Umdoni Local Municipality Local Economic Development Strategy
Final Draft
December 2015
PREPARED FOR:
PREPARED BY:
Kayamandi Development Services (Pty) Ltd P.O. Box 13359, Hatfield, 0028 Umdoni Local Municipality [email protected] P.O. Box 51006, Musgrave, 4062 (012) 346 4845 www.umdoni.gov.za (039) 976 1202
Umdoni LED Strategy Review
Table of Contents Abbreviations ...... i Executive Summary ...... 1 Section 1: Introduction ...... 3 1.1 Background & Purpose ...... 3 1.2 Defining a common understanding of LED ...... 4 1.3 Methodology ...... 9 1.4 Study area ...... 13 1.5 Structure of the Remainder of the Report ...... 17 Section 2: Policy Review...... 18 2.1 National Policies and Strategies ...... 18 2.2 Provincial Policies and Strategies ...... 32 2.3 District Policies and Strategies ...... 42 2.4 Local Policies and Strategies ...... 50 Section 3: Overview and Status Quo of LED in Umdoni ...... 57 3.1 Umdoni LED Plan (2005) ...... 57 3.2 Challenges with LED implementation ...... 62 3.3 Status quo of projects ...... 62 Section 4: Situational Analysis ...... 64 4.1 Demographic and Socio-economic Profile ...... 64 4.2 Environmental Profile ...... 74 4.3 Infrastructure Profile...... 79 4.4 Economic Profile ...... 82 4.5 Spatial Profile ...... 95 Section 5: Opportunity Analysis ...... 98 5.1 Agriculture...... 98 5.2 Mining ...... 105 5.3 Manufacturing ...... 110 5.4 Utilities Sector ...... 115 5.5 Construction ...... 119 5.6 Retail and Trade ...... 124 5.7 Transport and Communication ...... 128 5.8 Finance and Business Services ...... 133
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Umdoni LED Strategy Review
5.9 Personal, Community and Government Services ...... 137 5.10 Tourism Sector ...... 141 5.11 Conclusion ...... 147 Section 6: Development Framework ...... 148 6.1 LED Vision & Objectives ...... 148 6.2 Development Thrusts, Programmes & Projects ...... 150 6.3 Project Prioritisation ...... 178 Section 7: Implementation Guidelines ...... 202 7.1 Priority Projects Implementation Guidelines ...... 202 7.2 Conclusion ...... 206 Section 8: Strategic Framework ...... 207 8.1 Legislative Background & LED Roles and Responsibilities ...... 207 8.2 Institutional Structure of Umdoni LED Unit ...... 212 8.3 Capacitation and Human Capital Development ...... 219 8.4 Monitoring & Evaluation ...... 223 8.5 Way Forward ...... 228 Annexure A: Potential Funding Sources ...... 229
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Umdoni LED Strategy Review
List of Tables Table 1.1: LED Economic Principles ...... 7 Table 2.1: Summary of the Agricultural Strategic Plan (2010-2015) ...... 36 Table 2.2: Summary of the Education Strategic Plan (2010-2015) ...... 38 Table 2.3: Ugu District LED Key Economic Sector Goals ...... 46 Table 3.1: Umdoni LED (2005) strategies and projects ...... 59 Table 3.2: Umdoni LED Plan (2005) Lead Projects ...... 60 Table 3.3: Status Quo of Lead Projects ...... 62 Table 4.1: Population figures for National, Provincial, District and Local Level ...... 65 Table 4.2: Population distribution per local municipality within the UDM ...... 65 Table 4.3: Age distribution for Umdoni LM, 2001 and 2011 ...... 66 Table 4.4: Estimated Population & Household growth based on historical growth...... 68 Table 4.5: Population density (2011) ...... 68 Table 4.6: Highest level of educational attainment for Umdoni LM, 2001 and 2011 ...... 70 Table 4.7: Annual household income ...... 71 Table 4.8: Employment statistics for Ugu DM and Umdoni LM ...... 74 Table 4.9: Umdoni LM Conservation Areas ...... 77 Table 4.10: Household Access to water for Umdoni LM, 2001 and 2011 ...... 80 Table 4.11: Household Access to electricity for umdoni LM, 2001 and 2011...... 80 Table 4.12: Household Access to Proper Sanitation for Umdoni LM, 2001 and 2011 ...... 81 Table 4.13: Household Access to refuse removal services, 2001 and 2011 ...... 81 Table 4.14: Type of dwelling occupied by households in Umdoni LM...... 81 Table 4.15: Tenure Status for households residing in Umdoni LM ...... 82 Table 4.16: The nine classifications of the Carvalho Scale ...... 84 Table 4.17: Sectoral share of GVA at current basic prices, 2003 and 2013 ...... 85 Table 4.18: Contribution of LMs to Sectoral GDP of the Ugu DM, 2013 ...... 85 Table 4.19: Umdoni LM economic sector carvalho classifications ...... 87 Table 4.20: GDP Tress Index for Umdoni LM, 2013 ...... 92 Table 4.21: GDPR Growth Rate for Umdoni LM between 2003 and 2013 ...... 93 Table 4.22: Average per annum employment growth in Umdoni LM, 2003 and 2013 ...... 94 Table 4.23: Skill level of formal employment for Umdoni LM, 2003 vs. 2013 ...... 95 Table 5.1: Agricultural Sector's current situation (2003-2013) ...... 99 Table 5.2: Agricultural Strengths and constraints ...... 103
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Umdoni LED Strategy Review
Table 5.3: Mining Sector's current situation (2003-2013) ...... 105 Table 5.4: Mining operations active within Umdoni LM (2015) ...... 107 Table 5.5: Mining strengths and constraints ...... 109 Table 5.6: Important Manufacturing subsectors in Umdoni LM (2013) ...... 110 Table 5.7: Current situation for manufacturing in Umdoni LM (2003-2013) ...... 111 Table 5.8: Manufacturing Strengths and Constraints ...... 114 Table 5.9: Current situation for the utilities sector (2013) ...... 115 Table 5.10: Current situation for the construction sector (2003-2013) ...... 119 Table 5.11: Construction Strengths and Constraints ...... 123 Table 5.12: Current situation of the retail and trade sector (2003-2013) ...... 124 Table 5.13: Retail and trade strengths and constraints ...... 127 Table 5.14: Current situation of the transport and communication sector (2003-2013) ...... 128 Table 5.15: Transport and communication strengths and constraints ...... 133 Table 5.16: Current situation for the finance and business sector (2003-2013) ...... 133 Table 5.17: Current situation for the government services sector (2003-2013) ...... 137 Table 5.18: Accommodation and catering sub-sector economic indicators (2013) ...... 142 Table 5.19: Tourism sector strengths and constraints...... 145 Table 6.1: Thrusts & Programmes...... 151 Table 6.2: Summary of Thrust 1: Agricultural Support, Growth and local value adding ...... 173 Table 6.3: Summary of Thrust 2: Tourism Development & Sustainable Town Revitalisation ...... 174 Table 6.4: Summary of Thrust 3: Conservation and Green Economy Development ...... 175 Table 6.5: Summary of Thrust 4: Industrial and Business Development Promotion ...... 176 Table 6.6: Summary of thrust 5: Regional and Rural Integration & support ...... 177 Table 6.7: Priorities projects per thrust ...... 178 Table 6.8: Summary of prioritised projects ...... 198 Table 6.9: Budget roll-out for implementation of priority LED projects ...... 198 Table 6.10: Priority projects stakeholder matrix ...... 199 Table 6.11: Suggested locaitons for the prioritised projects ...... 201 Table 8.1: Monitoring and Evaluation Matrix ...... 226
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List of Figures Figure 1.1: Methodology ...... 10 Figure 2.1: Strategic Goals and Objectives for KZN until the Year 2030 ...... 33 Figure 2.2: Summary of the District GDS ...... 42 Figure 4.1: Gender distribution for Umdoni LM - 2001 vs. 2011 comparison ...... 66 Figure 4.2: Population pyramid for Umdoni LM, 2011 ...... 67 Figure 4.3: Number of People per year that moved to Umdoni since 2001 ...... 69 Figure 4.4: Umdoni LM: Annual household income distribution, 2001 and 2011 ...... 72 Figure 4.5: Annual GVA growth, 2003-2013 ...... 86 Figure 4.6: Annual GVA growth - LM comparison, 2003-2013 ...... 87 Figure 4.7: GDPR shift share change: Umdoni LM to uDM, 2003 to 2013 ...... 88 Figure 4.8: Umdoni LM Sectoral Production, 2003 & 2013 ...... 90 Figure 4.9: Umdoni LM: Sectoral contribution to GVA, 2013 ...... 91 Figure 4.10: Sectoral contribution to formal employment in Umdoni LM ...... 93 Figure 4.11: National, Provincial, District and Local employment growth trends ...... 95 Figure 5.1: Agriculture sector GDP contribution vs. employment (2013) ...... 99 Figure 5.2: Agricultural sectoral share per Local Municipality (2013) ...... 100 Figure 5.3: GDP contribution vs. employment share for mining (2013) ...... 106 Figure 5.4: GDP and employment contribution of LMs towards UDM (2013) ...... 106 Figure 5.5: GDP contribution vs. employment share for manufacturing (UDM, 2013) ...... 111 Figure 5.6: GDP and employment contribution of LM's towards UDM (2013) ...... 112 Figure 5.7: GDP contribution vs. employment share for the utilities sector (2013)...... 116 Figure 5.8: GDP and employment contribution of LM's towards UDM (2013) ...... 117 Figure 5.9: GDP contribution vs. employment share for construction (2013) ...... 119 Figure 5.10: GDP and employment contribution of LM's towards UDM (2013) ...... 120 Figure 5.11: GDP contributions vs. employment share for trade and retail (2013) ...... 124 Figure 5.12: GDP and employment contribution of LM's towards UDM (2013) ...... 125 Figure 5.13: GDP contributions vs. employment share for transport & communication (2013) ...... 129 Figure 5.14: GDP and employment contribution of LM's transport and communication sector towards UDM (2013) ...... 130 Figure 5.15: GDP contribution vs. employment share for finance and business Services (2013) ...... 134 Figure 5.16: GDP and employment contribution of LMs Finance & Business Services towards UDM (2013) ...... 135
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Figure 5.17: GDP contribution vs. employment share for the personal, community and government services sector for LMs within UDM (2013) ...... 138 Figure 5.18: GDP and employment contribution of LMs towards total GDP and employment for the government services sector in UDM (2013) ...... 138
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List of Maps Map 1.1: Umdoni Local Municipality within the Provincial Context ...... 14 Map 1.2: Umdoni Local Municipality within the District Municipal COntext ...... 15 Map 1.3: Umdoni Local Municipality area of Jurisdiction ...... 16 Map 4.1: Population distribution for Umdoni Local Municipality ...... 69 Map 4.2: Geographic distribution of Annual Household Income for Umdoni LM ...... 73 Map 4.3 Umdoni Local Municipality Climate Profile ...... 75 Map 4.4 Umdoni Local Municipality Vegetation Types ...... 76 Map 4.5 Umdoni Local Municipality Land Coverage ...... 76 Map 4.6 Umdoni Local Municipality Soil Profile ...... 77 Map 4.7: Environmental Attributes and Informal Conservation Areas ...... 78 Map 4.8: Umdoni Local Municipality Transportation Network ...... 97 Map 5.1: Umdoni Local Municipality Agricultural Potential ...... 101 Map 5.2: Umdoni Local Municipality geology ...... 107 Map 5.3: Operational Mines in Umdoni LM ...... 108
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Umdoni LED Strategy Review
Abbreviations ADA Agribusiness Development Agency ACIP Aquaculture Competitiveness Improvement Programme AFF Agriculture, Forestry and Fisheries AGIS Agricultural Geo-referenced Information System APAP Agriculture Policy Action Plan ARC Agricultural Research Council BPRP Beekeeping for Poverty Relief Programme BRU Bio-Resource Units CRDP Comprehensive Rural Development Programme CS Carvalho Scale CSA Climate-Smart Agriculture DARD Department of Agriculture and Rural Development DM District Municipality DS Differential Share EAP Economically Active Population EDTEA Economic Development, Tourism and Environmental Affairs EPWP Extended Public Works Programme FET Further Education and Training GDP Gross Domestic Product GDPR Gross Regional Domestic Product GDS Growth and Development Strategy GET General Education and Training GVA Gross Value Added IDP Integrated Development Plan ICT Information Communication Technology IGDP Integrated Growth and Development Policy IM Industrial Mix IPAP Industrial Policy Action Plan KAPs Key Action Programmes KZN KwaZulu-Natal KZNTMP KwaZulu-Natal Tourism Master Plan LED Local Economic Development LM Local Municipality LQ Location Quotient LRAD Land Redistribution for Agricultural Development LSM Living Standard Measure MSA Municipal Systems Act MTSF Medium Term Strategic Framework NDP National Development Plan NEA Not Economically Active NEPAD New Partnership for Africa’s Development NFLED National Framework for Local Economic Development
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NGP New Growth Path NIPF National Industrial Policy Framework NQF National Qualifications Framework NSDP National Spatial Development Perspective OAU Organization of African Unity PEA Potential Economically Active PGDP Provincial Growth and Development Plan PGDS Provincial Growth and Development Strategy PRASA Passenger Rail Agency of South Africa SA South Africa SAARF South African Audience Research Foundation SALGA South Africa Local Government Association SASA South African Sugar Association SASRI South African Sugarcane Research Institute SCDA South Coast Development Agency SCGA Sezela Cane Growers Association SDBIP Service Delivery and Budget Implementation Plan SDF Spatial Development Framework SEA Strategic Environmental Assessment SIC Standard Industrial Classification SoCS Sites of Conservation Significance SPLUMA Spatial Planning and Land Use Management Act USCDA Ugu South Coast Development Agency USCT Ugu South Coast Tourism WESSA Wildlife & Environmental Society of South Africa
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Umdoni LED Strategy Review
Executive Summary Kayamandi Development Services (Pty) Ltd has been appointed by Umdoni Local Municipality to review the current Local Economic Development (LED) Strategy and to formulate an implementation plan. The LED Strategy forms part of the Municipality’s overall strategic plan, as outlined in the Integrated Development Planning Process (IDP), in seeking to promote viable local economic activities that benefit the local population, through the creation of direct and indirect employment.
The LED strategy is to be utilised and implemented by the Umdoni Local Municipality and will assist in ensuring that the available local resources are used in a committed and effective manner to promote local economic development proactively and dynamically. The strategy is based on the underlying principle that there is a gap between the existing levels of development in the Umdoni Local Municipality and the potential level of development.
The LED strategy is aimed at ensuring that the Umdoni Local Municipality can effectively and efficiently facilitate the creation of an appropriate enabling environment that is conducive to economic development and investment. In addition also to compare all local economic information and to investigate the possible options and opportunities available locally in order to broaden the economic base of the Local Municipality.
The above can only be achieved, however, by clearly understanding the current development situation of the Local Municipality. A Social, Spatial and Demographic Profile (Section 4) of the Local Municipality was therefore created in order to provide a baseline from which to assess the characteristics and trends of the area and to highlight the main challenges and obstacles faced by the area. In addition, to ensure that a credible LED Strategy is developed, it needs to align with policy directives and guidelines within the context of the national, provincial, district and local policy environment. Therefore, a review of all the relevant policies and strategies (Section 2) provides the guidelines and targets required to direct the Local Municipality’s LED framework.
Following the Policy Review and Social, Spatial and Demographic Profile, an Opportunity Analysis (Section 5) was conducted to identify areas of development potential as well as the strengths and weaknesses of the local economy. The identified development opportunities were used as a point of departure in developing specific LED programmes and projects that will exploit the competitive advantages of the local economy and address its identified weaknesses.
Based on the Opportunity Analysis and preceding research, focused development thrusts, programmes, projects and development facilitation actions were created as part of the Development Framework (Section 6). These project and development facilitation actions were then prioritised based on the level of importance. Stakeholder consultations and further internal deliberations finalised a list of projects and actions that tackle the most pressing needs in the Municipality, and that will have the largest impact within the local economy and which thus need to be implemented first (within the 5-year timeframe of the LED Strategy). The prioritised projects in order of priority are as follows: 1. Umdoni Gateway2Opportunity database 2. Beachfront Master Plan implementation 3. Blue Flag accreditation
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Umdoni LED Strategy Review
4. TC Robertson Nature Reserve upgrading 5. Revitalise small grower sugarcane sector 6. Multi-purpose Agricultural centre 7. Youth Small Business Development Centre 8. Railway Commuter System 9. Recycling Centre
The Development Framework is followed by Implementation Guidelines (Section 7), which serves as a manual for the implementation of the LED Strategy by the LED Unit of the Umdoni Local Municipality. The following general guidelines were discussed with regards to LED implementation: Obtain ongoing funding Appoint an implementer Finalise ownership Develop detailed business plan Location and facilities (if need arises) Management Team Staffing Human Resource Development Financial & Accounting Systems
The final section (Section 8) provides a Strategic Framework for the implementation of the LED Strategy. The chapter includes aspects such as institutional requirements, the relationship of LED to other regional, provincial and government structures, factors of development facilitation, marketing, integrated programming and performance monitoring.
The Umdoni Local Municipality’s Reviewed LED Strategy (2015) aims to promote a diversified, integrated and sustainable local economy ensuring job creation, economic viability and ultimately ensuring a better quality of life for all its citizens
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Umdoni LED Strategy Review
Section 1: Introduction Kayamandi Development Services (Pty) Ltd has been appointed to review the current Local Economic Development (LED) Strategy of the Umdoni Local Municipality. This Section sets out the background and purpose of the LED and provides a common understanding of the LED concept in South Africa. The Section also includes the methodology that was followed, data sources consulted in undertaking the study, describes the study area, and sets out the structure of the remainder of the report.
This Section is comprised of the following sections: Background and purpose Defining a common understanding of LED Methodology Study area Structure of remainder of report
1.1 Background & Purpose
Kayamandi Development Services (Pty) Ltd has been appointed by Umdoni Local Municipality to review the current Local Economic Development (LED) Strategy and to formulate an implementation plan. The LED Strategy forms part of the Municipality’s overall strategic plan, as outlined in the Integrated Development Planning Process (IDP), in seeking to promote viable local economic activities that benefit the local population, through the creation of direct and indirect employment.
Local government has a constitutional obligation to participate in development. In terms of section 152 of the constitution (1996: 84) local government should “promote social and economic development of communities.” It defines this role as a “central responsibility (for municipalities) to work together with local communities to find sustainable ways to meet their needs and improve the quality of their lives. This has been crafted into a national framework for LED in South Africa. The framework acknowledges that “the majority of South Africans were kept out of the mainstream of the economy through inferior education, restrictions on movement and trade, no access to finance and resources, and deliberate state action that forced people into poverty and distress”.
A LED plan aims to investigate the options and opportunities available to broaden the local economic base of the area in order to address the creation of employment opportunities and the resultant positive spin-off effects throughout the local economy.
Increased unemployment levels provide an unhealthy environment and economy for investment, which in turns leads to a stagnating local economy. This, in turn, can place further strains on an already over extended local resource base, reinforcing the need for an innovative and effective broadening of the local economic base. This entails introducing new activities, offering incentives, applying new technologies, development of SMMEs, broadening ownership, etc.
The LED plan is created by building the programme on the underlying needs, opportunities and comparative and competitive advantages of the Municipality. The document also provides the Municipality with guidelines to create and facilitate economic development in order to realise the underlying development potential and in order to encourage both private and public sector investment and local job creation.
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Umdoni LED Strategy Review
This plan is to be used by the Local Municipality to assist in ensuring the dedicated and effective utilisation of local available resources and to promote local economic development in a proactive and dynamic manner.
The plan is built on the underlying principle that a gap exists between the existing levels of development in Municipality and the potential level of development. In order to bridge this gap the LED Strategy, therefore, provides the Municipality with the following: A strategically focused local economic development profile Identification of the development potential of the Municipality Identification of opportunities for SMME development in the Municipality Methods to enhance co-ordination, integration and participation in local economic development A local economic development plan Sustainable and commercially viable business opportunities appropriately packaged for investment An institutional analysis An implementation and monitoring and evaluation plan
The LED review plan is based on the Municipality’s economic base and to identify trends and gaps in the local economic environment. From this, opportunities and strategies are identified to provide Umdoni Municipality with guidelines for the continued creation and facilitation of economic development. These strategies will also assist the Municipality to realise the underlying economic development potential and to encourage private sector investment and job creation.
1.2 Defining a common understanding of LED
1.2.1 Defining LED Each and every local community is unique with a distinctive and unique environment that holds an array of opportunities and threats. These unique features are the foundation for any LED strategy as a strong local economy can only be created once the community understand its strengths and weaknesses and learn how to transform these into opportunities and lucrative economic activities. The ability of communities to enrich themselves and improve their living conditions depend on them being able to adapt to the fast changing and increasingly competitive market environment. Prioritising the local economy and increasing the productive capacity of local businesses and individuals are crucial if communities are to succeed and prosper.
It is thus very important to state that the aim of LED is not for municipalities or public bodies to fund small local projects with government funds, neither for municipal officials to run or manage these or larger projects. In the past these types of projects have been initiated without proper business plans or any serious notion of sustainability, and the duration as well as employment created was temporary. Thus, LED is not about funding small unsustainable projects, but rather about developing robust and inclusive local economies.
LED is a term which is used to denote both local and broader actions which seek to build strengthen and further capacitate local markets i.e. business and employment developments. Defining LED is not
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Umdoni LED Strategy Review an easy task, as it is an integrated strategy that incorporates a number of important components. One way of trying to better understand LED is by saying what it is not: LED is not an industrial policy and therefore it is also not the same as SMME promotion (though the latter may be part of LED) LED is not community development. Community development is about commonality. It is about self-help groups, mutual assistance and voluntary work to help the disadvantaged and solve health, education, housing and other problems. LED is about competitiveness – it is about companies thriving in competitive markets and locations thriving in a competitive, globalised world LED is not poverty eradication. However, LED is concerned, inter alia, with the creation of sustainable jobs that indirectly results in a reduction in poverty.
LED is also not about quick fixes or generating wish lists. It requires a practical understanding of what the local area does well and what it has to offer, where the weaknesses and gaps lie, what outside threats and opportunities exist, and what the local area wants and needs. LED actions are market based and are more often than not geared towards a business unit, namely SMMEs or even larger enterprises.
LED focuses on enhancing competitiveness, increasing sustainable growth and ensuring that growth is inclusive. LED actions are therefore those which: Focus on creating sustainable economic growth Are market-orientated (vis-à-vis business and commercial development) Are multi-sectorial involving the diversification of the economic and employment base within the economy Are participatory involving multiple stakeholder inclusive of both the public and private sector Is beneficiary at the individual level through private ownership of the businesses being support and facilitated And, are those which are focused in supporting businesses which are located in the first (e.g. mainstream) economy
The purpose of LED is to enhance the economic capacity of a local area and to improve its economic future and the quality of life for all. It is a process by which public, business and non-governmental sector partners work collectively to create better conditions for economic growth and employment generation. LED actors and facilitators therefore usually include, but are not limited to national, provincial and local governments and parastatal and development agencies. A partnership between the aforementioned actors and stakeholders are key to the successful formulation and implementation of an LED, and it is often the strength of these partnerships that can make or break local economic development. LED encompasses a range of disciplines including physical planning, economics and marketing, and incorporates many local government and private sector functions including environmental planning, business development, infrastructure provision, real estate development and finance.
The idea driving LED today is that economic opportunities and activities can be utilised to improve the quality of life for all members of the community. LED should go beyond merely addressing economic aspects like growth in employment, income and business activity, and should consider development (the need for structural change, level of integration between informal and formal sectors, the quality
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Umdoni LED Strategy Review of development, etc.) and the local community (poverty reduction, increased self-reliance, satisfying basic human needs, mutual commitment, integrated social and environmental objectives).
This above argument recognises that LED cannot succeed if it is about merely choosing a winning project, as this would be doing economic development planning backwards. Successful local economic development necessitates a clear LED strategy that correctly synthesises the current realities of the local economy. Furthermore, a successful LED reflects the values of its citizens and helps create a positive environment where economic activity and growth can thrive.
It is important that the LED is developed within the context of the municipal Integrated Development Plan (IDP), as described in Section 25 of the Municipal Structures Act. Integrated development planning is a process whereby a municipality prepares a comprehensive 5-year strategic plan (the IDP) that is reviewed annually in consultation with the local community and other stakeholders. The IDP outlines a long-term vision, includes an assessment of the existing level of social and economic development, and outlines the setting of development priorities and objectives, the existing spatial framework and land development objectives, operational strategies and municipal budgeting. By synthesising the development objectives, priorities, strategies and budgets, the IDP helps to ensure coordination between LED and other government initiatives. As the IDP is now the basic unit of planning for government as a whole, it is vital that the LED be fully integrated within the IDP.
1.2.2 Principles of LED LED is based upon the following economic principles and should be practiced within the context of the economic principles, referred to in the Table 1.1.
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Umdoni LED Strategy Review
TABLE 1.1: LED ECONOMIC PRINCIPLES ECONOMIC DESCRIPTION RELEVANCE TO LED PRINCIPLE Diversification and production of new products and services must be Broaden An important development principle underlying LED is to broaden the considered when identifying programmes and possible projects. economic base/ economic base, through the integration of diverse economic initiatives. Promote SMMEs, women, youth, disabled individuals and BEE diversification ownership of new and existing companies. Stakeholder participation at Economic Indabas in LED. This principle encompasses the building of capacity of the municipalities Capacity building LED training (theory and practice) for public officials and associated public sector role players with respect to LED. Business start-up, management and financial training for private sector. Comparative advantage indicates relatively more competitive production All comparative advantages in the local area must be identified in a SWOT Comparative & function for a product or service in a specific local economy than on the analysis and built upon when identifying programmes and potential competitive aggregate economy (provincial or national). It therefore measures projects, thereby exploiting the existing strengths and opportunities in the advantage whether a specific economy produces a product more efficiently. local area. The environment in which businesses operate must be conducive to Creation of conducting business. This includes: A locational analysis will reveal what locational factors need to be favourable Reducing the establishment and operating costs of businesses; improved upon to promote the local area as a desirable location to conduct locational factors Improving infrastructure; and business. Facilitating the provision of trained labour. Creating favourable conditions for the growth and development of business enterprises by reducing risk and making it more calculable by: One of the roles of the local municipality is to create an environment that Enabling Creating a stable business environment (discussed above) promotes both existing and new business in the local area. The LED process environment Increase confidence levels of the public and private sector investors; can be used to facilitate this process. Unlocking under-utilised resources. Historically LED should target HDIs, marginalized communities and geographic regions, This principle must be incorporated during the visioning and setting of LED disadvantaged BEE companies and SMMEs to allow them to participate fully in the objectives and may be implemented through specific LED projects. individuals (HDIs) economy. Income The sustainable income generation potential is a way to measure market The income generation potential of a specific project must be considered generation potential (i.e. commercial viability) and is used to inform the prioritisation when prioritising potential projects. potential of projects. An integrated and holistic approach to the development planning process The situational analysis of the local area will identify social, demographic, is of paramount importance. This implies that the interrelationships Integrated / infrastructural, financial and environmental strengths and opportunities between economic activities and other development dimensions such as holistic approach that must be considered and included in potential LED programmes and the social, demographic, institutional, infrastructural, financial and projects. environmental aspects have been carefully considered.
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Umdoni LED Strategy Review
ECONOMIC DESCRIPTION RELEVANCE TO LED PRINCIPLE Linkages refer to the flow of goods and services between at least two agents. Linkages with neighbouring economies refer to It is important to encourage circular flow of capital within the Leakages (the net outflow of buying power) i.e. households residing community. Linkages within the study but purchasing goods and services outside the local One LED objective is to reduce leakages and increase injections through area; and programmes and projects. Injections (the net inflow of buying power) i.e. businesses located outside the study area but purchasing products inside the study area. LED aims at creating places and opportunities to match supply and demand Current strengths and opportunities for expansion and new ventures will be Local markets as well as to discover, propagate and promote new business opportunities. identified during the SWOT analysis of the area. LED promotes local ownership, community involvement, local leadership The identification and involvement of key stakeholders will ensure that and joint decision-making. local leadership and the local economy are involved in the LED process. Local ownership Specific LED projects may be aimed at increasing the number of locally owned enterprises. Public Private LED involves local, national and international partnerships (e.g., twinning) The establishment of PPPs should be explored in the implementation of Partnerships between communities, businesses and governments to solve problems, projects. (PPP) create joint business ventures and build up local areas. This can be the promotion of existing business, start-ups or external Local municipalities are responsible for creating an enabling business Promoting companies coming into a location. environment that encourages the expansion of existing business and the business emergence of new business ventures. Maximise the use Local skills and resources of the local area must be identified during the LED aims at making better use of locally available resources and skills and of existing situational analysis and ideally must be utilised during the implementation maximises opportunities for development of resources. resources of projects, as extensively as possible. It is important to involve and uplift the SMME sector through enhancing the capacity of local entrepreneurs by establishing support measures and An enabling environment in which SMMEs can be established and Promoting SMMEs incentives to promote participation. This suggests that appropriate maintained must be created; and technology transfer needs to place in an environment conducive for the SMMEs can be promoted through specific projects. successful establishment of SMMEs.
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Umdoni LED Strategy Review
1.2.2 Relationship of IDP to LED Integrated Development Planning (IDP) is a process by which municipalities prepare 5-year strategic plans that are reviewed annually in consultation with communities and stakeholders. These plans adopt an implementation approach and seek to promote integration by balancing social, economic and ecological pillars of sustainability without compromising the institutional capacity required in the implementation, and by coordinating actions across sectors and spheres of government.
The IDP is a process, through which a municipality prepares a strategic development plan. It draws together all the development objectives of a municipality including Local Economic Development, and formulates strategies to realise those objectives in an integrated manner. This means that everyone is working towards the same goal.
The IDP is a comprehensive plan for the development of the local area. It includes a long-term vision, an assessment of the existing level of social and economic development, the setting of development priorities and objectives, spatial framework and land development objectives, operational strategies, municipal budgeting and other resource allocation.
By drawing together the development objectives, priorities, strategies and budgets in this way, the IDP helps to ensure co-ordination between LED and other initiatives of government. The IDP is now the basic unit of planning for government as a whole. It is important to note that the IDP process is the single, inclusive planning process within which other processes must be located. LED must be fully integrated within the IDP.
In conclusion, the LED strategy is a tool for sustainable economic growth and development, job creation and improvement of the quality of life for everyone community member. LED should be a combined effort from local government, businesses, companies and individuals, and should remove bureaucratic barriers, lower transaction costs, address market failures, strengthen competitiveness and create a unique advantage for local enterprises.
1.3 Methodology
Figure 1.1 below presents the methodology that was used during the review process of the LED Strategy for Umdoni Local Municipality. The various steps undertaken are subsequently discussed.
Step 1: Organising the effort:
The first step in reviewing the LED strategy was used for orientation purposes and entailed addressing the following aspects: Undertaking an inaugural meeting with the client to finalise the project goal, objectives, process deliverables and programme. Finalise the contractual aspects Defining a common understanding of LED Identification and sourcing of all the required background information relevant to the study. Establish contact with knowledgeable individuals, institutions and municipal roleplayers relevant to the study to identify their needs with regards to amendments
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Umdoni LED Strategy Review
Analyse additional/newly released resources that can contribute to the LED strategy such as policies, programmes, strategies, socio-economic studies, SDF, Investment Attraction Strategy, etc. Develop a detailed review process plan with actions, roles, responsibilities and timeframes to be adopted
The purpose of this step was to undertake performance monitoring, which included an evaluation of the impact to date of the existing LED strategy and the framework and hence an indication of the strengths and weakness of the strategy with regards to achieving its set goals and objectives.
FIGURE 1.1: METHODOLOGY
Step 2: Gap and situational analysis and status quo amendment
The purpose of this step was to update the economic and socio-economic evaluation in line with changes in the development milieu and developmental trends. Changes were effected wherever significant differences and outdated information was contained. Careful consideration was taken to
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Umdoni LED Strategy Review ensure that the LED aligned to that of the District Municipality and the Provincial GDP and that it included recommendations regarding economic infrastructure development, where applicable.
This step also entailed updating the sectoral production, economic base, employment, growth, specialisation, linkages, comparative advantages, market trends, etc. Changes and updates to legislation and other strategies were also included, updated budget inputs from departments were considered, etc.
Based on the updated overview of the existing environment, the gap that exists between the existing levels of development and the potential level of development were identified.
The purpose of this step is to analyse the data obtained in order to update the development opportunities. The outcome of the updated profile were an inventory of key development projects. In order to provide increased opportunities for SMMEs, an important development principle underlying economic development, namely broadening the economic base, were defined. Apart from a general higher level of output, broadening the economic base also ensures the introduction of new activities, which are not currently operational in the area. This means an extension of the production capacity in terms of new products and services and application of new technologies that is not being applied in production processes. This should make the region more competitive.
Consequently, an integrated and holistic approach to the development planning process is of paramount importance. This implies that the interrelationships between economic activities and other development dimensions such as the social, demographic, institutional, infrastructural, financial and environmental aspects were carefully considered when updating key development projects for the region. A normative approach were also adopted in the undertaking of this study, so that lessons can be learnt from the success and failures of other development initiatives undertaken in neighbouring regions.
The outcome of this step was an updated status quo document with an analysis of the policy environment, macro and local profile, SWOT analysis, and development opportunities. Due cognisance was also taken to ensure that the regional role and function of Umdoni is identified, and that focus is placed on identifying opportunities for SMMEs in addition to anchor projects.
Step 3: LED workshop and stakeholder engagement
The purpose of this step was to hold a workshop with key stakeholders and roleplayers within the study area to report back on the suggested amendments, to obtain inputs with regard to priorities, inputs and comments and changed needs, and to assist with prioritising economic development opportunities based on the updated knowledge of the local economic development situation.
The participatory process was undertaken with the Project Steering Committee (PSC) and other Stakeholders as identified and approved by the Planning, Development and Infrastructure Committee (PD&I).
The aim of the workshop was to develop an integrated vision supported by a series of development thrusts, based on the latent development potential of the study area. A thrust can be identified as a “collective economic force that can generate sufficient economic energy to create a series of sustainable development opportunities or projects”. Such a “thrust” is furthermore characterised by
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Umdoni LED Strategy Review a catalyst or core activity with associated satellite activities. The thrusts are utilised as guidelines for project integration at the workshop.
The focus of the workshop were follows: To update and verify the status quo To update, identify and verify economic opportunities per sector To interpret and collate opportunities in terms of economic sectors and thrusts To undertake updated resolutions to be addressed in the economic strategy To incorporate, involve and commit key stakeholders and communities to economic development of the area To educate the community, business and municipality
Step 4: Final updated LED strategy and implementation guidelines
Once municipal and stakeholder inputs and comments have been received, the purpose of this step is to update the strategic framework in line with the workshop outcomes in terms of key projects and programmes based on the vision, thrusts and opportunities identified in the preceding steps.
To be in a position to compile a local economic development strategy that can make a definite impact in terms of sustainable economic development, and hence better achieve the set indicators, realistic and practical projects will be identified for the sectoral programmes.
The strategy will be aligned to available budget, and new legislation and policies and all the different components will be integrated to consist of the following updated elements: A financial plan to focus project phasing in terms of financial requirements in accordance with a phasing schedule. Specific attention will be given to budgeting specifications to ensure integrated and strategic management of institutional resources. A purpose-directed management plan, which relates and integrates the projects in terms of the relationships between different institutional structures and their contribution toward the development process. A strategy plan that will direct implementation and monitoring and evaluation of the framework (including a monitoring tool) and strategy will be compiled, addressing: o Fast track actions such as the institution of a development agency/body and to facilitate the implementation of high priority and anchor programmes for immediate impact on the economy o Medium term actions to facilitate the implementation of the second round of programmes. o Long term actions: These refer to the actions that need to be taken for the ongoing facilitation of nodal economic opportunities and refer to a 5-year action plan as well as the institution of a monitoring and evaluation system. A spatial plan: The LED framework will be compiled to align with the GDP as well as the National Spatial Development Perspective, the Spatial Development Framework of the municipality as well as relevant district plans and strategies. A holistic spatial mapping of the LED and implementation plan will be developed that that identifies existing nodes, corridors, linkages, nodal commercial activities, advantages and resources base, and high priority projects.
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A monitoring and evaluation plan: This plan will also enable monitoring and evaluation in order to achieve the level of economic development required by the Municipality and to ensure that the required targets are being met.
Focussed attention will be placed on updating the organisational structure, as well as enabling implementation of the strategy through the provision of practical implementation guidelines, and detailed action plans per priority projects.
Step 5: LED strategy amendment workshop and stakeholder participation
The second workshop will be engage the relevant stakeholders with regards to the updated/reviewed strategy in terms of all of the components such as the investment climate confirmation, action plans, management and institutional plan, spatial plan, actions plans, infrastructure plan, monitoring and evaluation plan, etc.
1.4 Study area
Umdoni Local Municipality is one of six local municipalities that fall within the jurisdiction of Ugu District Municipality, within the KwaZulu-Natal Province, as illustrated in Map 1.1 and Map 1.2.
Umdoni Local Municipality is situated towards the north-western side in Ugu District Municipality. eThekwini Metropolitan Municipality borders Umdoni to the north, to the east, the Indian Ocean creates a natural border, to the south, Umzumbe Local Municipality and to the east Vulamehlo Local Municipality borders Umdoni.
Umdoni has four traditional council areas which include the Shozi Traditional Authority-Langa, Alexandra Traditional Authority, Cele Traditional Authority and Zembeni Traditional Authority. These are situated in the northern region of Umdoni and to the west of Pennington.
The Umdoni Local Municipality is 252 square kilometres in physical size, and is divided into 10 wards with approximately 78 874 people within its boundaries. This translates to a density of 314 people per kilometre.
Umdoni Local Municipality is both strategically and conveniently located with regards to accessibility as the N2, R102 and R612 roads connect the municipality with Durban and Port Shepstone, among others. This is illustrated by Map 1.3 below.
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MAP 1.1: UMDONI LOCAL MUNICIPALITY WITHIN THE PROVINCIAL CONTEXT
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MAP 1.2: UMDONI LOCAL MUNICIPALITY WITHIN THE DISTRICT MUNICIPAL CONTEXT
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MAP 1.3: UMDONI LOCAL MUNICIPALITY AREA OF JURISDICTION
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1.5 Structure of the Remainder of the Report
The remainder of the report will be structured as follows:
SECTION 2: POLICY REVIEW: This Section sets out the National, Provincial and Local government policies, programmes and initiatives to which the LED strategy needs to align and/or take into consideration.
SECTION 3: OVERVIEW AND STATUS QUO OF LED IN UMDONI This section provides an overview of the previous LED Plan that was done for the Umdoni Local Municipality in 2005, along with a status quo as to what projects have been implemented.
SECTION 4: SITUATIONAL ANALYSIS: This Section sets out the socio-economic context with regards to demographics, environmental and infrastructure contexts as well as the economic context in relation to the District, Provincial and National context in order to create the background against which an appropriate development path can be determined.
SECTION 5: OPPORTUNITY ANALYSIS: This Section sets out the opportunity analysis of the Umdoni Local Municipality. The analysis incorporates sectoral potential analysis which assists in creating an understanding with regard to the sectoral competitive advantages of the local economy and is used to determine the development potential within the Local Municipality and to identify specific projects that could contribute towards the development of each sector and the economy of the municipality holistically.
SECTION 6: DEVELOPMENT FRAMEWORK: This Section is aimed at providing the local economic framework that will guide local economic development within Umdoni Local Municipality. This Section sets out the shared strategic direction, which enables the Municipality to facilitate development in a coordinated and structured manner. The framework thus enables local communities, business and private sector partners, local government and non-governmental organisations the opportunity to work together towards a shared vision and strategy for local economic development, allowing economic growth and job creation and enabling the achievement of set targets.
