improving the standards of living of our people and the Department of Economic Affairs is striving to meet the following development objectives
* Promoting economic growth
* Diversification and transformation of the provincial economy
* Developing social and human capital
* Improving efficiency and effectiveness of governance and development institutions
* Unemployment reduction through sustainable economic growth and social development.

The Northern Cape as a relatively poor province is looking forward with excitement and optimism to the new national industrial policy which includes strategies to assist rural economic development that will provide leverage to the Northern Cape to increase employment and economic growth.

For too long now the Northern Cape exported job opportunities by exporting raw materials to be beneficiated internationally and in other centres in our country creating work not benefiting our communities. In the process we have exported our educated youth, depriving our province from strategic skills development we now so dearly need.

The mentioned national industrial policy with its development strategies can be rolled out in special economic zones, industrial development zones, regional industrial strategies with the accompanying financial incentives creating the economic vehicles for the Northern Cape province to beneficiate at source. In the meanwhile the Department of Economic Affairs laid a good basis to benefit from these policies by taking the following initiatives.

Achievements in 2007/2008

* Foreign direct investment in jewellery manufacturing has been secured.
* Minister announced that the state diamond trader will relocate to Kimberley.
* Mariculture Project employed 100 people during construction phase.
* Data on product and value procured by mines has been made available to Department of Economic Affairs (DEA).
* List of 10 products that are procured by mines and that can be manufactured in the province has been identified.
* BPO and O call centre established in the Kgalagadi.
* Provincial information strategy developed with the Northern Cape nominated as pilot project.
* German investors identified for the high speed testing facility.
* Provincial Small Medium Micro Enterprise (SMME) strategy launched.
* The department developed and completed the Namaqua District Growth and Development Strategy (DGDS). Supported all the other regional growth and development strategies.
* The PMPI (Private Mining Procurement Initiative) initiative secured for 20 companies opportunities from PETRA diamonds.
* 57 SMMEs went through business and mining training.
* The Asia-Expo secured sales from about 3 000 people passing through the stalls daily.
* Gambling licence for Kuruman awarded to a 100 percent Black Economic Empowerment (BEE) consortium.
* 1 400 liquor outlets inspected of which 150 closed.
* The Northern Cape Liquor Bill compiled and tabled in the provincial legislature.
* The Northern Cape Gambling Bill compiled.
* The Northern Cape Investment and Promotion Bill compiled.

Budget Allocation for 2008/09

The budget allocation of the Department of Environment Affairs and Tourism for the 2008/2009 financial year is R112 240 000. This represents 1,54% of the total allocated budget of the Northern Cape province. Of this amount R44 394 000 (42,51%) is transfers. The other R67 846 000 or 0,88% of the total allocated Northern Cape provincial budget will be used to govern and develop the economy of the province.

The distribution of these funds in the department reflect the urgency of the department to ensure that the province responds to policy and economic imperatives. The allocations for economic planning and economic development programmes increase by 36,5% and 9,5% respectively.

Administration: R23 412 000
Integrated Economic Development: R47 517 000
Trade and Industry Development: R13 284 000
Economic Planning: R12 854 000
Total: R112 240 000

Our plans for 2008/2009
Speaker, the Department of Economic Affairs aims to increase the levels of economic growth and to create jobs by implementing the following key strategic projects
* Diamond and mineral beneficiation strategy
* Manufacturing centres
* BPO and O
* LED
* SMME Development
* Mariculture park.

I will now provide an overview about the highlights on each one of the projects

Diamond Strategy
The aim of the diamond strategy is to re confirm the status of Kimberley as the diamond hub of South Africa and SADC. The strategy comprises of the following key initiatives.
* Relocation of the South African State Diamond Trader (SDT). Minister Sonjica announced in parliament on 31 May 2007 that the SDT will open in Johannesburg and in time move to Kimberley. This was reaffirmed when she visited Kimberley recently. Relocation timelines are being identified. The relocation is an important step in the process of establishing Kimberley as diamond hub, based on easy and competitive access to rough. De Beers has taken the lead and relocated the head office of the De Beers Diamond Trading Company (SA) to Kimberley. In 2005 no less than 15 million carat of rough diamonds as well as 300 000 carat alluvial diamonds passed through Kimberley.
* The Kimberley International Diamond and Jewellery Academy are being developed in Kimberley to be ready for operation in September 2008. The project's intent is to address the skills shortages currently being experienced in the industry. The training will offer accredited and specialised courses and will be aimed at the Southern African development Community (SADC) region.

