Budget Debate on Vote 4 Economic Development and Tourism

Apr 20, 2023 | Press Releases

Hon P Govender, MPL
Inkatha Freedom Party
KZN Legislature, 18 April 2023

Hon. Chairperson, Hon. Premier, Hon. Leader of the Official Opposition, Hon. Members of the House. It gives me great pleasure to represent the Inkatha Freedom Party in this important Budget Debate.

Economic Development and Tourism is one of the departments that has the potential to improve the lives of the citizens of our province. The IFP appreciates all efforts that government is making to revive the mandate of re-positioning KZN as Africa’s leading tourism and investment destination. We also acknowledge and applaud various collaborative initiatives designed to facilitate the process of establishing tourism clusters in the Province. We are, however, worried that KZN, in all fairness, does not present a positive outlook for a variety of reasons, some of which might repeat themselves.

First among these, is that we are in a Province that lives under the cloud of a repeat of the July 2021 riots and looting that destroyed many businesses, led to the loss of lives and of thousands of jobs. We have not yet heard any constructive and assuring preventative solutions designed to avoid what this Province went through during July 2021.

This leads to the second concern, which is the waning business and investor confidence in the Province, with many companies adopting a ‘wait and see’ approach. Issues such as slow progress in approving water use licences, EIAs, community service delivery protests, and radical criminal groups that disrupt projects, all contribute to a negative business environment. With that being said, we do believe that more needs to be done to resuscitate investor confidence in the Province.

Trade and Investment KwaZulu-Natal says that it is on an aggressive approach towards repositioning KZN as a preferred investment destination and they plan to do this through engagements with the diplomatic corps and so on. This sounds like an endless objective, with no feasible plans on how it will be achieved. This makes us sceptical about having overwhelming confidence that KZN is going to be the number one destination for tourists and business invertors during the 2023/24 Financial Year. The IFP believes that the Department needs to aggressively implement the much-talked about Red Tape Reduction Initiative, especially at municipal level, as this will fast-track investments in KZN.

What makes the investor confidence situation even worse, is that the Province is struggling with an ongoing water crisis, particularly in the uThukela and Ugu District Municipalities – and in some parts of the eThekwini Metro, which sustained heavy infrastructure damage during the April floods. In addition, at a presentation to the Portfolio Committee, we were told that in 2022, loadshedding resulted in a collective 157 days without power supply and 55 000 jobs were lost in KZN. This, added to other problems, such as high rates of crime and violence, does not provide a good picture to potential Foreign Direct Investors (FDIs).

Hon. Chairperson, one needs to be mindful that Foreign Direct Investment is based on trust – trust in our country, trust in its leadership, trust in our ability to deliver a reliable power supply, trust to protect investment infrastructure from criminal activity and corruption. Without such trust, we will not see investors clamouring to invest in our Province. This is why people are placing their trust in the IFP, because they know we are a Party that they can Trust. Trust Us.

Hon. Chairperson, I don’t mean to sound overtly pessimistic, but I will rather have it that way than lead our people in the direction of blind optimism because that is what I feel our government is doing.

I believe that we should shy away from tabling ideas that are too extravagant and unachievable and focus on realistic solutions. One such example, would be the great fanfare that surrounded the announcement that Mara Phones had pledged R1.5 billion to build South Africa’s first high-tech smartphone plant and associated retail infrastructure in 2019, at the Dube Trade Port outside Durban. At the launch, the company said it had spent roughly half of that planned capital to set up the factory. Even though Mara Phones was granted a R100 million tax break and was given the promise that government would give it preference when any of its departments bought cell phones until 2026, the company has gone bust and jobs were lost. Such occurrences do not give confidence to future investors and our citizens who are in the job market.

I do believe that it is not too late to revive business confidence in KZN. I often hear the call for citizens to buy locally produced goods and our citizens will want to be patriotic and respond positively if – and only if – cheap imports are curtailed.

This Department is receiving a R6.909 million EPWP Conditional Grant. I would like to think that this funding will be channelled towards creating an enabling environment that will attract potential investors.
Hon. Speaker, it is my earnest belief that our Province is in a crisis when it comes to our unemployment rate, especially with regard to our youth. When using an expanded definition of unemployment, the numbers are worrying in that KZN is standing at 48.7 percent, which means that almost half of our people are unemployed. I am aware that it is not government’s responsibility to provide jobs but government has a responsibility to create a conductive environment for investments that would create sustainable jobs.

As the official opposition in KZN, the IFP supports efforts directed at providing adequate employment through small and medium business support initiatives in the Province, such as learnerships, mentorships and leadership programmes, as well as initiatives to support youth-owned businesses through the KZN Youth Empowerment Fund and the Operation Vula Fund.

Nevertheless, we would like to encourage this Department to be very cautious and vigilant of any cynical attempts by officials and senior staff members who seek to benefit themselves and their friends through these schemes.

I am pleased to note that the KZN Growth Fund has four projects in the pipeline that will create 238 new jobs and save about 4 300 jobs. But this entity needs to be cautious because it is presently grappling with a number of projects that are in a state of recovery due to non-performance.

I refer to projects such as the KwaDukuza Private Hospital that was given R70 million in 2015 but now summons have been served on it; in 2016 HBM SA was given R65.7million – summons are to be served this month. The entity informed the Portfolio Committee that it has five matters before the courts, to the value of R700 million and has also incurred legal costs of about R4 million. This is money that belongs to the citizens of our Province, hence my call for caution. I urge the Department to ensure that proper due diligence is conducted before tax-payers’ money is invested in such ventures.

Since about 70% of the Department’s Budget goes to its entities, it is important that there is alignment of their plans in order to take our Province forward. If we are serious about building a capable state, all entities must pull in the same direction, critical vacant posts need to be filled by competent and honest officials. I am aware that the DPSA has approved the filling of close to 190 funded vacant posts. I want to urge the Department to move with speed to fill these posts.

I urge the Hon. MEC to find a way to provide assistance to the farmers with the back-flooding at the St Lucia Lake that is destroying crops and putting people out of jobs while damaging the economy of the area.
When we visited areas that were affected by the July 2021 unrest and looting, we found that township economies were largely devastated. This Department needs to do all that is needed to revive township economies and assist informal traders, as these sectors are drivers of the economy at a local level and they should not be left behind.

Hon. Chairperson, millions of rand has been spent on the Drakensberg Cable Car Project. We need to know, what is the future of this Project? Is this Department intending to scrap it or throw more money at it?

We are aware that in some departments massive amounts of money are being lost through corruption and flagrant disregard of the PFMA and Treasury Regulations.

If we are serious about consequence management there has to be a clear plan of action on how to deal with corruption and incompetence. We therefore, encourage the Department to take corruption seriously, because people have lost patience with a government that seems paralysed in the face of corrupt activities within government departments.

Hon. Chairperson, the IFP supports the Department’s Budget of R3.406billion for the 2023/2024 financial year.

I thank you.

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