SECTION 7: IMPLEMENTATION GUIDELINES: Section six sets-out the priority projects and development facilitation focus areas that have been highlighted through stakeholder consultation and through the use of a project prioritisation matrix required for the 5-year implementation period of the strategy along with action plans, timeframes, resource requirements, a financial plan and a spatial plan. In order for the LED Unit of Umdoni Municipality to effectively plan and implement this LED Strategy, the purpose of this section is to provide a 5-year action plan and implementation guidelines for the highest priority projects that need to be executed in the immediate to short term. At the same time, the financial- and spatial plan of these high priority projects and facilitation actions are presented.
SECTION 8: STRATEGIC FRAMEWORK: This Section provides an overview of the institutional structure of the Local Municipality, guidelines on monitoring and evaluation, and a way forward for the municipality.
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Section 2: Policy Review This Section sets out the National, Provincial and Local government policies, programmes and initiatives to which the LED strategy needs to conform and/or take into consideration. In other words this Section sets out the platform for future Economic Development so that the relationship between these are clearly articulated and to ensure alignment to existing policies, programmes, strategies, etc.
2.1 National Policies and Strategies
This section focusses on the major applicable National policy frameworks that guide planning and LED efforts in South Africa. The aim, therefore, is to provide an overview of the broader national yardstick that guides development and ultimately guides LED efforts at grassroots level. The National legislation and policies that has been considered and are discussed herein includes, but are not limited to: The Constitution of the Republic of South Africa, Act 108 of 1996 National Government Key Outcomes (2014-2019) National Development Plan: 2030 New Growth Path for South Africa, 2010 National Spatial Development Perspective (NSDP), 2006 Spatial Planning and Land Use Management Act (SPLUMA), Act 16 of 2013 Industrial Policy Action Plan (IPAP), 2015/16 -2017/18 New Partnership for Africa’s Development, 2001 Medium Term Strategic Framework (MTSF) 2014 to 2016 Comprehensive Rural Development Programme, 2009 Restitution of Land Rights Amendment Act, Act 15 of 2014 Municipal Systems Act, Act 32 of 2000 National Framework for Local Economic Development, 2006-2011 The Integrated Growth and Development Policy (2012) and the Agricultural Policy Action Plan (2014-2019)
2.1.1 The Constitution of the Republic of South Africa (1996) The cornerstone for all legislation and policy-making in South Africa is the Constitution (No 108 of 1996). Section 7 of the Act defines the role of local government in its community, and five objectives of local government are outlined in section 152: To provide democratic and accountable government for local communities. To ensure the provision of services to communities in a sustainable manner. To promote social and economic development. To promote a safe and healthy environment. To encourage the involvement of communities and community organisations in the matter of local government.
Furthermore, section 153 stipulates the following developmental duties of all municipalities: A municipality must structure and manage its administration, budgeting and planning processes to give priority to the basic needs of the community, and to promote social and economic development. A municipality must participate in national and provincial development programmes.
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Key implications for Umdoni Local Municipality:
All provinces and municipalities located within South Africa are legally bound to promote social and economic development within its community. This implies that public investment within Umdoni Local Municipality should largely focus on developing the municipal area in terms of local economic development and providing for the basic needs of the community.
2.1.2 National Government Key Outcomes National Government has designed 14 Outcomes for Government and all its service delivery functions. The 14 Outcomes are based on a concept of The Outcomes Approach which is essentially a strategic approach which focuses on achieving the expected real improvements in the life of all South Africans.
The outcomes approach broadly defines what is expected to be achieved, how it is to be expected to be achieved and whether the outcomes are being achieved. The overall goal of the 14 outcomes that have been designed is to ensure that government does not just carry out the functions it is supposed to, but to ensure that results from these functions are achieved and show impacts on the lives of South Africans.
The outcomes approach mainly: Focuses on results Makes explicit and testable the chain of logic in our planning, so we can see the assumptions we make about the resources that are needed Links activities to outputs and outcomes and to test what works and what doesn’t Ensure expectations are as clear and unambiguous as possible Provides clear basis for discussion, debate and negotiation about what should be done and how it should be done Enables learning and regularly revising and improving policy, strategy and plans through experience Makes co-ordination and alignment easier
The 14 Outcomes have been based on the Election Manifesto and the Medium Term Strategic Framework (2014-2019), as well as consultation on ministerial and administrative levels. The outcomes are a representation of the desired development impacts to be achieved by government’s policy priorities.
The 14 Outcomes are listed as: 1. Quality basic education 2. A long and healthy life for all South Africans 3. All people in South Africa are and feel safe 4. Decent employment through inclusive growth 5. A skilled and capable workforce to support an inclusive growth path 6. An efficient, competitive and responsive economic infrastructure network 7. Vibrant, equitable and sustainable rural communities towards food security for all 8. Sustainable human settlements and improved quality of household life 9. Responsive, accountable, effective and efficient local government 10. Protect and enhance our environmental assets and natural resources 11. Create a better South Africa and contribute to a better Africa and a better World
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12. An efficient, effective and development orientated public service 13. A comprehensive, responsive and sustainable social protection system 14. A diverse, socially cohesive society with a common national identity
Key implications for the Umdoni Local Municipality
The Umdoni LED will require initiating cross-cutting collaboration between departments to ensure efficient delivery of proposed outcomes. Collaboration with other departments will also require the implementation of projects, information sharing and promotion and inter-departmental marketing. Aspects such as case specific analysis of the municipality and the inherent circumstances are required, and focusing on the community work programme within the local communities.
2.1.3 National Development Plan (2030) The National Development Plan 2030 (NDP) is geared towards charting a new path for South Africa which includes eliminate poverty and reduce inequality to ensure that every individual has access to opportunities which have been hampered in the past by the apartheid legacy.
The main pillars that will be used to achieve radical economic transformation are: productive investment crowded in through the infrastructure build programme competitiveness enhancement in productive sectors of the economy addressing spatial imbalances in economic opportunities elimination of unnecessary regulatory burdens workers’ education and skills development to meet economic needs a macroeconomic and financial framework to support employment-creating growth Workplace conflict reduction and improved cooperation between government, organised business and organise labour Expanded opportunities for historically excluded and vulnerable groups, small businesses and cooperatives Public employment schemes to provide relief for the unemployed and build community solidarity
According to the NDP 2030, the above can only be achieved through ensuring that each person has access to or comprise over: Education and skills Proper housing Proper nutrition Safe communities Social security Efficient transport Job opportunities
In order to be able to achieve the goal of eliminating poverty and to ensure that everyone has access to these basic services mentioned above, the government must take on an approach which requires and enables individuals to actively engage and mobilise their own development. This will require government to reassess their strategies to achieve the following: The active efforts and participation of all South Africans in their own development
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Redressing the injustices of the past effectively Faster economic growth and higher investment and employment Rising standards of education, a healthy population and effective social protection Strengthening the links between economic and social strategies An effective and capable government Collaboration between the private and the public sectors Leadership from all sectors in society
The plan identifies key priority areas that need to be focussed on to ensure that poverty is eliminated by 2030. These include creating an economy that will create more jobs, improve infrastructure, switch to a low-carbon economy, ensure an inclusive and integrated rural economy, reversing the spatial effects of apartheid, improving the quality of education, training and innovation, ensure quality health care for all, achieve social protection, build safer communities, reform the public service, fight corruption and unite the country.
Key Implications for Umdoni Local Municipality
The NDP 2030 sets out a number of objectives to eliminate poverty by 2030. This implies that the LED for Umdoni Local Municipality needs to ensure that it aims to aid in eliminating poverty through implementing projects and programmes that will enable individuals to take charge of their own future through skills development and job creation.
2.1.4 New Growth Path (2010-2020) The New Growth Path (NGP) is Government’s vision to place jobs and decent work at the centre of economic policy. The NGP targets five million new jobs from 2010 to 2020. The South African Government has determined that a growing consensus exists in that to create decent work, reducing inequality and defeating poverty a new growth path has to be established through the restructuring of the South African economy to improve its performance in terms of labour absorption as well as the composition and rate of growth. The new growth path has been developed to be a new alignment of economic objectives and growth initiatives building on the previous growth initiatives GEAR and AsgiSA which sought to half poverty by 2014 and create economic recovery by raising economic growth to 6%.
The new growth path further aims to target limited capital and capacity that maximise the creation of decent work opportunities within the context of macro and micro economic policies to create a favourable economic climate and to support the development of labour-absorbing activities.
In order to achieve the new growth path proposed, key trade-offs have been identified which must be addressed in order to achieve the desired long term future economic development goals. These trade- offs have been identified as: Between present consumption and future growth, since that requires higher investment and saving in the present, Between the needs of different industries for infrastructure, skills and other interventions, Between policies that promise high benefits but also entails substantial risks, and policies that are less transformative and dynamic but are also less likely to have unintended consequences,
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Between competitive currency that supports growth in production, employment and exports and a stronger rand that makes imports of capital and consumer goods cheaper and, Between present costs and future benefits of a green economy.
The strategy seeks to introduce changes in the wider economic systems by means of considering changes in the structure of savings, investments and production through constantly pursuing key policies and programmes. In support of the previously mentioned, the focus would be to encourage an effective social dialogue to help establish deliberation and consensus on long term policies, trade- offs and sacrifices. The approach further focuses on the re-industrialisation on the back of opportunities identified in the growth path. This essentially focuses on the expansion and development of value-adding in the economy to produce final products and not only provide raw materials to international markets. This focuses on deepening the local and regional markets of South Africa as well as to widen the market through diversified products and goods.
In relation to the previous discussion, the strategy has identified main indicators of success. These indicators are listed below as: Jobs (the number and quality of jobs created), Growth (the rate, labour intensity and composition of economic growth), Equity (lower income inequality and poverty) and, Environmental outcomes.
Key implications for Umdoni Municipality
The LED review’s programmes and projects for Umdoni Local Municipality should focus on sectors which will be able to provide employment on a large scale. In other words, focus should be placed on industries which would be able to provide large amounts of labour/employment. In the same approach, continued focus should also be placed on existing advanced industries crucial to sustained growth. This inevitably means that existing core industries should be encouraged to provide continued growth and development whilst, industries which provide labour intensive jobs or large amounts of jobs should be facilitated to grow to provide a wider base of employment, for Umdoni this could be the expansion of the current tourism industry. The LED must also encourage the investment by private and public sectors into proposed economic opportunities to enable the growth in employment- creating activities. The Strategy should further focus production/provision of products and services based on meeting local needs. This would essentially be aimed towards identifying possible regional products which can be exported throughout the South African domestic market, as well as servicing local communities in products necessary to advocate the basic needs to maintain sustainable livelihoods. Lastly the strategy should seek to provide a basis from which local SMME’s and entrepreneurs can forge new businesses and opportunities as well as to facilitate the growth and development of skills and knowledge. The existing lack of skills within all sectors of the South African demography poses numerous problems related to growth and employment of persons which would be a necessary focal point of the strategy.
2.1.5 National Spatial Development Perspective (2006) The National Spatial Development Perspective (NSDP), 2006 comprises the reviewed, updated and amended version of the NSDP developed in 2003. The challenge facing South Africa is rooted in its inherent failure to provide services to all communities. Another challenge is in the economic fraternity
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Umdoni LED Strategy Review where the fruits or gains of the first economy are not shared in the second economy. These challenges have been compounded by the failure of the enshrined Constitutional principles of integrating, coordinating and aligning the actions of the three spheres of government (National, Provincial and Local spheres).
The NSDP is fundamentally tailored at reconfiguring apartheid spatial relations and implementing spatial priorities in a manner that meets the Constitutional imperative. This is focused at devotions to provide services to everyone and to alleviate poverty and inequality. The NSDP is an indicative tool that guides overall development in all spheres of government. It involves a progressive development agenda based on respective development plans of the national, provincial and local government such as the Integrated Development Plans (IDPs), the Provincial Growth and Development Strategies (PGDS) and the Medium Term Strategic Framework (MTSF). It provides feasible methodological grounds and principles for making government decisions on infrastructure investment and development spending more focused and rational. It necessarily responds to the challenge of economic growth and inclusion by posting the twin concepts of development potential and need as reflected in the poverty gap. It also provides a delineated yardstick suitable for debates about the future development of the national space economy. It proceeds by offering recommendations necessary to bring about optimum alignment between infrastructure and development programmes within localities. It operates in line with the planned national government objectives such as poverty reduction, job creation, sustainable service delivery, integration, rectification and coordination of distorted spatial development.
The NSDP, therefore, involves the following: A set of principles and mechanisms for guiding infrastructure investment and developmental decisions; A shared understanding of the national space economy by describing the spatial manifestations of the main social, economic and environmental trends; and An interpretation of the spatial realities and the implications for government intervention.
Given the objective to grow the economy, create jobs, address poverty and promote social cohesion, the NSDP assists government in confronting three fundamental planning questions, namely: Where should government direct its investment and development initiatives to ensure sustainable and maximum impact? What kinds of spatial reforms and arrangements are more conducive to the achievement of the objectives of democratic nation building and social and economic inclusion? How can government as a whole capitalise on complementarities and facilitate consistent decision making; and move beyond mere focus on integration and coordination procedures to establishing processes and mechanisms that would bring about strategic coordination, interaction and alignment?
The NSDP is also informed by the following principles: Rapid economic growth that is sustained and inclusive is a prerequisite for the achievement of other policy objectives, amongst which poverty alleviation is key; Government has a constitutional obligation to provide basic services to all citizens (eg. water, electricity as well as health and educational facilities), wherever they reside;
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Beyond the constitutional obligation identified in Principle 2, government spending on fixed investment should be focused on localities of economic growth and/or economic potential in order to gear up private sector investment, stimulate sustainable economic activities and create long-term employment opportunities; Efforts to address past and current inequalities should focus on people, not places; In order to overcome the spatial distortions of apartheid, future settlement and economic development opportunities should be channelled into activity corridors and nodes that are adjacent to or link the main growth centres.
NSDP has a critical role to play in reconstructing the historical spatial distortions of the past. It is very relevant in surfacing spatial dimensions of social exclusion and inequality in accessing economic and social development projects in communities. This will also accelerate the level of development and contribute to the broader growth and development policy objectives of government.
Key implications for Umdoni Local Municipality
NSDP will assists in bringing investment and growth in the area. Umdoni Municipality can be seen as an area of limited potential growth as NSDP reasons, where providing basic service and grants, human resource development, labour market intelligence is not enough. Umdoni Municipality’s economic and infrastructural development needs to be aligned within the LED strategy’s review. Through the strengthening of sectors, in Umdoni Municipality such as the Tourism, it will allow for more progressive economic development in the area. Investment in these areas needs to be coordinated and integrated with the IDP of Umdoni Municipality and form part of the LED programmes identified as part of the LED Strategy.
2.1.6 Spatial Planning and Land Use Management Act (Act 16 of 2013) The Spatial Planning and Land Use Management Act (SPLUMA) is a national framework (assented to on 2 August 2013) which guides national spatial planning and land use management in South Africa. The aim of the Act is to promote inclusive development and equitable and efficient spatial planning for the three spheres of government. It also aims to provide a framework that will monitor, coordinate and review spatial planning and land use management by providing a standardised framework regarding their policies, principles, norms and standards.
As outlined in the Act “many South Africans continue to live and work in places defined and influenced by past spatial planning and land use laws and practices which were based on racial inequality, segregation and unsustainable settlement patterns. Moreover the continued existence and operation of multiple laws at national and provincial spheres of government in addition to the laws applicable in the previous homelands and self-governing territories have created fragmentation, duplication and unfair discrimination.” The Act is therefore objected to rectify the past spatial disintegration and regulatory imbalances by ensuring consistency in the procedures and decision making process regarding land use and development applications.
Section 2(2) of SPLUMA stipulates that “except as provided for in the Act, no legislation not repealed by this Act may prescribe an alternative or parallel mechanism, measure, institution or system on spatial planning, land use management and land development in a manner inconsistent with the provisions of this Act”. This therefore means that SPLUMA will repeal all legislation that regulated spatial planning, land development and land use management prior to its proclamation.
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Section 7(a)(ii) states that “all spatial development frameworks and policies at all spheres of government must address the inclusion of persons and areas that are previously excluded, with an emphasis on informal settlements, former homeland areas and areas characterised by widespread poverty and deprivation.” Section 7(a)(iv) stipulates that “land use management systems must include all areas of a municipality and specifically include provisions that are flexible and appropriate for the management of disadvantaged areas, informal areas and former homeland areas.”. Section 7(a)(v) indicates that land development procedures must include provisions that accommodate access to secure tenure and the incremental upgrading of informal areas.
Section 7(b)(i) stipulates that spatial planning and land use management systems must promote land development that is within its fiscal, institutional and administrative means of the Republic, and furthermore (ii) that protection of prime and unique agricultural land should receive special consideration.
Key Implications for Umdoni Local Municipality
The Umdoni Municipality LED should take into consideration the of previous and current land claims, and ensure consistency in the procedures and decision making as laid out by SPLUMA. LED projects and developments should then be supported through the Municipal Planning Tribunals. It should therefore include all ten wards of Umdoni as well as all persons in these areas in order to uplift the economy and make provision for the alleviation of poverty and deprivation. The LED should also be flexible enough to allow for various changes, such as physical, economical and cross border political stability. LED projects identified for Umdoni Municipality by the LED Strategy should embark on eradicating poverty, promoting sustainable growth and developing and facilitating the strengths of the area.
2.1.7 Industrial Policy Action Plan (2015/16 - 2017/18) The National Industrial Policy Framework (NIPF) articulates South Africa's overarching approach to industrial development, providing a strong basis for the policy certainty that must underpin it. The Industrial Policy Action Plan (IPAP) 2015/16 - 2017/18 - the seventh iteration of the Industrial Policy Action Plan - further reinforces the policy certainty that has been crafted over the past seven years. It also provides a working outline of the National Programme of Action that has been put in place to implement government’s industrial policy objectives. Building on previous IPAP iterations, the main transversal focus areas of IPAP 2015/16 – 2017/18 are as follows:
Public Procurement Industrial Financing Developmental Trade Policy Competition Policy Innovation and Technology Special Economic Zones (SEZs) and Industrial Development Regional Integration
Key Implications for Umdoni Local Municipality
Development in the Umdoni Local Municipality should be geared towards the diversification of the local economy to better absorb economic shocks and provide more job creation to sustain the demand
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Umdoni LED Strategy Review for jobs in the area. Skills development and transfer is of vital importance, and job creation should be one of the key focus areas in the municipality. Labour-based production methods should receive preference, as this will ensure employment in the local economy and will result in the upliftment of the local community.
2.1.8 New Partnership for Africa’s Development (founded in 2001) The New Partnership for Africa’s Development (NEPAD) is a vision and strategic framework for Africa’s Renewal. The NEPAD strategic framework document arises from a mandate given to the five initiating Heads of State (Algeria, Egypt, Nigeria, Senegal, and South Africa) by the Organization of African Unity (OAU) to develop an integrated socio-economic development framework for Africa. NEPAD is designed to address the current challenges facing the African continent. Issues such as the escalating poverty levels, underdevelopment and the continued marginalisation of Africa needed a new radical intervention, spearheaded by African leaders, to develop a new vision that would guarantee Africa’s Renewal.
The primary objectives of NEPAD are as follows: To eradicate poverty; To place African countries, both individually and collectively, on a path of sustainable growth and development; To halt the marginalisation of Africa in the globalisation process and enhance its full beneficial integration into the global economy; and To accelerated the empowerment of women.
NEPAD manages a number of programmes and projects in six theme areas, namely: Agriculture and Food Security Climate Change and Natural Resource Management Regional Integration and Infrastructure Human Development Economic and Corporate Governance Cross-cutting issues, including Gender, Capacity Development and ICT
Key Implications for Umdoni Local Municipality
One of Umdoni Municipality’s key challenges are the influx of population and the high poverty in the area, this strategy can therefore be beneficial through making use of the priority sectors to relieve the poverty. The LED Strategy does currently contain and should continue to have practical strategies to collaborate with the various municipalities, and improve on the stronger sectors in the municipality. The Umdoni Municipality LED Strategy should also take into consideration the lessons learnt from the successes and failures that have been applied in the previous LED and these should be adapted to face the current socio-economic and economic challenges. LED projects identified for Umdoni Municipality by the LED Strategy should embark on eradicating poverty, promoting sustainable growth and developing and facilitating the empowerment of women and the poor. The LED Strategy should also promote agriculture, human development and infrastructure development.
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2.1.9 Medium Term Strategic Framework (2014 to 2019) The MTSF highlights Government’s support for a competitive economy and accelerated growth, creation of decent work opportunities and encouragement of investment. This is the first MTSF to follow the adoption of the NDP in September 2012. The MTSF provides: A translation of the electoral mandate; Priorities for the next 5 years; Focus on economic investment and growth; and An expansionary fiscal outlook.
The electoral mandate for 2014-2019 focuses on the following priorities: Radical economic transformation, rapid economic growth and job creation Rural development, land and agrarian reform and food security Ensuring access to adequate human settlements and quality basic services Improving the quality of and expanding access to education and training Ensuring quality health care and social security for all citizens Fighting corruption and crime Contributing to a better Africa and a better world Social cohesion and nation building.
For this MTSF period has two over-arching strategic themes, namely radical economic transformation and improving service delivery, under which the fourteen key outcomes (as outlined in Section 2.1.2) with activities and targets have been selected.
Key implications for Umdoni Municipality
The LED strategy’s review for Umdoni should strive to improve on crosscutting issues that will drive the economy to assist in the achieving of targets that are set out by die MTSF. Issues such as technological innovations, access to credit and infrastructure, human resources development, etc. need to be the centrepiece of success in mitigating economic backlogs in Umdoni Municipality. The thrusts should strive to broaden economic participation of local labour and therefore contribute to reducing poverty and inequality.
2.1.10 Comprehensive Rural Development Programme (2009) The CRDP is a strategic priority of the National Government’s Medium Term Strategic Framework (MTSF) and takes a proactive participatory community-based planning approach towards rural development compared to the ‘traditional’ interventionist approach. The ultimate aim of the CRDP is to be an effective response against poverty and food insecurity, improve the standards of living and address skewed patterns of distribution and ownership of wealth and assets through: Maximising the use and management of natural resources Rectify past injustices through rights-based interventions
This will set the stage for the creation of vibrant, equitable and sustainable rural communities. The CRDP therefore aims to facilitate integrated development and social cohesion through participatory approaches in partnership with all sectors of society by implementing a three-point strategy. This strategy is based on the following: a coordinated and integrated broad-based agrarian transformation;
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strategically increasing rural development; and an improved land reform programme
This strategy entails a Rural Employment Creation and Skills Training Model aimed at creating ‘development specialists’ at ward level. These specialists will train and mentor a selection of unemployed community members who will be employed on a two-year basis on the Extended Public Works Programme (EPWP) principles. The CRDP further emphasise the involvement of various stakeholders and role-players, as well as the importance of clear-cut roles and responsibilities of the various stakeholders, as the CRDP involves all aspects of rural life which cannot be addressed by the alone by the National Department of Rural Development and Land Reform.
Key implications for the Umdoni Local Municipality:
The LED strategy for Umdoni has to align with the principles of the CRDP and strive towards creating a vibrant, equitable and sustainable community through agrarian transformation, skills development and job creation. The LED strategy should, just like the CRDP, involve all stakeholders and clearly define roles and responsibilities to ensure sustained economic growth and community wellbeing. The LED should further take from the CRDP in that focus should be placed on agricultural development, improving food security, creating business opportunities, and expanding on opportunities for women, youth, people with disabilities and older persons who stay in rural areas.
2.1.11 Restitution of Land Rights Amendment Act, Act 15 of 2014 The new Restitution of Land Rights Amendment Act was signed into law on the 30th of June 2014. The Act now provides for the re-opening of the lodgement of land claims by people who missed the 31 December 1998 deadline to lodge land claims. The lodgement of land claims shall take place over a period of five years, ending on 30 June 2019.
Key implications for the Umdoni Local Municipality:
With the recently passed Restitution of Land Rights Amendment Act, a key challenge will be to develop a sound understanding of the sociology of emerging agriculture to determine how to better support sustainable land reform initiatives.
2.1.12 Municipal Systems Act (MSA) (No. 32 of 2000) The Municipal Systems Act sets out a framework to guide a municipality’s performance through the development of a performance management system. Performance management seeks to ensure that local government strategy and policy deliver concrete results. It measures the outcomes, behaviours and activities of an organisation, its departments and staff, which contribute to the achievement of the strategic vision of the organisation. It is a multi-level process comprising council-wide, departmental and individual performance. The aim of the Act is, amongst other factors, to: Provide for the core principles, mechanisms and processes that are necessary to enable municipalities to move progressively towards the social and economic upliftment of local communities. Provide for community participation. Establish a simple and enabling framework for the core processes of planning, performance management, resource mobilisation and organisational change which underpin the notion of developmental local government.
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Provide a framework for local public administration and human resource development. Empower the poor and ensure that municipalities put in place service tariffs and credit control policies that take their needs into account by providing a framework for the provision of services, service delivery agreements and municipal service districts.
According to section 4(2), the council of a municipality, within the municipality’s financial and administrative capacity and having regard to practical considerations, has the duty to: Exercise the municipality’s executive and legislative authority and use the resources of the municipality in the best interests of the local community. Encourage the involvement of the local community. Strive to ensure that municipal services are provided to the local community in a financially and environmentally sustainable manner. Promote and undertake development in the municipality. Promote a safe and healthy environment in the municipality.
Key Implications for Umdoni Local Municipality
According to the Municipal Systems Act, all local municipalities are legally bound to fulfil its duties and produce an IDP document and accordingly a LED strategy to encourage development in their community. The Development objectives that has been laid out in the current IDP are roads, sustainable housing, Local Economic Development and job creation, institutional development, tourism development and Broader Economic Development. In addition to this, the Act outlines the duty of the Umdoni Local Municipality to provide services to its area of jurisdiction. The Umdoni Local Municipality must furthermore operate in a manner that satisfies the conditions set out by the Act.
2.1.13 National Framework for Local Economic Development (2006-2011) The National Framework for Local Economic Development (NFLED) aims to serve as a guide that seeks to ensure an understanding of LED, and has put forward a strategic implementation approach that municipalities, provinces, national government, state-owned enterprises and communities can follow to improve local economic development. The NFLED seeks to mobilise local people and local resources in an effort to fight poverty. This framework also seeks to guide the implementation of the LED Key Performance Indicator of the 5-year Local Government Strategic Agenda. The focus of the NFLED is upon: Improving competitiveness of the 52 District and Metropolitan municipal regions in South Africa by providing an approach to developing local economies with the participation of all relevant stakeholders. Rendering economic growth compatible with social equity and safeguarding the environment. What the state can do to support and reward citizens who organise locally and operate in local level partnerships to engage in greater economic activity, spreading economic activity in an even manner. How the state can be a platform to facilitate the inclusion of all to participate in the economy.
Flowing from the evolving practice of LED and the South African national context, there are ten principles identified that guide this framework. These are: Through a developmental approach, Government has a decisive and unapologetic role to play in shaping the economic destiny of our country.
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Creating an environment in which the overall economic and social conditions of the locality are conducive to the creation of employment opportunities is the responsibility of Local Government. LED is an outcome of actions and interventions resulting from local good governance and the constant improvement and integration of national priorities and programs in local spaces. Inward investment from the state or private sector will only be effective where the potential and competitive advantages of each area are known and exploited. Promoting robust and inclusive local economies requires the concerted, coordinated action of all spheres and sectors of government centred on the application and localisation of the principles espoused in the NSDP. Locally owned appropriate solutions and strategies must emerge to support national frameworks in both rural and urban local spaces and should promote sustainable development and sustainable human settlements. South Africa competes in a global and increasingly integrated world economy whose threats must be minimised and whose opportunities must be exploited. Private companies, including social enterprises and cooperatives, form the heart of the economy and have a crucial role to play as partnerships with public and community role players that will ultimately stimulate robust and inclusive local economies. People are the single greatest resource and including all citizens in development and increasing their skills leads to increased opportunities for stimulating local economies. Local initiative, energy, creativity, assertive leadership and skills will ultimately unlock the latent potential in local economies and will shape local spaces.
Objectives of the framework: To shift towards a more strategic approach to the development of local economies and overcome challenges and failures in respect of instances where municipalities themselves try to manage litany of non-viable projects or start-ups. To support local economies in realising their optimal potentials and making local communities active participants in the economy of the country. To elevate the importance and centrality of effectively functioning local economies in growing the national economy. To wage the national fight against poverty more effectively through local level debates, strategies and actions. To improve community access to economic initiatives, support programmes and information. To improve the coordination of economic development planning and implementation across government and between government and non-governmental actors. To build greater awareness about the importance and role of localities and regions which globally are playing an increasingly significant role as points of investment facilitated by supportive national policies.
Key Implications for Umdoni Local Municipality
According to the NFLED, the Umdoni Local Municipality should provide leadership and direction in LED policy-making; administer policy, programmes and projects and be the main initiator of economic
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Umdoni LED Strategy Review development programmes through public spending, regulatory powers and their promotion of industrial- and small business development, social enterprises and co-operatives.
2.1.14 The Integrated Growth and Development Policy (2012) and the Agricultural Policy Action Plan (2014-2019) Agriculture, Forestry and Fisheries (AFF) are widely recognised as sectors with significant job creation potential and with strategic links to beneficiation opportunities. These sectors however faces numerous challenges. A detailed analysis of the various challenges is given in the Integrated Growth and Development Policy (IGDP). Based on this analysis, the IGDP also outlines appropriate responses. The Agricultural Policy Action Plan (APAP) seeks to translate the high-level responses offered in the IGDP, into tangible, concrete steps. However, this first iteration of APAP is not offered as a fully comprehensive plan; rather, based on the model of the Industrial Policy Action Plan (‘IPAP’), it identifies an ambitious but manageable number of focused actions, in anticipation of future APAP iterations that will take the process further. APAP is planned over a five-year period and will be updated on an annual basis. Aligning itself with the New Growth Path (NGP), the National Development Plan (NDP) and Industrial Policy Action Plan (IPAP), APAP seeks to assist in the achievement of Outcome 4, Decent Employment through Inclusive Growth, and that of Outcome 7, Comprehensive Rural Development and Food Security.
The IGDP identifies four broad sector goals which translate into a comprehensive, abiding intervention framework, which will be supported through iterations of APAP via short- and medium-term interventions targeting specific value chains (‘sectoral interventions’) or transversal challenges (‘transversal interventions’). The four broad sector goals are: Equitable growth and competitiveness; Equity and transformation; Environmental sustainability; and Governance.
The APAP recognises that different subsectors operate according to different dynamics and face district challenges and therefore, a need exists to be selective as to which subsectors or value chains to focus upon in the short and medium term, while also recognising that agricultural commodities in particular are often inter-related, in which case it is more helpful to speak of ‘integrated value chains’. The first APAP therefore focuses on a discrete number of value chains identified as strategic in meeting the objectives of the NGP, NDP and IPAP, using the general selection criteria such as Contribution to food security; Job Creation; Value of production; Growth potential; and Potential contribution to trade balance (including via export expansion and import substitution).
Eleven sector interventions were identified, and specific key milestones have been developed for each of them. The eleven sector interventions or Key Action Programmes are: Poultry/Soybeans/Maize Integrated Value Chain Red Meat Value Chain Dairy Sugar Cane Wheat Value Chain Horticulture Biofuels Value Chain Forestry Small-scale fisheries Aquaculture Competitiveness Improvement Programme (ACIP)
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Improved compliance enforcement in the fisheries sector
APAP proposes a number of transversal interventions that complement but also go beyond the specific sectoral interventions identified above. Altogether seven transversal interventions – or ‘Key Action Programmes’ (‘KAPs’) – are included, which collectively seek to strengthen the agriculture, forestry and fisheries sectors in diverse ways, which includes: Fetsa Tlala Integrated Food Production Intervention Research and Innovation Promoting Climate-Smart Agriculture (CSA) Trade, Agri-business development and support Strategic Infrastructure Project (SIP 11); Agro-logistics and Rural infrastructure Bio-security Land Reform
Key Implications for Umdoni Local Municipality
The agricultural sector of the Umdoni Local Municipality, as a key economic sector within the local municipality, should be geared towards creating employment opportunities, improving food security, enhancing economic benefits and creating a knowledgeable and skilled labour force. It is therefore important to align with the interventions identified with APAP, especially in regards to sugar cane, red meat, horticulture and small-scale fisheries interventions.
2.2 Provincial Policies and Strategies
The Provincial legislation and policies that has been considered and are discussed herein includes, but are not limited to: Provincial Growth and Development Strategy, 2011- 2030 Provincial Growth and Development Plan, 2012-2030 Provincial Spatial Development Framework, 2011 KwaZulu-Natal Agricultural Strategic Plan, 2010-2015 Strategy for Agrarian Transformation in KwaZulu-Natal, 2015 KwaZulu-Natal Education Strategic Plan, 2010-2015 White Paper on the Development and Promotion of Tourism in KwaZulu-Natal, 2008 KwaZulu-Natal Tourism Master Plan, 2013- 2018 Provincial Spatial Economic Development Strategy, 2011 KwaZulu-Natal Small Enterprise Development Strategy
2.2.1. Provincial Growth and Development Strategy, 2011- 2030 The Provincial Growth and Development Strategy (PGDS) is aligned within the current provincial, national as well as global policy frameworks, aimed at bettering the lives of its citizens through sustainable practices. The strategy is aimed at mobilising as well as synchronising strategic plans and investment priorities in all spheres of government, state owned entities, business, higher education institutions, labour, civil society and all other social partners. The purpose of the PGDS is to be the primary growth and development strategy for KwaZulu-Natal to 2030. It sets a long-term (20 year +) vision and sets out the strategic goals and objectives for the Province (refer to Figure 2.1).
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FIGURE 2.1: STRATEGIC GOALS AND OBJECTIVES FOR KZN UNTIL THE YEAR 2030
Source: KZN PGDS, 2011-2030
The PGDS is meant to serve as the overarching strategic framework for development – it is not an inventory but focusses on strategic areas. The PGDS is meant to guide the activities and resource allocation of all levels of spheres of government as well as provide suggestions to private sector and non-government agencies that can contribute to development in the Province. The main challenge is to devise people-centred strategies to advance a sustainable and transformative agenda which also curb historically derived social and spatial disparities.
According to the PGDS, the various challenges effecting the growth of KwaZulu-Natal Province includes the current unsustainable settlement practices, capacity and skill constraints as well as inefficiencies in the governance and administrative landscape, non performing economic development areas, dispersed rural settlements, high levels of adult illiteracy, unemployment, gender inequality and environmental degradation. In order to alleviate and eradicate these issues, it is pointed out that consistent intervention and investment is required.
Key implications for the Umdoni Local Municipality
The presentation of the PDGS presents Umdoni as an area which is mainly comprised of economic support and social investment areas. The implementation of these objectives and strategic goals should seek to achieve and stimulate economic growth and social development. The strategy should not only aim at increasing skills and education levels, but to also increase productivity, alleviate poverty, stimulate job creation, promote good health and achieve environmental sustainability.
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2.2.2. Provincial Growth and Development Plan, 2012- 2030 After a broad consultation process, the PGDS was adopted by KZN Cabinet in August 2011, and Cabinet mandated the KZN PPC to prepare an implementation plan in the form of a Provincial Growth and Development Plan (PGDP). Whereas the PGDS sets the 2030 Vision for the Province as well as the Strategic Goals and objectives that will drive the Strategy, the PGDP sets out to describe the desired outcome in respect of each Strategic Objective. The PGDP is in essence a framework for monitoring the achievements of the strategy.
The PGDP aims at describing the desired outcomes for 2030, agree on a set of indicators that will be used to apply and measure the progress made, and create strategic interventions required, along with the catalytic projects to support these interventions. The monitoring, evaluation, and reporting and review framework also form part of the plan to measure the progress made towards the vision, and targets that need to be achieved by 2015, 2020, 2025 and 2030.
Large scale strategic interventions or ‘catalytic projects’ have been identified. These are projects that will receive priority attention and support, based on the potential and scale of these projects to fast track achieving PGDS Goals and Objectives. The PGDP identified 35 public sector and 45 private sector catalytic projects within the province.
Key implications for the Umdoni Local Municipality:
The implementation of these strategic goals and their relevant interventions will stimulate economic growth to ensure growth in social and human development. The attainment of Poverty eradication and social welfare objective will have a positive effect on Umdoni as there are high levels of poverty in the municipality. The enhancing of industrial development will also be a key investment for Umdoni, as the development will provide the key production sectors, such as manufacturing and tourism to lead to government-led job creation programmes, develop through an expanded knowledge base, and will therefore enhance the productivity of the economy.
2.2.3 Provincial Spatial Development Framework, 2011 The implementation of the Provincial Growth and Development Strategy as well as the Provincial Growth Development Plan, will result in the need for strategic and targeted interventions within specific geographical locations. The Provincial SDF therefore provides insight to these locations through an analysis of the strengths, weaknesses, opportunities and threats of the current situation in the province.
The strategies, programmes and plans, laid out in the PGDS and PGDP are based on the strengthening of current strengths, they assist to eliminate weaknesses, explore opportunities and mitigate threats within the social, economic and environmental realms. The SDF provides spatial principles as a departure point to guide the approach of development for the province, the information then leads to spatial variables and then the priority intervention areas.
The envisaged spatial vision for KwaZulu-Natal as contained within the SDF can be summarised as follow: “Optimal and responsible utilisation of human and environmental resources, building on addressing need and maximising opportunities toward greater spatial equity and sustainability in development”.
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The following nine spatial principles underscores the general spatial intentions of the PGDS and serves as provincial guiding principles which should ideally be pursued within all levels of spatial planning at district and local level in alignment with the Provincial SDF: Principle of Environmental Planning Principle of Economic Potential Principle of Sustainable Communities Principle of Local Self-Sufficiency Principle of Spatial Concentration Principle of Sustainable Rural Livelihoods Principle of Balanced Development Principle of Accessibility Principle of Co-ordinated Implementation
The spatial variables consist of environmental sensitivity, social needs, economic potential and urban accessibility. The spatial variables were considered collectively and were further ranked in key elements and their importance which was then used to formulate a composite Provincial SDF.
The SDF ensures that synergies exist between various government departments as well as the private sector in order to exploit their full potential to provide the correct investments from government to create the maximum impact possible.
Key implications for the Umdoni Local Municipality:
Ugu District Municipality has been identified for 17 major projects which include: Resort Corridor Development, Umzimkulu Dam, Nature Based Tourism, Eco, Battlefields and Cultural Tourism Heritage Tourism Routes, Agro-processing incorporating bio-fuels, Small Town Regeneration and Regional Airports, two new tertiary institutions, Rural Service Centres, ECD Centre Development, Centre’s for the Disabled and Senior Citizens, Substance Abuse Rehabilitation Centres, Provincial Art Centre and Three Rural Art Centres, Cultural Villages, School Greening and Rural Waste Management Units.
Pennington in Umdoni Local Municipality is seen as a Priority Intervention area 1 as a result of the density analysis, and Scottburgh as a tertiary node who mainly contributes to their sub-regional and local economies whilst also acting as a vital service centre to its communities. Therefore some of these major projects might be developed in Umdoni and will increase the economy whilst providing social upliftment for its residents.
2.2.4 KwaZulu-Natal Agricultural Strategic Plan (2010-2015) The KwaZulu-Natal Department of Agriculture, Environmental Affairs and Rural Development provide a five year strategic plan which is based on the Departments strategic goals and objectives which are aligned with provincial and national priority areas. The Agricultural vision for the KwaZulu-Natal Province is: “To be the champion for optimal agricultural land use, sustainable food security, sound environmental management and comprehensive, integrated rural development.”
The strategic goals and objectives identified with the Agricultural Strategic Plan for KZN are summarised in Table 2.1 below.