* Diamond cutting and polishing and jewellery manufacturing components is forming part of the recently established Kimberley Diamond and Jewellery Centre. This is in line with the Provincial Growth and Development Strategy (PGDS) strategy which highlighted minerals beneficiation as one of the key economic strategies for the Northern Cape province.

* Establishment of the Kimberley Diamond and Jewellery hub. The hub will have to provide high security accessibility from air, support services funding, finance, insurance, access to statutory bodies, training and education, and synergistic value chain related businesses.

* Establishing Kimberley as a brand. Diamonds and jewellery processed and passing through Kimberley that comply with set standards will qualify for the Kimberley diamond and jewellery brand, bringing with it distinctive authenticity and quality. In turn the brand will also act as an incentive for those assigning it to their products, increase prices and establish client demand in a highly competitive global marketplace.

* The province launched the Kimberley Diamond and Jewellery Centre a fortnight ago. This coincided with the launch of the R100-M gold chain technology factory in Kimberley on 15 May 2008 and highlights the first step in the implementation of the diamond strategy.

The diamond strategy has been highlighted in the national industrial policy framework action plan. The project urgently requires the support of Department of Trade and Industry (DTI) and will contribute significantly to economic growth, industry expansion, industry diversification, entrepreneurial opportunities, employment creation, and investment creation in the province.

Manufacturing Centre
Mining is still one of the key sectors in the Northern Cape economy. During 2006 the sector contributed 24% to the provincial Gross Domestic Product (GDP). The sector mainly focuses around the iron ore and manganese mining activities in the Kgalagadi area. The main concern in terms of the mining industry is the fact that the majority of inputs used in the production process are imported from other provinces.

Linked to this, the economic analysis of the provincial economy also indicated that the manufacturing industry in the province is underperforming. The manufacturing sector only contributed 3,4% to the provincial economy and 0,6% of the national manufacturing output in 2006.

To address both the concern the North West University was appointed to research the possibilities to produce inputs for the mining industry through a process of reverse engineering. The first phase of the results indicated that more than 80% of the expenditure on inputs is on only 10 products with 10 major suppliers.

The strategic decision has been taken to implement this production of inputs (using reverse engineering) in the mining industry by establishing a manufacturing centre in Kgalagadi. The initiative fits perfectly into the Regional Industrial Development Strategy (RIDS) strategic vision of revitalising neglected industrial park to the benefit of the provincial economy.

BPO and O
The Northern Cape province is a pilot project for the presidential project on Information and Communications Technology (ICT). As part of the process the province is in the process to establish the BPO and O industry in the province. This links to the need identified in the PGDS to diversify the economy from the dependence on the primary sector to move into the services sector. The ICT sector has been identified in AsgiSA as a sector that can contribute significantly towards job creation in the South African economy.

The province is proud to announce that the first BPO and O call centre has been launched in Kgalagadi. The support of the Department of Trade and Industry (DTI) in this endeavour should be acknowledged. The planning to open a second centre in Sol Plaatje municipality in Kimberley is also well advanced.

The Department of Economic Affairs intends to buy two seats in the Kuruman BPO and O centre to serve firstly as SMME info centre and to enhance the consumer protection function in the department.

Upington Cargo Hub
The Upington International Airport is being redeveloped as a Cargo Hub. The support of major role players in industry like Airports Company of South Africa (ACSA), South African Airways (SAA) Cargo and some freight forwarders have been confirmed.

The cargo hub project fits the definition of a logistics hub as identified the RIDS strategy. The major challenge is to secure enough freight to make the hub sustainable. The local Khara Hais municipality is investigating the possibilities to establish and Industrial Development Zones (IDZ) or other special economic zone in the industrial area adjacent to the international airport. The support from the DTI to ensure that this project is on the national agenda in terms of industrial development is hereby requested.

Mariculture
The Mariculture industry has been identified in the PGDS and DGS of Namakwa as an opportunity to alleviate job losses created by the downscaling of mining activities in the Namakwa District. The main focus is on the development of a Mariculture park in Port Nolloth and competitive mariculture industries in Alexander Bay, Kleinsee and Hondeklip Bay.

