Ben Mphalele
The Limpopo province aims to exploit its status as a regional hub for southern Africa and to boost its own economic development. This ambition was stated by Ben Mphahlele, the managing director of the Limpopo Development Agency (Leda), which recently hosted the Limpopo International Investment Conference at the Carousel Hotel in North West province.
Mphahlele notes that part of the reason that the apartheid government did not develop the then Northern Transvaal was because of its proximity to Botswana, Zimbabwe and Mozambique, as instability in any of those countries would have spilt over into the province. He argues that its regional proximity is now one of the key reasons to increase investment in Limpopo and develop it as a regional hub. Polokwane, which is 300km from Johannesburg, can become a freight and logistics hub for southern Africa and the rest of sub-Saharan Africa.
Each of the province’s five regions have been identified as specialist hubs of growth, for instance, an energy hub in Lephalale centred around the Medupi power station, an agricultural hub for tropical fruit in the Capricorn district and a red meat district in Vhembe.
Tshepo Phetla, group chief operations officer at Leda, says Limpopo is a key location of the North-South Corridor stretching to sub-Saharan Africa. He says the province should look to exploit economic activities such as copper beneficiation; presently it is transported by rail from Konkola in Zambia to Richards Bay.
He notes that Limpopo must also be prepared to use the ports of Maputo and Beira in Mozambique, and Luanda in Angola to access export markets with its rich and diverse agricultural produce.
The current Limpopo provincial government has set itself the target of increasing its share of South Africa’s GDP from its present level of 7% to 8% by the end of its term in 2019. Mpahlele noted that one of the key ingredients to achieve that objective is to increase the manufacturing sector’s contribution to the provincial economy, moving from mining to minerals beneficiation and from primary agriculture to agro-processing. A key step that the province has taken to achieve this is to develop two Special Economic Zones, in Makhado Musina and in Tubatse.
Nepo Kekana, head of Investment Promotion and facilitation at Leda, says the conference is the start of an engagement process with international investors: “The conversation needs to carry on a point where we secure investment commitments.”
One investor that has managed to exploit opportunity in Limpopo is the Industrial Development Corporation (IDC), a state-owned development financier, which has grown its presence in the province in recent years.
Kgampi Bapela, the manager of the IDC in Limpopo, says the financier has increased its activities significantly over the past three years, when Limpopo was the smallest contributor to the IDC portfolio. Over the past three years, Limpopo received R10-billion in funding approvals from the IDC or about 14% of its total approvals, almost twice the province’s rate of its economic contribution. Limpopo’s portfolio now accounts for R15.4-billion or 10.5% at market value or R 8.2-billion at cost. Mining and quarrying accounts for R9-billion of the latter amount, while manufacturing accounts for R3.8-billion, a reflection of the IDC’s strategic intent of growing the sector. It has helped create 14 700 jobs in the province.
The IDC’s investment includes Palaborwa Copper Mining Company, which has a beneficiation stream through the production of copper cathodes among other products; Tzaneen blueberries; the newly opened Park Inn Hotel by Radisson in Polokwane, Foskor fertiliser manufacturer (where the IDC has a long history of investment) as well as Capricorn FM, Limpopo’s only commercial radio station.
The conference also heard of the province’s ambitious plan to improve internet access in Limpopo through Limpopo Connexion. The idea, according to chief executive Baldwin Ramasobane, is to connect Limpopo’s five regions with 3 180 km of core fibre network and 150 microwave towers. This will ensure internet access to stimulate information and communication technology and the knowledge economy.
The conference also heard from Judex Oberholzer, a development economist who has worked in the area of agro-processing as a key sector for industrialisation for 30 years. He notes that a key factor in the success of any agricultural strategy, including the recently adopted Agri Parks, is supply. “Supply can make or break the Agri Parks,” says Oberholzer.
Mphahlele notes that industrialisation will help stimulate the growth of new industries in the province and help drive the diversification of the economy.