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TABLE 2.1: SUMMARY OF THE AGRICULTURAL STRATEGIC PLAN (2010-2015) Strategic Goal Strategic Objectives Ensure Environmentally sustainable development Sustainable Natural Mitigate impact and promote a safe, healthy environment Resource Management Manage Invasive Alien Species To conserve indigenous biodiversity of KwaZulu-Natal Provide technical support, extension, specialist advisory services and progressive training and mentorship to households and farmers Provide and develop support systems and infrastructure for Rural Development, sustainable land use, agricultural development and Agrarian Reform and comprehensive rural development Social and Economic Prevention, control and/or eradication of animal diseases Infrastructure Creating and facilitating improved access to stable and diversified Development food supply for improved nutritional wellbeing and improvement in household income Undertake appropriate adaptive agricultural research, technology development and transfer to advance agriculture Creation of access to local and international markets for local Creation of decent work agricultural produce opportunities and Development commercial farming entrepreneurs and agri- ensuring economic business growth and infrastructure Enhance linkages with international entities, partners, stakeholder development and between sphere of government Provide effective and efficient corporate and strategic support Integrated and services to MEC, HOD and Department Transformed Service Provide effective, efficient and transparent financial and risk Delivery management systems Provide effective Human Resource capacity Source: KZN Agricultural Strategic Plan, 2010-2015
Key implication for Umdoni Municipality
As a relatively agricultural strong municipality, Umdoni should conserve the current agricultural land and focus on cultivating potential agricultural land in order to foster positive economic growth and provide food security. Possible programmes including agro-processing or agro-tourism can be incorporated to further grow the local economy. The LED Strategy for Umdoni Municipality should support and encourage existing agricultural activities, farming and small scale, garden farming for each resident in order to contribute to food security.
2.2.5 Strategy for Agrarian Transformation in KwaZulu-Natal (2015) The KwaZulu-Natal Provincial Department of Agriculture and Rural Development (DARD) developed a strategy document with a detailed approach for the transformation of the agricultural sector within the province. It proposed that an agrarian transformation strategy, support by and integrated approach to rural development, will in turn contribute towards addressing food security, job creation and the growth of the provincial economy. The Vision of the Department is to create “a united, sustainable and vibrant agricultural sector with thriving rural communities in balance with nature”.
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The Province of KwaZulu-Natal is strategically located to use agriculture and agro-processing as a catalyst for the growth and prosperity of the province. The Province is well endowed with natural resources and this diversity enables wide variations in the type of farming and levels of agricultural production. However, there needs to be a radical improvement of the mandatory services that are provided by DARD, together with innovative delivery models. The Department aims to: Encourage a shift towards more labour intensive agricultural subsector Encourage fuller use of land within commercial farming areas, especially via conservation agriculture/climate smart agriculture and land redistribution Strengthen the smaller stratum of large scale commercial farmers, which account for a disproportionate share of farm jobs Promote a better balance between large scale commercial farms and smallholder farms via land reform and development within the former KwaZulu Administration areas.
DARD has, through its Bio-resource Units (BRU) programme, identified a range of commodities that will be suitable for production within the Ugu District Municipality. These include: Crops: sugarcane, timber (gum), macadamias, mangoes, litchis, chillies, maize, amadumbe, bananas, coffee and tea Livestock: crocodiles, beef and goats
The Agrarian Transformation strategy employs various programmes: Land Reform Support Programme Inclusive Agri-village Programme River Valley Catalytic Programme Inclusive Agricultural Communal Estate
Key implication for Umdoni Municipality
The Agricultural sector, as previously mentioned, plays a very important role within the Umdoni Local Municipality. It is thus important that the LED strategy for Umdoni Local Municipality aligns to the Agrarian Transformation Strategy and its various programmes (all of which are applicable to the Local Municipal area) and action plans for the Province, and more specifically the area.
2.2.6 KwaZulu-Natal Education Strategic Plan (2010-2015) The KwaZulu-Natal Department of Education provides a five year strategic plan which is based on the Departments priority areas. The Department of Education’s vision for the KwaZulu-Natal Province is: “A well-educated, skilled and highly developed citizenry”.
The Department aligns its goals to various policy documents including provincial priorities. The inclusion of provincial policies is done to ensure sector collaboration for the implementation of government programmes, as it is important in order to accelerate service delivery. The goals and objectives selected ensure that all components of Department focus on the overall goal of providing quality education for all.
The Province developed Strategic Goals and Strategic Objectives to ensure integration and address complexity. Although there are specific strategic objectives, specific to programmes, programme plans will not be confined to the use of one objective since others cut across. The six strategic goals and nineteen strategic objectives, encapsulate the Department’s contribution towards the achievement
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Umdoni LED Strategy Review of national, provincial goals and all other international mandates. These strategic goals and objectives are presented in Table 2.2 below.
TABLE 2.2: SUMMARY OF THE EDUCATION STRATEGIC PLAN (2010-2015) Strategic Goal Strategic Objective To increase access and provide resources to education in public ordinary schools. Broaden access to To provide infrastructure, financial, human and technological resources. education and To implement teaching, management and governance support provide resources programmes at all schools. To provide diverse curricula and skills oriented programmes across the system. To implement quality assurance measures, assessment policies and Improve schools systems to monitor success of learners. functionality and To develop and enhance the professional quality and academic educational performance of managers and educators in all institutions. outcomes at all To administer an effective and efficient examination and assessment levels services. Develop human To develop the skills of the Departments workforce at all levels. resource, To ensure equitable distribution of human resource. organisational capacity and enhance skills To implement an integrated programme in dealing with the impact of Develop schools Communicable diseases, HIV & AIDS in the workplace and in all into centres of institutions community focus, To provide support to mitigate the challenges of unemployment, and care and support Child-headed Households. To implement administrative management systems and accounting Ensure good procedures in ensuring in ensuring maximum support to curriculum corporate delivery. governance, To implement Batho Pele in all institutions management and To deal decisively with issues of fraud, corruption and maladministration. an efficient To implement Education Management Systems to improve information administration management. To promote youth development, arts, culture and sports in all institutions. To promote To preserve heritage through utilisation of National symbols in national identity encouraging unity and patriotism amongst the people of KZN. and social cohesion To develop strong partnerships with all education stakeholders. To implement nation building programmes and projects. Source: KZN Education Strategic Plan, 2010-2015
Key implication for Umdoni Municipality
Umdoni should focus on the strategic goals and objectives as has been set out by the Education sector plan for KwaZulu-Natal. Creating safe and literate communities and important priority for the LED Strategy as it will allow for sustainable growth, improved service to the tourism sector as well as an increase in the quality of life for Umdoni Citizens.
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2.2.7 White Paper on the Development and Promotion of Tourism in KwaZulu- Natal (2008) The White Paper was developed as a result of the need for a provincial strategic policy that could provide foundation and competitive strategies for KwaZulu-Natal linked to existing national and provincial strategies. The White Paper also took into consideration all the tourism related legislation, policies and strategies on a National and Provincial level, in order to ensure a co-ordinated approach that locates tourism in KwaZulu-Natal. The document sets out the strategic Policy issues any competitive destination strives for. The vision for tourism is to: “To position the Province of KwaZulu- Natal as Africa’s leading Eco-Cultural tourism destination, nationally and internationally.”
The White Paper sets out transformation objectives and recommendations in order to achieve these goals. It proposes the province follows a new approach, one which is experimental and beyond boundaries to market destinations. The paper recognises that many partners are requires to achieve the tourism growth objectives and therefore sets out the roles and responsibilities for partners in tourism.
This paper also highlights that one of roles of the Provincial Government is to develop a Master Plan for tourism. Along with the development of goals and principles it includes the importance of making use of a framework to ensure performance and compliance.
Key implications for the Umdoni Local Municipality
The tourism sector should make use of the guidelines set out to grow a sustainable and attractive tourism sector. The Umdoni tourism department should have multi partners to achieve the tourism objectives, and should make use of new approaches to market their destinations. These departments should collaborate with district and provincial level departments to ensure that funding is secured and that the highest level of development is achieved for Umdoni in order to further improve the touristic strength that this municipality has.
2.2.8. KwaZulu-Natal Tourism Master Plan The vision set out by the KwaZulu-Natal Tourism Master Plan (KZNTMP) is that by 2030 the province will be globally renowned as Africa’s top beach destination with a unique blend of wildlife, scenic and heritage experiences for all visitors. The 2030 vision for tourism, further outlines specific key actions for the achievement of the set objectives, which includes increasing the tourism GDP levels, ensuring growth in levels of foreign and domestic visitor arrivals to the province and increasing levels of tourism employment in the province.
The plan sets out the key strategic objectives and how to achieve these objectives for the province. The development of the KZNTMP has been strategically accepted and coordinated through the involvement and participation of various industry stakeholders. The plan provides strategic guide for the future direction of development, growth, management and monitoring of tourism in the province.
The strategic objectives for the KZNTMP are: Increase the tourism GDP levels Grow the levels of all foreign visitor arrivals to the province Grow the levels of domestic visitor arrivals to the problems Increase tourism employment in the province
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Improve the geographic spread of tourism within the province Improve overall visitor service and satisfaction levels throughout the province in all areas in which a visitor is served Achieve significant transformation in the sector Grow the events and meetings incentives and exhibitions sector as a key and important market area for the province Improve other niche tourism experiences for which the province has potential and develop these markets
The Master Plan is based on four main strategic clusters, namely: Cluster One: Policy, Strategy, Governance, Research & Knowledge Management Monitoring & Evaluation Cluster Two: Planning and Product Development Cluster Three: People in Tourism Cluster Four: Marketing
The aim of these clusters is to provide policy direction for tourism within the province; to prioritise and focus product planning and development to grow visitor numbers; to promote tourism awareness and understanding and also to ensure tourism growth and development in order to grow visitor numbers with a distinct emphasis on domestic tourism.
The strategy comprises of four sections of the development phase. The first development phase was between 2012-2014, the current phase 2014-2019, followed by 2019-2024 and 2024-2030. The current phase entails the development of a cable car, the development of the first new beach tourism node with a recognised international branded beach resort on it, the finalising of the Zulu Heritage Route and iconic visitor attraction, completion of Durban Cruise passenger terminal, the implementation of a tourism public transport system, as well as the development of two N2 gateways to KZN. These are among many others objectives for the current phase of 2014-2019.
Risk factors had also been identified by the Master plan to which this plan can be susceptible, although with the critical importance of all stakeholders working together to ensure an integrated and coordinated implementation of the strategy, the team should be able to deal effectively with these risk factors should they arise, and the plan should continue to maintain proper platforms for stakeholder engagements and further development.
Key implications for the Umdoni Local Municipality
Major developments are planned for the growth of the Durban tourism environment, and with Umdoni Local Municipality, just being a short drive from Durban many of the spinoffs from the development could be favourable to Umdoni if they are managed correctly. There are also a few projects and thrusts which do not yet have locations. Here Umdoni should communicate with the KZN tourism board and suggest that some of these are implemented in Umdoni. A thrust such as the development of a beach side resort can lead to numerous spinoffs for the Local Municipality.
2.2.9. Provincial Spatial Economic Development Strategy (2011) The PSEDS, this is currently available, is in the process of being revised by the Department of Economic Development and Tourism (DEDT). The sectors which will drive economic growth of the province
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Umdoni LED Strategy Review include the agricultural, industry, tourism and the service sector. The logistics and transport sector (including rail) in the services sector are also important subsectors underpinning growth in all four sectors. The Strategy is aimed at the identified targets of hunger within the various districts, and to respond to the hunger areas with accurate responses of agricultural growth and food security.
Improvement of the quality of life for the residents of the province will be achieved through the various sectoral strategies and programmes. These are set out address the developmental challenges through programme specific interventions. There are several spatial considerations that will have bearing on this project.
One of the sectoral strategies that the strategy aims at, is exploiting the Province’s enormous agricultural potential and comparative advantages to its full extent in order to stimulate the growth economic development which then creates increased basis of income, food security, employment and assists the eradication of poverty in rural areas. This will be done by focussing on the establishment and support of agricultural cooperatives and agri-processing plants. Support of SMMEs as they won’t be able to become sustainable or overcome challenges unless they receive intensive training in business skills, have access to affordable financing on an ongoing basis, and most importantly, have access to markets.
Key implications for the Umdoni Local Municipality
Areas of potential exist in manufacturing, agriculture and mining; research and development, retail and private sectors, tourism and public service and administration sectors and therefore Umdoni Local Municipality’s LED should include interventions aligned with these sectors. Such as the promotion of SMMEs and Cooperatives in the local economy, ensuring that local communities are involved at all levels of planning, linkages of development to regional initiatives and supporting the local environment for LED in the municipal area.
2.2.10. KwaZulu-Natal Small Enterprise Development Strategy The Small Enterprise Development Strategy aims to provide a provincial framework that assists in the coordination, orientation and guidance to all small enterprise development programmes and related activities. This strategy allows all stakeholders to align their programmes and actions. The alignment of these programmes and actions therefore provides support and adds value to the development of emerging small enterprises.
The implementation of the comprehensive and integrated programmes of development and growth of small enterprises in the KwaZulu- Natal as this will achieve the development of entrepreneurship skills, facilitation of easy access to local and international markets, facilitation of access to finance, provision of relevant and effective training to small enterprise operators, as well as the facilitation a mentoring and incubation programme for all small enterprises in the province.
Key implications for the Umdoni Local Municipality
The Umdoni Local Municipality LED’s review should focus on the development and support of Small Enterprises, as well as equipping the owners with the correct skills to allow for a sustainable business to be developed. This should be done through ensuring that entrepreneurial skills are developed, providing ass assistance and support to SMMEs in terms of access to finance and markets as well as training and skills development of small enterprises.
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2.3 District Policies and Strategies
The following policies and legislation for the Ugu District have been consulted to ensure alignment with the LED strategy for the Umdoni Local Municipality: Growth and Development Strategy (GDS) (2012) Spatial Development Framework Review( 2011) Integrated Development Plan (2013 – 2017) Local Economic Development Strategy (LED) (2007) Economic Planning Programme (2010) Manufacturing Sector Strategy (2007) Trade Sector Strategy (2007) South Coast Tourism Strategy (2013-2017)
2.3.1. Ugu District Growth and Development Strategy (2012) The Ugu Growth and Development Strategy (GDS) commits all stakeholders to achieving a shared vision that “by 2030 the district will be a leading tourism destination and agricultural and manufacturing hub where jobs are created and everyone benefits equally from socio-economic opportunities and services”. Figure 2.2 presents a summary of the District Growth and Development Strategy, outlining the vision, emerging vision elements, as well as the six key drivers identified to achieve the vision.
FIGURE 2.2: SUMMARY OF THE DISTRICT GDS
Source: Ugu District GDS, 2012
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The GDS identifies the area between Scottburgh and Hibberdene as one of three key activity zones for the district. This coastal corridor contains residential land uses, with some retail and service activity predominantly within the Scottburgh node, and some light-industrial activity at Park Rynie. It is expected that residential densification will occur, along with tourism and recreational activities, further retail and service industry, as well as light-industrial development.
Key interventions identified specifically for the Umdoni LM (excludes district-wide interventions), include the following: Beachfront upgrades and upgrade areas surrounding Blue Flag Beaches (Pilot Coastal Precincts) Upgrade of industrial parks – ensure affordability of land, building & services - (Park Rynie) Market and Facilitate Industrial Development opportunities – (Park Rynie) Upgrade Dense Informal Settlements – (eMalangeni) Maintenance & upgrade of towns in terms of SDF nodal plans – (Umzinto) Municipalities to implement existing environmental plans and address gaps – (Umdoni LM)
Key implications for the Umdoni Local Municipality
The area between Scottburgh and Hibberdene is seen as a key activity zone for the development objectives to be implemented. More densification is expected along with the development of tourism and recreational activities, further retail and service industry, as well as light-industrial development. The LED strategy’s review should therefore take these changes into considerations for future development areas. Focus is given to the key activity areas with regards to commercial activity such as manufacturing, tourism, and retail services for the area between Scottburgh and Hibberdene. However, this is based on the fact that accessibility is currently good along the coastal strip, and given the existing activities that are located within this corridor, investment is likely to continue to be channelled into this corridor.
2.3.2. Ugu District Municipality Spatial Development Framework Review (2011) The Spatial Development Framework (SDF) provides the District with development directives regarding Economic Development Nodes and Economic Growth Potential of Towns. The development approaches implemented and that have been proposed by the IDP include: Responding to development pressures Promoting a sustainable development sequence Retaining the unique character of the area Improving living conditions Locating development support within a wider metropolitan context Ensuring sustainable development Supporting appropriate local economic development Creating development management capacity Ensuring availability of appropriate physical and social services Positively integrating the natural into the built environment
The SDF principles and plan contain an approach that addresses the spatial reconstruction of the District with its clear integration of a system of settlements. At a broad and indicative level, the SDF provides strategic guidance in respect of location and nature of development across the District.
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The Land Use Management Framework contained within the SDF, creates basic guidelines for a land use management system across the District, while the Implementation Framework identifies a series of programs and projects for the development of land within the district. Interventions identified is categorised as short-, medium- or long- term interventions. Only the short-term interventions are however discussed in detail, as the medium to long-term interventions are merely indicated as these are left for reconsideration during future reviews of the SDF.
The SDF provides a visual representation of the desired spatial form of the municipality; and clearly and explicitly indicates desired or undesired utilisation of space across the district in broad terms.
Key implications for the Umdoni Local Municipality
The District SDF already identifies nodes and corridors for specific development activities and therefore the LED Strategy for Umdoni should ensure that LED initiatives align with these already identified nodes. Linkages and accessibility represents a major development issue in the district and therefore the infrastructure related to the linkage points should be considered for upgrading or maintenance.
Scottburgh is identified as a community level multi-use node, while Umzinto has been identified as a mixed use large neighbourhood level node. The area between Scottburgh and Hibberdene has also been identified as a key activity zone. Maintenance and the development of small infill areas in Scottburgh will occur with the implementation of the SDF as this is the area where there is a potential for integration with existing urban areas. The SDF also states that further expansion of existing industrial areas in Umdoni must be encouraged.
2.3.3. Ugu District Integrated Development Plan (2014/15) The Ugu District Municipality’s IDP was created to provide direction and guidance for development from 2014 onwards. An IDP usually indicates development for 5 years although a plan can be reviewed each year to keep up with market demands. The vision set out for Ugu’s IDP is to create: “A place where everyone benefits equally from socio-economic opportunities and services”. The plan is based on three pillars which are priorities, strategic objectives and the point action plan.
The following are the nine priority areas which have been identified by the municipality: 1. Infrastructure investment 2. Economic and sectoral development (job creation, employment, LED projects, tourism, agriculture, rural development) 3. Financial viability 4. Education and skills development 5. Institutional integration and co-ordination 6. Centralised planning 7. Reduce HIV &Aids 8. Clean environment 9. Peace and stability
The strategic objectives include: to create a conducive environment for participatory development to build and strengthen the administrative and institutional capability of the municipality
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to develop and maintain a financially viable and sustainable organisation that achieves full compliance with legislation to create a conducive environment for economic growth and job opportunities to provide access to sustainable quality drinking water and sanitation services to develop and promote an integrated sustainable environment
Finally the point action plan consists of a shared and common vision; financial viable municipality; responsive and people centred administration; sustainable infrastructure development; good governance; and improved delivery service.
Key implications for the Umdoni Local Municipality
The IDP sets out a number of objectives to improve the municipality’s infrastructure, social capital as well as a compliant public environment in the Ugu District Municipality. This implies that the LED for Umdoni Local Municipality needs to ensure that it aims to increase economic growth through implementing projects and programmes that will enable individuals to take charge of their own future through skills development and job creation.
2.3.4. Ugu District Municipality Local Economic Development Strategy, 2007 The Local Economic Development (LED) Strategy for the Ugu District Municipality is integrated with other strategies which therefore forms part of the overall LED Strategy. It also builds on the Ugu District’s Local Economic Regeneration Strategy of 2003. The vision of the strategy is also aligned to the broader vision of the Ugu IDP and therefore by the year of 2009, Ugu had wanted to achieve a sustainable agriculture, tourism, manufacturing, commerce and ICT sectors. They hoped the local economy would encourage retention, expansion and attraction of investment based on the well- developed economic infrastructure and institutions, and quality local labourers which had been empowered by education, skills development and a better health. The vision also included a strong, growing and more equitable local economy providing employment and empowerment opportunities to the residents of Ugu.
Principles were established in order to guide the implementation of the LED programmes, projects and activities in Ugu. They comprised the creation of an enabling environment for local business, aligning LED programmes and objectives to the IDP and national priorities, ensuring community participation, collaboration of local government, private sector and civil society, ensuring local governance, including transparency in decision making and accountability to the citizens of Ugu. Other guiding principles included the promotion of sustainable development and growth, inward investment from the public and private through the exploitation of competitive advantage markets, the coordination actions from all spheres of government and the promotion of sustainable human settlements.
The core thrusts in the LED included: Value adding on agricultural products Transport and logistics infrastructure and services ICT infrastructure and skills Hinterland development (social, economic and infrastructure) Tourist sector development Manufacturing, trade and commerce growth and development
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Attract, retain and expand investment Strong institutional implementation mechanism Poverty eradication
Sector strategies were compiled for the agriculture, manufacturing, tourism, trade and commerce and information communication technology (ICT) sectors, although for the transport and logistics sector no strategy was created as the municipality would use the Ugu public sector transport strategy.
The key sectors of development were identified as tourism, agriculture and manufacturing. Table 2.3 outlines the LED goals identified for each of these key economic sectors.
TABLE 2.3: UGU DISTRICT LED KEY ECONOMIC SECTOR GOALS Tourism Agriculture Manufacturing o To make the manufacturing sector ~ To have a shared goal central to the Ugu and focus for Ugu district economic development To improve the ~ To improve the strategy management of tourism productivity of the sector o To establish appropriate in Ugu and enhance food space for manufacturing Developing effective, security sector development comprehensive and ~ To create an enabling o To focus on specific Goals wide-spread marketing environment manufacturing sectors of tourism in Ugu ~ To enhance the and markets Create an enabling environmental o To facilitate the stability/ environment for Ugu sustainability of the growth of key Tourism Product sector manufacturing sectors Development ~ To address fundamental o To address fundamental issues that impact on the issues impacting on agricultural sector industrial sector development Source: Ugu District LED, 2007 Key implications for the Umdoni Local Municipality
The Ugu LED Strategy is in line with the District’s IDP and SDF, and combines and uses many of their proposals, visions and goals therefore creating a co-ordinated strategy. Emphasis in general is placed on skills development and the creation of employment opportunities in the tourism, agriculture and manufacturing sector. The LED for Umdoni Local Municipality should build on this and exploit the existing opportunities such as building on the agricultural activities in the area. The thrusts that have been identified for the district is also applicable on a local level, and therefore the programmes and projects are easier to implement.
2.3.5. Ugu District Municipality Economic Planning Programme (2010) The Economic Planning Programme was created in order to address the weaknesses of the municipality with the strengths from Ugu. This programme determined that the strengths of the municipality should be used to reduce poverty and unemployment in the district.
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A major problem is that majority of the districts secondary and tertiary sectors are stronger than the primary sector in the economy. This is a cause for concern as primary sector economies require more unskilled labour than skilled labour, and therefore there is a higher unemployment rate in such areas.
The programme aims at clearing the unemployment backlog. The programme suggests improved employment figures can be created by matching the skills supplied by labour with the skill demand of the economy. This should at least clear the structural unemployment and only deal with cyclical unemployment.
To accelerate economic growth the following interventions have been suggested: Growth in employment creation and small enterprises generating opportunities for historically marginalized people and communities; Addressing sector specific constraints around infrastructure, regulatory burdens, inadequate access to markets, input problems of skills and capital; A drive to reduce costs of doing business in all industries by supporting regulatory efficiency, competitive markets for input and wages, skills market and moderation of administered prices. Improving the competitiveness of the district Skills development and competency acquisition
Key implications for the Umdoni Local Municipality
Umdoni Local Municipality should focus on the improvement of labour force skills as well as improving the economic and business climate in order to stimulate competition. The LED strategy’s review needs to align its thrusts, projects and programmes with idea of being able to stimulate and strengthen the production side of the economy.
2.3.6 Ugu District Municipality Manufacturing Sector Strategy (2007) A strategy was formulated to guide the development of manufacturing in the Ugu District Municipality, within the LED framework. The strategy includes a vision for manufacturing development, broad goals to be achieved as well as the objectives which need to be focused. The vision that has been identified for Ugu in the manufacturing sector is: To develop a vibrant manufacturing sector in the District which fully supports the developmental goals of the District and Local Municipalities in terms of entrepreneurship development, black economic empowerment, job creation and income generation.”
The specific goals which need to be realised are: To make the manufacturing sector central to an Ugu economic development strategy o Influence district and local municipality strategic planning o Influence local level spatial planning o Plan for and obtain national and provincial government support To establish appropriate space for manufacturing sector development o Maintain / upgrade existing industrial areas o Establish new industrial areas o Build competitive infrastructure platform To focus on specific manufacturing sectors and markets o Strengthen / support existing industries
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o Promote eThekwini / SDB Linkages o Develop Agri-industries o Develop manufacturing linkages with tourism sector o Marketing of Ugu Industry and Industrial Opportunities To facilitate the stability / growth of key manufacturing sectors o Facilitate / promote inter-firm linkages o Promote local government / industry relationships o Provide incentive packages To address "fundamental issues" impacting on Industrial Sector Development o Increase HIV/AIDS awareness and build support systems for people affected by HIV/AIDS o Promote Improved Service Delivery o Facilitate Skills Development o Promote Black Economic Empowerment Key implications for the Umdoni Local Municipality
Through focusing on specific manufacturing sectors and markets, the LED will be able to provide support to existing industries, or develop other agri-business and therefore create linkages between the tourism and manufacturing sector. Umdoni Local Municipality has a strong manufacturing sector and therefore should fulfil its major role in terms of the economic development in the District. They should build the capacity of their decision makers and establish an information sharing forum. The LED strategy’s review should keep provide thrusts, projects or programmes with direct linkages to the manufacturing industry.
2.3.7 Ugu District Municipality Trade and Commerce Sector Strategy (2007) The trade and commerce sector strategy was formulated to guide the development of tourism in the Ugu District Municipality, within the LED framework.
The proposed vision for Ugu for the trade and commerce sector has been determined as: “To develop an environment supportive of trade and commerce activities and to achieve an integrated and evenly distributed commercial economy in the Ugu district which promotes entrepreneurship, employment and BEE objectives.”
The specific goals which need to be realised this strategy is: Growth and Development of the Formal Economy o Empowerment and pro-poor growth o Improve linkages and the functioning of the economy o Create an enabling environment for commerce and trade activities o Capacity building initiatives Improve the spatial distribution of commercial activities in the district o Business support measures in rural nodes o Promote markets in rural nodes Stimulate and Support the development of the informal economy o Management and control of informal activities o Growth and development of informal economy Key implications for the Umdoni Local Municipality
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By empowering and supporting pro-poor and inclusivity there will be continued growth and development in the economy, as it provides new opportunities and increases participation of black ownership and economic activity. The LED should therefore take into consideration the various programmes and projects which can be implemented in order to support economic growth for Umdoni.
2.3.8 Ugu District Municipality South Coast Tourism Strategy (2014) Ugu South Coast Tourism’s vision is “To become the most visited non-metropolitan tourist destination in KwaZulu-Natal Province”. Their mission is to responsibly manage the tourism sector within the principles of transparency and accountability, to establish and maintain tourism structures that accord with tourism legislation and regulations, creating strong relationships in tourism public and private sectors, investing in human and financial resources to meet marketing and development mandates and provide economic opportunities.
The strategy’s objectives include: 1. To ensure that the company operations are compliant with all regulatory frameworks 2. To capacitate the company in terms of personnel in accordance with the organisational organogram 3. Sustain and develop operations of district wide Visitor Information Centres 4. Provide staff development 5. To contribute to the growth in the District tourism economy through visitor volume growth and the application of a Marketing Action Plan. 6. Utilise events as a conduit for profiling the South Coast and contributor to visitor volume growth 7. Establish and sustain stakeholder participation 8. Ensure effective awareness of socio-economic conditions through tourism 9. Capacitate people for sustaining livelihoods through tourism 10. Ensure participation in tourism management and ownership of tourism products by local communities 11. Develop unique and sustainable tourism products and services 12. Ensure the DM/LM coastal management/ development projects are activated 13. Create an enabling environment for tourism investment 14. Ensure tourism support infrastructure is adequately provided and/or maintained
The key attention spheres that have been identified by the strategy include ocean activity and beach lifestyle, eco and outdoor adventure/sports, business and convention tourism, sports and health tourism, cultural heritage, nature based tourism and hinterland cross activity/ experience offerings.
Their market segments and niches include ‘beach and leisure lover’, ‘adrenaline and endure lover’, ‘marine explorer’, ‘avitourists’, ‘mature mobiles’, ‘adventurists’, ‘pleasure seekers’, ‘informal relaxer’, ‘emergent spender’, ‘golfing activator’ and ‘sports and leisure participator’.
Key implications for the Umdoni Local Municipality
With strong tourism development potential in Umdoni, many of the key attention spheres that have been identified in this strategy could be further expanded and incorporated into the Umdoni Local Municipality’s LED review. The strategic objectives are further explained in programmes, projects and
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2.4 Local Policies and Strategies
The following Local policies and legislation have been consulted to ensure alignment with the LED strategy for the Umdoni Local Municipality: Umdoni LM Integrated Development Plan, 2015/16 Umdoni Spatial Development Framework, 2010 Previous Umdoni LED Framework, 2005 Umdoni LM Service Delivery and Budget Implementation Plan, 2014/15 Umdoni Tourism Marketing Plan (2007) Umdoni Business Retention and Expansion Programme (2007) Umdoni Industrial Strategy (2007) Umdoni Agricultural Sector Strategy (2007)
2.4.1. Umdoni LM Integrated Development Plan (2015/16) An integrated development plan is required by the Municipal Systems Act (No. 32 of 2000) from local government to be used as a tool for the facilitation and management of development in each area. A number of policies, strategies and development indicators have been developed in line with the prescriptions of legislation to ensure that all government activities are aimed at meeting the developmental needs expressed at the local government level.
The Umdoni Local Municipality has established tourism infrastructure and high potential agricultural lands which are highlighted as strength in the IDP. The weaknesses include the poor delivery of service, degrading and poor maintenance of infrastructure. The municipality does however have a number of opportunities that can be utilised to optimise growth for the municipality. This includes the strategic location of Umdoni, the economic potential through exposing the tourism aspects of Umdoni as well as using its agricultural potential. The high access through roads and the railway line makes the logistical component another opportunity that can be exposed in union with its strategic location. Threats that possibly constrain Umdoni are the specified as the lack of service delivery, population influx, poverty and inequality and the lack of economically driven and sustainable projects. The Umdoni Local Municipality is guided by the following (6) development goals: 1. Improving access to basic services for all communities 2. Vibrant economic development and quality services 3. Improved customer satisfaction levels 4. Responsive and capacitated local government 5. Improved and new revenue streams 6. Overcoming the spatial divide that exists between Urban and Rural communities
The comparative advantages, for Umdoni LM, that have been exposed by the IDP are: Development of economic sectors and spatial localities in accordance with people’s needs and potential Focus on strategic sectors to improve its full potential Focus on labour intensive opportunities to address unemployment and poverty while social safety nets and access to services should be improved
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Spatial targets that are set out by the IDP include the Tertiary Regional Node that is situated along the proposed new corridor development, in order to create interaction between markets and mobility. Another target that is set out is to grow the agriculture, tourism, industry and export sectors. The development objectives for the next five years are: Roads: Maintenance and storm water Sustainable housing: Human Settlement Housing Local Economic Development and Job Creation Institutional Development: Accountability and Management Tools and Frameworks Tourism Development Broader Economic Development (SDF, LUMS SEA)
Key implications for the Umdoni Local Municipality
Umdoni LM has important economic activities in the municipal area that can be improved on. The Tourism and Agricultural sectors have been identified as important economic activities in the Municipal area. Revitalisation projects have also been incorporated into the strategy to stimulate investment confidence into Umdoni. Through the promotion of economic development in these sectors, quality of life can be improved for many of Umdoni citizens and therefore the LED strategy should include the activities that have been identified for this strategy. The solving of challenges mentioned in the IDP can also contribute to the improvement of quality of life for Umdoni Local Municipality residents.
2.4.2 Umdoni LM Spatial Development Framework (2010) A Spatial Development Frameworks represents the spatial planning policy for Umdoni and guides development in the area where the Town Planning Scheme does not provide guidelines. It includes the constraints and opportunities in an n area to show where growth and interventions are needed the most. Objectives need to be used to create the desired result, they are the same as those mentioned above in the IDP.
The SDF states that Umdoni is situated in the Priority 1 and 2 intervention areas, as a result of the environmental sensitivity, economic potential, social needs and urban accessibility, when compared to other areas of the province. The focus is therefore set on the new developments such as the Umdoni Seaside Corridor between Mbambinyoni and Umzinto Rivers. Redevelopment and infill development should be used in order to orchestrate a development corridor. The Rorqual Estate Development should be mixed use and should achieve economic development through major investment injections.
The SDF is expected to contribute to the creation of a thriving and stable development of the municipality through: Maintaining and upgrading the existing development Creating new opportunities within a structured development Utilising a road hierarchy as one of the structuring elements Creating an agreed nodal hierarchy Providing additional range of accommodation Preventing urban / peri-urban sprawl Establishing, managing and integrating a natural environmental system Improving the aesthetics of the coast
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Improving living conditions in the western part of Umdoni Integrating hinterland and coastal development opportunities Links into the opportunities emanating from eThekwini Creating linkages to the municipalities in the west
The agricultural sector does hold some sort of potential in the area due to the favourable location of the municipality. The proximity to the national markets makes the economies of scale in farm production a reality that should be capitalised on. Principles should be implemented to protect the high potential agricultural and biodiversity areas.
Key implications for the Umdoni Local Municipality
The implementation of the SDF for Umdoni will contribute majorly to strengthening the current economic environment and provide more opportunities, social facilities and upgrading the current infrastructure. The usage of spatial elements will ensure that the more vulnerable areas are protected and that the current urban areas are upgraded with regards to the needs of the community.
2.4.3 Previous Umdoni LED Strategy (2005) The previous LED strategy included large development projects, such as the development of the beach front and the Umdoni Tourism Route, as well as previous trends of having smaller projects, such as the “1stop shop” in the community. The smaller projects idea has since been rejected and recreated to rather have a long term implementation strategy that focuses on more than a few projects at a time. These types of shorter term projects were unsustainable and only benefitted those involved for the short run. Other of these initiatives was the Ifafa sugar cane redevelopment, park regeneration and vegetable production. The priority areas that were identified by this plan was the rejuvenation of the Tourism Industry, the expansion and agricultural sector, and the development of the manufacturing sector. In the manufacturing sector, potential projects included the establishment of a business park, and a Micro manufacturing centre. The tourism sector aimed to create new jobs, alleviate poverty and improve the integration of Umdoni into the south coast tourism, this included marketing, building public-private partnerships, the implementation of the Beachfront Master Plan and restructuring the tourism business sector in Umdoni. It also included the stimulation and upgrading of the inland cultural, nature and adventure products.
The main focus of the Agriculture strategy was to create jobs, alleviate poverty and increase food security, and therefore increasing the returns of the agricultural sector in Umdoni. The initiatives for this sector included the co-ordinating of the land reform structure, the establishment of agricultural sector support / ”1 stop shop”, facilitate market linkages, additional uses for sugarcane, improving the infrastructure networks that relate to agriculture.
Key implications for the Umdoni Local Municipality
This strategy is well explained and provides sufficient information with regards to where funds and efforts need to be distributed in the Municipality. The projects chosen have been explained well and selection criteria for the lead projects have been explained well. Enough detail has been provided with the project suggestions; it does however not indicate who needs help in enough detail as well as how they can be helped or which other sectors need to assist with the implementation.
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2.4.4 Umdoni LM Service Delivery and Budget Implementation Plan (2015/16) The Service Delivery and Budget Implementation Plan (SDBIP) is essentially the management and implementation tool which sets in-year information and links service delivery output to the budget of the municipality, thus providing credible management information and a detailed plan for how the municipality will provide such as services and the inputs and financial resources to be used. The objectives that are set out by the budget policy are: to ensure effective and efficient performance management within the municipality to develop staff and ensure effective service delivery through training to ensure effective and efficient internal and external communication to ensure that all communities have access to energy sources to ensure provision, upgrading and maintenance of infrastructure and services that enhances economic development to ensure financially sustainability and sound financial principles to facilitate an integrated approach towards planning for urban and rural communities
This plan provides income and an expenditure amount, the budget is however in a deficit, which means that the municipality has more expenditures than income. The three year capital work plan indicates large amounts spent on infrastructure upgrading or delivery, therefore aiming to achieve the objectives set out for this budget plan.
Key implications for the Umdoni Local Municipality
Through the use of this policy the LM will be able to prioritise and implement the projects that are set out by the Umdoni IDP. The fund allocation will indicate the projects and programmes which are a high priority or more sustainable in the long run.
2.4.5 Umdoni LM Tourism Marketing Plan (2007) The Marketing Plan recommends a two phased approach to marketing the Umdoni region. Phase 1 focused on pulling all the Local Stakeholders on-board with the initiative and Phase 2 began an outward focus on the External Market of Southern African Families.
Results from a survey indicated that 47% came to the South Coast Region because of WOM (Word of Mouth), 34% because of brochures they had collected and 12% because of a Tourist Information Office or signage.
This plan indicated that the current tourism assets, in 2007, are comprised of the beaches, nature- based assets, adventure tourism assets, cultural tourism assets, golf tourism assets and institutional arrangements. It also indicated that the current tourism products and services offer a variety of activities over the 12 months of the year, but that international tourists only visit during peak periods (summer and winter months). It also indicated that the tourism target market for Umdoni was family tourism, both beach apartment and holiday cottage letting, and that majority stayed in self-catering units in 2007.
Umdoni had struggled with concentrating on retaining the current market, making optimum use of Umdoni’s valuable resources, establishing an identity for Umdoni, capitalising on the position of Umdoni, they were unable to provide adequate and regulated signage, they couldn’t link the local organisations into one representative body, or extend the attraction activities beyond the peak
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The key unique selling points identified for Umdoni were explained as those relating to heritage, variety of activity, all year round mild climate, the sugar sector history, European history relating to Botha House which could be combined with the Indian history of indentured labour.
This Marketing Plan felt that by focusing on Cultural and Outdoor (Beach, Adventure and Eco) tourism products Umdoni would provide a complimentary but non-competing positioning, which could pull visitors from both TKZN and Hibiscus’ marketing efforts without trying to compete head on.
Key implications for the Umdoni Local Municipality
The importance of marketing and signage should not be underestimated as it does play a role in drawing visitors to the area. Word of mouth also had a large impact on the visitor counts and therefore the current environment in Umdoni needs to remain attractive in order to draw more visitors.
The tourism activities that are offered to tourists should not only provide a large variety, but more activities should be considered for the international visitors during the summer and winter months.
2.4.6 Umdoni LM Business Retention and Expansion Programme (2008) This programme was passed down from the pilot BR&E programme that was initiated in the Ugu District by Trade and Investment KwaZulu Natal, after the programme was successfully implemented in 3 municipalities. The programme had a way of mobilising the business sector to engage in economic development of the municipality.
The weaknesses that were identified at the time, for Umdoni Local Municipality were named as
The lack and large need for a business chamber of commerce The lack of participation by the municipality in the programme activities and meetings The lack of participation by the local businesses, less than 30% participated after having previously mentioning that they would participate. The volunteers that were trained for interviewing skills lacked as well as their perseverance to complete the task The extracting and cleaning of data, caused delayed and somewhat distorted results to the municipality
The aim of the programme was to mobilise the business community through taking the recommendations from the survey forward. This was done so that the community can be mobilised around the proposals and could start implementing them.
Key implications for the Umdoni Local Municipality
It is important to understand the role that the Business chamber of commerce plays in Umdoni, and could potentially play. This needs to be brought forward through SMME programmes to ensure that the businesses in the municipality can expand and create more jobs for the local residents.
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2.4.7 Umdoni LM Industrial Strategy (2007) The role of the Municipality in promoting local economic development, particularly creating an enabling framework for industrial development, is crucial but should be approached with a degree of practicality and rationality to the surrounding area of Umdoni. The document promotes industrial development in Umdoni although it waivers caution as such development would compete for resources not only with the other local economic development initiatives, but many other development or service delivery related pressures within the municipality.