Severe poaching and over exploitation of the country's marine resources resulted in the national minister closing natural abalone harvesting earlier this year. To counter the negative impact on the industry the focus has turned to the mariculture industry to produce cultured abalone, oysters and other fish products.

These experimental projects growing oysters and abalone in Alexander Bay, Port Nolloth and Kleinzee have proven to be successful. Also, the experimental trials conducted by the University of Stellenbosch, with the financial support of the Department of Science and Technology, on behalf of the Northern Cape province at Hondeklip Bay was completed earlier this year.

The results prove that Namaqualand and its nutrient rich waters are ideal for the viable commercial growth of abalone and other marine species. This positive and more advanced growth rate of marine species experienced through the test trials at Hondeklip Bay gives encouragement and security to investors that conditions in Namaqualand are ideal for this purpose.

This has proven advantages to our province when Department of Environmental Affairs and Tourism (DEAT) assessed the allocation of pilot mariculture projects financed out of R100-m from the national social responsibility fund. It is with excitement that I can inform this house that MINMEC decided to award the Northern Cape with an abalone farm as well as an experimental salmon research and development project in Port Nolloth.

Vehicle Testing Centre
The Department of Economic Affairs has appointed Gerotek to do a feasibility study on a high speed vehicle testing facilty near Upington. The first phase of the feasibility study concluded that Upington is the ideal location for such a facility because of the weather conditions and the time zone. Four possible sites have also been identified for such a facility.

An economic impact analysis of the project indicated that the project will significantly contribute to the local economy. Depending on the size of the final project up to 2000 direct and indirect jobs will be created in the process.

SMME Development
Small Medium Micro Enterprises (SMME) development has been identified as one of the sectors in the economy that can contribute significantly to the target of halving unemployment by 2014. In this regard the Department of Economic Affairs launched its provincial SMME strategy in August 2007.

The SMME Strategy over the Medium Term Expenditure Framework (MTEF) will concentrate on supporting SMME Development as a provincial specific economic intervention. SMME financing is also one of the major challenges that the department is trying to address. A draft agreement has been negotiated with ABSA to start a local enterprise fund to the value of R25 million.

Absa trained two economic affairs staff members to evaluate business plans. The fund will provide financing at lower than normal cost to the SMME's in the province. I would like to use this opportunity to thank Absa for taking this initiative.

Local Economic Development
The Department of Economic Affairs is tasked to provide support to local authorities and has played a key role in facilitating the involvement of provincial government departments in the DGDS summits that were held in the five districts of the province.

The department also developed the Namakwa District Growth and Development Strategy (DGDS) strategy. The department will assist the district municipalities to fast track the DGDS strategies in the coming financial year. The department is also proud to announce that the first provincial Local Economic Development (LED) forum has been lauched during Februarie 2008.

It is worth noting that the overall intentions of this economic forum at provincial level is to jointly work together as government, business, communities and organized community organizations to ensure that our regional economy grows through effective utilisation of our own resident comparative and competitive advantages. We shall only be able to reap the benefits of these co-operative and co-ordinated efforts if we all participate and positively contribute to our regional economic growth efforts.

The department also ensured that district LED forum is constituted in most of the district municpalities. The aim of these forums is to jointly agree on the growth priorities in the different district.

These initiatives are linked to the call during the 51st ANC national conference a policy decision was adopted to forge strong links with business, community organizations, trade unions, religious bodies, women and youth structures as well as other organizations to ensure that, in actual practice all South Africans effectively practice self liberation by transforming their own lives. These district LED forums are therefore established based on the same cooperative and coordination principles.

Mining
Small scale mining
The Northern Cape contains a variety of deposits that lend themselves to small scale mining activities the development of which is often hindered by a lack of technical and financial resources. The department will actively seek to develop economic strategies which seek to unlock the small scale mining sector which in turn will be a vehicle which promotes, supports and facilitates integrated economic development in the poor rural communities.

Talks with First National Bank are at an advanced stage to secure a one stop mining and material centre for the small scale miners. Initially the project will be housed in Springbok, later moving also to Kimberley and the Kgalagadi.

Spin-offs from Large scale mining
The Northern Cape Province has been extensively explored but in geological terms remains an interesting exploration target. The role of the department is to market the province as an exploration target and to make the general non geological environment as attractive as possible to investors especially those developers with medium to large mining operations.