Industrial strategy is a term that generally refers to any attempt by government to apply a coherent and consistent set of policies that are designed to improve the performance of the industrial economy. These policies are frequently directed at the manufacturing sector, but an industrial strategy could also centre on the performance of a number of other sectors in the economy, ranging from resource production to services. The Umdoni LM Industrial Strategy is oriented towards correcting imbalances in the economy's performance and involves the assumption by government of a prominent role in facilitating or effecting economic change.
The following Program objectives apply to this Strategy:
Establish a pro-business attitude. Build an effective communication system between employers and community leaders. Clarify the contribution these firms make to the local economy. Identify the business climate strengths and weaknesses. Detect as early as possible business expansion, contraction and closure plans which have a community wide impact.
The national policy framework offers little comfort for Umdoni LM, as it does not feature on the national industrial priority areas. It is also not identified as an industrial area at a provincial level. Umdoni does not contain any of the main sectors that the DTI develops at present, but there are signs that agri-processing is to get substantial support in the future. This is an area that could be key for Umdoni and the South Coast as agricultural potential exists.
Key implications for the Umdoni Local Municipality The strategic location of Park Rynie and relatively good access to Scottburgh and Umzinto establishes potential areas for industrial development. The key will be in the form or type of industries that can be developed in the area, with regard to the local needs of the markets. The constraining factors are however land availability, access to electricity, municipal bulk infrastructure, access to raw materials and access to a market and therefore needs to be researched thoroughly before development takes place.
2.4.8 Umdoni LM Agricultural Sector Strategy (2007) This project was funded by the European Commission through the Gijima Local Economic Development for KwaZulu-Natal. The specific objective of the strategy was to compile an agricultural development strategy for the Umdoni, which would assist in strengthening the sector through overcoming challenges and apprehending existing opportunities.
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The vision of this document was for the agricultural sector of Umdoni to align with that which was previously developed for the district’s agricultural sector, namely:
“A market-driven, efficient and sustainable agricultural sector that meets the national targets for land reform, BEE and poverty eradication and which unlocks existing potential to generate income, create jobs and provide food security”.
This Sector Strategy supported and promoted the following areas in Umdoni in order to strengthen the agricultural sector: Cane - Small and medium scale farmers growing cane in Umdoni and supplying to the local mill Vegetables - Projects currently producing vegetables, especially in the areas near Umzinto Orchard crops – Pursue opportunities that exist for diversification into macadamias and bananas Subsistence / food security - Urban agriculture in low income settlements; community gardens, home gardens and dryland cropping in rural areas Livestock & poultry - Livestock owners with small herds of goats and cattle; household chickens; broiler projects.
The strategic layout was done in such a way that it was able to identify a strategic theme, along with a goal or intervention that could be undertaken or explored in order to achieve the goal and in turn the theme. These interventions all needed to support the following three elements: creating an enabling environment improving access to key resources approaches to development of the sector
From the 35 specific interventions, 5 anchor projects that were identified for the status quo at the time, involved key projects that was been selected as a result of being high priority activities, that supported a range of important stakeholders along with agricultural development within Umdoni Municipality. Key implications for the Umdoni Local Municipality
Through the implementation of these strategic projects, large milestones could have been overcome. The LED review should therefore review the projects that were suggested, and determine whether they are still relevant and if they could make a large impact on the local economy or the development of individuals in order to support food security for locals and South Africans.
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Section 3: Overview and Status Quo of LED in Umdoni The Constitution of the Republic of South Africa mandates local government to promote social and economic development within their areas of jurisdiction. This mandate is executed in terms of the Municipal Systems Act (Act 32 of 2000), which provides for the principles, tools and systems necessary to enable municipalities to fulfil this mandate. One of these tools is an Integrated Development Plan (IDP), which essentially is a synthesis of various sector plans and strategic guide for prioritisation, decision-making and investment. The LED plan is one of the constituent parts of the IDP, and should be prepared with due cognisance of the other sector plans and IDP. It is in accordance with this mandate, that the Umdoni Local Municipality together with the Department of Economic Development (DED) formulated the LED Strategy for Umdoni Local Municipality in 2005. The need however for the LED plan in Umdoni Municipality went beyond meeting the constitutional and legal obligations but also encompassed the following: Need to integrate economically disparate parts of the municipal area, that is, better developed for Natal and largely poor former KwaZulu parts of the municipal area Need to exploit location and other comparative advantages to achieve economic development. Umdoni Local Municipality is located along the N2 and forms part of the South Coast Ribbon Development Need to address the high poverty and unemployment that characterises Umdoni area Need to review the trends and economic direction that key sectors in the local economy are taking Need to upscale economic development in centres such as Umzinto and Pennington Need to integrate economic development locally with National, Provincial and Regional economic development initiatives. A number of initiatives have been started with African and other countries, and areas like Umdoni can partake in the implementation of these arrangements LED is a sector plan within the IDP, and its implementation should be integrated with other sectoral plans in order to achieve integrated and coordinated development
This section provides a status quo of the LED Plan and projects of Umdoni as well as the challenges that the municipality has experienced with implementation.
3.1 Umdoni LED Plan (2005)
The Umdoni LED Plan was developed and adopted by Council in June 2005. The plan is essentially a guiding document for local economic development within the municipality. The LED Plan acknowledges that the tourism and agricultural sectors are key focus areas to unlock local economic development within the Local Municipality.
3.1.1 Identified opportunities The Umdoni has a strong underlying resource base. The natural resource environment and the location of Umdoni are strong indicators that the area can perform far better economically than it has
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Umdoni LED Strategy Review recently. The Umdoni area is strategically located along one of the major Provincial and National trade routes, and the south coast. The neighbouring coastal municipal areas are larger and do dominate in many respects (Ethekwini and the Hibiscus Coast), but these positions of dominance could be used as an advantage in Umdoni.
The location along the South Coast presents opportunities for tourism and lifestyle development. The natural environment, particularly the beaches, and the lifestyle aspects are strong draw cards. Tourism is a sector where Umdoni has a clear comparative advantage. The area contains high potential agricultural land, with rain fed agriculture and access to water. The agricultural sector is well established and organised. The property market is increasing in value and there is demand for strategically located vacant land for expansion. The obstacles to economic development are related to institutional development, rather than a lack of resources or local comparative advantage.
The area is considered to have high agricultural potential and good overall land use potential (in terms of slope, soils type etc). A map indicating general land use potential is attached (the map was originally produced for the IDP process). In terms of the bio-resource unit classification of the Department of Agriculture, the Umdoni area is within a high potential agricultural zone (see maps 2 and 3). The area is mainly classified as part of the South Coast – Ya12 bio-resource Unit (BRU). A small area is classified as Kwa Ndaya – Wa5. This is part of the traditional areas in the north west of the municipal area. This small area is classified as semi-intensive – while the rest of the area is classified as suitable for intensive agriculture.
The commercial agriculture sector is well established and well organized in terms of institutional capacity. It is probably the best organized in terms of knowledge and sector intelligence; representative structures etc and does not appear to be suffering from the same levels of fracturing (compared to business, industry and tourism). The sugar industry in particular is well organized and this offers substantial opportunities to support small growers and new entrants. The sector offers unique opportunities for public – private partnerships.
3.1.2 Strategies, programmes & activities The strategic framework for the Umdoni Local Economic Development Plan comprises of five key components; namely the vision, development goals, strategies and activities, the LED programme and LED projects. The vision is based on the broader development vision as outlined in the Municipal IDP. It represents a desired situation, which the municipality intends to achieve in the short to long term. The development goals are an expression of the desired outcomes of the LED intervention while the objectives establishes the organisational performance standards and target activities for the achievement of each goal.
The LED framework consists of both sector specific and cross-cutting strategies. The sector specific strategies are based on three sectors (tourism, agriculture, trade & industry) and the cross-cutting strategies are based on matters which affect all economic sectors. A number of projects/activities were developed for each of the strategies. In addition to the strategies, projects and activities, a total of sixteen (16) lead projects were identified.
The overall economic development goals of the LED strategies are: To facilitate the expansion, rejuvenation and diversification of the tourism sector To facilitate growth and expansion of the manufacturing sector
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To enhance and diversify the agricultural sector To provide support to the SMMEs To expand the skills base To develop sustainable LED institutional structures To facilitate targeted spatial interventions
The following table provides a summary of the identified strategies and the associated projects or activities per strategy.
TABLE 3.1: UMDONI LED (2005) STRATEGIES AND PROJECTS Strategies Projects/activities Formulation of Umdoni Tourism Development and Marketing Plan (Local Tourism Competitiveness Action Plan application to Gijima Fund) Institutional processes, including: Building a coherent public-private partnership Integrate with District-wide structure (UTME) Tourism Restructure Tourism Business Sector in Umdoni Sector: Formulation of local tourism competitiveness plan Expand, Identification and mobilisation of tourism leadership and stakeholders (public & private) rejuvenate through a Participatory Appraisal of Local Tourism Competitive Assessment (PALTCA) and and diversify the formulation of a local tourism competitiveness plan Stimulate and upgrade the development of inland culture, nature and adventure products linked to coastal products as part of the Umdoni Development and Marketing Plan Implementation of Beachfront Master Plan, This will include project packaging (including contractual and financial aspects, etc.) Access THETA Learnerships Land Reform Coordinating Structure: the purpose is to ensure that maximum stability and benefits are achieved in the land reform process Umdoni agricultural sector support: an institutional project ensuring that small producers are able to access support through a central “1 stop shop” Sugarcane growers support structures: institutional restructuring support for small growers Agriculture Financing model for small growers: a review of the financing model that predominates in Sector : the sector Expand and diversify Additional uses for cane: to participate in the research process undertaken by SASRI. Aim is to make cane production more profitable. Sugarcane re-establishment and redevelopment: to revitalise the small grower sector Vegetables: to expand and support the small vegetable producers. Institutional support should initially be given, also access. Initiate a study to identify niche markets in agriculture suitable for small farmers Review of infrastructure networks relating to agriculture (water, roads, etc.) Industrial sector analysis (in partnership with the business chamber process) Investigation into the establishment of Business Park(s). The two areas immediately Trade and identified include Park Ryne and Umzinto. This is linked to the spatial targeting project. Industry Mahlongwa/Mandawe Micro Manufacturing Centre for the disabled Investigate the linkage for light industry to the southern Durban area Establishment of black yards in Amahlongwa, Emandawe and Emalangeni
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Strategies Projects/activities SMME support: Linkages with SMME support agencies based in Durban. This is a function for the LED unit and the Business Chamber Informal sector support Skills training for SMME owners (entrepreneurs) Review of the Umdoni Municipality Procurement Policy Support for co-operatives Training & Skills Development: Initiate a municipality wide learnership programme with the business organisations Undertake a skills review in relation to market demand with business organisations (particularly in tourism, manufacturing and agriculture) Cross-cutting Initiate a skills development programme for SMME owners issues Institutional support: Creating the required environment for public-private partnerships to take place, in particular supporting the Business Unity process that is currently taking place Assisting in the expansion of the Hawkers Association that exists in Scottburgh Spatial Targeting: Umzinto – Park Rynie Corridor, including Business Park feasibility and concept plan for development of Umzinto Market stalls in Umzinto Economic infrastructure audit Land audit and land release paln, in particular to identify cavant and suitable public and private land Source: Umdoni LED Plan (2005)
3.1.3 Lead Projects Sixteen (16) projects were identified as lead projects for the Umdoni Local Municipality. These projects were selected taking the following factors into account: Projects that have a geographic spread. Projects that support key growth sectors. Projects that support various size of organization. Pro-poor and pro-growth projects. Projects where there is momentum and organizational support. Projects that have proven feasibility and sustainability. Projects that will have broad impact. Projects that create the groundwork for later development. Projects that create or support the institutional base.
The sixteen lead projects that have been identified in the LED Plan (2005) are presented in the following table.
TABLE 3.2: UMDONI LED PLAN (2005) LEAD PROJECTS PROJECT IMPETUS Tourism Scottburgh Beach The beachfront is an important asset in the Scottburgh economy. There has Front been some planning undertaken and this now requires implementation. This Redevelopment includes project packaging, tender processes, and financial assessments, project management.
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PROJECT IMPETUS Tourism The proximity to Durban and the unique features of the Umdoni area need Development and to be balanced with the benefits of marketing as part of the South Coast Marketing Plan (Ugu) district. This could be done through the District structure. Umdoni Tourism The current investment profile and the development of opportunities are Route strongly biased towards the coastal areas. It is suggested that a route be examined that will open up the inland areas to tourism. The route could take in the Sezela Mill (as a sugarcane route) and the old Indian settlements as part of a heritage aspect. This may require a review of the existing road infrastructure and proposals in this regard. Strengthening the The CTO would benefit from a strategic planning and organizational review Umdoni CTO process. This includes identifying funding and marketing opportunities, as well as potential programmes to generate interest in tourism opportunities more broadly. Land reform co- There are a large number of claims in the Umdoni area. It is in the interests ordinating structure. of the claimants and the Umdoni agricultural sector that the land remains productive and that the claimants receive the required support. Umdoni agricultural The purpose of the projects is to broaden access to agricultural support sector support (‘1 services through a ‘1 stop shop’. The small growers from all sectors are not stop shop’) able to access information, specialist services or support effectively. The purpose would be to provide a space for private sector service providers and Departments to utilize. Ifafa Small Grower There are opportunities to revive the small grower sugar cane sector. Low Sugar cane re- levels of institutional and technical support have led to reduced establishment and reinvestment in the sector. As reinvestment has declined so have yields and redevelopment this creates a downward spiral. Support for intensive There are a number of intensive vegetable growers co-operatives that vegetable producers. require revitalization. An example is the Sinethemba Growers Co-operative. The full list of projects is attached in Annexure B. Trade and Industry Sector Park Rynie The Park Rynie area could be the first part of the revitalization of the Regeneration corridor between Park Rynie and Umzinto in the Business Park Development Initiative process. The Pennington Environmental Group also identified this opportunity during the 2004 IDP process. Mahlongwa / The Mahlongwa / Mandawe area have identified the need for a micro Mandawe Micro manufacturing centre that is appropriate for the disabled. There are models Manufacturing for this type of initiative. This is one of the poverty related projects identified Centre during the project process Cross cutting: Institutional Support Stakeholder The proposed project is to assist in mobilization of all stakeholders, but Mobilization and particularly in creating the required long term partnerships required with support for Business the business community, it will assist in creating the required linkages with Unity (Chamber the Provincial and national structures, in defining roles, structures and movement) consultation processes etc. The business chamber establishment process is taking place. This needs ongoing support and should lead to the situation where appropriate public – private partnerships can be established. LED Unit and related The LED unit has been established. The unit is responsible in ensuring that structures. the LED Forum and the LED Workgroups are established and that regular report backs take place. The LED unit will also be responsible for the meeting
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PROJECT IMPETUS administration and preparing reports for the Economic Development Portfolio Committee. Hawkers association The informal sector is difficult to support as members are dispersed and do not have a single voice. The development and support of the sector requires a level of institutional support as a first step. Cross cutting: SMME Support Business support It is not recommended that a Local Business Support Centre be established linkage / network in Umdoni. There are substantial support structures (with access to new markets) in Durban and the proximity to Durban needs to be exploited. The Business Chamber will be key in this regard. Municipal The Municipality needs to undertake a review of the Procurement Policy. Procurement Policy Issues such as BEE support, SMME support, transparency etc need to be reviewed. This has been raised as a key Pilot Project. Umzinto Market There is an active and extensive informal sector in Umzinto. Umzinto Stalls requires improved spatial planning and infrastructure. It is recommended that more formal trading areas be developed in order to support the traders and the spatial planning process. Source: Umdoni LED Plan (2005)
3.2 Challenges with LED implementation
The following has been identified as challenges in relation to Local Economic Development as per the Umdoni IDP (2015/2016): No Tourism Development Plan Increasing number of businesses operating illegally with no business licenses Limited resources (financial) to support SMMEs and Cooperatives Lack of LED capacity (Human and Financial) within the Planning and Development Section as the post of an LED manager has been vacant throughout the 2014/2015 Financial Year Limited/lack of land for development opportunities Lack of area plans to direct development
3.3 Status quo of projects
The table below indicates what has been done within the last 10 years regarding the implementation of the lead projects as identified by the LED Strategy (2005). It is evident that in many cases attempts have been made in implementing these projects but they have not been successful.
TABLE 3.3: STATUS QUO OF LEAD PROJECTS PROJECT STATUS Scottburgh Beach Front This project has been undertaken and completed. Currently the Redevelopment Municipality is developing a business plan to source funding. Tourism Development and The Municipality is working closely with Ugu South Coast Tourism Marketing Plan in promoting tourism activities locally. There are also two tourism area committees that are operating in Umdoni Municipality, namely Scottburgh Tourism Area Committee and Pennington Tourism Area Committee. There is also a local tourism office which deals with local tourism issues.
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PROJECT STATUS Umdoni Tourism Route Nothing has been done in this regard Strengthening the Umdoni CTO Land reform co-ordinating The land reform process is till on going, and the Department of structure. Land Affairs is giving support to claimants once they are awarded their claim. There are a number of land claims which has not been finalised as yet. There is also a district land committee, which is tasked to support new land owners Umdoni agricultural sector There is still no “1stop shop” for the agricultural sector, however, support (‘1 stop shop’) the Municipality is supporting small growers, especially those who are vegetable producers. The municipality has bought a tractor which assists small growers who specialises in vegetable production, to plough their land. The assistance is only given to communities who are working in groups/cooperatives. Ifafa Small Grower Sugar cane The municipality has played a minor or no role in supporting small re-establishment and sugar cane growers redevelopment Support for intensive There are a number of communal gardens in the area. Some of vegetable producers. these communal gardens has been registered as cooperatives and some not. They play an important role in promoting food security. The Municipality, however wish to see them grow from subsistence farmers to commercial farmers. The Municipality is working closely with the Department of Agriculture in supporting them. Park Rynie Regeneration There is an existing Park Rynie Industrial Hub, which was revitalised Initiative by Umdoni Local Municipality in conjunction with Ugu District and the Department of Economic Development. Mahlongwa / Mandawe Micro No achieved Manufacturing Centre Stakeholder Mobilization and There is an existing Business Chamber and the Umdoni LED Forum support for Business Unity is functional. (Chamber movement) LED Unit and related There is a fully functional internal LED unit. structures. Hawkers association There is an existing hawkers/street vendors structure Business support linkage / There is an existing Umdoni Business Chamber but they provide network limited support in terms of Business support linkages/networks Municipal Procurement Policy Not attended to this project Umzinto Market Stalls The Municipality is in the process of establishing the Umzinto Market Stalls Source: Umdoni LED Department, 2015
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Section 4: Situational Analysis This Section seeks to provide an indication of the status quo reality in terms of the socio-economic and demographic, environmental, infrastructure, economic and spatial profile components within a Local, District, Provincial and National context which specifically relate to the critical areas of LED. This Section, combined with Section 5, becomes the status quo basis from which problem identification within the local economy and the development thereof is determined in order to create development strategies, case specific to the local economy of Umdoni to address the economic problems and casualties.
The remainder of this Section is structured as follows: Demographic and Socio-economic profile Environmental Profile Infrastructure Profile Economic Profile Spatial Profile
4.1 Demographic and Socio-economic Profile
This section provides an in-depth analysis of the socio-economic composition of the Umdoni Local Municipality compared to the demographic contexts found within the Ugu District Municipality, KwaZulu-Natal Province, and South Africa as a whole.
To be able to understand the socio-economic reality of the Umdoni LM, one must consider the factors which impact on the area from an historical and current perspective. This provides a holistic picture of the components contained within the area, as well as those components within the broader district and provincial contexts. By considering these factors, the development path for the Umdoni LM can be determined. The following demographic and socio-economic aspects are detailed upon within this section: Population Age & Gender Population Growth Population Density and Distribution Migration Trends Education profile Household Income Employment profile Health indicators
4.1.1 Population Umdoni Local Municipality covers approximately 252 km², which represents about 5% of the total area of the Ugu District Municipality. The population statistics for Umdoni Local Municipality compared to the national, provincial and district population, are set out in the Table 4.1.
As revealed by Table 4.1, approximately 10.3 million people resided in KwaZulu-Natal in 2011, of which only about 7% resided in the Ugu District Municipality. The table further reveals that the Umdoni Local
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Municipality had a population of less than 79 000 people in 2011 and had seen a large increase in annual growth between 2001 and 2011 with a growth rate of 2.4%, when compared to the growth rates on a national, provincial and district level. This could possibly be attributed to the movement from inland areas, to areas which provide more access to economic opportunities, social facilities and better service provision. The population of Umdoni contributes only about 11% to the total population for the Ugu District, which is understandable when considering that it only constitutes approximately 5% of the total District area.
TABLE 4.1: POPULATION FIGURES FOR NATIONAL, PROVINCIAL, DISTRICT AND LOCAL LEVEL Annual Average Growth rate Judicial Area 2001 Population 2011 Population (2001-2011) South Africa 44 819 778 51 770 560 1.5% KwaZulu-Natal 9 584 129 10 267 300 0.7% Ugu DM 704 030 722 484 0.3% Umdoni LM 62 375 78 875 2.4% Source: StatsSA Census 2001 and 2011 data, Kayamandi calculations
Table 4.2 below compares the population distribution and densities for the various local municipalities within the Ugu District.
TABLE 4.2: POPULATION DISTRIBUTION PER LOCAL MUNICIPALITY WITHIN THE UDM Percentage 2011 Percentage Density Local Municipality Area (km²) area split Population Population split (pop/km²) Vulamehlo LM 960 19% 77 403 11% 80.6 Umdoni LM 252 5% 78 875 11% 312.9 Umzumbe LM 1 259 25% 160 975 22% 127.8 Umuziwabantu LM 1 086 21% 96 556 13% 88.9 Ezinqoleni LM 648 13% 52 540 7% 81.0 Hibiscus Coast LM 839 17% 256 135 36% 305.2 Ugu District 5 044 100% 722 484 100% 143.2 Source: StatsSA Census 2011 data, Kayamandi calculations
When considering the population distribution amongst the six local municipalities within the Ugu District Municipality, it is clear that the Hibiscus Coast Local Municipality is home to more than a third of the population (36%), which is understandable as this local municipality is the economic hub of the Ugu district and includes various vibrant coastal towns regional centres such as Port Sheptstone, Hibberdene, Ramsgate, Margate and Port Edward. The Umzumble Local Municipality contributes 22% to the total population of the Ugu District, followed by Umuziwabantu with 13% population share. The smallest local municipalities in terms of population share within the district are Ezinqoleni (7%), followed by both Vulamehlo and Umdoni Local Municipality with respectively 11% population share in the Ugu District. It is however interesting to note that the Umdoni Local Municipality has the highest population density within the District with approximately 313 people per square kilometre.
4.1.2 Age and Gender In order to understand the dynamics of a community or population, it is important to consider the age distribution, as it will ultimately have an influence on the demand of the market and give insights into the future growth of an area. The age distribution for Umdoni Local Municipality for the year 2001 and 2011 are set out in Table 4.3.
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TABLE 4.3: AGE DISTRIBUTION FOR UMDONI LM, 2001 AND 2011 Percentage Percentage Age 2001 Population 2011 Population Distribution Distribution 0-4 years 5 268 8.4% 7 825 9.9% 5-14 years 12 639 20.3% 13 312 16.9% 15-34 years 22 629 36.3% 29 365 37.2% 35-64 years 17 690 28.4% 22 294 28.3% 65+ years 4 149 6.7% 6 079 7.7% Total 62 375 100% 78 875 100% Source: StatsSA Census 2001 and 2011 data, Kayamandi calculations
From the table above, it is understood that in 2001, approximately 28% of the population in Umdoni LM was younger than 15 years of age, and approximately 7% of the population was older than 65 years of age. This means that the remainder (approximately 65%) of the population fell within the Potential Economically Active Population. Potential Economically Active (PEA) population refers to everyone that falls within working age (15-64 years). When comparing the Umdoni population statistics of 2011 with that of 2001, it is clear that although there have been some changes in terms of proportion age distribution, the percentage of population that fall within the PEA population still accounts for approximately 65%. It is evident from the table above that there has been an increase in the proportion of the Umdoni Local Municipality’s population that are aged above 65 years, this could be an indication that people tend to move to coastal areas upon retirement in search of a better quality of life.
Figure 4.1 presents the gender distribution for the Umdoni Local Municipality in 2001 and 2011 respectively. It is clear that the male population share has increased by 1% from 48% in 2001 to 49% in 2011, and subsequently the female population has decreased from 52% to 51%. The increase in male population could be as a result of the development, or upgrading taking place in the municipality since 2009, and therefore men, who might also be the “head of household”, moving to Umdoni to seeking new or better job opportunities along the coast.
FIGURE 4.1: GENDER DISTRIBUTION FOR UMDONI LM - 2001 VS. 2011 COMPARISON
Source: StatsSA Census 2001 and 2011 data, Kayamandi calculations
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Figure 4.2 presents a population pyramid for Umdoni Local Municipality, whereby the population for 2011 is grouped according to age category and gender. When examining the population pyramid, it is clear that the population residing in Umdoni Local Municipality conforms to a constrictive pyramid form, indicating that birth rates are relatively low and the elderly death rate is also relatively low. It is clear from the figure that the Umdoni Local Municipality has a relatively large percentage share elderly population (older than 65 years) when compared to the national elderly proportion share of 5.3%. The youth category (15-34 years) is the most dominant age category in the Umdoni Local Municipality, which is in line with the National and Provincial trends.
In terms of gender distribution it is clear that the male population dominates the younger age categories namely children (0-14 years) and youth (15-34 years); while the female population dominates the older age categories namely the adults (35-64 years) and elderly (65yrs+). This trend of male dominance in younger age categories and female dominance in older age categories is a trend that is also recorded on a national, provincial and district level. This is expected as women in general have a higher life expectancy than their male counterparts.
FIGURE 4.2: POPULATION PYRAMID FOR UMDONI LM, 2011
Source: StatsSA Census 2011 data, Kayamandi calculations
The population pyramid once again confirms that the majority of the population residing in Umdoni Local Municipality falls within the PEA population, and thus development projects to be launched in the area, in theory, should have access to an abundance of human resources, irrespective of their skills availability. The fact that a considerable percentage of the population represent the youth, existing programmes focussed on youth and entrepreneurial development should be further exploited, and additional programmes benefitting youth, should be developed and implemented.
4.1.3 Population Growth Population growth and projections are important as it influences and guides planning for the distant future. Table 4.4 provides an indication of the projected population and household figures for 2015
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TABLE 4.4: ESTIMATED POPULATION & HOUSEHOLD GROWTH BASED ON HISTORICAL GROWTH 2001 Population 2011 Population 2015 Population 2020 Population Population 62 375 78 875 86 000 95 000 Households 16 481 22 867 25 000 27 700 Source: Kayamandi calculations based on StatsSA Census 2001, 2011 data, SPOT building counts, migration statistics.
The table above shows a gradual continual incline of population and households into the area for the next five years. Based on the calculations it is estimated that the Umdoni Local Municipality by 2020 will comprise of approximately 95 000 people and 27 700 households.
4.1.4 Population Density and Distribution The overall density for Umdoni Local Municipality is calculated to be approximately 314 people per square kilometre, which is high in comparison to the overall population density of the District (140/km²), the Province (110/km²) and the country (42.4/km²).
TABLE 4.5: POPULATION DENSITY (2011) Percentage Population Ward Population Area Distribution density 1 7 455 5% 12 km² 621/km² 2 9 905 10% 24.1 km² 412/km² 3 9 298 9% 23.7 km² 392/km² 4 6 863 11% 27.1 km² 253/km² 5 6 556 7% 16.9 km² 387/km² 6 6 078 1% 2.5 km² 2 449/km² 7 8 765 32% 81.2 km² 108/km² 8 9 211 5% 13.8 km² 668/km² 9 6 731 4% 10 km² 670/km² 10 8 013 16% 40.2 km² 199/km² Total 78 875 100% 251.5 km² 314/km² Source: Quantec database: Census 2011, Kayamandi calculations
As revealed by the table above (Table 4.5) and visually illustrated by Map 4.1, Ward 6 has the highest population density with approximately 2 450 people per square kilometre. The remainder of the municipality has a relatively high population density which varies from 108 to 670 people per square kilometre.
When looking at the population distribution within Umdoni Local Municipality (Table 4.5 above), it is clear that just below a third (32%) of the population reside in Ward 7, followed by Ward 10 (16%) and Ward 4 (11%). Regardless of the fact that Ward 6 has the highest population density, it also contributes the least to the total population (1%) of the municipality. This could be attributed to the densely populated suburbs of Umzinto, namely Asoka Heights and Hazelwood, within a small area that is Ward 6 (2.5km²). The following map illustrates the population distribution for Umdoni Local Municipality per Ward.
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MAP 4.1: POPULATION DISTRIBUTION FOR UMDONI LOCAL MUNICIPALITY
4.1.5 Migration Trends To determine possible factors influencing migration of people to Umdoni, the figure below provides insight to the number of people who moved to Umdoni per year since 2011.
FIGURE 4.3: NUMBER OF PEOPLE PER YEAR THAT MOVED TO UMDONI SINCE 2001
Source: StatsSA Census 2011 data, Kayamandi calculations
From the figure it is clear that the majority of in-migration to Umdoni Local Municipality occurred during 2009 to 2010, this could be as a result of people migrating to this area as a result of possible employment opportunities linked to the industrial development at Rynie Park. For that same period
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(2009-2010) 386 people had moved to Ugu District. Possibly indicating that more elderly residents are moving towards the coast to enjoy a more scenic retirement than what the urban areas provide. Another possible reason for migration to Ugu could be that people are seeking job opportunities that might be available in the Metropolitan (eThekweni) although they might not want to live in the city, therefore moving to Ugu, in order to still be in a comfortable commutable distance from eThekweni.
4.1.6 Education Analysing education levels is an important part of understanding the demographic background for any area as it has a direct influence on the local economy with regards to skills, employment and ultimately income.
The following table provides the highest education levels of residents older than 20 years in Umdoni Local Municipality in 2001 and 2011.
TABLE 4.6: HIGHEST LEVEL OF EDUCATIONAL ATTAINMENT FOR UMDONI LM, 2001 AND 2011 2001 Percentage 2011 Percentage Level of Education Population distribution Population distribution No Schooling 7 480 20% 4 140 9% Some Primary 6 885 18% 7 201 15% Complete Primary (Gr7) 2 111 6% 2 168 5% Some Secondary 11 011 29% 15 280 32% Complete Secondary (Gr12) 7 565 20% 14 666 31% Higher/ tertiary 2 745 7% 3 924 8% Total 37 798 100% 47 380 100% Source: StatsSA Census 2001 and 2011 data, Kayamandi calculations
The statistics in Table 4.6 above reveals that the percentage of individuals (20 years and older) with no education in Umdoni Local Municipality has decreased by 11%, while those that have completed high school has increased with 11% from 2001 to 2011. The data shows that the local population is attaining higher skills levels and are thus more able to become viable within the local workforce.
The table above shows that approximately a third (32%) of the adult population in Umdoni has some level of secondary education, but did not complete Grade 12. This could indicate that individuals do not feel compelled to complete their secondary education, as it is possible for them to complete certain diplomas and certificates without having received a matric certificate. Schooling within South Africa’s Education System is only compulsory through to Grade 9. Under the National Qualifications Framework (NQF) students may opt at the successful completion of Grade 9 to obtain the General Education and Training (GET) Certificate and to pursue employment or technical training at Further Education and Training (FET) institutions.
The geographic features of Umdoni could also contribute to the high proportion of individuals who have not complete Grade 12(61%). This can also be attributed to a lack of resources, as well as long and mountainous travelling distances can constrict individuals to journey to education facilities nearly 200 days each year.
The 61% non-completion rate of Umdoni is however considerably lower than the average at national (68%), provincial (70%) and district (77%) level. This suggests that there is either a higher quality of education, or more availability of educational facilities or other education resources.
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The data further implies that the majority of the adult population in Umdoni Local Municipality has low skills levels and would therefore very likely be employed in sectors that do not require a lot or specialised skills. Only about 8% of the adult population has achieved higher or tertiary education. Umdoni Local Municipality should therefore ensure that opportunities in these sectors which require a low skill base are adequate to ensure that programmes are developed that are aimed at improving education levels and skills.
4.1.7 Household Income Analysing household income levels can provide insight into a population’s poverty levels and living standards. Table 4.7 below illustrate the annual household income distribution for Umdoni Local Municipality for 2001 and 2011.
TABLE 4.7: ANNUAL HOUSEHOLD INCOME Income Level 2001 Percentage 2011 Percentage Classification distribution distribution None 18% 17% No Income R1- R4 800 10% 4% R4 801- R9 600 20% 8% Low income R9 601- R19 200 16% 21% R19 201- R38 400 15% 17% R38 401- R76 800 11% 13% R76 801- R153 600 6% 9% Middle income R15 3601- R307 200 3% 6% R307 201- R614 400 1% 3% R614 401- R1 228 800 0.3% 1% R1 228 801- R2 457 600 0.3% 0.2% High income R2 457 601 and more 0.0% 0.1% Unspecified 0.2% 0.0% - Total 100% 100% - Source: StatsSA Census 2001 and 2011 data, Kayamandi calculations
In 2011, 17% of households in Umdoni had indicated that they receive no income. The rural nature of Umdoni Local Municipality could result in low job opportunities available, and therefore a high rate of “no income earners”. One third (33%) of the households in Umdoni Local Municipality fell within the low income classification, while 49% of households fell within the middle income classification and as little as 1% of the households are high income earners. This could be as a result of majority of the area having agrarian terrains, which is used mostly for sugarcane planting or the primary sector. Although the mountainous terrain calls for higher labour input, than on more flat terrain, the industry does not employ as many individuals as it would in an urban economy, or a more industrialised sector.
Based on the average annual household income it is assumed that the majority of households in Umdoni Local Municipality are struggling to afford basic necessities, and can be classified according to the South African Audience Research Foundation’s (SAARF) Living Standard Measurement (LSM) as Level 1 or Level 2 households. This means that the heads of these households typically fall within the 15-24 or 50 and older age categories, have completed some primary or secondary education, live in a small town or rural area and their dwellings comprise of either a shack or traditional hut.
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These households are also typically very dependent on social grants. Despite the fact that social grants aim to improve the living standards of poverty stricken and needy individuals and households by redistributing wealth in order to create a more equitable society, it could also lead to a dependency mind-set which can cause despondency and unwillingness of individuals to look for employment or create their own income-generating opportunities. A high dependency on social grants furthermore leads to increased government spending per year.
Figure 4.4 presents the percentage distribution of annual household income for 2001 and 2011.
FIGURE 4.4: UMDONI LM: ANNUAL HOUSEHOLD INCOME DISTRIBUTION, 2001 AND 2011
Source: StatsSA Census 2001 and 2011 data, Kayamandi calculations
From the figure it is clear that there has been a significant decrease in the percentage of households earning less than R9600 per annum from 2001 to 2011, while an increase is recorded in the percentage of household earning middle to high annual household income. From the figure it is clear that the percentage of households classified as earning a low income (R0 – R19200) have decreased from 64% in 2001 to 50% in 2011. The middle income category have increased from 35% in 2001 to 49% in 2011, while the high income category increased from 0.6% in 2001 to 1% in 2011. These changes can be attributed to inflation, or to a more developed economy than in 2001, which therefore results in better quality jobs, and most likely increased remuneration.
Map 4.2 presents the geographic distribution of annual household income in Umdoni Local Municipality for 2011. The map reveals that more than half of the residents in Ward 4, Ward 5 and Ward 10 are receiving annual household incomes of the middle income category (between R19 201 and R614 400 income per year). The remaining wards (Wards 1, 2, 3, 6, 7, 8 and 9) host the majority of the residents who earn low incomes (no income to R19 200 per year).
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MAP 4.2: GEOGRAPHIC DISTRIBUTION OF ANNUAL HOUSEHOLD INCOME FOR UMDONI LM
4.1.8 Employment When dealing with employment, a clear understanding of the difference between Potential Economically Active (PEA) population and Economically Active Population (EAP) has to be evident: Potential Economically Active (PEA) population refers to all individuals of working age (15-64), irrespective of disabilities, school attendance, willingness to work or employment status. Economically Active Population (EAP) refers to only those individuals (aged between 15 and 64) that are currently employed or are willing and available to work or have been actively looking for work over the last four weeks, and excludes those individuals that are discouraged work seekers (have not actively looked for work over the last four weeks), those unwilling to work (homemakers/housewives, early retirees), unable to work due to an injury or disability and those that are attending an education institution on a full-time basis.
Table 4.8 presents the employment statistics on a district and local municipal level for 2001 and 2011. From the table it is revealed that the current PEA population accounts for 65.5% of the total population in Umdoni Local Municipality, while the EAP accounts for only 31.7%. The unemployment rate for the potential economically active population is thus 16%, while the unemployment rate for the Economically Active Population is calculated at 33%. In comparison to Ugu District, Umdoni has 5.5% more PEA and 6.7% more EAP. When coupled with migration and population trends, this could add to the suspicion that residents from other local municipalities in Ugu are moving to Umdoni for improved quality of life.
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The current PEA population for KwaZulu-Natal accounts for 63% of the provinces total population, while the EAP accounts for 30%. Therefore Umdoni Local Municipality has a higher potentially active population as well as an economically active population.
The National and Provincial unemployment rate for the Potential Economically Active Population are similar to that of Umdoni with 16.5% and 15.5% respectively.
TABLE 4.8: EMPLOYMENT STATISTICS FOR UGU DM AND UMDONI LM Ugu District Municipality Umdoni Local Municipality % of Total % of Total % of Total % of Total 2001 2011 2001 2011 Pop Pop Pop Pop PEA 398 876 57% 434 080 60% 40 210 64.6% 51658 65.5% EAP 176 229 25% 179 589 25% 22 807 36.7% 25 034 31.7% Total population 703 949 100% 722 484 100% 62 227 100.0% 78 875 100.0% Employment Status (%) - PEA % of total % of total % of Total % of total 2001 2011 2001 2011 PEA PEA Pop PEA Employed 85 358 21% 116 420 27% 13 437 33% 16 698 32% Unemployed 94 543 24% 63 169 15% 9 739 24% 8 337 16% Not Working 222 647 56% 254 491 59% 17 403 43% 26 624 52% Total PEA 398 876 100% 434 080 100% 40 210 100% 51 658 100% Employment Status (%) - EAP % of total % of total % of Total % of total 2001 2011 2001 2011 EAP EAP Pop EAP Employed 85 358 48% 116 420 65% 13 437 59% 16 698 67% Unemployed 94 543 54% 63 169 35% 9 739 43% 8 337 33% Total EAP 176 229 100% 179 589 100% 22 807 100% 25 034 100% Source: StatsSA Census 2001 and 2011 data, Kayamandi calculations
4.2 Environmental Profile
Umdoni Local Municipality is bordered by the Indian Ocean on its eastern side. This coast line stretches about 40 km. The coastal characteristics such as the estuaries, dunes, sandy beaches and rocky shores provide significant attractions and touristic income for the local economy. The natural resource base of Umdoni Local Municipality is strong as there are various types of resources; which includes high potential agricultural land, rock formations, coastal lines and natural estuaries and lagoons. The resource base has not yet been used to its full potential, and there is a gap to produce and deliver various ecosystem goods and services. Although as transformation and degradation increases, the level of supply of ecosystem goods and services will decrease. According to Ugu’s Coastal Management Programme (2015 draft) there are ten estuaries in Umdoni Local Municipality. Each of these estuaries had been analysed in the South African National Biodiversity Assessment for 2011, where one was determined to be in an excellent condition, four in a fair condition, four in a poor condition and the last remain unanalysed.
Map 4.3 presents the distribution of average annual rainfall that Umdoni Local Municipality receives. The municipality is however currently experiencing a drought. The average temperatures experienced by the municipality vary between a minim of 16.9°C and maximum of 23.7°C.