Business Regulation
Departmental Revenue Collection
Optimising revenue collection is a strategic imperative which will aid sustainable financial growth and development in the Northern Cape. The Department of Economic Affairs (DEA) will drive the process for the passing of the revised Northern Cape Unfair Business Bill and the establishment of a Consumer Court.

These will assist the DEA in its aim to collect revenue of R16,286 million in this financial year with gambling and liquor taxes being the major contributors. The depart will also focus on ensuring fair business practice in an effort to facilitate the effective implementation of the National Credit Act.

To ensure effective revenue collection the department allocated an additional R5.9 million towards the Liquor and Gambling Boards to meet their operational requirements.

Governance
If investor confidence is to be enhanced in the province it is critical that the Northern Cape ensure the predictability and efficiency of governance systems which ensure maximum stakeholder participation at all levels. Hence, the DEA will continue to focus on the regulatory framework within which the gambling and liquor industries will operate, while simultaneously establishing the Northern Cape Liquor Board and the Northern Cape Gambling Board. These public entities will enable the DEA to regulate these sectors more effectively.

Trade and Investment
The department has appointed a team to drive the business plan to extend the brief currently performed by Northern Cape Development Agency (NCEDA). The enabling legislation will serve before this legislature during this sitting. It is envisaged that the new investment agency will have a bigger focus on trade and investment promotion than NCEDA.

The agency will be positioned to work with strategic partners in both the public and private sector so as to position the province as an investment destination of choice and to facilitate trade and investment promotion in the province. This agency will function within the context of the Northern Cape Provincial Growth Development Strategy (NCPGDS) to promote trade and to attract foreign direct investment to the province, grow exports of products and services from the Northern Cape and market the province as a competitive business destination, both nationally and internationally.

Business Development
Foreign Direct Investment
The DEA will also continue to pursue strategies which promote increased trade with our SADC neighbours, take advantage of the European Union (EU) trade agreement and the AGOA (African Growth and Opportunity Act) and NEPAD agreements, lobby for recognition of provincial interests in new trade agreements and do more to enhance the export readiness of potential exporters.

These strategies will include hosting trade expos and international investor conferences which will actively focus on promoting foreign direct investment, inter and intra trade between the provinces and international trade. To implement this initiative the department allocated R3.6 million towards implementing the strategies.

Sector Development
The department will seek to unlock and stimulate competitiveness of the prioritised sectors across the value chain within the Northern Cape Province. This will be achieved by establishing partnerships with industry stakeholders with the intent to leverage resources to enable the creation of sustainable jobs and develop capacity through the implementation of high impact projects geared at stimulating the competitiveness of prioritised sectors. The department hence allocated R7 million towards the implementation of the provincial diamond strategy.

IGR and Stakeholder Management
Intergovernmental relations as a focus area will facilitate dialogue and exchange of information and understanding among all spheres of government about the impacts of policies within different social, economic, spatial, demographic and environmental contexts. This will promote the integration of planning and compatibility of polices with common objectives of all spheres of government.

The department will also seek to analyse the most critical stakeholders in all sectors and spheres, both public and private. The strategic intent will be to focus on the identification and prioritisation of these key stakeholders and develop a departmental strategy to optimally engage the stakeholders in developing the economy of the province. These will include stakeholders in the three spheres of government, financial institutions, Non Governmental Organisation (NGO's), research institutions and academic institutions.

Ladies and gentlemen, I have tried to give you a brief overview on the activities of the department of economic affairs. From the strategic way forward it is clear that as a team we are trying to make a difference to the lives of the poor in this province.

I, speaker, have deliberately given my colleagues gifts symbolic of our province. On the one hand they have received bottle openers hand-crafted by SMMEs using warthog tusks and impala horns. The warthog and the impala are hardened animals which adapt themselves to harsh conditions.

We have also included some of the finest gifts from Baccus a product of GWK (Griekwaland Wes Ko-operasie), which is increasingly being produced in the Northern Cape.

Speaker, my optimism for economic affairs in this province would not have been possible were it not for my confidence in the Head of Department (HOD) and the officials of the department as well as my own support staff, who are often called upon to execute their functions under trying circumstances.

Speaker let me conclude with the words of our state president "And so, let us roll up our sleeves and get down to work, fully understanding that the task to build the South Africa for which we yearn is a common responsibility we all share."

I thank you.