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A Strategic Environmental Assessment (SEA) had been done for the Umdoni Local Municipality during 2010/11. The SEA determined that more than 75% of the municipality has been transformed, and as a result the area is subject to impacts relating to large-scale transformation. The study included an estuarine component which concluded that estuaries in Umdoni LM are highly degraded. The riverine systems are also believed to be in a very poor state of “health” and are therefore highly vulnerable. The SEA concludes that based on these environmental constraints experienced in Umdoni, the future for the natural systems in Umdoni is very bleak and could have a potentially high negative impact on the other coastal assets of the area. Umdoni Local Municipality’s natural resources now has more constraints than opportunities available for development, and therefore has exceeded the thresholds of sustainability, and the term “development” will need to be reviewed for this ecologically sensitive area.
MAP 4.3 UMDONI LOCAL MUNICIPALITY CLIMATE PROFILE
The environmental assets of Umdoni are clearly the main attraction of the area and provide a strong comparative advantage. These assets include the beaches and sea which provide recreational activities such as surf and rock fishing, deep-sea fishing, tidal pools, surfing and scuba diving. However, unless maintenance is done on any remaining natural systems, the potential of having an active ecosystem and high tourism economic effects will decrease. It is critical to ensure the continued delivery of the ecosystem services along with the required biodiversity upliftment occurs in order to provide continued economic activity in the area. Untransformed land in the local municipality are of conservation importance and play an important role when considering future developments, as it is important that the biodiversity features are not negatively affected. Umdoni’s ecosystem consists mainly of coastal forests and thornveld vegetation types, which is presented in Map 4.4. Map 4.5 presents the land coverage within the Umdoni Local Municipality. The area is mainly cultivated land and thickets and bushland.
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MAP 4.4 UMDONI LOCAL MUNICIPALITY VEGETATION TYPES
MAP 4.5 UMDONI LOCAL MUNICIPALITY LAND COVERAGE
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Map 4.6 below presents the broad soil patters found in Umdoni Local Municipal area. It is clear that area mainly consists of Glenrosa and Mispah soil forms. These soils are generally shallow, have a variable fertility and water holding capacity depending on the rock type form which they are derived.
MAP 4.6 UMDONI LOCAL MUNICIPALITY SOIL PROFILE
Map 4.7 presents the most important natural attributes (waterbodies, wetlands and ridges within the Umdoni Local Municipality. From the map it is clear that the Umdoni area has various natural assets and environmental attributes such as ridges, rivers, waterbodies and wetlands. The Municipality also borders the Aliwal Shoal MPA, which creates numerous opportunities linked to tourism, especially divining activities. Umdoni hosts three of the eleven golf courses along the ‘Golf Coast’, and therefore also attracts a lot recreational activities in this regard.
According to the Municipality’s IDP (2014/15), there are no formal Protected Areas or informal Natural Heritage Sites with the municipality. There are however eight Sites of Conservation Significance (SoCS), one conservancy and three green wedge areas. The table below provides a summary of these informal conservation areas in Umdoni Local Municipality.
TABLE 4.9: UMDONI LM CONSERVATION AREAS Conservation area Type Category Ownership Leylands Bush Informal SoCS 123 Municipal Mkondweni Informal SoCS 124 Municipal Quakweni Informal SoCS 125 Municipal TC Robertson Memorial Sanctuary Informal SoCS 004 Municipal Mzinto Lagoon Nature Reserve Informal SoCS 074 Municipal Nkomba Bird Sanctuary Informal SoCS Municipal
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Conservation area Type Category Ownership Makamati Dam Informal SoCS 075 Municipal Gwala Gwala Informal SoCS 284 Private Pennington Conservancy Informal Conservancy Municipal/Private Farm Abrams Informal Green Wedge 3 Private Umdoni Park I Informal Green Wedge 4 Private Sezela Informal Green Wedge 5 Private Source: Umdoni Local Municipality IDP (2014/15)
MAP 4.7: ENVIRONMENTAL ATTRIBUTES AND INFORMAL CONSERVATION AREAS
As a result of the findings of the study the SEA suggest that investment is a non-negotiable, and must bring enhancement in the remaining, untransformed natural capital as well as the vital rehabilitation of the eco-systems that have been compromised. They also stress that it would be irresponsible to allow traditional development in Umdoni.
The SEA 2010/11 set out an Integrated Environmental Management Programme to provide pro-active tools and guidelines to guide decision making within the Local Municipality from an environmental perspective. The following activities for environmental management have been identified by the Umdoni Local Municipality SEA 2010/11: Rehabilitation of natural capital The facilitation of the Town Planning Scheme with the SEA, and adjustment of the SDF Actions related to water resources Natural resource rehabilitation Building costal resilience Management of Storm water runoff and water quality
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It has been a common phenomenon at local government level throughout South Africa to (unintentionally) regard environmental issues such as implementing initiatives to reduce carbon footprint and combat climate change as a non-priority. However, in this area it is a pressing issue as the degradation of environmental resources can be directly linked to the decline in the tourism industry and therefore a decline in the local economy.
Innovative concepts identified by the Ugu District Municipality for creating more sustainable development and decreasing the carbon footprint include the following: A Refuse buy-back voucher centre Recycling facilities (for various types of products, e.g. tyres, plastic, paper, household and commercial waste) Recycled goods manufacturing cooperatives that produce plastic furniture, gifts, arts and crafts and handmade paper, etc. Communal vegetable gardens using compost made from green/organic waste, and promote household/individual gardens and compost heaps The installation of bio-digester units vs. conventional sewerage systems for household use Household rainwater harvesting tanks Solar powered geysers and solar panels
4.3 Infrastructure Profile
In order to evaluate the quality of life of the Umdoni Local Municipality’s population, it is important to establish to what extent households has access to basic services (water, electricity, sanitation and refuse removal) and proper housing, as well as other basic services such as health and education.
The current health facilities found within Umdoni Local Municipality includes the G.J. Crookes Hospital, three fixed clinics, one gateway clinic, one Emergency Medical Service, one Medico-Legal Mortuary and seven mobile clinics. The municipality also boasts disaster management facilities and 10 members of each ward have been capacitated in basic firefighting and first aid. The educational facilities that are available within Umdoni include two Pre-Primary Schools, twenty-five Primary Schools, eight Secondary Schools and three Combined Schools. According to Local Municipality’s Draft SDF Draft Status Quo Report 2013, the application of planning standards for educational facilities provides standards that indicate that (according to Umdoni’s population figure) 19-22 primary schools are needed and 8- 13 secondary schools are essential to make adequate provision for the local education demand. This concludes that Umdoni is within acceptable range for primary schools, but below the standards for secondary schools.
Table 4.10 provides data on the access of households to water in Umdoni Local Municipality for 2001 and 2011. The table indicates that the majority (87%) of households have access to piped water, either from a tap inside their dwelling (36%), from a communal tap less than 200m away (28%), from a communal tap that is further than 200m away (12%) or from a tap inside their yard (11%). It is however of great concern that more than half of the households in Umdoni Local Municipality (53%) does not have access to water within their own yard. Taking into consideration the KZNPGDP Target of 50% households with yard water connections by 2030, greater focus needs to be placed on providing water supply infrastructure to the communities within Umdoni Local Municipality.
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TABLE 4.10: HOUSEHOLD ACCESS TO WATER FOR UMDONI LM, 2001 AND 2011 Household Access to Water 2001 2011 Tap inside dwelling 37% 36% Tap inside yard 12% 11% Communal tap less than 200m from dwelling 13% 28% Communal tap more than 200m from dwelling 24% 12% Borehole /rainwater tank / well 1% 4% Water-carrier / tanker / water vendor 0% 2% Dam /river /stream/ spring 9% 2% Other/ unspecified 3% 4% Total 100% 100% Source: StatsSA Census 2001 and 2011 data, Kayamandi calculations
Table 4.11 presents the percentage of households using different sources of energy for lighting purposes for 2001 and 2011, providing an indication of the access to electricity within the Umdoni Local Municipality.
TABLE 4.11: HOUSEHOLD ACCESS TO ELECTRICITY FOR UMDONI LM, 2001 AND 2011 Energy Used for Lighting 2001 2011 Electricity 66% 76% Gas 0.4% 0.4% Paraffin 4% 1% Candles 28% 21% Solar 0.2% 0.2% Other/ unspecified 2% 0.3% Total 100% 100% Source: StatsSA Census 2001 and 2011 data, Kayamandi calculations
From the table it can be deduced that the majority of households in 2011 in the Umdoni Local Municipality had access to electricity (76%), which is a significant increase from the 66% that had access to electricity in 2001. However, great efforts still needs to be made in order to reach the target set in the KZNPGDP of 89% households with access to electricity by 2020 and 98% by 2030. A major concern however arises in that more than a fifth (21%) of the households in Umdoni LM use candles as the main source for lighting, which creates a major environmental and health risk in terms of fire hazards in the settlements.
Table 4.12 presents the percentage of households within Umdoni Local Municipality with access to proper sanitation in 2001 and 2011. From the table it is clear that the majority of the households in Umdoni Local Municipality make use of flush toilets (46%), which is however a decrease from the 50% in 2001. This could be as a result of the increase in households that have moved into the municipality since 2001, therefore creating an increasing sanitation services backlog. This figure is however much higher than the proportion of households who have access to flush toilets in Ugu Districts Municipality (26%), and it is slightly higher than KwaZulu-Natal (45%). Nearly a third of households (31%) make use of pit latrines, which poses great health risks to the community. What is also evident is that there has been an increase in the supply of VIP’s in Umdoni Local Municipality (pit latrine with ventilation pipes). Although another major concern is that 2% of the population in Umdoni Local Municipality do not have access to any sanitation facilities.
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TABLE 4.12: HOUSEHOLD ACCESS TO PROPER SANITATION FOR UMDONI LM, 2001 AND 2011 Household Toilet Facility 2001 2011 Flush toilet 50% 46% Chemical toilet 8% 4% Pit latrine with ventilation (VIP) 9% 12% Pit latrine without ventilation 24% 19% Bucket toilet 1% 7% None 9% 2% Other / unspecified 0% 10% Total 100% 100% Source: StatsSA Census 2001 and 2011 data, Kayamandi calculations
Table 4.13 presents the percentage of households in Umdoni Local Municipality with access to refuse removal services for 2001 and 2011. From the table it is clear that 45.4% of households do not have access to refuse removal services by the local municipality. More than half (54%) of the households in Umdoni do however have access to refuse removal by die municipality (either through collection or communal refuse dump).
TABLE 4.13: HOUSEHOLD ACCESS TO REFUSE REMOVAL SERVICES, 2001 AND 2011 Household Refuse Removal 2001 2011 Removed by local authority at least once a week 42% 53% Removed by local authority less often 1% 1% Communal refuse dump 3% 2% Own refuse dump 47% 43% No rubbish disposal 7% 2% Other/ unspecified 0% 0.4% Total 100% 100% Source: StatsSA Census 2001 and 2011 data, Kayamandi calculations
The KwaZulu-Natal Growth and Development Plan (2011-2030) has set itself the target of improving on the housing backlog by 7% by 2015 (from 17.9% backlog baseline in 2010) and a further 7% decrease by 2020, 2025 and 2030. Table 4.14 provides the percentage of households per dwelling type for 2001 and 2011 in Umdoni Local Municipality.
TABLE 4.14: TYPE OF DWELLING OCCUPIED BY HOUSEHOLDS IN UMDONI LM Category Dwelling Types 2001 2011 House or brick structure on a separate stand or yard 42% 67% Town/cluster/semi-detached house (simplex, duplex or triplex) 2% 2% Formal Flat in a block of flats 11% 4% House/flat/room in backyard 1% 1% Room/flatlet not in backyard but on shared property 2% 1% Informal dwelling/shack in backyard 3% 1% Informal Informal dwelling/shack NOT in backyard (e.g. in an 10% 12% informal/squatter settlement) Traditional Traditional dwelling/hut/structure made of traditional materials 22% 12% Not specified Other/unspecified/Not applicable 8% 1% Total 100% 100% Source: StatsSA Census 2001 and 2011 data, Kayamandi calculations
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From the table it is evident that the majority of households in Umdoni reside within a formal housing (75%), of which brick structures on a separate stand or yard are the most dominant (67%). Compared to the 57% of households residing in formal housing in 2001, it is clear that there have been major improvements within the Umdoni Local Municipality in terms of housing provision. Umdoni has 3% more formal dwellings when compared to the Province and 10% more households living in formal structures than in Ugu.
Various housing projects have been implemented in Umdoni Local Municipality. Collectively over 7 200 houses have been built for flood victims, through the Malangeni Rural Housing Project as well as the Ifafa Glebe Housing Project. Some of the current housing projects include Amahlongwa Mission Reserves Rural Housing Project and Umzinto Slums Clearance Housing Project which is estimated to provide 2 905 homes. Other housing feasibilities are currently underway in order to address the housing backlog. There is a dire need for community rental units in both rural and urban areas, and a call has been made for land owners, in and around Umzinto, Ghandhinagar and Shayamoya, to dispose their land for the Municipalities human settlements project, as this will assist in relieving the pressure for housing assistance. According to Ugu’s consolidated SDF report (2011) Mandawe and Malangeni will also be upgraded to small clusters of low to middle income housing.
Table 4.15 presents the data in regards to the tenure status of dwellings within the Umdoni Local Municipality for 2001 and 2011. The KZNPGDP includes targets to improve the household with registrable form of tenure from 55.1% in 2010 to 56% in 2015 and 57% in 2020.
TABLE 4.15: TENURE STATUS FOR HOUSEHOLDS RESIDING IN UMDONI LM Tenure Status 2001 2011 Rented 24% 24% Occupied rent-free 13% 16% Owned but not yet fully paid 13% 12% Owned and fully paid off 42% 45% Other 8% 3% Total 100% 100% Source: StatsSA Census 2001 and 2011 data, Kayamandi calculations
From the above table it is evident that the majority of households in 2011 (57%) within the Umdoni Local Municipality owned (whether fully paid off or not) the dwellings that they resided in. This translates well to the target set by the KZNPGDP, as previously indicated.
Another important aspect regarding infrastructure includes the telecommunication in Umdoni. Despite the efforts of erecting various cell masts in the area, many settlements still do not have network coverage. According to the Umdoni Local Municipality IDP 2015/16, the municipality is considering engaging the network service providers to deliberate the provision of cell masts for the remaining settlements.
4.4 Economic Profile
This section aims to put the economic profile of Umdoni Local Municipality into the National, Provincial and District economic context through looking at various economic indicators and through drawing a number of comparisons.
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4.4.1 Macro Economic Profile In order to enhance the analysis of the economic component within the Umdoni Local Municipality, as well as define in which sectors the municipality has a comparative advantage over other regions in the Ugu District Municipality, several analysis techniques are used. To provide a better understanding of these techniques, the terminologies associated with these techniques are defined below. Gross Domestic Product (GDP) is defined as the market value of all final goods and services produced within a country in a given period of time. The higher the GDP the higher the income in the Region. The size of an economy is usually measured by its GDP. This value is equal to the economic wealth of the country; all things of economic value that can be bought or sold that have been produced in the region in one year. This includes all goods, such as bread, maize, cars and gold, as well as all services, such as taxi rides, telephone units, haircuts, hotel rooms and tickets to soccer matches. Gross Regional Domestic Product (GDPR) of a region is the total value of all final goods and services produced within the boundaries of a region in a particular period. Gross Value Added (GVA) is a measure of the value of goods and services produced in an area, industry or sector of an economy. In national accounts GVA is output mines intermediate consumption; it is a balancing item of the national accounts’ production account. GVA is linked as a measurement to GDP, as both are measures of output. The relationship is defined as: GVA + taxes on products – subsidies on products = GDP. As the total aggregates of taxes on products and subsidies on products are only available at whole economy level, GVA is used for measuring the Gross Regional Domestic Product (GDPR) and other measures of the output of entities smaller than a whole economy. Multiplier Effect is a measure of the Indirect and Induced employment that is created by increasing employment in a Sector by one Location Quotient (LQ) is a means of comparing the performance of regions against a benchmark region, usually the Province or the Nation. It compares how a sector is performing in a region, compared to the performance of the same sector in the benchmark region. A LQ of 1 means that the regions are performing equally, whereas a LQ of less than 1 means that the regions is not performing well. A LQ of more than one shows that the region is out-performing the other regions. Industrial Mix (IM) measures the share of regional economic change that could be attributed to the benchmark region’s industry mix. It reflects the degree to which the local region specialises in industries that are fast or slow growing in the benchmark economy. A positive industry mix reveals that a region specialises in provincial fast growing industries, whereas a negative industry mix reveals that the region specialises in provincially declining industries. Differential Share (DS) is reflected in the difference between the industry’s local regional growth rate (or rate of decline) and the industry’s benchmark region growth rate. Some regions and some industries generally grow faster than others, even during times of overall prosperity. Carvalho Scale combines the Location Quotient, Industrial Mix and Differential Share to give a sectoral breakdown of a region’s potential for growth and its potential strengths and weaknesses. The Location Quotient is used to provide information on concentration of employment or GDP, while the Industrial Mix and Differential Share components provide an assessment of sector capacity for growth/decline, compared to Provincial trends (in that Sector). Therefore, the Carvalho Scale combines the two in order to classify the past growth of the economic sectors of a
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region into one of nine categories, based on whether it had a High, Medium or Low LQ and whether it had a Leading or Lagging IM and DS.
The nine classifications of the Carvalho Scale is presented in Table 4.16, with an outline of the associated location quotient, provincial sector relative growth, location relative growth and Industry Targeting classifications.
TABLE 4.16: THE NINE CLASSIFICATIONS OF THE CARVALHO SCALE LOCATION PROVINCIAL LOCATION INDUSTRY CARVALHO QUOTIENT SECTOR RELATIVE RELATIVE TARGETING CLASSIFICATION (LQ) GROWTH (IM) GROWTH (DS) CLASSIFICATION > 1.25 (High) Leading Leading Driving 0.75 – 1.25 Current strength Leading Leading Accelerating (Medium) < 0.75 (Low) Leading Leading Rising Emerging strength > 1.25 (High) Lagging Leading Evolving Prospects limited by 0.75 – 1.25 Lagging Leading Transitional external trends (Medium) Prospects limited by < 0.75 (Low) Lagging Leading Moderate weak base & external trends > 1.25 (High) Leading Lagging Promising High priority retention 0.75 – 1.25 Leading Lagging Yielding target (Medium) Prospects limited by < 0.75 (Low) Leading Lagging Modest weak base & declining competitiveness > 1.25 (High) Lagging Lagging Challenging Prospects limited by 0.75 – 1.25 weak base & declining Lagging Lagging Vulnerable (Medium) competitiveness Prospects limited < 0.75 (Low) Lagging Lagging Marginal overall Source: Newkirk, R.S. 2002
4.4.1.1 GVA and GDP Contribution In order to gain perspective on the economic situation within a specific area, the GVA contribution for that specific area needs to be considered. Table 4.17 provides an overview of the GVA contribution per economic sector for South Africa, the KwaZulu-Natal Province, Ugu District Municipality and Umdoni Local Municipality.
Table 4.17 shows that the GVA for Umdoni Local Municipality in 2013 was over R3.7 billion, about two and half times more than the 2003 GVA at R1.4 billion. The greatest contributor towards Umdoni Local Municipality’s GVA in 2013 was made by the business services sector, which shows a higher contribution than the District and Provincial average contribution. This in essence shows the relative importance of the Business Services Sector in Umdoni Local Municipality. This could be attributed to the infrastructure upgrades that were done to the tarred and gravel roads in the Umdoni Local Municipality, therefore increasing the accessibility and efficiency for both customers and employers. The Wholesale & Retail trade sector contributes the second most towards the Local GVA (20%) followed by the manufacturing sector (16%). It is however noticeable that since 2003, the Manufacturing sector has seen a substantial decline of 10% in GVA contribution in the Umdoni Local
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Municipality. This could possibly be due to the close proximity of the Local Municipality to the well- established industrial areas in Durban.
TABLE 4.17: SECTORAL SHARE OF GVA AT CURRENT BASIC PRICES, 2003 AND 2013 KWAZULU- SOUTH AFRICA UGU DM UMDONI LM NATAL 2003 2013 2003 2013 2003 2013 2003 2013 GVA (R/million) 1 155 150 3 030 263 189 679 480 382 8 059 21 338 1 481 3 707 Agriculture 3% 2% 6% 4% 14% 8% 11% 8% Mining 7% 9% 2% 2% 1% 1% 0% 1% Manufacturing 19% 12% 26% 16% 19% 17% 26% 16% Utilities 3% 3% 3% 3% 4% 3% 3% 1% Construction 2% 4% 2% 3% 2% 4% 1% 3% Retail trade 14% 17% 14% 18% 17% 19% 16% 20% Transport 10% 9% 13% 13% 10% 12% 10% 9% Business 20% 22% 16% 19% 14% 17% 17% 22% services Social services 6% 6% 6% 6% 6% 6% 6% 6% Government 15% 17% 13% 15% 12% 13% 11% 13% services Total 100% 100% 100% 100% 100% 100% 100% 100% Source: Quantec Research 2015, Kayamandi calculations
The agricultural sector in Umdoni Local Municipality shows a higher contribution towards GVA when compared to the average contribution of the KwaZulu-Natal Province and South Africa. The Umdoni Local Municipality is characterised by commercial agriculture, dominated primarily by sugar cane fields. However, since 2003, the agricultural sector has seen a decline of 3% in GVA contribution in the Umdoni Local Municipality. This could be as a result of various factors such as rising input costs, drought, etc.
Table 4.18 below shows the contribution of each of the local municipalities contained within Ugu District Municipality towards the District GDP, as well as the contribution of each Local Municipality’s economic sectors towards the District’s economic sector:
TABLE 4.18: CONTRIBUTION OF LMS TO SECTORAL GDP OF THE UGU DM, 2013 Umdoni Vulamehlo Umzumbe Umuziwabantu Ezingoleni Hibiscus Ugu Sector LM LM LM LM LM coast LM DM Agriculture 17% 5% 31% 9% 2% 37% 100% Mining 31% 27% 9% 11% 5% 18% 100% Manufacturing 17% 2% 10% 14% 2% 55% 100% Utilities 7% 1% 6% 6% 4% 75% 100% Construction 16% 5% 13% 7% 7% 54% 100% Retail trade 18% 4% 12% 6% 4% 56% 100% Transport 14% 6% 8% 5% 10% 58% 100% Business services 22% 4% 13% 11% 1% 49% 100% Social services 18% 4% 15% 12% 3% 48% 100% Government services 17% 3% 12% 15% 5% 48% 100% Total 17% 4% 13% 10% 4% 52% 100% Source: Quantec Research 2015, Kayamandi calculations
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From the table above, it is clear that highest contributor towards the Districts total GDP is the Hibiscus Coast Local Municipality (52%), followed by the Umdoni Local Municipality (17%). It is also interesting to note that despite the fact that the mining sector does not contribute significantly towards the local economy of Umdoni Local Municipality, it contributes the most towards the GVA for mining in the District when compared to the other local municipalities. The table furthermore reveals that the Hibiscus Coast Local Municipality is the major regional node of the District, based on the dominant distribution of sector contribution.
4.4.1.2 Annual GVA Growth To provide an overview of Umdoni Local Municipality’s economic performance, the annual growth in GVA for the area over a ten year period need to be examined and considered. Figure 4.5 presents the annual growth in GVA from 2003 to 2013 for South Africa, KwaZulu-Natal Province, Ugu District Municipality and Umdoni Local Municipality.
FIGURE 4.5: ANNUAL GVA GROWTH, 2003-2013
Source: Quantec Research 2015, Kayamandi calculations
From the figure above it is clear that the GVA growth in Umdoni Local Municipality broadly follows the same growth trend as the district, province and country at large. The latest recorded GVA growth for Umdoni Local Municipality of 1.6% (2012 to 2013), is slightly higher than the average for the District (1.4%), but slightly lower than the average for South Africa (1.9%) and KwaZulu-Natal (1.8%).
When examining the GVA growth for the six local municipalities contained within the Ugu District Municipality (Figure 4.6), it shows that Umdoni Local Municipality follows the same trend than the other five municipalities, with uMuziwabantu Local Municipality showing, on average, more positive and rapid growth compared to the remaining five local municipalities.
The latest recorded growth rates for the various local municipalities (2012 to 2013) reveal that Umzumbe LM recorded the highest growth rate (2.8%), followed by Umuziwabantu LM and Enzingoleni LM (2.3% respectively), Umdoni LM (1.6%), Hibiscus Coast LM (0.9%), and Vulamehlo LM (0.5%).
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FIGURE 4.6: ANNUAL GVA GROWTH - LM COMPARISON, 2003-2013
Source: Quantec Research 2015, Kayamandi calculations
4.4.1.3 Carvalho Classifications Table 4.19 below shows the Carvalho Classifications, as well as the prospects for each of the economic sectors for the Umdoni Local Municipality. Umdoni Local Municipality’s economic sectors are compared to the Ugu District Municipality’s economic sectors and are based on the GDPR growth between 2003 and 2013.
TABLE 4.19: UMDONI LM ECONOMIC SECTOR CARVALHO CLASSIFICATIONS INDUSTRY LQ IM DS CS PROSPECTS Prospects limited by external Agriculture 0.92 Lagging Leading Transitional trends Prospects limited by external Mining 1.60 Lagging Leading Evolving trends Manufacturing 1.04 Leading Lagging Yielding High priority retention target Utilities 0.38 Lagging Lagging Marginal Prospects limited overall Construction 0.86 Leading Leading Accelerating Current strength Prospects limited by external Retail trade 0.99 Lagging Leading Transitional trends Transport 0.80 Leading Lagging Yielding High priority retention target Business services 1.24 Leading Leading Accelerating Current strength Prospects limited by external Social services 0.98 Lagging Leading Transitional trends Government Prospects limited by external 0.95 Lagging Leading Transitional services trends Source: Quantec Research 2015, Kayamandi calculations
The mining, manufacturing and business services sectors have a comparative advantage in their respective sectors as a result of them having a LQ value greater than 1. This indicates that these sectors are out performing their respective sectors at district level and thus, play a major role in the development and growth of the local and district economies. The mining sector has a LQ value greater than 1.25, which indicates that this sector serve a larger needs spectrum which extends beyond the
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The agriculture, manufacturing, construction, retail trade, business services, community services and government services sectors has a LQ value within the range between 0.75 and 1.25, which depicts sectors which can provide at a subsistence level to the local community and thus is a self-sufficient unit catering for the local communities within Umdoni Local Municipality.
The lowest performing sector in Umdoni Local Municipality in comparison with the District, is the utilities sector, which have a LQ value of lower than 0.75. The data suggest that this sector is not meeting the local needs of the municipality and are importing the majority of its goods/service in order to operate.
According to the Carvalho Classification and prospects, Umdoni Local Municipality’s current strength fall with the construction and business services sectors. The agriculture, mining, utilities, retail trade, community services and government services sectors have limiting prospects due to either external trends or a declining competitiveness or a weak base. The manufacturing and transport sectors are classified as a high priority retention targets. This could be contributed to the strategic location of Umdoni as it is midway between Durban and Port Shepstone.
Figure 4.7 illustrates the GDP shift share coefficients for Umdoni Local Municipality. In order to understand the data depicted below and the relevance and significance of the results, reference is made to understanding the concepts of Shift Share Analysis (SS), and also the coefficients of the analysis which relate to the Regional Share (RS), Industrial Mix (IM) and the Differential Shift (DS). These concepts are discussed along with the conclusions gained from the data.
FIGURE 4.7: GDPR SHIFT SHARE CHANGE: UMDONI LM TO UDM, 2003 TO 2013
Source: Quantec Research 2015, Kayamandi calculations
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Shift Share analysis compares the local growth/decline of a certain sector to the growth/ decline experienced by the same sector in the larger region (in this case the District), as well as to the growth/decline in the overall economy of the larger region. As such, the Shift Share analysis separates the growth/decline of a specific sector locally from external factors, such as the influence of the total growth in the larger region, the influence of growth in the same sector in the larger region and the influence of local factors. The Shift Share analysis, therefore, allow a better understanding of the local economic structure.
The Regional Share (RS) refers to the change that could be occurred in a sector of the local economy if that sector had grown at the same rate as that of the larger region (or in this instance Ugu District Municipality). The RS is, therefore, reflected in the difference between the Ugu District Municipality GDP Growth Rate (or rate of decline) between 2003 and 2013 in comparison to the local sector in 2003, indicating how much of the growth in the local sector can be attributed to the economy of the Ugu District Municipality. The RS for Umdoni Local Municipality shows that none of the economic sectors of the Local Municipality has had a negative regional share value. Further cognisance has to be given to the fact that the data indicates that the manufacturing, retail trade and business services sectors can attribute the growth experienced in these sectors to the growth experienced in the Ugu District economy. All other sectors show a low to marginal influence when related to the RS or District growth impacts.
The IM shows leading sectors in the economy that are specialising on a local level in industries/sectors of the economy that are growing faster than the Benchmark or District economy. The data suggest that the manufacturing and business services sectors are well performing sectors which could provide the possibilities for further development and diversification of functions and activities. The negative values shown above, depicts the lagging industries/sectors within Umdoni Local Municipality. The core indication here is that these lagging industries/sectors are industries/sectors in which the Umdoni Local Municipality is specialising, whilst the sector is declining at a district level. Agriculture is the main sector showing a lagging tendency in the Municipality which ultimately means that the Municipality should seek to create diversification within its local economy in order to encourage a vast range of economic opportunities and functions which can be self-sustaining and of regional significance.
The DS gives a further indication of which sectors have a comparative advantage on a local level, causing it to grow faster than the same sector in the Benchmark economy. Leading industries are indicated by a positive DS and illustration a region’s comparative advantage above others. The data shows that Umdoni Local Municipality has a comparative advantage in all sectors of the economy except for the manufacturing, utilities and transport sectors which shows negative tendencies. When considering sectors that lack comparative advantage, the sector’s constraints and factors influencing the sector negatively should be addressed in order to encourage the expansion of existing businesses and the development of new ones. The main focus would also be to encourage retention of businesses and attraction of new businesses to the area through the creation of business environment conducive to establishment and market entry.
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4.4.2 Local Economic Profile The section focuses on analysing the current economic situation which exists within the Umdoni Local Municipality on a more detailed local level to provide more insight into the local economy and how it is inter-related. The information reviewed in this section will be an indication of: Which sectors are the main contributors to the economy of the study area, Which sectors are growing and becoming more important, and Where opportunities are for further growth and development
The economic activity of an area is generally measured by the means of output generated by that activity. In order to measure the output generated by an area, reference is generally made to the GDPR or Gross Domestic Product per Region. The GDPR is an indicator of the quantifiable measure to which the market value of new goods and service produced in a given time period can be measured. The section below provides an indication of the contributions made by each sector the local economy of Umdoni Local Municipality and therefore provides an indication of the most important sectors in the economy.
4.4.2.1 GVA Contribution In order to gain a comprehensive understanding of Umdoni Local Municipality’s economic climate and economic sectors, the sectoral production needs to be consulted. This will reveal the sectors that are performing well, and highlight those that may be struggling.
Figure 4.8 below reveals the sectoral contribution towards Umdoni Local Municipality’s economy for 2003 compared to 2013. The figure reveals that, in 2003, the manufacturing sector was the greatest contributor towards the Local GVA (R380 million), while in 2013 it was the third highest contributor (R606 million).
FIGURE 4.8: UMDONI LM SECTORAL PRODUCTION, 2003 & 2013
Source: Quantec Research 2015, Kayamandi calculations
The greatest contributor towards the GVA in 2013 was the business services sector, contributing approximately R813 million. This could be as a result of the increase in demand for coastal properties
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Umdoni LED Strategy Review in KwaZulu-Natal. Retail trade (R738 million), manufacturing (606 million) and government services (R493 million) were other major contributors to the local GVA, while mining (R50 million) and utilities (R48 million) were the lowest contributing sectors.
Figure 4.9 illustrates the sectoral share in percentages for Umdoni Local Municipality. From the figure it is clear that the major contributors toward the local economy are Business services (22%), Retail and Trade (20%), Manufacturing (16%) and Government services (13%). This could be as a result of the high demand for property in the area, especially for the elderly residents who are looking for areas to retire. The retail and trade sector plays a large role in the municipality, as Umdoni is a popular tourism destination. This causes local spending on accommodation and in retail outlets. The transport (9%), agriculture (8%), and social services (6%), although to lesser degree than the aforementioned sectors, still make a significant contribution towards the local economy. The mining, utilities and construction sectors contributes the least towards the local economy.
FIGURE 4.9: UMDONI LM: SECTORAL CONTRIBUTION TO GVA, 2013
Source: Quantec Research 2015, Kayamandi calculations
4.4.2.2 Tress Index In order to measure the diversification of an economy, the Tress Index is used. The Tress Index is based on determining the share contribution by each sector and then accordingly ranking these sectors from smallest to largest contribution. A weighted value is then determined which is then reworked to provide an indication of the Tress Index for the economy as a whole. The indication scale is distributed between 0 and 100, where 0 shows a completely diversified economy and 100 shows a concentrated economy.
The table below is an indication of each sectors GDPR contribution for Umdoni Local Municipality, the sector share it has in the total economy, the rank of the sector in the economy according to the Tress Index and finally the Tress Index.
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TABLE 4.20: GDP TRESS INDEX FOR UMDONI LM, 2013 SECTOR GDP % SHARE RANK Business Services R 541 257 450 23% 9 Manufacturing R 536 170 825 23% 8 Government & Social Services R 384 803 573 17% 7 Retail trade R 367 051 564 16% 6 Transport R 230 097 376 10% 5 Agriculture R 167 047 056 7% 4 Construction R 64 557 972 3% 3 Utilities R 18 308 371 1% 2 Mining R 16 809 496 1% 1 Total R 2 326 103 683 100% - Tress Index 48.3 Source: Quantec Research 2015, Kayamandi calculations
In terms of output created by each sector within Umdoni Local Municipality’s economy, the business services and manufacturing sectors are the dominant contributors, contributing approximately 23% to the total output, respectively. The government and social services (17%), retail trade (16%), and transport (10%) sectors are the other main contributors to the local economy. Essentially, the business services sector contributed approximately R541 million to the local economy, whilst the manufacturing sector contributed approximately R 536 million to the total economic output.
The Tress Index for Umdoni Local Municipality has been calculated at 48.3. This is an indication of an economy that is relatively diversified, although there is scope for greater diversification. A diversified economy can be described as an economy that is not particularly dependent on any one sector to be able to function and sustain itself. In essence, all the sectors in that local economy are contributing to the local economy in such a way that the local economy is not vulnerable to fluctuations in any one sector. When considering Umdoni Local Municipality, the Tress Index indicated that the local economy is relatively diversified in nature, but is still majorly dependent on certain sectors, such as business services and manufacturing, to drive and stimulate growth. The business services and manufacturing sectors together contributed almost half of the GDPR output for the municipality. This poses significant issues when related back to dependence on single sectors for growth and development. The prospects of growth in other sectors, or linkages between lower performing sectors and the major sectors of the local economy must be investigated to stimulate and encourage growth across all sectors of the economy.
4.4.2.3 GDPR Growth Rate In order to establish which economic sectors within Umdoni Local Municipality shows potential, and which sectors are struggling, the GDPR growth rate should be consulted.
From Table 4.21 below, it is clear that the total GDPR for Umdoni Local Municipality shows an overall growth rate of 4% growth per annum, which is higher than the national (3.4%) and provincial (3.6%) annual growth rates over the same time period, but slightly lower than the district (4.1%) annual growth rate. The construction sector recorded the greatest growth at 11%, followed by the mining sector at a growth rate of 9% per annum. The utilities sector shows the only negative growth at -9% per year.
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TABLE 4.21: GDPR GROWTH RATE FOR UMDONI LM BETWEEN 2003 AND 2013 SECTOR 2003 2013 GROWTH Agriculture 11% 8% 1.4% Mining 0% 1% 9.1% Manufacturing 26% 16% 3.5% Utilities 3% 1% -9.0% Construction 1% 3% 11.1% Retail trade 16% 20% 3.9% Transport 10% 9% 3.3% Business services 17% 22% 6.8% Social services 6% 6% 3.2% Government services 11% 13% 3.6% Total 100% 100% 4.0% Source: Quantec Research 2015, Kayamandi calculations
4.4.2.4 Employment and Labour Employment is considered as one of the ‘big three’ economic indicators along with inflation and GDP, when analysing the economic situation for a specific area or region. Employment rate, sectoral employment share and skills level all contribute to establishing the employment and labour profile of a specific area, such as Umdoni Local Municipality.
When considering Figure 4.10 below, it is clear that although the agriculture sector held the greatest employment share in Umdoni Local Municipality in 2003, the employment share decreased by approximately 13% from 2003 to 2013. The Retail Trade sector is currently the highest contributor towards formal employment with 20% share, followed by social services sector at 19% and the government services sector at 16%. All three these sectors have recorded an increase in percentage share towards formal employment between 2003 and 2013.
FIGURE 4.10: SECTORAL CONTRIBUTION TO FORMAL EMPLOYMENT IN UMDONI LM
Source: Quantec Research 2015, Kayamandi calculations
Table 4.22 below provides a summary of growth in employment in the time period between 2003 and 2013 and seeks to reveal the employment trends for Umdoni Local Municipality for the same period.
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TABLE 4.22: AVERAGE PER ANNUM EMPLOYMENT GROWTH IN UMDONI LM, 2003 AND 2013 GROWTH AVERAGE NO OF JOBS SECTOR 2003 2013 RATE CREATED PER ANNUM Agriculture 3 517 1 451 -8.5% -207 Mining 6 188 40.8% 18 Manufacturing 2 266 1 943 -1.5% -32 Utilities 70 20 -11.9% -5 Construction 486 891 6.2% 40 Retail and trade 2 790 3 151 1.2% 36 Transport & communication 523 602 1.4% 8 Finance and business services 1 676 2 152 2.5% 48 Community services 2 889 3 104 0.7% 21 Government services 1 766 2 647 4.1% 88 Total 15 990 16 146 0.1% 16 Source: Quantec Research 2015, Kayamandi calculations
From the table, it is clear that Umdoni Local Municipality has seen a very small increase in employment from 2003 to 2013 with a total gain of 156 jobs at an annual growth rate of 0.1%, and average job creation of 16 jobs per year. It should however be noted that only three sectors in Umdoni Local Municipality showed negative employment growth, with the utilities sector recording a negative growth rate of -11.9% per annum, followed by the agricultural sector (-8.5%) and the manufacturing sector (-1.5%). The agricultural sector has been struggling as a result of the drought that the local municipality has been facing; this could thus be influencing the number of produce harvested, and consequently influence the amount of labour used during ploughing, planting or harvesting seasons. It is therefore possible that, in order to keep costs low, farmers are reducing their labour inputs in order to receive greater marginal returns which contribute to the decline in labour this sector.
When comparing the employment growth trend in Umdoni Local Municipality with that of South Africa, KwaZulu-Natal Province and Ugu District Municipality in Figure 4.11, it is clear that Umdoni Local Municipality has over the decade, showed, on average, a higher growth rate than the District average, but a lower growth rate than the provincial and national averages. This trend is understandable in that Umdoni is a coastal municipality within the District (increased job opportunities due to tourism and developed areas), which is predominantly rural.
Umdoni Local Municipality recorded the same general trends as the country, province and district in terms of formal employment growth rates. It is also clear that although South Africa and the Province has recorded increased growth rates in terms of employment during the 2005/2006 period, the District and Local Municipality recorded significantly higher growth rates for the same time period. This could be attributed to active sugar cane industry in this area and the increased production of sugar during the same period as reported by the Department of Agriculture’s Statistics and Economic Analysis division and the South African Sugar Association (SASA).
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FIGURE 4.11: NATIONAL, PROVINCIAL, DISTRICT AND LOCAL EMPLOYMENT GROWTH TRENDS
Source: Quantec Research 2015, Kayamandi calculations
Table 4.23 below depicts the skill level for those employed in Umdoni Local Municipality for the year 2003 compared to the year 2013. From the table it is clear that the majority (43%) of those formally employed in 2011, are semi-skilled or unskilled, followed by 41% that are skilled, and only 16% who can be classified as highly skilled.
TABLE 4.23: SKILL LEVEL OF FORMAL EMPLOYMENT FOR UMDONI LM, 2003 VS. 2013 2003 2013 SKILL LEVEL POPULATION PERCENTAGE POPULATION PERCENTAGE Highly skilled 1 909 12% 2 543 16% Skilled 5 512 34% 6 591 41% Semi- and unskilled 8 568 54% 7 012 43% Total 15 989 100% 16 146 100% Source: Quantec Research 2015, Kayamandi calculations
It is also evident that the percentage of skilled and highly skilled employees have increased and the percentage of semi-skilled and unskilled employees has decreased. Furthermore, the overall numbers of those formally employed have increased by 157, (approximately 1%). More significant however, is the increase of approximately 643 in those employed in highly skilled occupations (approximately 33%), which shows a shift within the Local Municipality towards higher skilled occupation. This could possibly be attributed to the labour force that is working in eThekweni but living in Umdoni.
4.5 Spatial Profile
In order to gain greater perspective of the spatial dynamics of Umdoni and in order to understand how these dynamics fit in with the development potential and economic character. The current spatial structuring elements in Umdoni are: The Coastline and beaches Protected areas in Umdoni The main transport routes N2 Corridor and R102
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The urban edge in the municipality is of utmost importance in order to contain urban sprawl from encroaching onto conservation areas or ecological sensitive areas. This will minimise the strains that are put on the environment and protect agricultural land.
Umdoni Local Municipality enjoys great accessibility through existing major transport networks. These include the N2 which connects the area to Durban, in the north, and Port Shepstone towards the south. The R102 runs relatively alongside the N2, although it does provide more coastal views and easier access to the coast than the N2. The R612 is a road that is perpendicular to the N2 and R102 and connects Umdoni to Ixopo, to the west. All these transport networks can be viewed in the map below (Map 4.8).
The municipal area is also served by a network of district, collector and local roads which links Umdoni area with the other suburbs and farms within the local municipality. Many of the rural access roads are gravel roads, the roads that area more urban are however characterised by potholes. An existing rail network is also evident in Umdoni, and is situated along major transport routes. The metropolitan rail system has three stations for commuters from Durban to Umdoni, via; Kelso/Pennington, Park Rynie and Scottburgh. Railway tracks further south of these stations do exist and are electrified and in use by Spoornet as far south as Port Shepstone, although no commuter services are offered along these tracks. The municipality has potential in terms of enhancing its transportation network through creating public transport routes, other than the taxi and bus route system. The Municipality is working closely with the Department of Transport to prioritize public transport routes during budgeting process.
These existing transport networks hold great opportunities for Umdoni with regards to distribution of goods and services and provide mobility and access to economic sectors. Linkages are formed between towns, cities and regions (Durban, Amanzimtoti, Port Shepstone and Margate) which creates multiplier inter and intra-regional economic benefits.
In line with the above, four corridors are listed in the IDP, namely the National Corridor which runs along the N2, the Secondary Corridor includes other major arterial routes in the Municipality, the Tertiary Corridor includes the minor arterial routes, and the Tourism Corridor connects Durban to Umdoni via the R102.
The Umdoni Seaside Corridor is an initiative that has been outlined by Umdoni’s SDF 2010, and is based on council-owned land along the R102/ Tourism Corridor. This route is along the coastal corridor of Scottburgh and Park Rynie, situated between Mbambinyoni and Umzinto Rivers. It is intended to develop the tourism base, through market-related demands in Scottburgh and Park Rynie.
Another initiative that has been indicated by Umdoni’s IDP 2015/16 is the “Ugu Perishable Goods Industrial Hub”. Two sites have been identified for the multi-user development. One of the sites have been identified at Ellingham Estates, which is adjacent to Park Rynie, and is situated along the R612 and is 1km away from the N2 off ramp. The second site has been identified on the Ifafa Sugar-cane Farm, which is adjacent to the Ifafa Beach N2 off-ramp.
Scottburgh is the primary development node for Umdoni Local Municipality and is highly accessible via the N2/R102. The node is bordered by the ocean, a golf course, the N2 and the Mbambinyoni Estuary, which constrains it from developing horizontally into ecological sensitive areas.
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Through consulting Umdoni Local Municipality’s SDF, two development initiatives were identified, namely the Umdoni Seaside Corridor and the Rorqual Estate Development. More details on these initiatives are provided below: Umdoni Seaside Corridor As mentioned above the Umdoni Seaside Corridor, runs along the coastal corridor of Scottburgh and Park Rynie, and is situated between Mbambinyoni and Umzinto Rivers. It is intended to develop the tourism base, through market-related demands in Scottburgh and Park Rynie. Strategic sites have been identified such as Scottburgh Beach, Scottburgh Caravan Park, Scottburgh Golf Course, TC Robinson conservation area, TC Robinson conservation area, Park Rynie camp ground, Umzinto River and the Kelso Site. These areas have priority in terms of revitalisation in order to fully utilise the sites. The redevelopment of these sites will act as catalysts for the surrounding areas along the Umdoni Seaside Corridor. The focus of the corridor is in Scottburgh (town centre), its beach, the immediate coastline and lagoon, as the development of this area has the greatest multiplier effect on Council-led- redevelopment initiatives. Rorqual Estate Development The development, which is said to be mixed use development of scale, is proposed to be developed on Farm Ellingham, which is situated on the mid-south coast of KZN. The development will comprise of commercial, industrial residential, leisure and tourism facilities. The development stretches over an area of 543.9 ha, and will include a multi-functional node as a gateway at the intersection of N2 and R612, a tourism node, open space systems and residential development.
MAP 4.8: UMDONI LOCAL MUNICIPALITY TRANSPORTATION NETWORK
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Section 5: Opportunity Analysis The purpose of this Section is to identify opportunities for development within Umdoni Local Municipality’s economy. An overview of the existing activities and strengths, as well as constraints to development, is provided for each economic sector, namely Agriculture, Mining, Manufacturing, Utilities, Construction, Wholesale and Retail Trade, Transport and Communication, Finance and Business services, Community and Government services, as well as Tourism. Development potential for each sector will be identified, according to existing and latent comparative advantages and the latest market and technology trends.
5.1 Agriculture
5.1.1 Overview of the Agricultural Sector As defined by the Standard Industrial Classification (SIC), the Agriculture sector includes activities such as the growing of crops, market gardening, horticulture, farming of animals, forestry and logging and related services. Related sub-sectors of the Agriculture sector also comprise of commercial hunting, game proliferation, forestry, logging and fishing (SIC, 1993).
In Section 4 it has been made clear that Umdoni Local Municipality has prime agricultural land, and therefore extensive agricultural practices are focused on. The predominant agricultural activities that can be found in Umdoni Local Municipality include crop, vegetable and some fruit farming, with other agricultural activities including sugarcane production with the associated Illovo Sugar Mill located in Sezela. Sugarcane is a strategic crop for Kwazulu-Natal, where sugarcane production is located, comprising nearly 50% of field crop gross farming income across the province. A unique relationship exists between sugarcane and sugar production, in that cane is a bulky, non-tradable commodity which requires rapid post-harvest processing in order to preserve the sucrose in the cane stalk. As a result sugar mills are always located as close as possible to cane supply. The financial viability of these significant capital investments is entirely dependent on a sustainable supply of sugarcane in each mill supply area. This in turn means the sheer size of economic activity generated in rural areas through the activities of sugarcane cultivation and sugar production generates a number of jobs in support industries and commerce. In most cases the sugar mill and accompanying cane farms form the backbone of the nearest rural town and are major contributors to the development of secondary economic activity, services and infra-structure that otherwise would be absent.
The grazing capacity and soil conditions are of high quality, although the area is currently experiencing a drought, the IDP identified the agricultural sector in Umdoni Local Municipality as a strategic sector which provides major strengths and potential expansion opportunities.
The agricultural sector contributes a small portion to employment and GVA in Umdoni Local Municipality, as is outlined by the indicators provided in Table 5.1 below. The agricultural sector can however have significant multiplier effects throughout the entire regional economy, because of the stimulation of other economic activities that are related to the agricultural sector, such as manufacturing, agro-processing and trade.
From the table above it is clear that employment in the agriculture sector on both a district and local municipal level experienced a slight decrease during 2003 to 2013. A negative annual growth rate of
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-8% was experienced for agricultural employment in Umdoni Local Municipality and -10.4% Ugu District Municipality. Both local and district municipalities have the same portion of employment share with 7% and 7.2% respectively.
TABLE 5.1: AGRICULTURAL SECTOR'S CURRENT SITUATION (2003-2013) Economic Variable UDM Umdoni LM Share GDP 7.9% 7.5% GDP growth per annum (2003-2013) -0.1% 1.4% GDP contribution to sector in DM - 16.5% Share of employment 7.2% 7 % Employment growth per annum(2003-2013) -10.4% -8% Employment contribution to sector in DM - 17% Source: Quantec data 2015, Kayamandi Calculations
Umdoni experienced a GDP growth rate of 1.4% in the agricultural sector, although the sectoral employment rate per year was negative, this could indicate that the agricultural sector might have become more mechanised, therefore resulting in a low or declining employment rate for the period of 2003 to 2013. Therefore, much needs to be done to utilise the job creation potential of the sector and add value to the local agricultural produce.
The agricultural sector of Umdoni Local Municipality contributes approximately 17% to the District’s agricultural employment, as can be seen in Figure 5.1. This indicates that out of the 9 921 workers in the agricultural sector of Ugu District Municipality, approximately 1 683 are employed in the agricultural sector within Umdoni Local Municipality.
FIGURE 5.1: AGRICULTURE SECTOR GDP CONTRIBUTION VS. EMPLOYMENT (2013)
40% 37% 35% 35% 31% 31% 30% 25%
20% 17% 17% 15% 9% 10% 10% 5% 5% 5% 2% 2% 0% VulamehloLM Umdoni LM Umzumbe LM UMuziwabantu Ezingoleni LM Hibiscus Coast LM LM Share of DM GDP Share of DM employment
Source: Quantec data 2015, Kayamandi calculations
Although Umdoni LM is among the higher contributing municipalities for the agricultural sector in the Ugu DM, Umdoni still contributes very little employment share and GDP share. Hibiscus Coast LM contributes the highest in the District, with more than double than Umdoni LM GDP and employment share.
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FIGURE 5.2: AGRICULTURAL SECTORAL SHARE PER LOCAL MUNICIPALITY (2013)
25%
19% 20% 16% 15%
10% 10% 8% 7% 7% 7% 7% 5% 5% 5% 5% 4%
0% Vulamehlo LM Umdoni LM Umzumbe LM UMuziwabantu Ezingoleni LM Hibiscus Coast LM LM
GDP Employment
Source: Quantec data 2015, Kayamandi calculations
Figure 5.2 indicates that both the agricultural GDP and employment of Umdoni Local Municipality contribute 7% towards the total GDP and employment within that local municipality. Here it can be determined that the agricultural sector in Ugu District is not a strong sector as five out of the six local municipalities contribute 10% or less to the total GDP and employment in each respective municipality. Umzumbe LM has the strongest agricultural sector out of the six local municipalities in Ugu District.
Apart from analysing the economic indicators, it is also important to understand the status quo of existing agricultural products and the potential for increased and diversified production. It is necessary to take into account aspects such as land cover, land capability, specific agricultural regions and grazing capacity within Umdoni Local Municipality.
Map 5.1 below visually illustrates the agricultural potential in Umdoni Local Municipality according to the Southern African Agricultural Geo-referenced Information System (AGIS). The map indicates that the Umdoni Local Municipality generally has moderate potential arable land, although minimum ‘moderate potential arable land’. This supports the sectoral contribution towards Ugu District, although it does contradict the District and Province’s view of the strong agricultural sector (arable agricultural land and labour force available) that KwaZulu-Natal has.
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MAP 5.1: UMDONI LOCAL MUNICIPALITY AGRICULTURAL POTENTIAL
Further factors of the analysis of potential
The following factors, specific to the Umdoni Local Municipality have an influence on the development potential within the Agricultural sector: ~ Availability of resources: o The availability and quality of water is a constraining factor. o Degradation of ecosystem and natural water bodies o Favourable weather conditions o Agricultural land (grazing capacity and soil conditions) o Sloping terrain in Umdoni o Weather conditions o Prices of fertilizer and herbicides o Cane crushing potential (Amount of sugarcane harvested per ha) ~ Economic linkages: o Close proximity to Durban and Port Shepstone o Close proximity to exporting and importing markets o Natural resource base increase tourism market ~ Market trends: o Growing demand for value added products o Growing demand for agro-processing products ~ Supporting/Enabling environment: o Transformation and degradation of natural resources o Lack of financial services and support for subsistence and emerging farmers
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o Lack of skills o Shortage of available land as a result of high quantity of conservation areas
5.1.2 Kwa Zulu Natal Growth and Development Plan The agricultural sector is of key strategic importance to KwaZulu-Natal as a result of the comparative advantages that the province has with regard to its land and labour resources. Agriculture is highlighted as one of the major economic development sectors for KwaZulu-Natal as it is more labour absorbent than tertiary sectors. Therefore the agricultural sector should be expanded strategically in order to position KZN becoming a trade gateway. For the achievement of 6% unemployment rate by 2030, the province proposes to create an annual real growth rate of 3.2% increase. A major portion of the jobs will be created in the agricultural sector with targets ranging from 3 115 000 jobs in 2020 to a rise of 4 230 000 jobs in 2030.
In order for KwaZulu-Natal to achieve substantial job creation development, a strategic objective set out by the KZNPGDP, through unleashing agricultural potential. Their agricultural sector provides a total of 30% of national agricultural output and therefore contributes significantly towards creating employment (formal and informal) as well as providing food security.
The coupling of the agricultural sector along with the manufacturing sector will allow for various inputs that can be used to contribute to economic growth. Food, beverages, tobacco, wood and paper industries are only some of the inputs that can be directly related to the outputs from the agricultural sector. If these opportunities are appropriately harnessed, the agricultural sector in KZN has the potential to create a substantially higher number of jobs in a shorter time frame, and in turn will contribute towards the addressing of food security whilst also creating sustainable livelihoods.
5.1.3 Ugu District GDS and LED guidelines The Ugu Growth and Development Strategy shares a vision where the agricultural sector is highlighted as an important sector for investment and growth. The vision states that the agriculture sector, along with others, will be able to create jobs which all can equally benefit from, and gain from the socio- economic opportunities that it provides. Although the sector has shed jobs at an alarming rate over the past decade, restrictive legislation needs to be reviewed in order to increase the previous agricultural investment appetite. The Umdoni LED supports this and states that more emphasis should be given to the Umdoni agricultural sector through creating comparative advantages from their agricultural potential.
Areas of growth and further development are indicated in the Ugu GDS document, where potential development can take place on large tracts of undeveloped yet fertile and communal (trust) land. The land could be used to develop commercial agriculture, small sustainable gardens and poverty alleviation projects. Growth can be assisted by the various well-developed transport enterprises in the district as well as the usage of the established agricultural export market for sugar and macadamia products.
As a result of the District’s strong natural environment and 112 kilometre coastline it provides numerous opportunities for economic growth in the primary sector. Activities that can be expanded include: maritime activities the marketing of a variety of beach experiences some with Blue-Flag status
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unique adventure tourism activities including the Aliwal Shoal which ranked within the top 10 dive experiences in the world The annual event of the Sardine Run.
Important areas of development for the agricultural sector in Ugu District Municipality include the development of sugar cane and banana production potential on the fertile and communal trust land, the alignment of land reform initiatives with regards to opportunities that are presented in fresh produce markets, and the coupling of the primary sector with secondary sectors such as manufacturing in order to expand agro-processing capabilities such as bio fuels.
5.1.4 Implications for Umdoni Local Municipality LED Strategy Review Umdoni Spatial Development Framework indicates that agricultural is the backbone of Umdoni’s economy. The natural environment in Umdoni also creates further potential for increased GDP rates in the future. The further development of this sector can be achieved through the increase of agricultural inputs and increasing the access to markets, especially for the smaller scale farmers.
The Framework presents a spatial target that promotes the Local Municipality as an area where the agriculture sector needs to be used as a method of job creation through socio-economic development and investment. Therefore, accelerating growth and production for many other industries which are related to, or dependant on, the agricultural sector. The SDF also emphasises that the focus of Umdoni should be on ensuring that the farming units are sustainable and that the high potential agricultural land is protected.
5.1.5 Development Opportunities and Potential Projects In order to identify possible opportunities within the agricultural sector, it is important to understand the strengths and constraints within the sector. Based on the above and through stakeholder consultation, a number of strengths and constraints have been identified, as tabled below:
TABLE 5.2: AGRICULTURAL STRENGTHS AND CONSTRAINTS Strengths Constraints Umdoni Local Municipality has been identified Agricultural activities are constrained through by the IDP as the an area dominated by sugar large conservation areas cane Lack of skills and knowledge for emerging Established agricultural activities such as crop farmers to produce commercially production and livestock farming Emerging farmers experience a lack of funds Established sugar cane production and the Lack of knowledge on how to access Illovo Sugar Mill located in Sezela agricultural land Existing infrastructure such as transport Lack of support to agricultural cooperatives networks Soil erosion, overgrazing and conservation Within reach of local and international areas markets Small linkages with agro-processing industries Natural environments ranging from beach Little beneficiation fronts, estuaries and lagoons Lack of capital for infrastructural spending Umdoni Local Municipality falls within the Environmental degradation District’s “Large convenience node” as well as International commodity price swings a tourism point Sugar cane burning places increased pressure 9706 ha commercial agricultural land on biodiverse areas Existing agricultural support agencies such as Lacks grazing capacity and good soil conditions the Sezela Cane Growers Association (SCGA)
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Strengths Constraints Labour absorbent sector Increase in price of fertilizer and herbicides SA investment climate for exports has Lack of cane tonnage has caused suspension of increased crushing at Umzimkulu Mill (Port Shepstone) Lack of cane irrigation limits product outputs Unfavourable climate (drought) Limited budget to implement SEA
Taking the above factors into account, together with national and provincial policy directives and previous research that has been conducted in the area and the province, this section seeks to identify a number of development opportunities that can address the current issues experienced within the agricultural sector as well as build on potential strengths.
The development opportunities/potential projects identified are: » SMME and Cooperative Support & Training: o Skills development o Support & general equipment o Access to funding o Addressing land tenure/ownership issues o Conduct and assist with proper research and feasibility studies prior to project implementation » Provision and Manufacturing of Local Agricultural Inputs: o Livestock (dairy, beef and chickens) o Cattle feed, chicken feed, etc. o Fertilisers, chemicals, insecticides, etc. o Commercial Farming o Perishable food products could link to the agricultural parks » Development of Niche-Market Agricultural Products: o Tea production o Commercial timber o Macadamia nut production » Creating an Enabling Environment: o Revise and incentives rates & taxes o Land reform (small-scale emerging farmers and rural cooperatives) o Policing of rural areas to combat crime and create a secure environment o Need more support from the Municipality for small cane growers o Agricultural Centre/ Distribution Depot (linking to the N2, R612 and R102) » Food Security Programmes and Projects: o Management of Agricultural Land for food security for i. Community gardens ii. Household gardens iii. School food gardens and feeding
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5.2 Mining
5.2.1 Overview of the Mining sector The mining sector referred to in this section can be classified as a combination between the definitions for “mine” and “mineral” as stated within the Minerals and Petroleum Resources Development Act, Act 28 of 2002 (MPRDA).
A Mine is defined as “any operation or activity for the purposes of winning any mineral on, in or under the earth, water or any residue deposit, whether by underground or open working or otherwise and includes any operation or activity incidental thereto”, whilst Mineral is defined as “any substance, whether in solid, liquid or gaseous form, occurring naturally in or on the earth or in or under water and which was formed by or subjected to a geological process, and includes sand, stone, rock, gravel, clay, soil and any mineral occurring in residue stockpiles or in residue deposits, but excludes the following: Water, other than water taken from land or sea for the extraction of any mineral from such water, Petroleum, or Peat
The mining sector thus is the practice of extracting and beneficiation of minerals occurring naturally above, in or under the ground and includes solids, liquids, grease and crude petroleum being mined from an underground and/or surface mine, quarry or well extraction.
Table 5.3 below provides the agricultural sector’s current situation in Ugu DM and Umdoni LM.
TABLE 5.3: MINING SECTOR'S CURRENT SITUATION (2003-2013) Economic Variable UDM Umdoni LM Share GDP 0.8% 1.4% GDP growth per annum (2003-2013) 20% 40.8% GDP contribution to sector in DM - 29.1% Share of employment 0.04% 0.1% Employment growth per annum(2003-2013) -6.0% 9.1% Employment contribution to sector in DM - 28.8% Source: Quantec data 2015, Kayamandi Calculations
The information above indicates that this sector is a minor contributor of GDP to the local economy of Umdoni LM (1.4%) as well as Ugu DM (0.8%). On both district and local economic levels, the mining sector has shown large annual growth rates between 2003 and 2013 with 20% and 40.8% respectively. Umdoni Local Municipality’s (29%) mining sector contributes a large portion of GDP and employment to the total District’s mining sector.
With regards to employment, the mining sector contributes 0.1% towards the employment share within Umdoni, whereas Ugu’s mining sector contributes even less towards employment share (0.04%). Employment in the mining sector is developing at a negative rate of -6% per annum in Ugu DM, while it is growing at a rate of 9% per annum in Umdoni LM between 2003 and 2013.
The figure below reveals the GDP contribution compared to the share of employment for mining of the six local municipalities located within the Ugu District Municipality.
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FIGURE 5.3: GDP CONTRIBUTION VS. EMPLOYMENT SHARE FOR MINING (2013) 35% 29% 29% 29% 30% 24% 25% 19% 20% 17%
15% 11% 12% 9% 10% 9% 5% 6% 5% 0% VulamehloLM Umdoni LM Umzumbe LM UMuziwabantu Ezingoleni LM Hibiscus Coast LM LM
Share of DM GDP Share of DM employment
Source: Quantec data 2015, Kayamandi calculations
From the figure above, it is clear that the mining sector in Umdoni Local Municipality contributes the highest to employment share when compared to the mining sector in the other local municipalities within Ugu Municipality. Vulamehlo Local Municipality is the highest contributor to GDP share, followed by Umdoni Local Municipality.
Figure 5.4 below compares the GDP and employment contribution of the mining sector within each of the six local municipalities towards the respective local municipality’s total GDP and employment in 2013.
From the figure, it is clear that although mining contributes little to the total GDP and employment in Umdoni LM. Umdoni LM’s mining sector contributes slightly more, on average, towards the total employment and GDP for mining in the district than Umzumbe LM, UMuziwabantu LM, Ezingoleni LM and Hibiscus Coast LM, although the contribution is still very low.
FIGURE 5.4: GDP AND EMPLOYMENT CONTRIBUTION OF LMS TOWARDS UDM (2013) 4.0% 3.6% 3.5%
3.0% 2.6% 2.5% 2.0% 1.5% 1.0% 0.7% 0.8% 0.7% 0.5% 0.6% 0.6% 0.3% 0,3% 0.5% 0.1% 0.2% 0.0% Vulamehlo LM Umdoni LM Umzumbe LM UMuziwabantu Ezingoleni LM Hibiscus Coast LM LM
GDP Employment
Source: Quantec data 2015, Kayamandi calculations
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Map 5.2 presents the geology of the Umdoni Local Municipal area according to information obtained through the Department of Environmental Affairs (2002). From the map it is clear that the main geology types present in the Umdoni Local Municipality are Arenite, Gneiss, Shale and Tillite.
MAP 5.2: UMDONI LOCAL MUNICIPALITY GEOLOGY
In Umdoni only 9.2ha of land is covered with mines and quarries, this translates to 0.04% of the municipal area. Various areas in Umdoni Local Municipality have deposits of sandstone, mudstone/ shale, granite/gneiss dwyka formation, dolerite sills and shales. Table 5.4 presents the mines that are operational according to the Department of Mineral Resources. . The localities of these mines are presented in Map 5.3.
TABLE 5.4: MINING OPERATIONS ACTIVE WITHIN UMDONI LM (2015) Type of Mine Name Mine Owner Commodity Area Farm name Mining Lancaster Lancaster Aggregate; Mine Quarries - Quarries Umzinto Amandawe Sand Natural opencast Scottburgh Ifafa Lagoon Ifafa Lagoon Mine Morewood Glen sub Sand natural Umzinto Estates CC Estates CC opencast 3 CF Landers & Mine Farm 16641 & 3 of Monte Video Sand natural Umzinto Son (Pty) Ltd opencast 14; Monte Video Mpambanyoni Crookes Bros Mine Sand natural Umzinto Renishaw Estate Sands Ltd opencast Triple Option Triple Option Mine Sand natural Umzinto Lucas 2626 sub 5 Trading 608 CC Trading 608 CC opencast Source: DMR 2015 Operational Mines Database
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MAP 5.3: OPERATIONAL MINES IN UMDONI LM
5.2.2 Kwa Zulu Natal Growth and Development Plan Although the mining sector is not as important or as strong and component as the agricultural sector it still plays a major part with regards to increased economic development and job creation. In order to do this the Province must ensure that investment is encouraged into productive primary sectors. This can be achieved through the expansion of mineral beneficiation and natural gas extraction, according to the KZNPGDP.
The beneficiation of minerals found in KZN has the potential to create substantial employment and boost economic growth within KZN. Labour can be utilised for the extracting of minerals, the value- adding of mineral products as well as exporting of the products. Through the capitalisation of the Durban and Richards Bay ports within the Province even further opportunities can be utilised in order to make full use of the access to international markets.
The interventions proposed by the KZNPGDP include the utilisation and beneficiation of mineral resources and natural gas, and the expansion and maintenance of Coal Line to Richards Bay. Potential areas of expansion in the mining sector include: offshore natural gas extraction along the expansive KwaZulu-Natal coastline onshore coal-bed methane extraction at KZN coalfields exploration off the coastline from , Port Shepstone to Richards Bay, in search of natural gas potential
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5.2.3 Ugu District GDS and LED guidelines The Ugu Growth and Development Strategy also indicates that, as with KZNPGDP, the mining sector is a minor contributor towards employment but that it can still play a critical role with regards to the improvement of the GVA.
Prior to 2009, the District’s economy showed greater diversification with regards to the extracting of metal products. These mineral products were beneficiated and were growing steadily despite the downturn in 2008/09. Therefore the local sourcing of supplies and services by the major mining industries should continue along with formal expansion of small-medium scale mining within the Ugu District. Mining in the District is mainly focused on building material mining and provide potential to develop stone-crushing plants, as well as lime and cement mining activities.
Illegal mining is however taking place in the district, and in order to benefit from greater tax revenue sourcing, these entities need to be monitored and regulated more efficiently in order to ensure that there are no negative effects on the natural resources within the district and that working environments for employees are along standards set out by national laws.
5.2.4 Implications for Umdoni Local Municipality LED Strategy Review With regards to the Provincial GDS and the District GDS and LED, a number of considerations should be made when proposing mining programmes and actions. These include: Investigating small-scale mining activity potential through approaching smaller mining companies Investigation of mineral beneficiation for those mines that are currently active The sector is highly capital intensive and requires market stability to encourage investment.
5.2.5 Development Opportunities and Potential Projects In order to identify possible opportunities within the mining sector, it is important to understand the strengths and constraints within the sector. Based on the above and through stakeholder consultation, a number of strengths and constraints have been identified, as tabled below:
TABLE 5.5: MINING STRENGTHS AND CONSTRAINTS Strengths Constraints Close proximity to large import and Very small sector with regards to GDP exporting harbours contribution and employment in Umdoni Variety minerals are evident in Difficulty with mining approvals as a result of the Umdoni highly biodiverse area Existing transport linkages Uncertainty regarding available mineral resources . N2 and R102 from Durban to High negative environmental impacts due to lack Margate of rehabilitation . R612 linkages to inland areas Biodiverse sensitive areas Many conserved natural areas, not available for development Water and ground pollution caused by sand mining along the banks of the river upstream of the treatment facilities Environmental Degradation
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Taking the above factors into account, together with national and provincial policy directives and previous research that has been conducted in the area and the province, this section seeks to identify a limited number of development opportunities that can address the current issues experienced within the mining sector as well as build on potential strengths.
The development opportunities/potential projects identified are: Investigation of re-opening and re-issuing of mining licences to existing or illegal mines/sand winning production Investigation of possible untapped mineral resources such as off-shore natural gas extraction
5.3 Manufacturing
5.3.1 Overview of the Manufacturing Sector By definition, manufacturing is the chemical and physical transformation of materials or compounds into new products. Similarly it can be described as the process of turning raw material into a finished product. Manufacturing is usually undertaken through small or large-scale industrial operations.
Umdoni Local Municipality’s manufacturing sector has a relatively large impact on the local economy as a result of the development and expansion of industrial and commercial areas. The creation of agglomeration of economies between the agriculture and manufacturing sectors will result in major growth in the area. This can be achieved through value added production plants, as well as by making use of the locally produced agricultural products. Forward and backward linkages between the agricultural and manufacturing sectors need to be further exploited, through industries such as agro- processing. The table below presents the manufacturing subsectors in Umdoni Local Municipality.
TABLE 5.6: IMPORTANT MANUFACTURING SUBSECTORS IN UMDONI LM (2013) Subsector of manufacturing % share of Umdoni LM % share of Umdoni LM manufacturing manufacturing GDP employment Food, beverages & tobacco 26% 31% Metals, metal products, machinery and equipment 12% 10% Petroleum products, chemicals, rubber & plastic 29% 8% Other non-metal mineral products 1% 2% Source: Quantec data 2015, Kayamandi Calculations
From the table it can be concluded that the agricultural sector contributes significantly to the manufacturing sector as the beneficiation of produce from the agricultural sector into food, beverages and tobacco products accounts for approximately 31% of the local municipality’s manufacturing GDP.
Table 5.7 reveals the current situation for the manufacturing sector within Ugu District Municipality and Umdoni Local Municipality. From the table, it is evident that 16.4% of Umdoni Local Municipality’s GDP and 9.7% of the employment share is accounted for by the manufacturing sector in 2013. The employment share in Umdoni Local Municipality (9.7%) is higher than that of Ugu District Municipality (9.4%). Despite the fact that the GDP for this sector shows a positive annual growth rate on both local and district level, employment in the manufacturing sector shows a negative growth rate in Umdoni
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LM(-1.4%). This could attributed to various factors, including the mechanisation of manufacturing processes or increases in minimum wage stipulations.
TABLE 5.7: CURRENT SITUATION FOR MANUFACTURING IN UMDONI LM (2003-2013) Economic Variable UDM Umdoni LM Share GDP 16.9% 16.4% GDP growth per annum (2003-2013) 5.9% 3.5% GDP contribution to sector in DM - 18.7% Share of employment 9.4% 9.7% Employment growth per annum (2003-2013) 0.5% -1.4% Employment contribution to sector in DM - 17.8% Source: Quantec data 2015, Kayamandi Calculations
The manufacturing sector in Umdoni LM contributes 18.7% towards the district’s manufacturing GDP, and contributes 17.8% towards employment for this sector in the district.
Figure 5.5 below compare the GDP and employment share for the manufacturing sector of the six local municipalities located in Ugu District Municipality, as well as the percentage contribution of the six local municipalities towards the total GDP contribution and employment share for the manufacturing sector of Ugu District Municipality.
FIGURE 5.5: GDP CONTRIBUTION VS. EMPLOYMENT SHARE FOR MANUFACTURING (UDM, 2013) 60% 55% 54%
50%
40%
30%
19% 20% 18% 12% 13% 10% 10% 10% 2% 3% 2% 3% 0% VulamehloLM Umdoni LM Umzumbe LM UMuziwabantu Ezingoleni LM Hibiscus Coast LM LM Share of DM GDP Share of DM employment
Source: Quantec data 2015, Kayamandi calculations
From the graph above it can be deduced that the manufacturing sector is the strongest in Hibiscus LM, as it has the highest contributions to the District, with regards to GDP (55%) and employment (54%) share. Umdoni LM contributes more than average, to the District, with regards to GDP and employment share. Four of the six municipalities contribute no more than 13% to either GDP or employment at the District level.
Figure 5.6 presents the share of the various local municipalities’ manufacturing sectors towards their respective total GDP and employment. It is clear that Umdoni’s manufacturing sector has a higher
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Umdoni LED Strategy Review percentage share towards its total GDP (23%) and employment (9.7%), in comparison to the other local municipalities.
FIGURE 5.6: GDP AND EMPLOYMENT CONTRIBUTION OF LM'S TOWARDS UDM (2013)
30.0% 27.9%
25.0% 23.1% 23.3%
20.0% 17.4% 14.7% 15.0% 12.1% 12.1% 9.7% 10.1% 10.0% 7.0% 5.8% 6.0% 5.0%
0.0% Vulamehlo LM Umdoni LM Umzumbe LM UMuziwabantu Ezingoleni LM Hibiscus Coast LM LM GDP Employment
Source: Quantec data 2015, Kayamandi calculations
Factors in the analysis of development potential
The following factors, specific to Umdoni Local Municipality, have an influence on the development potential within the Manufacturing sector: Economic Linkages: o Close proximity to large export market in Durban o Potential forward and backward linkages between the agriculture and manufacturing sectors o Leakage of buying power to Durban and Port Shepstone o Establishment of business parks/incubators for the manufacturing sector (Umdoni IDP 2015/16) Availability of skills and labour: o A shortage of critical skills within the manufacturing sector, such as technical and artisanal skills, is one of the major development constraints within this sector o Specific skills requirements: Technical and artisanal skills, engineering skills, design skills, IT skills, quality control, research, science and technology Market trends: o International manufacturing trends towards the “new economy” such as natural and herbal remedies, food supplements, pharmaceuticals and cosmetics, etc. have not been fully exploited o A clear indication of a need for a food processing plant has been expressed
5.3.2 KwaZulu-Natal Growth and Development Plan The manufacturing sector is a key productive sector for KwaZulu-Natal as it contributes significantly towards economic growth, job creation and the generation of foreign capital. The Province must focus
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Although the sector experienced a sharp decline over the past decade, progress has been made towards new technologies and value-adding within the global manufacturing sector. Urgent actions therefore need to be taken by the Province to stimulate growth within this labour-absorptive sector. Investment needs to be driven into new technologies in order to improve efficiency and reduce costs, whilst creating new opportunities for value-adding. These could be utilised in the traditional industries such as automotive and components, metal and metal products, chemicals, furniture and wood products, clothing and textiles as well as in chemicals and pharmaceuticals.
Initiatives set out by the KZNPGDP seek to improve the competitiveness of the industries and ensure their retention and expansion into new markets. These interventions include the enhancement of value-adding activities within the manufacturing sector, as well as the development of SEZs and industrial Hubs.
New opportunities in the manufacturing industry in KZN include: manufacturing of renewable energy products manufacturing of rolling stock (rail) and other capital equipment marine manufacturing (boat building and ship repair) food processing and agro-processing
5.3.3 Ugu District GDS and LED guidelines The Ugu Growth and Development Strategy includes the importance of the manufacturing industry in its vision, here it states that along with other sectors, manufacturing will be able to create jobs from which all can equally benefit through the socio-economic opportunities that it provides. Ugu District has been indicated as a furniture manufacturing hub and a perishable goods processing hub, by the Department of Economic Development and Tourism.
Ugu District is strategically positioned in order to take advantage of the Eastern Cape market, whilst also having access to the Durban ports, and therefore access to international markets. Potential opportunities therefore exist through the encouragement of linkages with opportunities provided by eThekweni. This is highlighted in the strategic object for the expansion of key productive sectors, in the Ugu Growth and Development Strategy. These productive sectors include manufacturing coupled with agriculture and mining but also includes tourism for Ugu District. These sectors are important as they are labour intensive and therefore provide labour absorption for semi-skilled, skilled and highly skilled labour. The following three strategic programmes have been identified in order to grow the manufacturing sector: Expansion of Agro-Processing Stimulating the manufacturing sector and manufacturing value-chains Ensuring effective assistance and support to SMME’s, co-operatives and informal traders
5.3.4 Implications for Umdoni Local Municipality LED Strategy Review Development targets that are set out for Umdoni Local Municipality include the acceleration of growth in agriculture, industries and export sectors (metals, clothing, textiles, agro-processing, and manufacturing) as well as the diversification of value chain development and cluster formations. Another area that can be included or expanded, from current sugar cane production, is the
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5.3.5 Development Opportunities and Potential Projects In order to identify possible opportunities within the manufacturing and industrial sector, it is important to understand the strengths and constraints within the sector. Based on the above and through stakeholder consultation, a number of strengths and constraints have been identified, as set out in Table 5.8.
TABLE 5.8: MANUFACTURING STRENGTHS AND CONSTRAINTS Strengths Constraints Park Rynie access to main transport networks Lack of industrial incentives to attract Direct linkages local and foreign markets industrial plants and SMME’s through main transport networks Weak forward and backward linkages o Existing transport linkages through the N2, Manufacturing sector contraction R102 and R612 from Durban to Port Leakage of buying power Shepstone, links to various provincial and Manufactured goods need local buying regional hubs, railway linkages, links to power harbours and airports Upgraded infrastructure at Park Rynie Linkages to agriculture in order to create successful agro-processing industries Labour absorbent sector Potential development of the perishables hub
Taking the above factors into account, together with national and provincial policy directives and previous research that has been conducted in the area and the province, this section seeks to identify a number of development opportunities that can address the current issues experienced within the manufacturing sector as well as build on potential strengths.
The development opportunities/potential projects identified are: » Special Activity Areas: Processing and refining Milling of sugar cane products Packaging of fresh produce Vegetable and fruit canning High-tech meat processing (focus on exporting) Research and development Pharmaceutical production o Medicinal and pharmaceutical preparations Alternative medicines and medicinal botanical products Cosmetics o Natural cosmetics o Ethnic cosmetics
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» SMME Support and Training Skills development Support & general equipment Access to funding Conduct and assist with proper research and feasibility studies prior to project implementation » Vacant property could be developed in strategic manufacturing areas (such as at Park Rynie) » Local Manufacturing Opportunities Continued maintenance of infrastructure to upgrade the Industrial Park (Park Rynie) Design and extend the Industrial Park Ugu’s Industrial Perishable Hub at o Park Rynie o Ellingham Estate Agro-processing plant Small scale industries Umdoni should focus on adding value to raw products in the area instead of exporting, where value is added in a different country. This will boost the agricultural sector alongside the manufacturing, as more opportunities are created for value adding, which therefore creates more opportunities for economic and employment growth. Agro-processing will create a more diverse portfolio of marketable products
5.4 Utilities Sector
5.4.1 Overview of the Utilities sector The utilities sector, which includes electricity and water production and delivery, is extremely important, as it creates and enabling environment for economic development, as without adequate infrastructure, investment and growth opportunities are limited. Umdoni Local Municipality is currently experiencing challenges with regards to supplying adequate electricity and water, which creates a large backlog and increased pressure from the residents to deliver on basic government services.
The table below illustrates the current situation of the utilities sector in Umdoni Local Municipality.
TABLE 5.9: CURRENT SITUATION FOR THE UTILITIES SECTOR (2013) Economic Variable UDM Umdoni LM Share GDP 3.3% 1.3% GDP growth per annum (2003-2013) -1.2% -9% GDP contribution to sector in DM - 6.8% Share of employment 0.2% 0.1% Employment growth per annum(2003-2013) -4.4% -12.2% Employment contribution to sector in DM - 6.1% Source: Quantec data 2015, Kayamandi Calculations
From the table above, it is clear that the utilities sector (electricity and water) contributes approximately 1.3% towards Umdoni Local Municipality’s GDP, while the GDP share for utilities in the District only accounts to about 3.3%. The utilities sector is also showing major decline in Umdoni Local Municipality as well as in Ugu District Municipality with a rate of -9% and -1.2% respectively. It is also
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With regards to employment, the share of employment which the utilities sector is responsible for in Umdoni Local Municipality is 0.1%, which is 0.1% more than the employment share of the sector on District level (0.2%). The growth rate for employment is also rapidly declining in Umdoni Local Municipality, with the annual growth rate in utilities being around -12.2%. The utilities sector in Umdoni Local Municipality contributes 6.1% towards the total employment for the sector in the district. The decreasing growth rates are concerning and therefore attention should be given to the improvement of this sector.
Figure 5.7 below put the above into context when compared to the five other local municipalities that make up Ugu District Municipality.
As revealed in Figure 5.7, the contribution of utilities towards the GDP and employment on local municipal level, are extremely low in Umdoni Local Municipality. The average GDP and employment contribution from the utilities sector for Local Municipalities in the District is both 17%, while Umdoni Local Municipality’s contributes a very low percentage of 7% towards GDP and 6% towards employment.
FIGURE 5.7: GDP CONTRIBUTION VS. EMPLOYMENT SHARE FOR THE UTILITIES SECTOR (2013)
80% 75% 73% 70%
60%
50%
40%
30%
20% 7% 8% 10% 6% 7% 7% 6% 5% 5% 1% 1% 0% VulamehloLM Umdoni LM Umzumbe LM UMuziwabantu Ezingoleni LM Hibiscus Coast LM LM
Share of DM GDP Share of DM employment
Source: Quantec data 2015, Kayamandi calculations
Figure 5.8 shows that the utilities sector in Umdoni Local Municipality are performing well below average on local level, as a result of the contribution to GDP and employment share, towards the utilities, on district level, are the second lowest at 0.8% and 0.1% respectively.
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FIGURE 5.8: GDP AND EMPLOYMENT CONTRIBUTION OF LM'S TOWARDS UDM (2013) 3.5% 3.0% 3.0% 2.6% 2.5%
2.0%
1.5% 1.3% 1.1% 1.0% 0.7% 0.8%
0.5% 0.3% 0.3% 0.1% 0.1% 0.1% 0.2% 0.0% Vulamehlo LM Umdoni LM Umzumbe LM UMuziwabantu Ezingoleni LM Hibiscus Coast LM LM GDP Employment
Source: Quantec data 2015, Kayamandi calculations
5.4.2 Kwa Zulu Natal Growth and Development Plan The Kwa- Zulu Natal Provincial Growth and Development Strategy highlight various spatial development corridors in order to promote economic development in the province. In order to attain success in these projects good planning needs to ensure the sustainability, by developing the utilities sector, in order for it to have a positive effect. Currently KZN, along with the rest of South Africa, has insufficient electricity infrastructure to meet the rising demands of both industry and household consumers. This is as a result of the limited capacity of the current power stations, this creates increased power outages, which will negatively impact on growth and development and therefore alternative energy generation becomes a more comprehensive goal, whilst also assisting with the increasing of environmental sustainability.
As a result sufficient water, electricity and sanitation are required to ensure the growth and development of KZN. In order to assist this process the KZNPGDP has proposed the following interventions for the utilities sector: Improve water resource management and supply Review and implement the Provincial Water Strategy Rationalise and extend Water Board Jurisdiction Research and promote skills development for more localised water harvesting Programme for building dams Programme for development of water resources Develop a financial model for the implementation of operations and maintenance Establish policy and design standards for the provision of 75 litres of water per person per day Improve energy production and supply Review and implement the Provincial Energy Strategy Provide base-load alternative energy supply Programme and funding for operations and maintenance Expedite the planning and implementation of sub-transmission networks in the Province
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Taking the local and district trends into consideration the following targets for the utilities sector are set out in the Kwa- Zulu Natal PGDP: The annual growth target for water provision in the utilities sector in KZN is 1 billion litres per person per year as there is approximately 10 million people in need of water. The percentage of households with access to water in KZN in 2012 is 23%, with low rate of access the aim at increasing it to 35% in 2020 and to reach at least 50% by 2030 The increase of sanitation towards households in KZN is expected to rise to 100% in 2020 as the current baseline is 85.6% Increase the households source of electricity supply to 89% in 2020 and to 98% in 2030, from a baseline of 75.9% in 2012
In order to secure future growth trends basic services such as water, sanitation and electricity must be provided to schools, business and households in KZN. The utilities sector should also assist with addressing historical developmental spatial and racial imbalances throughout the province by upgrading and constructing infrastructure such as roads, housing, electricity and water, among others.
5.4.3 Ugu District GDS and LED guidelines The District’s Growth and Development Strategy puts emphasis on the fact that the utilities sector is extremely important to ensure an enabling environment for development and economic growth. Furthermore, the electricity shortfall and water interruptions experienced in the District, especially in Umdoni Local Municipality negatively affect the economic climate and hampers investment into the area.
The strategic programmes for the utilities sector in the District are stipulated as follows: Facilitate Expansion of the Sukuma Sakhe Programme and 100ha Programme in Traditional Councils in order to address historical imbalances as mentioned in the KZNPGDP Development of electricity and water in order to assist the Strategic Infrastructure Development driver for the District Ensure effective water resource management and awareness Utilising of subterranean (ground) water Investing in alternative energy sources
These are all critical types of infrastructure that feed directly into Ugu’s potential for economic growth and development.
5.4.4 Implications for Umdoni Local Municipality LED Strategy Review Taking the targets and focus areas of the KwaZulu-Natal’s PGDP and District GDS into consideration, the following implications for the Umdoni Local Municipality’s utilities sector are evident: An adequate and reliable supply of water and electricity is vital in creating and enabling environment for development, economic growth and investment in Umdoni Local Municipality The sector will be negatively influenced by the national energy crisis in South Africa Alternative energy sources and water supplies should be investigated Disaster management plans should be investigated to avoid unnecessary spending of resources
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5.5 Construction
5.5.1 Overview of the Construction sector The performance of this sector is dependent on economic growth in general and is essentially a derived demand. The table below reveals the major trends for the construction sector in Umdoni Local Municipality As seen in the table below the construction sector, in Umdoni Local Municipality, experienced positive growth in production (11%) and an incline in employment growth (10%) from 2003 to 2013.
TABLE 5.10: CURRENT SITUATION FOR THE CONSTRUCTION SECTOR (2003-2013) Economic Variable UDM Umdoni LM Share GDP 3.3% 2.8% GDP growth per annum (2003-2013) 6.7% 11.1% GDP contribution to sector in DM - 15.5% Share of employment 9.2% 9% Employment growth per annum (2003 -2013) 5.7% 10% Employment contribution to sector in DM - 16.9% Source: Quantec data 2015, Kayamandi Calculations
From the table above, it is clear that the construction sector contributes only 2.8% to Umdoni Local Municipality’s GDP and slightly higher, at 3.3% on District level. The GDP growth for the construction sector is higher than that of the District, while the local construction sector’s GDP contribution towards the sector in the district is 15.5%.
The construction sector holds a very small share of employment both on Local level (9%) and a similar share on District level (9.2%). The construction sector furthermore shows small employment growth rates on District level, with 5.7% and 10% growth per annum on Local level. Figure 5.9 seeks to compare the construction sector in Umdoni Local Municipality with the other five local municipalities contained within Ugu District Municipality.
FIGURE 5.9: GDP CONTRIBUTION VS. EMPLOYMENT SHARE FOR CONSTRUCTION (2013)
60% 54% 54% 50%
40%
30%
20% 16% 17% 13% 13% 7% 7% 7% 10% 5% 5% 4% 0% VulamehloLM Umdoni LM Umzumbe LM UMuziwabantu Ezingoleni LM Hibiscus Coast LM LM Share of DM GDP Share of DM employment
Source: Quantec data 2015, Kayamandi calculations
From the graph above it can be deduced that the construction sector, for Umdoni LM, has above average contributions to the DM with regards to GDP (16%) and employment (17%) share. However, Hibiscus Coast LM has the highest levels of GDP and employment share towards the district; this could
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Umdoni LED Strategy Review be as a result of the higher population the municipality hosts and therefore their increased need for development and the construction industry in order to keep up with local demand.
Figure 5.10 illustrates that when considering the contribution of all the Local Municipalities within Ugu District Municipality towards the total GDP and employment share for the construction sector, that Umdoni Local Municipality contributes relatively the same as other local municipalities. The gap between the highest and lowest contributor is only 5%, thus indicating that all the construction industries in the district contribute more or less the same amount of GDP to their local municipality.
FIGURE 5.10: GDP AND EMPLOYMENT CONTRIBUTION OF LM'S TOWARDS UDM (2013) 14% 12% 12% 10% 10% 9% 9% 9% 8% 7% 6% 6% 4% 4% 3% 3% 3% 2% 2% 0% Vulamehlo LM Umdoni LM Umzumbe LM UMuziwabantu Ezingoleni LM Hibiscus Coast LM LM GDP Employment Source: Quantec data 2015, Kayamandi calculations
The performance of the construction sector mainly reflects on the provision of infrastructure in Umdoni Local Municipality. Infrastructure investments should be focused on the improvement of the reliability and availability of services and must include spending on bulk water infrastructure, water supply networks and energy distribution.
The following factors, specific to Umdoni Local Municipality, have an influence on development potential within the Construction Sector: Availability of Resources: o The Local Municipality does not have an adequate and reliable supply of sanitation, water and electricity o Highly vulnerable natural resources cap potential development space o Degradation of natural resources o Natural disasters destroying or damaging current infrastructure Availability of Skills and Labour: o Specific skills required: Technical and artisanal skills, design skills, project management skills o Advancement in technology o Future planning to ensure the correct infrastructure is built to sustain development needs and that resources aren’t wasted Enabling Environment: o This sector plays an extremely important role in creating an enabling environment for economic growth
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o Water shortages negatively affects production and investment o Large areas are indicated as areas of conservation in Umdoni, therefore increasing the difficulty of development o Provision of infrastructure should be allow for future development and not only meet current needs
5.5.2 Kwa Zulu Natal Growth and Development Plan The KwaZulu-Natal Growth and Development Plan provide an indication that R827 billion will be spent on the building of new and upgrading of existing infrastructure. These are dedicated towards the improvement of access to healthcare facilities, schools, water, sanitation, housing and electrification, as well as the construction of ports, roads, railway systems, electricity plants, hospitals, schools and dams. As the performance of this sector is dependent on economic growth in general it is directly proportionate to the performance of the provision of infrastructure.
As the National Development Plan sets a goal of 11 million new jobs to be created by 2030 for various job drivers, one of these job drivers include the provision of infrastructure which lays the foundation for higher growth, inclusivity and job creation. Therefore the other sectors would need to create interventions where the construction sectors demand will increase in order to achieve the targets set out for growth and job and skill creation.
Significant potential exists through improving the efficiency and expansion of government-led investment programmes in order to assist in creating employment / work opportunities. This can be achieved through the enhancement of existing mechanisms such as the Expanded Public Works Programmes (EPWP), the Community Work Programmes (CWP) and the Jobs Fund. These programmes aim at creating labour-intensive programmes which targets infrastructure development, food security, health and safety, social and community development, environmental protection and rehabilitation, development of sport and recreation, and road maintenance.
The KZNPGDP highlights important indicators that need to determine the success of such programmes in the construction sector: The total number of work opportunities created through Expanded Public Works Programme and Community Work Programme Currently the 2010 baseline is 483 921 work opportunities created, this needs to be improved to 725 340 in 2020 and 957 449 in 2030
Other sectors would therefore need to create interventions where the construction sectors demand will increase in order to achieve the targets set out for growth and job and skill creation.
5.5.3 Ugu District GDS and LED guidelines Various projects and programmes have been suggested by the Districts GDS in order to upgrade and contribute to economic growth in the area. Most of these projects include the construction sector through the development of agro-processing, manufacturing plants, supplying of houses or upgrading and maintaining infrastructure and sustainable resources. The usage of the construction sector means an increase in GDP and employment for the District.
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The construction sector furthermore includes labour intensive projects, such as the upgrading of various sectors infrastructure. The strategic programmes for the utilities sector in the District are stipulated as follows: Development of utilities sector Expansion of the key productive sectors o Expansion of Agricultural Production and Agri-Processing o New Tourism Product Development and Marketing o Enhancing Investment Promotion & Facilitation Capacity Education and Skills Development o Increasing school resources and capacity Safety and Empowerment of communities o Facilitate Expansion of the Sukuma Sakhe Programme and 100ha Programme in Traditional Councils in order to address historical imbalances as mentioned in the KZNPGDP o Encourage Promotion of Arts & Culture and Sport & Recreation Facilities, Initiatives and Events o Promote Human Settlement Development and Town Rehabilitation o Ensure Clustering of Supporting Services & Facilities Strategic Infrastructure Development o Development of Airports and Harbours o Develop an Integrated Road & Rail Network to support both Passenger and Cargo Transport o Develop ICT Infrastructure to Support the Knowledge Economy o Strengthening of Energy Infrastructure Capacity and Efficiency o Ensure Effective Water Resource Management and Awareness Environmental Sustainability o Advance Alternative Energy Generation Capacity
5.5.4 Implications for Umdoni Local Municipality LED Strategy Review As the performance of this sector is dependent on economic growth in general it is directly proportionate to the performance of the provision of infrastructure. The KZN PGDP, Ugu Growth and Development strategy and Umdoni’s IDP identifies the construction sector as one of the growth and development pillars for the area as a result of all the existing industries, shops, banks and agricultural orientated settlements. Therefore roads, sustainable housing and human settlement has been identified as first and second priority for Umdoni Local Municipality (IDP 2015/16).
The construction sector is seen as a so-called “job-driver” as it is associated with infrastructure development, which includes public investment in: Energy Transport Water Communication infrastructure Housing
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Jobs can therefore be created through the construction sector in construction of new infrastructure, operation of the new facilities, expanded maintenance and the manufacturing of components for various infrastructure programmes within the Local Municipal context.
5.5.5 Development Opportunities and Potential Projects In order to be aware of the potential opportunities which the construction sector may hold, the current strengths and constraints need to be examined. These have been identified through the analysis and stakeholder consultation, and are set out in the table below:
TABLE 5.11: CONSTRUCTION STRENGTHS AND CONSTRAINTS Strengths Constraints An important sector to aid development Small local contractors do not have the Existing engineering and construction relevant certification or grading to come into businesses and skills contention for government contracts Existing well-established transport linkages Local contractors are usually sub-contracted Tourism development corridor along the N2 by large construction companies and R102 (exploitation occur in many cases) R612 links inland areas to Umdoni Loss of economic injection due to Potential of a non-perishable food hub appointment of outside construction being developed companies Potential development of the beach front in Highly vulnerable ecological system Scottburgh Small areas left for development as a result Potential job creation for Umdoni of the environmental conservation areas Potential re-investment into Umdoni
Taking the above factors into account, together with national and provincial policy directives, this section seeks to identify a number of development opportunities that can address the current issues experienced within the construction sector as well as build on potential strengths. The development opportunities/potential projects identified are:
» Support and training of Local Construction companies and SMME’s o Assisting local construction companies with certification and grading of their businesses, to be able to tender for government contracts o Skills development training » Value-adding and complimentary activities o Brick manufacturing o Stone crushing o Manufacturing of building supplies » Spin-off development: o Increase in property and residential development (retail, trade, hospitals, schools and residential land uses(retirement villages)) » Infrastructure upgrades: o Industrial Parks o Roads and rail network o Beach front development o Informal trader stalls o Increased streetlights for safety of residents
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5.6 Retail and Trade
5.6.1 Overview of the Retail and Trade sector The table below reveals the trends evident for the retail and trade sector in Umdoni Local Municipality and Ugu District Municipality.
TABLE 5.12: CURRENT SITUATION OF THE RETAIL AND TRADE SECTOR (2003-2013) Economic Variable UDM Umdoni LM Share GDP 19.3% 19.9% GDP growth per annum (2003-2013) 3.4% 3.9% GDP contribution to sector in DM - 17.9% Share of employment 26.2% 27.7% Employment growth per annum(2003-2013) 3.4% 3.7% Employment contribution to sector in DM - 18.4% Source: Quantec data 2015, Kayamandi Calculations
From the table above, it is evident that retail and trade sector is a relatively important sector for both GDP and employment share in Umdoni Local Municipality and Ugu District Municipality. The retail and trade sector contributes approximately 19% towards GDP and 26% towards employment on District level, and about 20% towards GDP and 28% towards employment on local level.
The retail and trade sector is showing a higher annual GDP growth rate on Local level (3.9%) than on District (3.4%), while both the District and the Local Municipality shows employment positive growth rates at 3.4% and 3.7% respectively.
The retail and trade sector in Umdoni Local Municipality contributes approximately 18% towards the GDP to the sector in Ugu District Municipality, and contributes about 18% towards employment to the retail trade sector. This indicates the importance of this sector to Umdoni Local Municipality.
Figure 5.11 compares the information relevant to Umdoni Local Municipality as discussed below, with the remaining local municipalities located within the district.
FIGURE 5.11: GDP CONTRIBUTIONS VS. EMPLOYMENT SHARE FOR TRADE AND RETAIL (2013) 60% 56% 55%
50%
40%
30% 18% 20% 18% 12% 12% 10% 6% 6% 4% 4% 4% 4% 0% VulamehloLM Umdoni LM Umzumbe LM UMuziwabantu Ezingoleni LM Hibiscus Coast LM LM Share of DM GDP Share of DM employment
Source: Quantec data 2015, Kayamandi calculations
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The figure reveals that, compared to the other five local municipalities located within Ugu District Municipality, the retail and trade sector in Umdoni contributes the second highest to both the GDP and employment share.
Figure 5.12 below shows that, in relation to the contribution of the GDP and employment, of the retail and trade sector, towards the total for the sector on District level, Umdoni Local Municipality contributes above average rates. This is as a result of the average contributions for the retail sector being 19% towards GDP and 28% towards employment.
FIGURE 5.12: GDP AND EMPLOYMENT CONTRIBUTION OF LM'S TOWARDS UDM (2013) 35%
29% 30% 28% 27%
25% 22% 23% 19% 20% 19% 17% 17% 15% 15% 15% 10% 10%
5%
0% Vulamehlo LM Umdoni LM Umzumbe LM UMuziwabantu Ezingoleni LM Hibiscus Coast LM LM GDP Employment
Source: Quantec data 2015, Kayamandi calculations
According to Umdoni’s Business Retention and Expansion Programme (2007) the Local Municipality needs employees who are equipped with interpersonal skills, customer service skills, marketing skills, public relation skills and clerical skills. Majority of the businesses had a positive outlook towards employment as 62% of the respondents indicated that they would want to increase their employment numbers by 2010. Majority of the businesses that had also said that they had been in the business for numerous years and therefore had built up a regular customer base, and as a result they felt that loyalty had been the main advantage of being in business in Umdoni. Some of the disadvantages had been mentioned as the high crime rate and transport costs, as a result of the far distance from suppliers. The respondents had expressed a very influential weakness was the lack of participation by the municipality in programme activities, and that some had considered moving away, this was mostly due to slow growth and a lack of space. The business respondents indicated that possible opportunities for further diversification in the Municipality’s businesses and facilities could include a conference centre, fish canning, and a fuel supply depot.
5.6.2 Kwa Zulu Natal Growth and Development Plan In an effort to ensure that the retail and trade sector in Umdoni Local Municipality reaches its full potential, the KwaZulu-Natal Provincial Growth and Development Plan should be consulted. According to the KZNPGDP, retail and trade is becomes part of nearly all other sectors as wholesale, trade and retail can be found in sector’s strategy. The Plan therefore includes programmes which assist in the expansion of tertiary sectors such as retail through the development of other sectors. The Province is
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The following strategic objectives will have an influence on the retail and trade sector: Enhance sectoral development through trade and investment Promote SMME and entrepreneurial development Improve water resource management and supply Improve energy production and supply Actively promote spatial concentration and co-ordination of development interventions Facilitate integrated land management and spatial planning
Initiatives in the retail and trade sector should therefore be integrated with initiatives in the manufacturing sector such as agro-processing, mineral beneficiation, tourism development and environmental sustainability.
5.6.3 Ugu District GDS and LED guidelines In order to increase the one of the Districts strongest sectors, various quality jobs should be created through maintaining and expanding existing businesses as well as attracting and establishing new businesses, particularly in trade and small businesses. Potential industrial and tourism type development will provide various opportunities for the District. Efficient and effective support to SMME’s will see growth in the retail trade sector and employment, thus investigating ways to improve SMME access to finance should be a priority. The Ugu District Growth and Development Strategy aims to create an enabling environment in order to facilitate the growth of key sectors in the economy. This entails programmes and interventions that create business friendly environments in Ugu to ensure the attraction of new investment and businesses.
The wholesale, retail and trade is linked to various other sectors and therefore have the following strategic programmes that affect the sector: Expansion of the key productive sectors o Expansion of Agricultural Production and Agri-Processing o New Tourism Product Development and Marketing o Stimulating the manufacturing sector and manufacturing value chains o Enhancing Investment Promotion & Facilitation Capacity o Ensuring Effective Assistance and Support to SMME's, Cooperatives and Informal Traders Enhance the Business and Investment Environment throughout the District o Strengthen District BR&E Programme Capacity o Enhancing Investment Promotion & Facilitation Capacity o Provision of land development opportunities Safety and Empowerment of communities o Encourage Promotion of Arts & Culture and Sport & Recreation Facilities, Initiatives and Events o Promote Human Settlement Development and Town Rehabilitation Strategic Infrastructure Development o Development of Airports and Harbours
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o Develop an Integrated Road & Rail Network to support both Passenger and Cargo Transport o Beach front development
5.6.4 Development Opportunities and Potential Projects Taking cognisance of the above, a number of opportunities to expand and further develop the retail trade sector within Umdoni Local Municipality, is evident. In order to identify these opportunities, the strengths and constraints of the sector needs to be examined and outlined in Table 5.13
TABLE 5.13: RETAIL AND TRADE STRENGTHS AND CONSTRAINTS Strengths Constraints Well established transport linkages (N2, R Limited knowledge of business services 102 and R612 connects Umdoni to Durban Close proximity to Durban, Port Shepstone and Port Shepstone, other existing links and Margate results in leakage of buying connect to other regional hubs) power Limited capacity to support local SMME Established retail and business environment development The touristic features of Umdoni attract Lack of retail and other business tourists throughout the year causing infrastructure spending in local retail outlets Limited developable sites due to ecological Potential development of land into sensitive areas investment areas Lack of a business retention and attraction strategy Upgrading of the beach front development Lack of a marketing and investment strategy
Taking the above strengths and constraints into consideration, along with inputs received during stakeholder consultation and the objectives as indicated by the KZN PGDP and District GDS, the following possible projects and programmes for the Umdoni Local Municipality’s retail and trade sector are evident: » Promotion of Existing retail and trade o Creating of a database of existing cooperatives o Compiling of a SMME strategy for Umdoni Local Municipality o Presenting further training and skills development programmes for existing SMMEs and cooperatives o Compiling a business retention and attraction strategy o Compiling a marketing and investment strategy » Establishing of a women and youth entrepreneurial centre o One-stop for business advice o Information centre o Entrepreneurial training facility o Awareness creation and knowledge bank of business climate and existing businesses in the area » Agricultural inputs and agro-processing o Establish businesses (SMMEs) for the selling of agricultural inputs such as seeds, pesticides, equipment, feed etc
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o Establish businesses for the selling of manufacturing outputs such as the non- perishable food products » Informal sector o Drafting an informal SMME strategy o Formalise the informal traders o Provide trading areas for informal SMME traders
5.7 Transport and Communication
5.7.1 Overview of the Transport and Communication sector The transport and communications sectors are very important for the economic growth of an area. The transport sector is an essential component of the economy with strong effects on development and the welfare of populations. When transport systems are efficient, they provide socio-economic opportunities and benefits that result in positive multiplier effects such as better accessibility to markets, employment and additional investments. When transport systems are deficient in terms of capacity or reliability, they can have an economic cost such as reduced or missed opportunities.
Development within this sector is also supported by the importance of communication in the new global economy. The introduction of new technology to the area, i.e. logistics, Information and Communication Technology (ICT), marketing channels, networking platforms, call centres, etc. can all contribute towards the development of various clusters and linkages within the local economy.
The most important road links within the Umdoni Local Municipality are: The N2 which connects the Local Municipality with Durban and Port Shepstone The R102 that links Umdoni with Durban and Port Shepstone The R612 that links Umdoni with Ixopo and Drakensburg mountain range
The transport and communication sector is mainly based on the performance of the infrastructure in Umdoni Local Municipality. Infrastructure investments should be focused on the improvement of the reliability and availability of services.
The following table provides insights on the current economic trends within the transport and communication sector.
TABLE 5.14: CURRENT SITUATION OF THE TRANSPORT AND COMMUNICATION SECTOR (2003- 2013) Economic Variable UDM Umdoni LM Share GDP 12% 9.4% GDP growth per annum (2003-2013) 5.4% 3.3% GDP contribution to sector in DM - 14.5% Share of employment 5.9% 5.4% Employment growth per annum (2003-2013) 6.7% 5.2% Employment contribution to sector in DM - 15.7% Source: Quantec data 2015, Kayamandi Calculations
From the table above, it is clear that the transport and communications sector contributes approximately 9.4% to the Umdoni Local Municipality’s GDP and holds about 5.4% share of the employment industry within the Municipality. The sector shows positive growth with regards to the
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GDP, although slightly lower than the growth rate for the District. The growth rate of employment in the transport and communication sector in the Local Municipality is also growing at 5.2% per annum.
The figure below seeks to put the above trends into context through comparing it to the other local municipalities contained within Ugu District Municipality.
FIGURE 5.13: GDP CONTRIBUTIONS VS. EMPLOYMENT SHARE FOR TRANSPORT & COMMUNICATION (2013) 70% 60% 60% 51% 50% 40% 30% 14% 16% 20% 11% 8% 7% 9% 10% 5% 7% 7% 5% 0% VulamehloLM Umdoni LM Umzumbe LM UMuziwabantu Ezingoleni LM Hibiscus Coast LM LM
Share of DM GDP Share of DM employment
Source: Quantec data 2015, Kayamandi calculations
From the figure above, it is clear that Umdoni LM’s transport and communication sector’s GDP contribution (14%) and employment share (16%) is the second highest when compared to the other five local municipalities situated within the District. Hibiscus Coast LM remains a strong contributor to the district in most of the sectors; this is likely a result of the high population Hibiscus Coast has in relation to the other municipalities in 2013.
Figure 5.14 below indicates that the transport and communication sector in Umdoni LM contributes minimally towards the total share for the sector within the District, both with regards to GDP and employment share. Ezingoleni LM dominates, contributing about 29% towards the GDP share and 16% towards the employment share for the transport and construction sector on District level.
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FIGURE 5.14: GDP AND EMPLOYMENT CONTRIBUTION OF LM'S TRANSPORT AND COMMUNICATION SECTOR TOWARDS UDM (2013) 35%
30% 29%
25%
20% 17% 16% 14% 15% 10% 10% 9% 6% 6% 6% 5% 4% 5% 4%
0% Vulamehlo LM Umdoni LM Umzumbe LM UMuziwabantu Ezingoleni LM Hibiscus Coast LM LM GDP Employment
Source: Quantec data 2015, Kayamandi calculations
5.7.2 Kwa Zulu Natal Growth and Development Plan The KwaZulu-Natal’s Provincial Growth and Development Plan provide indicators in order to measure port capacity, airport tonnage and passengers, road to rail ratio, condition of the roads as well as the access that it provides. This will provide rigid guidelines for district and local municipalities in order to ensure the correct developments and progress takes place to achieve National Development Goals.
Transportation and communication sector is recognised as playing an important role and vital function to unlocking the economic potential of the province. The importance of mentoring youth and provision of information communication technology skills is essential to the development of entrepreneurial skills for youth and longer term employment. The following strategic objectives and interventions have been laid out to improve the current transport and communication network and infrastructure in KZN: Development of Harbours. This will allow the harbour to operate at optimal capacity. The key infrastructure facilities here include the two ports of Durban and Richards Bay, these two ports handle nearly 80% of South Africa’s cargo tonnage and therefore needs to run smoothly. Port capacity needs to be improved through a proposed Durban Dig Out Port (DDOP) Development of Airports. The airports of KZN offer greater potential to increase connectivity both at domestic and international level. An aerotropolis initiative can eventually include commercial, residential and production activities and expand the capacity of KwaZulu-Natal to import and export goods Development of Road and Rail Networks. Rail and road links to the major seaports and airports will make it easy to switch cargo between different modes of transport, and therefore need to be upgraded and maintained constantly to improve the efficiency of the infrastructure. Develop inland Multi-Modal Logistic Hubs (Inland Port). Modal integration is encouraged and the movement of some goods from road to rail emphasized, so to increase the efficient
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utilization of infrastructure. KZN strategy ought to encompass all transportation modes including air, rail, road and pipelines.
The following catalytic programmes/projects are in support of the proposed intervention, contributing to the overall target indicators:- Cato Ridge LAP, Development and release of 119 ha of land for Industrial Development; and Dry Port / Inland Logistics Hub at Cato Ridge or surrounding area a proposed private sector development Watson Highway DTP Roadlink Ridge LAP; Interchange between the R102 and Airport Link Road; Interchange between the entrance to Support Zone 2 and the Eastern link road; Interchange between the Watson Highway and the DTP link road; Interchange on Airport link road, at the entrance to the Passenger Terminal Development of Trade Zone 2; SAPS Airwing Relocation; SAAF Relocation; Mega Industrial Integrated Township; Support Zone 2 Commercial Development; Support Zone 2 Interchange; and Passenger Terminal Interchange
Other SIP interventions have also been made reference to in order to increase the current potential of the Province, these among, 13 other, include; unlocking the Northern Mineral Belt with Waterberg as the catalyst , Durban – Free State – Gauteng Logistics and Industrial Corridor, Integrated Urban Space and Public Transport Programme and Expansion access to communication technology Broadband rollout; Digital Community Hubs.
These various developments or interventions are expected to provide many spin-offs including job creation as a result of increased capacity of the Provinces’ current infrastructure.
5.7.3 Ugu District GDS and LED guidelines The Districts GDS places special focus on the development of the corridors and strategic infrastructure as part of potential increase in economic growth. The district has existing public transport infrastructure that needs to be upgraded and extended. Major national and provincial linkage roads are within the District and provide potential for increasing the accessibility of the region.
The transport and communication sector includes various strategic programmes such as: Education and Skills Development o Encourage demand driven skills development and training linked to industry safety and Empowerment of communities o Focus on Tertiary Education o Creating partnerships between secondary and tertiary education institutions and private sector Safety and Empowerment of Communities
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o Facilitate Expansion of the Sukuma Sakhe Programme and 100ha Programme in Traditional Councils in order to address historical imbalances as mentioned in the KZNPGDP Strategic Infrastructure Development o Development of Airports and Harbours . Ensuring an Integrated Passenger and Freight Transport via Air . Enhance Connectivity to Existing Ports and Harbours o Develop an Integrated Road & Rail Network to support both Passenger and Cargo Transport . Rehabilitation of Key Branch Lines with Support from Transnet . Development and Rehabilitation of Key Primary, Secondary and Tertiary Roads . Rural Access Road and Facility Rehabilitation Programme . Exploitation of Inter-modal/Integrated Transport Potential . Development of Passenger Rail Capacity o Develop ICT Infrastructure to Support the Knowledge Economy . Increase Access and Quality of Telecommunications . Enhance Innovation & Technology Capacity o Strengthening of Energy Infrastructure Capacity and Efficiency . Increasing the Capacity of Energy Infrastructure o Ensure Effective Water Resource Management and Awareness
5.7.4 Implications for Umdoni Local Municipality LED Strategy Review Umdoni Local Municipality’s current transport linkages in the area are an enormous strength, because of the provincial and regional linkages that is provided. Therefore roads have been identified as Umdoni’s first priority (IDP 2015/16). Maintenance of the existing infrastructure is important as the streets and especially entrances in the municipality are currently not coping with the traffic it currently carries.
A spatial objective for the areas is to unlock the development opportunities of the N2, inland linkages via the R612 as well as the tourism corridor between Durban and Margate (R102). The IDP indicates that infrastructure is part of a job driver for the area, and that investment needs to go into transport and communication infrastructure. It is identified that the manufacturing of components for the infrastructure programme is an activity that can be expanded on. There is a great need for capabilities in the area which include the improvement of everything, from the broadband speeds to the public infrastructure systems, network coverage and sustainable energy.
Ugu District Growth and Development Strategy proposes a new industrial development that should be developed along a main road network will ensure proper visibility and exposure for the development, thus increasing the access to markets as well as the competition of the local industries, with those at a district or provincial level.
5.7.5 Development Opportunities and Potential Projects Taking the current economic situation and the policy direction into consideration, a number of development opportunities and potential projects are evident. However, the current strengths and constraint evident within the transport and communication sector in Umdoni needs to be considered to propose relevant projects. These are set out in Table 5.15.
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TABLE 5.15: TRANSPORT AND COMMUNICATION STRENGTHS AND CONSTRAINTS Strengths Constraints Well established existing transport network Poor condition of the roads within the (NE, R102 and R612) Umdoni LM Tourism development corridor Dilapidated and outdated infrastructure Entrance roads to areas (Especially Umzinto) Access to nearby harbours and airports Strong rail and road infrastructure
The following potential programmes and projects specific to the Umdoni Local Municipality exist within the transport and communication sector: » Improvement of Rail Transport System o Upgrade and expand on the opportunities that exists around the current usage of the railway passing through Umdoni o Investigate the possibilities of utilising the current railway lines for public transport as well as bulk cargo transport » Upgrading of facilities at beaches(walkways, ablution, etc) » Construction of river crossing along Amahlongwa River (IDP 2015/16) » Rehabilitation and construction of Disaster Projects (River banks, bridges, public ablution) (IDP 2015/16) » Upgrading of Roads o The upgrading and rehabilitation of roads(as specified in the IDP), will increased access create opportunities through linkages to larger economies , as well as for local residents to important social facilities such as schools, clinics and beaches o Contract local SMMEs in upgrading projects » Promote the Development of Information and communications technology o Skills development especially in regards to communication and ICT skills
5.8 Finance and Business Services
5.8.1 Overview of the Finance and Business Services sector The finance and business services sector is the best performing sector with regards to GDP in Umdoni Local Municipality, which means that this sector should be expanded and further cultivated to contribute even further to the local GDP.
The table below gives insight into the current situation of the finance and business services sector:
TABLE 5.16: CURRENT SITUATION FOR THE FINANCE AND BUSINESS SECTOR (2003-2013) Economic Variable UDM Umdoni LM Share GDP 17.2% 21.9% GDP growth per annum (2003-2013) 6.6% 6.8% GDP contribution to sector in DM - 22.3% Share of employment 11.3% 10.6% Employment growth per annum(2003-2013) 3.6% 3.6% Employment contribution to sector in DM - 16.3% Source: Quantec data 2015, Kayamandi Calculations
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The finance and business services sector in Umdoni Local Municipality contributes approximately 21.9% towards the local GDP, which is around 4.7% higher than the District average. Umdoni Local Municipality’s finance and businesses services sector shows a 6.8% growth rate (0.2% higher than the District) and IS the biggest contributor towards the Local Municipality’s GDP. This sector also contributes 22.3% towards the GDP of the sector in the District.
The finance and business sector accounts for 10.6% of the employment share in Umdoni Local Municipality (0.7% lower than the District’s GDP contribution) and shows employment growth of only 3.6%, both locally and on District level. Umdoni Local Municipality’s employment share towards the finance and business sector in the District only accounts for 16.3%.
Figure 5.15 and Figure 5.16 below visually illustrates the above statistics, compared to the other five local municipalities located within Ugu District Municipality.
FIGURE 5.15: GDP CONTRIBUTION VS. EMPLOYMENT SHARE FOR FINANCE AND BUSINESS SERVICES (2013) 60% 54% 50% 50%
40%
30% 22% 20% 16% 13% 12% 11% 11% 10% 4% 4% 1% 2% 0% VulamehloLM Umdoni LM Umzumbe LM UMuziwabantu Ezingoleni LM Hibiscus Coast LM LM
Share of DM GDP Share of DM employment
Source: Quantec data 2015, Kayamandi calculations
The figure above indicates that after Hibiscus Coast LM, Umdoni’ LM’s finance and business sector contribute the most towards its local GDP, and employment share compared to the other four local municipalities.
The figure below shows that, when compared to the other five municipalities located within Ugu District Municipality, Umdoni Local Municipality holds the highest share of the district GDP and an above average employment share for the financial and business sector.
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FIGURE 5.16: GDP AND EMPLOYMENT CONTRIBUTION OF LMS FINANCE & BUSINESS SERVICES TOWARDS UDM (2013)
25% 23% 21% 19% 20% 18% 18%
15% 12% 12% 11% 10% 11% 10% 8% 5% 5%
0% Vulamehlo LM Umdoni LM Umzumbe LM UMuziwabantu Ezingoleni LM Hibiscus Coast LM LM GDP Employment
Source: Quantec data 2015, Kayamandi calculations
5.8.2 Kwa Zulu Natal Growth and Development Plan In order to ensure a uniform approach with regards to growth and development of the finance and business sector across KwaZulu-Natal, it is important for local municipalities to take cognisance of the KZNPGDP, and to align the local LED strategies with these guidelines.
According to the KZNPGDP, Government services are set to play an important role in creating an enabling environment for development through investment in infrastructure, skills development and supporting services. Key programmes in the “Governance and Policy” of the Plan include the following strategic objectives: Strengthen policy, strategy and coordination and IDR Build government capacity Eradicate fraud and corruption Promote participative, facilitative and accountable governance
The Finance and Business sector in KZN plays a major role in economic growth as the current economic environment determines the level of growth the province can achieve. Key marketing infrastructure, well-organised market share and infrastructure and efficient transport systems will assist with the building of thriving business environments which can provide competition, economies of scale and in turn reduce costs of doing business.
To reverse the trend of job, in 2007 and 2010, creation of new employment opportunities and industrial development can be achieved through a Business Retention and Expansion (BR&E) programme.
5.8.3 Ugu District GDS and LED guidelines In order to increase highly dependent sectors, various conducive business environments should be created through the maintaining and expanding existing businesses as well as attracting and establishing new businesses. Ugu District Growth and Development Strategy aims to create an
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To improve one of the Districts strongest sectors, various quality jobs should be created through the maintaining and expanding existing businesses as well as attracting and establishing new businesses, particularly in trade and small businesses. Potential industrial and tourism type development will provide various opportunities for the District. Efficient and effective support to SMME’s will see growth in the retail trade sector and employment, thus investigating ways to improve SMME access to finance should be a priority. The Ugu District Growth and Development Strategy aims to create an enabling environment in order to facilitate the growth of key sectors in the economy. This entails programmes and interventions that create business friendly environments in Ugu to ensure the attraction of new investment and businesses.
The District has committed itself to enhancing the Business and Investment Environment throughout the District, by creating an enabling environment. The attainment of this objective comprises of “programmes and interventions that aim to create a business friendly environment in Ugu to ensure that new investment is attracted and new businesses are encouraged by local government”.
The creation of such a conducive environment “requires active investment promotion, business retention and expansion programmes and putting processes in place that reduce red-tape and other ‘cost-of-doing-business’ factors.”
The finance and business sector have the following strategic programmes that affect and will enhance the sector: Expansion of the key productive sectors o Enhancing Investment Promotion & Facilitation Capacity o Ensuring Effective Assistance and Support to SMME's, Cooperatives and Informal Traders Enhance the Business and Investment Environment throughout the District o Strengthen District BR&E Programme Capacity o Enhancing Investment Promotion & Facilitation Capacity Institutional Development o Enhancing Coordinated Planning and Implementation o Enhancing the Functionality of Existing Structures and Relationships o Strengthen Inter-Governmental Relations & Private Sector Partnerships o Ensure Strong Partnerships and Transparency between all Stakeholders o Ensure Strengthening of Inter-Governmental Relations o Building Local Government Capacity o Promote Shared Services within the District o Strengthen the Capacity of Local Municipal Decision Making
5.8.4 Implications for Umdoni Local Municipality LED Strategy Review Taking the above guidelines and current situation into account, Umdoni Local Municipality should take the following into consideration with regards to the finance and business sector:
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Finance & Business services sector will play an important role in creating an enabling environment for small businesses Access to finance for especially SMMEs should be enhanced Investment possibility should be enhanced through the development of catalytic projects Expansion of the tax base through the development of land (increase property tax base, ratepayers base) There is a great need for a business retention and attraction strategy There is a great need for a marketing and investment strategy
5.9 Personal, Community and Government Services
5.9.1 Overview of the Personal, Community and Government Services sector The table below presents a current situation of the personal, community and government services sector within the Ugu District and the Umdoni Local municipality.
TABLE 5.17: CURRENT SITUATION FOR THE GOVERNMENT SERVICES SECTOR (2003-2013) Economic Variable UDM Umdoni LM Share GDP 18.9% 18.9% GDP growth per annum (2003-2013) 2.7% 3.5% GDP contribution to sector in DM - 17.4% Share of employment 30.1% 29.6% Employment growth per annum (2003-2013) 2.5% 3.5% Employment contribution to sector in DM - 17.1% Source: Quantec data 2015, Kayamandi Calculations
From the table above it is clear that Umdoni Local Municipality’s personal, community, and government services sector has shown positive growth between 2003 and 2013 in terms of GDP and in terms of employment. It contributes approximately 18.9% towards GDP and approximately 29.6% towards the employment figures in Umdoni Local Municipality.
From the table it is also clear that the percentage contributions are among the stronger sectors of Umdoni, this is as a result of the combination of two sectors; the Personal and Community sector and the Government Sector. These percentages show an increase in production as well as an increase in employment between 2003 and 2013. It contributes about 17.4% towards the District’s GDP, and about 17.1% towards the District’s employment.
Figure 5.17 compares the GDP contribution and employment share of the personal, community and government services sector per local municipality contained within Ugu District municipality. From the figure, it is clear that Umdoni is the municipality with second highest GDP contribution and employment share for the personal, community and government services within the District, behind Hibiscus Coast Local Municipality. Although the contribution of the GDP and Employment seems strong in the graph above, it is important to place these figures into perspective. The fact that these are all government created jobs, and therefore may not be sustainable in the long run, is important to acknowledge along with the understanding that unemployment absorption in the combined sectors are extremely low. Therefore focus needs to be placed on the education and investment in local entrepreneurs to address the high unemployment rates.
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FIGURE 5.17: GDP CONTRIBUTION VS. EMPLOYMENT SHARE FOR THE PERSONAL, COMMUNITY AND GOVERNMENT SERVICES SECTOR FOR LMS WITHIN UDM (2013) 60%
50% 48% 47%
40%
30%
20% 17% 17% 13% 14% 14% 13% 10% 4% 4% 4% 4% 0% Vulamehlo LM Umdoni LM Umzumbe LM UMuziwabantu Ezingoleni LM Hibiscus Coast LM LM
Share of DM GDP Share of DM employment
Source: Quantec data 2015, Kayamandi calculations
The figure below illustrates the contribution of the personal, community and government sector within the six Local Municipalities located within Ugu District Municipalities, towards the sector’s GDP and employment contribution on District level.
FIGURE 5.18: GDP AND EMPLOYMENT CONTRIBUTION OF LMS TOWARDS TOTAL GDP AND EMPLOYMENT FOR THE GOVERNMENT SERVICES SECTOR IN UDM (2013) 45% 40% 40%
35% 31% 32% 30% 30% 30% 28% 24% 25% 19% 20% 18% 17% 17% 16% 15%
10%
5%
0% Vulamehlo LM Umdoni LM Umzumbe LM UMuziwabantu Ezingoleni LM Hibiscus Coast LM LM
GDP Employment
Source: Quantec data 2015, Kayamandi calculations
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The figure above presents the share that is contributed by Umdoni Municipality towards the District Municipality’s GDP is the second lowest in the District. Employment for Umdoni is among the lower ends of the scale, when compared to that of other local municipalities.
5.9.2 Kwa Zulu Natal Growth and Development Plan The community and government sector plays a large role in the improvement of the socio-economic and institutional environment. Therefore many interventions have been proposed to improve this sector. The main objectives that involve direct government involvement include: Improve the efficiency of government led jobs creation programmes Promote SMME and entrepreneurial development Improve early childhood development, primary and secondary education Support skills alignment to economic growth Poverty eradication and social welfare Enhance health of communities and citizens Enhance sustainable household food security in KZN Sustainable human settlements Safety and security Advance social capital Increase productive use of land Strengthen policy, strategy co-ordination and IGR Build government capacity Eradicate fraud and corruption Promote participative, facilitative and accountable governance Actively promote spatial concentration and coordination of development interventions Facilitate integrated land management and spatial planning
Each of the above mentioned objectives have various objectives that need to be obtained before the goal can be reached. Some of these include the facilitation of the expansion of investment into the services sector. As the services sector contributes significantly to the total Provincial economy it can generate substantial economic growth and employment through expansion of the services sector. For this to be successful the Province should ensure “continued investment into Business Processing, Outsourcing & Offshoring, retail and wholesale trade, finance and business, ICT, and the creative industries (film, fashion, craft, music)”.
As a result of transport, logistics and communication sectors being a major comparative advantage for the Province, investment into these sectors are important components of the services sector. Through the enhancement of investment in the services sector, among other, industrial development will be improved.
5.9.3 Ugu District GDS and LED guidelines The Ugu Districts Growth and Development Strategy voiced the importance of institutional support to improve the socio-economic environment for improved lives, more job opportunities and a more sustainable environment. The government sector is expected to perform an important role in identifying and attracting appropriate resources from other spheres of government and parastatals.
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In order for government to succeed in this aspect it requires municipalities to be outward-focused, forward-thinking and proactive.
The Ugu GDS indicates a cause for major concern, for the region is the government’s failure to mobilize external resources, as this limits factors on development within the region. In order to improve this, the Strategy has provided various strategic programmes that need to be implemented to improve the community and government services sector: Sectoral Development and Support o Enhancing Investment Promotion & Facilitation Capacity o Ensure a reduction in red-tape and other 'cost-of-doing-business factors Ensure Early Childhood Development and Primary and Secondary Education o Ensuring effective Early Childhood Development o School Resources and Capacity o Support and Promotion of the Education Sector Encourage demand driven skills development and training linked to industry safety and Empowerment of communities o A Focus on Tertiary Education o Creating partnerships between secondary and tertiary education institutions and private sector o Programmes for shared training centres Ensure Poverty Alleviation through Social Development and Food Security o Provide a safety net for the poor and vulnerable within the district o Encourage Social Development through Youth and Community Involvement Provide Support to Create Healthy Communities & Citizens o Enhancing Relationships between Stakeholders o Establishment of Awareness Programmes o Encourage Expansion of Interventions to Support Disabled Persons Ensure the Establishment of Sustainable Human Settlements o Promote Human Settlement Development and Town Rehabilitation o Ensure Clustering of Supporting Services & Facilities Guarantee the Safety and Security of Communities o Strengthen the Relationship between civil society, business and criminal justice system o Ensuring the Safety of all Citizens Enhancing Coordinated Planning and Implementation o Enhancing Coordinated District-wide Planning and Implementation o Enhancing the Functionality of Existing Structures and Relationships Strengthen Inter-Governmental Relations & Private Sector Partnerships o Ensure Strong Partnerships and Transparency between all Stakeholders o Ensure Strengthening of Inter-Governmental Relations Building Local Government Capacity o Promote Shared Services within the District o Strengthen the Capacity of Local Municipal Decision Making Eradicating Fraud & Corruption Ensuring Participative, Facilitative, and Accountable Governance
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5.9.4 Implications for Umdoni Local Municipality LED Strategy Review Institutional Development: Accountability and Management Tools and Framework have been identified as Umdoni’s fourth priority by the IDP 2015/16. Therefore the the following should be considered for Umdoni Local Municipality when taking into account the above guidelines as stipulated in the KwaZulu-Natal PGDP, the District GDS and the Local Municipality’s Integrated Development Programme: Government spending and investment should be focused on areas/industries with comparative advantage and/or development potential Focus on physical infrastructure, communication and technical support Identification of skills gaps, leading to skills development initiatives Provision of basic services (Street lighting) Diversification of tertiary (services) sector is important for development Importance of SMME development in services sector Focus on social and youth development Reduce in red-tape obstacles Improve early childhood development Enhance skills development
5.10 Tourism Sector
5.10.1 Overview of the Tourism sector Tourism is not an economic sector on its own, but forms part of other sectors, especially the trade, transport and finance sectors. However, due to its importance as an income and employment generator, it is believed that this sector should be discussed separately from the other sectors.
Tourism includes travel for a variety of reasons, amongst others leisure and recreation, business, education, health and healing, religious pilgrimages, sport, visiting friends and relatives, meetings and conferences.
The tourism sector is increasingly being recognised as an industry which has the economic potential to contribute to the reduction of poverty in developing countries and in remote rural areas, particularly as a result of its labour intensive nature, as well as the fact that many of the natural and heritage attractions are located in these rural areas, giving them a comparative advantage. There are a number of reasons why tourism is especially suitable for economic development in the least developed countries, and by extension rural areas, and include: Tourism is consumed at the point of production, which means that the tourist has to go to the destination, opening up opportunities for local businesses and ensuring local benefits Tourism is a more diversified industry than many others, allowing linkages with and support for other economic activities Tourism is labour intensive and supports a wide range of skills It creates opportunities for small and micro entrepreneurs Apart from the material benefits, tourism also provides the poor with cultural pride, creating greater awareness of the natural environment and its economic value The infrastructure required by tourism can also benefit poor communities.
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The Tourism sector is, therefore, seen as an ‘engine’ of employment creation, poverty eradication, ensuring gender equality and protection of the natural and cultural heritage. Tourism is a market led industry, where demand and market requirements inform the development of tourism supply. A brief analysis of current trends in tourism demand for KwaZulu-Natal will therefore provide direction for future tourism product development in the Province and allow for a more focussed approach in its marketing efforts. Detailed market information and tourism demand statistics even for KwaZulu-Natal Province, never mind Ugu District and Umdoni Local Municipality, is limited, and the analysis is largely based on information obtained from South African Tourism, discussions with tourism authorities in the Province, and local tourism role-players.
As aforementioned, tourism is not a standalone economic sector; it relies on other economic sectors for functionality. In an attempt to understand the economic contribution of tourism in Umdoni Local Municipality, the GDPR and employment of the accommodation and catering sub-sector were analysed. The table below depicts the employment and GDPR growth of the accommodation and catering subsector.
TABLE 5.18: ACCOMMODATION AND CATERING SUB-SECTOR ECONOMIC INDICATORS (2013) Sector Share (2013) Sector Share in Sector share in Contribution of Umdoni LM to Umdoni LM Ugu DM sector of Ugu DM Employment share 2.7% 2.8% 17.1% GDPR share 1.9% 1.6% 20.7% Sector average Sector growth in Sector growth in Sector growth in Sector growth in growth (2003-2013) South Africa KwaZulu-Natal Ugu DM Umdoni LM Employment 1.1% 1.8% 0.9% 0.3% GDPR 2.9% 3.6% 2.2% 3.0% Source: Quantec data 2015, Kayamandi Calculations
As depicted by the table above, the contribution made by the sub-sector to GDPR and employment in Umdoni Local Municipality and the District is almost insignificant. Umdoni does however contribute nearly a quarter of its employment and a fifth of its GDPR towards the total employment and GDPR for Ugu District Municipality. The table further indicate that there has been small growth in employment and GDP from this sector in South Africa. An even smaller amount of growth in employment can be seen in Umdoni (0.3% per annum).
In 2007 Umdoni Local Municipality compiled a Tourism Marketing Plan for the area. As part of the compilation of the Tourism Plan, surveys were conducted. The results had indicated that 47% of the visitors who visit the South Coast area is because of ‘word of mouth’ and 34% said it was as a result of brochures they had collected. The tourism market, prior to 2007, had consisted of 75% beach apartment and holiday cottage renting (61% were self-catering accommodation).
5.10.2 Existing Tourist Attractions and Facilities Umdoni has a few established tourism attractions, along with their beautiful natural environments ranging from the coastal settings, to nature reserves for the more adventurous spirits. The area currently includes a diverse mix of coastal tourism activities and facilities, although the municipality’s main attraction is currently the beach front. These range from high end products, such as the Selborne Golf Estate, to caravan and camping resorts for the tourism market.
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Various tourism activities include: Coastal Hotels Caravan and Camping Parks/resorts (including water slides, large tidal pool, excellent surf, mini golf) Bed and Breakfasts Guest Houses Tour Operators Self-Catering establishments Holiday apartment and Cottage lets Tourism Events (Scottburgh Spring Festival and Sani2C mountain bike race) Restaurants Coastal Economy o Fishing and Diving charters(rock fishing, deep sea fishing charters, scuba diving) o Beach amenities Current tourism products and services in Umdoni offer a variety of activities right throughout the year, although statistics from the KZN Tourism Master Plan had indicated that international tourists visit the province with high peaks during South African summer’s, whereas local tourist had preferred to visit the South Coast during the June and July winter months. Therefore there are still various areas of potential that can be developed to further develop tourist attractions surrounding the natural features that can be exploited to further create potential growth, and increased visitors throughout the year.
5.10.3 Kwa Zulu Natal Growth and Development Plan In an effort to ensure that the tourism sector in Umdoni Local Municipality reaches its full potential, the KwaZulu-Natal Provincial Growth and Development Plan should be consulted. Insight and objectives according to the KZNPGDP for the tourism sector are set out below:
According to the KZNPGDP, investment should be focused on various strong sectors of the province such as the tourism sector, in order to create sustainable employment. The development and diversification of the tourism market in KZN is highlighted to stimulate an increase in domestic and foreign visitors, thus improving the efficiency and productivity of the maritime and transport logistics sectors. The stimulation economic activities and job creation is important as this has strong linkages between achieving job creation and sustainability objectives.
The following strategic objectives will have an influence on the tourism sector: Enhance sectoral development through trade and investment Promote SMME and entrepreneurial development Support skills alignment to economic growth Enhance youth skills development and life-long learning Development of harbours, airports, road and railway networks Improve water resource management and supply Improve energy production and supply Increase productive use of land Manage pressures on biodiversity Actively promote spatial concentration and co-ordination of development interventions Facilitate integrated land management and spatial planning
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Initiatives in the tourism sector should therefore be integrated with initiatives in the agriculture (biodiversity), retail and trade, transport and communication, business sectors, and environmental sustainability. Additionally, expansion is required in the tertiary sectors of tourism, retail, transport and logistics, finance and business sectors, ICT, and creative industries (film, craft, music).
Current tourism activities as well as pipeline development projects can be capitalised on, along the 112km coastline which provides various growth opportunities such as the marketing of a variety of beach experiences, unique adventure tourism activities including the Aliwal Shoal and an annual event calendar including the Sardine Run.
5.10.4 Ugu District GDS and LED guidelines In order to increase the one of the Districts strongest sectors, various quality jobs should be created through the maintaining and expanding existing tourism attractions. Potential industrial and tourism type development provides various opportunities for the District. The tourism sector is identified by the Ugu GDS a lead sector within the region although it has seen a shrinking tourism season. There is still a lot of potential that needs to be untapped in tourism.
Currently main tourism attractions Ugu offer are the: Blue Flag beaches (including beach festivals with music and various sporting activities); The Sardine Run; Oribi Gorge; Mpenjati, Umtamvuna and Mbumbazi EKZNW Reserves; Deep Sea and Rock Fishing and other water-related activities (diving, kayaking); Fishing (Protea Banks at Shelley Beach is regarded as a Fishing “Mecca”); A range of accommodation facilities; and Golf courses The Ugu District Growth and Development Strategy aims to create an enabling environment in order to facilitate the growth of foreign visitors as currently it only attracts 10% international visitors. This entails programmes and interventions that create business friendly environments in Ugu to ensure the attraction of new investment and businesses.
One of the interventions includes New Tourism Product Development and Marketing, which promotes the growth of the tourism sector and to ensure all-year round tourism in Ugu. It entails the inclusion of a “tourism development zone, a Big 5 Nature Reserve, strategic marketing and targeting new market segments and exposing existing products, new product development (particularly within Tribal Authorities), developing an annual events calendar, beachfront upgrades, creating a cycle-friendly destination, and supporting linkages between urban and rural tourism products and nodes.” Other tourism goals and interventions include the following strategic programmes that affect the sector: Expansion of the key productive sectors o New Tourism Product Development and Marketing o Enhancing Investment Promotion & Facilitation Capacity Enhance the Business and Investment Environment throughout the District o Enhancing Investment Promotion & Facilitation Capacity Safety and Empowerment of communities o Encourage Promotion of Arts & Culture and Sport & Recreation Facilities, Initiatives and Events
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Strategic Infrastructure Development o Development of Airports and Harbours o Develop an Integrated Road & Rail Network to support both Passenger and Cargo Transport
5.10.5 Implications for Umdoni Local Municipality LED Strategy Review The tourism sector has only been identified as the fifth priority for Umdoni, although it is one of the main pillars within Umdoni, especially within the coastal strip of the municipality. The coast brings many visitors as well as retirees to Umdoni, as the rural coast provides comfort and peacefulness to many, whilst the close proximity to Durban provides access to a wider variety to facilities and other experiences. The Ugu district identifies Umdoni as a large convenience centre with a strong tourism point and therefore being able to support growth in the future.
Although Umdoni has a number of tourism attractions in the area they are neither highly accessible nor marketed to the full extent for sustainable long-term growth. Currently, Umdoni Tourism is marketed by the Ugu single body tourism of which Umdoni is a part of (i.e. Ugu South Coast Tourism). Local advertisement and marketing should also be done through the municipality, and not depend fully on Ugu SCT for marketing the activities and facilities available in Umdoni.
The IDP furthermore identifies the tourism sector as one of their fasting growing sectors, and focus should thus be placed on key routes and nodal developments within the Local Municipality. The tourism sector will however not be able to expand to its full potential without the support of other entertainment and accommodation facilities; therefore the development of land is important to sustain demand markets for those activities.
5.10.6 Development Opportunities and Potential Projects In order to identify possible opportunities within the tourism sector, it is important to understand the strengths and constraints within the sector. Based on the above and through stakeholder consultation, a number of strengths and constraints have been identified, as tabled below:
TABLE 5.19: TOURISM SECTOR STRENGTHS AND CONSTRAINTS Strengths Constraints Good road accessibility and linkages with Environmental degradation various transport infrastructures(road, Dirty towns and a lack of infrastructure railway, and connections to international maintenance that has discouraged visitors harbours and airport terminals) Lack of maintenance on paving and road infrastructure leading to local beaches Strategically located(Close to Durban, in- Lack of tourism plan between Durban and Port Shepstone) o Limited product offering; Existing tourism establishments o Under-marketing of key assets Tourism development corridor (N2 and o Weak linkages between the coastal R102) tourism products and those in the Linkages to Drakensburg mountain range hinterland o Weak exploration of further development via the R612 of tourism products Rich biodiversity o Under-explored arts and culture sector Existing nature reserves linked to tourism opportunities Beautiful beach fronts
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Strengths Constraints Various beach experiences A failure to target and attract new markets Sani2C mountain bike race into the district Deep Sea and Rock Fishing and other water- The need to stimulate the creative industry generally within the region related activities Close proximity to Durban, Port Shepstone Marine protected areas and coastal and Marge results in leakage of buying conservancy (education programmes) power A range of accommodation facilities; and Marine Protected area and coastal 3 of the 11 Golf courses in the South Coast conservancy areas (constraint on Potential development spin-offs of Music development potential) Local signage to promote tourism (along City (Hibberdene) main roads) Scottburgh Spring Festival Parking available near activities and facilities Scottburgh Classic Car Show Water quality Recognized area with tourism potential Degraded coastline Umdoni Park Forest (largest coastal forest Invasive alien species outside a protected area) Lack of funding for natural areas Capitalising on targeted spill from Durban Lack of Estuary Management Plan for Common Wealth Games Loss on invaluable coastal forests and grasslands All year – mild climates and warm seawaters Access to beaches in Pennington are limited No malaria, yellow fever, cholera and to the public as these access points are typhoid vaccinations needed privately owned Lack of control over the social ills at the local beaches (Vandalism, pollution etc)
The Umdoni Tourism Marketing Plan (2007) identified the following marketing related issues that should be addressed in a strategic framework:
~ retaining the current market ~ make full use of Umdoni’s valuable resources ~ establish an identity for Umdoni ~ capitalise on the strategic location of Umdoni ~ provide adequate and regulated signage ~ provide co-ordinated local organisations ~ extend attractions to attract tourists all year around ~ develop a tourism centre
Taking the above factors into account, together with national and provincial policy directives and previous research that has been conducted in the area and the province, this section seeks to identify a number of development opportunities that can address the current issues experienced within the tourism sector as well as build on potential strengths.
The tourism opportunities/potential projects identified are: Recreation & leisure tourist activities for low-income groups (local market) Day visitor facilities More diversified tourism portfolio to include interests for international visitors
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Adventure tourism (mountain biking, hiking, fishing, abseiling, zip-line, gliding, rafting, canoeing etc.) Scottburgh Spring Festival Niche markets, e.g. environment and coastal economy (conservation and marine protected areas) Support accommodation & catering initiatives Arts & Culture development Multi trails product (Izi-Go-Trail, Umzumbe River Eco-Trail and Vernon Crookes Trail Centre) Provide hiking equipment facilities for purchasing or rental Provide bike rentals for tourists Provide facilities for bike repairs Upgrading of entrances (potential amphitheatre project) Upgrading of Vernon Crookes Upgrading and development of TC Robertson site (eco-tourism facilities, lodge, conference facilities, small sanctuary, hiking/biking/equestrian trails etc.) Reintroduce hawker support Coastal Economy o Licensing and development of a restaurant at/on the beach o Development of launching facilities o Development of luxury diving facilities (accommodation, entertainment etc) o Upgrading, maintenance and development of beach front facilities o Development of Beachfront Master Plan Cultural Tourism (Missions, memorial sites, museums etc) Agri-tourism Development of Tourism ‘page’ on Umdoni Municipality’s website (with links to Ugu SCT for further information) Building of Amazon Valley Waterpark in Kelso (largest water park in South Africa) Attainment of Blue Flag Beach status
5.11 Conclusion
The purpose of this section was to provide an overview of each economic sector within the Local Municipality, and to identify each sector’s strengths, weaknesses and relative comparative advantages. Following from the analysis and overview of each sector, specific development opportunities (or potential projects) were identified. These opportunities were selected according to their ability to exploit the existing strengths of the local economy, and their ability to create linkages between industries. Some opportunities/projects also address issues of the enabling environment, such as infrastructure and support services.
The next step towards reviewing the LED strategy for the Umdoni Local Municipality is to develop a Strategic Framework for Local Economic Development in the Local Municipality.
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Section 6: Development Framework This section forms the backbone of the strategy and provides the LED vision for the municipality, a set of objectives, development thrusts, programmes and projects identified through Section 4. These projects are then prioritised. The structure of the Section is as follows: LED vision and objectives Development Thrusts, Programmes and Projects Project Prioritisation
6.1 LED Vision & Objectives
In order to achieve sustained economic development in the Umdoni Local Municipality, it is very important to envision a clear future for the municipality and to establish a clear path to achieve the desired future.
This visioning should be done in a realistic manner through acknowledging and incorporating the strengths and opportunities embedded within the Umdoni Local Municipality, which has been identified through the Situational Analysis (Section 4) as well as the Opportunity Analysis (Section 5). This will enable the local community to set up attainable objectives and reach them – thus achieving economic development and community upliftment. It is important that the LED vision and objectives be aligned with that of the Local Municipality’s IDP.
The vision, mission, principles and development priorities for Umdoni LM as set out by the IDP (2014/15) are presented below.
IDP Vision: “By 2020, Umdoni will be the JEWEL of the South Coast”
IDP Mission: “Working together in contributing to job creation, economic viability to ensure the well-being of our community in an eco-friendly environment through sustained local economic development”
IDP Principles: * Job creation * Economic viability *Well-being of the community * Environmentally friendly environment *Local economic development
IDP Prioritised Development Priorities: 1. Roads 2. Sustainable Housing & Human Settlements 3. Local Economic Development & Job creation 4. Institutional Development – Accountability and Management Tools & Framework 5. Tourism Development 6. Broader Economic Development (SDF, LUMS & SEA)
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The previous LED Strategy did not have a clearly defined local economic development vision for the Umdoni Local Municipality, but rather adopted the IDP vision. Key aspects surrounding the vision as well as the economic development goals, as documented in the previous Umdoni LED Strategy (2005) are as follows:
LED (2005) vision: The vision is based on the broader development vision as outlined in the municipal Integrated Development Plan. It represents a desired situation, which the municipality intends to achieve in the short to long term. Umdoni Municipality Development vision does not specifically mention economic development. Instead, it highlights the importance of tourism development and the need to protect, enhance and diversify this sector. The vision also indirectly highlights the importance of empowerment and integration of the second and first economies. However, the IDP identifies local economic development as one of the key development issues or strategic areas for intervention.
LED (2005) Economic Development Goals: * To facilitate the expansion, rejuvenation and diversification of the tourism sector * To facilitate growth and expansion of the manufacturing sector *To enhance and diversify the agricultural sector * To provide support to the SMMEs * To expand the skills base * To develop sustainable LED institutional structures * To facilitate targeted spatial interventions.
Seeing as the previous LED Strategy for Umdoni did not have a LED vision, it was deemed extremely important to refer to the following set of principles to compile a vision and objectives for this LED strategy that would align with the vision of the Integrated Development Plan (IDP): Identified needs: The needs of the community were translated into priorities to be addressed by the programmes suggested within this LED strategy Comparative advantage: Focus was placed on developing areas of current comparative advantage within the municipality Linkages: In order for Umdoni Local Municipality’s economy to grow and be sustainable, two linkages are needed; economic linkages and information linkages Employment: All programmes and projects to be implemented must be focussed on job creation. This means that programmes and projects must be labour intensive Income: The project has to be aimed at improving the income distribution in the municipality Sustainability: The economic and socio-environmental impacts of development need to be taken into account. These financial and physical impacts have to be assessed before the implementation of programmes and projects to ensure responsible utilisation of resources to ensure that the economy is sustainable in the long run BEE: Economic empowerment is an integral part of our country’s transformation process. This is to ensure the equal redistribution of wealth and opportunities amongst previously disadvantaged individuals Efficiency: Efficiency is achieved as soon as the rate of the completion of a task is increased. This approach is focussed on the projects and outcomes that must be achieved. Improvement
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in efficiency of municipal tasks and implementation of projects will make investment more attractive and improve the business climate Effectiveness: Effectiveness goes hand in hand with efficiency. The aim of effectiveness is to improve the relationship between outputs and inputs and energy required to perform a task Capacitation: In order to exploit and implement the development opportunities and projects the skills base of the economically active population, local governments and non-government institutions needs to be improved. It is implied that skills and technical knowledge must be expanded and developed to capacitate the municipality to take advantage of development opportunities
Taking all of the above into consideration, the proposed vision and objectives for the Umdoni Local Municipality’s LED can be defined as the following:
VISION To promote a diversified, integrated and sustainable local economy ensuring job creation, economic viability and ultimately ensuring a better quality of life for all its citizens
STRATEGIC OBJECTIVES * Expanding, rejuvenating and diversifying the tourism sector * Facilitating growth and expansion of the manufacturing sector *Enhancing and diversifying the agricultural sector * Providing support to the SMMEs * Expanding the skills base * Developing sustainable LED institutional structures * Facilitating targeted spatial interventions.
The vision stated above is aligned with the visions and objectives of various National, Provincial and Local legislation and policies (all of which are outlined in Section 2), in that it is geared towards creating jobs, reducing poverty and creating equality.
6.2 Development Thrusts, Programmes & Projects
The LED framework is based on a number of considerations, which include: Competitive and comparative advantage of Umdoni Local Municipality Strengths and opportunities identified within the economic sectors Existing feasibility studies, strategies and projects
In an effort to capitalise on the unique advantages of the area, strategic thrusts have been identified. The aim of these thrusts is to increase local community benefit and to enhance the competitiveness of the Local Municipality. Thrusts are thus defined as “planned actions aimed at creating impetus and critical mass in the local economic environment in order to generate momentum in the economy”.
Each strategic thrust identified comprise of a number of programmes. The aim of these programmes is to focus attention on specific areas of development to support the overall objective of the thrust. Each programme, in turn, comprise of specific projects to be implemented and facilitation actions that need to be addressed. By implementing and fulfilling the projects and facilitation actions, the overall objectives and targets of the relevant thrust will be achieved.
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The thrusts are furthermore formulated and packaged in such a way that an integrated approach towards development and growth in the municipality is possible. It also ensures that the overarching objectives set by the vision, mission and goals are achieved. The different strategic thrusts also allows for projects and facilitation actions to be linked to the different thrusts identified to enable a more focussed and coordinated approach to economic development
While issues such as the expansion of economic infrastructure, improved institutional capacity and good governance do have a critical role to play in ensuring the effective economic development does take place, these issues are considered to be supportive elements that will not in its own result in the expansion of the economic base, and are therefore not included in the strategic thrusts.
Table 6.1 presents the key thrusts and programmes that have been identified which constitutes the development framework for the Umdoni Local Municipality’s local economic development.
TABLE 6.1: THRUSTS & PROGRAMMES LED THRUSTS Agriculture support, Tourism Conservation & Industrial and Regional and growth & Local value- development, & Green Economy Business Rural Integration adding sustainable town Development Development and Support revitalisation Promotion LED PROGRAMMES Sustainable & Tourism Natural Business Regional diversified industry environment support & Integration agricultural development, revitalisation & capacitation & Strengthen development enhancement & conservation Entrepreneurial Community Emerging/upcoming support Green economy Development LED education farmer support & Destination development SMME and skills development marketing, Unlocking the development & capacitation Agro-processing branding, Oceans Integration of Rural development & promotion & Economy the informal integration & expansion awareness economy spatial Planning Market Town Promotion of development & Revitalisation Industrial, Trade creating an & Construction enabling activities environment Marketing & Information Technology Platforms
As can be seen in the table above, there are five (5) thrusts, and each have a number of supporting programmes. The following sub-sections details upon the five thrusts, the programmes associated with each of the thrusts and all the projects and development facilitation actions associated with each of the different programmes.
6.2.1 Thrust 1: Agricultural Support, Growth and Local Value-adding Despite the agriculture sector not contributing the most towards the GDP of Umdoni, it is in many respects perceived as the most important sector. Not only does the sector hold a great share of employment in the Municipality, but on a subsistence and informal level, many households are dependent on the sector for survival.
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This thrust is aligned with various policies at National, Provincial, District and Local level, by focusing on sustainable agricultural development, ensuring food security and transforming the agrarian industry/sector. These policies include, but are not limited to, the National Government Key Outcomes, National Development Plan, New Partnership for Africa’s Development, Agricultural Policy Action Plan, Provincial Growth and Development Plan, KZN Agricultural Strategic Plan, Strategy for Agrarian Transformation in KZN and Umdoni Agricultural Sector Strategy.
According to StatsSA (Statistics by place), approximately 4 795 households (21% of the total households) in Umdoni are engaged in some form of agricultural activity, with 1 220 of those households not earning any form of income (25% of households engaged in agricultural activities). These activities range from livestock and poultry production, to vegetable and crop production.
The objective of this Thrust is to add value to agricultural activities through establishing local manufacturing and processing plants, which utilise local raw materials and resources as primary inputs. It is therefore aimed at the regeneration of the agricultural sector, through building upon existing structures, to enable improved efficiency and diversification. Even though commercial pressures bear on the agricultural sector, large numbers of existing producers are likely to seek continued involvement in primary agriculture.
The following programmes have been identified under the agriculture sector support, growth and local value-adding thrust: Sustainable and diversified agricultural development Emerging/ upcoming farmer support and skills development Agro-processing development and expansion Market development & creating an enabling environment
This thrust is thus aimed at: Supporting existing agricultural activities by building upon existing structures Diversifying the sector by proposing alternative agriculture activities Adding value to local raw materials through establishing beneficiation activities Ensuring food security to local communities Developing the skills of local communities Providing avenues and access to local markets for products
Key Role-players Potential sources of funding Umdoni LED Unit National Department of Agriculture Department of Agriculture KZN Department of Agriculture and Rural Ugu District LED Office Development Famers Associations and co-operatives KZN Agribusiness Development Agency Small-scale emerging farmers Gijima KZN Agri-SETA KZN EDTEA Sezela Cane Growers Association Ugu South Coast Development Agency South African Sugar Association Operation Vusulela (KZN EDTEA) Illovo Sugar South Africa (Sezela Mill) Land Redistribution for Agriculture Development Local Schools, clinics and local households interested in community gardens Esayidi TVET College
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Programme 1: Sustainable and Diversified Agricultural Development The aim of this programme is to ensure that the agricultural production in Umdoni Local Municipality becomes more diversified whilst also ensuring that farmers, communities as well as households become more self-sufficient through sustainable agricultural production.
Diversification of agriculture refers to the increase of agricultural activities undertaken within a specific area, while sustainable agriculture not only refers to ecological aspects, but considers social aspects such as hunger and poverty eradication. One of the main ways to expand production is to involve subsistence and emerging/ upcoming farmers by increasing involvement in formal sector production as well as promoting the use of new cultivars more suited to sub-tropical climates.
The projects listed below therefore aims to encourage subsistence farmers, agricultural households and community members to take part in organised and different types of new and current agricultural activities to become emerging/ upcoming/small-scale farmers while ensuring food security, taking cognisance of existing and proposed projects:
1. Promote and assist the establishment of vegetable production small farmers (especially niche products such as cassava) and encourage commercialisation 2. Support and enhancement of the small grower sugarcane sector in association with the South Africa Cane Growers Association (SACGA), the South African Sugar Association (SASA) and Operation Vuselela (KZN EDTEA) 3. Establish hydroponic farming and look into organic farming methods to produce a variety of niche products (e.g. mini vegetables, vegetarian niche products, etc.) in consultation with Siyavuna Development Centre 4. Within the forestry sector, opportunities for new entrants include tree-felling, harvesting and planting, and production of related products such as bark and coal should be investigated
The actions requiring facilitation to support this programme include:
1. Identify and approach possible niche markets for vegetable production (e.g. growing and supplying of cassava) 2. Communicate with the small growers sugarcane sector to determine their needs and means of assisting the enhancement of the association 3. Ensure continued discussion with institutions like SEDA and with national institutions like the IDC and the DTI to formulate financing mechanisms for the establishment of small scale and upcoming farming enterprises
Programme 2: Emerging/ upcoming Farmer Support and Skills Development The establishment of stronger linkages between communal, emerging/ upcoming and commercial farmers and drawing the communal/emerging farmers into the first economy is required. These linkages are vital for economic development. However, the communal and emerging/ upcoming farmers in the rural areas face several constraints to develop sustainable ventures. These include a lack of adequate transportation, lack of business management skills, lack of access to external markets, existing levels of small-scale production, lack of access to financing for improvement, and lack of knowledge of existing opportunities.
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Another constraint faced by emerging/ upcoming farmers is the inability to finance investments in equipment, such as irrigation to increase the efficiency of production. Another way to provide practical hands on training is to develop training plots where participants would come and spend time doing what they would do in the project but under supervision while being given more formal instruction in the evening. These training or demonstration plots are small-scale, short-cycle projects or test projects that prepare the way for replication or expansion.
Public Private Partnerships (PPP) between the existing commercial farmers and the emerging/ upcoming farmers also need to be promoted. This programme should also be aimed at getting the emerging/ upcoming farmers (and mostly women and the youth) involved in part ownership of agricultural activities. Furthermore, large amounts of land are held under trust for traditional leaders. It is also important for traditional leaders to be targeted to be on board and to understand the dynamics and opportunities on their land. The municipality should intervene in this process by holding workshops for traditional leaders to synthesize them on the impact of their decisions and actions on local economic development.
The projects supporting the achievement of this programme are as follows:
1. Develop a central mentorship programme for emerging/ upcoming farmers as well as small-scale farmers to enable them to manage a productive farming unit 2. Develop a skills development programme aimed specifically at emerging youth and women farmers (includes business management skills, etc.) 3. Bring commercial farmers and emerging/ upcoming and small-scale farmers together through Agri-BEE partnerships 4. Create a farming education and information sharing centre for farmers to share information on farming practices, attend training seminars and access local and affordable inputs for farming 5. Revitalise current dilapidated tunnel farming initiatives at Philani Clinic community gardens. 6. Promote food security through the development of community or household gardens/poultry projects and school feeding initiatives 7. Female farmer of the Year award. This aims to empower women in agriculture by recognising their contributions and increasing their visibility. 8. Young farmer of the Year award. This aims to empower youth in agriculture by recognising their contributions and increasing their visibility.
The actions requiring facilitation to support this programme include:
1. Create a database of retired farmers and possible mentors and incorporate into the Central Mentorship database 2. Identify and approach candidates to become mentors (commercial and/or retired farmers) 3. Identify and approach candidates for commercial farmers to be paired with upcoming farmers 4. Appoint an agricultural professional or knowledgeable person to manage the information sharing centre 5. Facilitate the acquisition of suitable land for sustainable small farming enterprises through the projects catered for under LRAD 6. Facilitate access to training for youth and women farmers 7. Identify the need and provide assistance with infrastructure needed for tunnel farming
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Programme 3: Agro-processing Development and Expansion This programme aims to develop and promote agro-processing, value adding and beneficiation activities with regards to existing and proposed agricultural activities found in Umdoni Local Municipality as well as the development of niche products.
The processing of raw materials from agriculture products in Umdoni Local Municipality will contribute significantly in expanding the manufacturing sector. The agglomeration of these activities will result in economies of scale and that would increase both economic development and employment opportunities. A number of opportunities exist within Umdoni to take the production of raw materials as inputs in the development of local value-adding activities to produce both intermediate and final products.
Furthermore, in response to declining agricultural profits, producers could develop new products with higher margins and functions and which incorporates cutting-edge processing technologies. Customer consumption habits are also shifting and demanding products such as organic produce and pre- packaged foods.
Niche products refer to those products that appeal to a specific market or group of people and are usually associated with specialised products or uses. Certain opportunities have been identified for the production of niche products that are well adapted to the climatic condition of Umdoni Local Municipality.
The projects supporting the achievement of this programme are as follows:
1. Investigate niche agro-processing products development/small-scale beneficiation such as macadamia nut products, sugar-based products, cassava processing etc. 2. Based on the successful implementation of aquaculture initiatives and projects from USCDA, investigate the extension of aquaculture value chain linkages 3. Processing of canned products such as jam, bottled vegetables and preserve processing, juice production, drying of fruit and the semi-processing of vegetables 4. Promote the development of a tin processing SMME to produce packaging materials to use for the proposed non-perishable food processing plant.
The actions requiring facilitation to support this programme include:
1. Facilitate public-private partnerships and joint venture establishments for development of agro- processing facilities 2. Facilitate the acquisition of suitable land as well as the development of a processing plant 3. Facilitate the development of a processing SMME/community initiative for packaging materials 4. Facilitate training in agro-processing, and develop and maintain a database of trained individuals
Programme 4: Market Development & Creating an Enabling Environment The aim of this programme is to successfully market the agricultural sector in Umdoni; in terms of new and existing development products, facilities and local markets. The marketing of the opportunities that the agricultural sector in Umdoni provides will enable maximum beneficiation for the community.
At present, a large amount of road freight transport moves through the Municipality, from Durban to Margate or Port Shepstone, on a daily basis. Therefore through capitalising on its location and
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This programme will thus focus on the municipality creating awareness of the potential opportunities that have been identified in this LED strategy that would be implemented to strengthen the economy.
The projects supporting the achievement of this programme are as follows:
1. Develop a multi-purpose agricultural centre and distribution depot that supports the agricultural sector with: storage and distribution of fresh produce, weekly market, nursery, agricultural retailers, youth development, commodity groups associations, truck pooling, skills training, letting of equipment, demonstration plots, etc. 2. Initiate a study to identify niche markets in agriculture suitable for small farmers. 3. Assist small-scale as well as emerging/ upcoming farmers in terms of packaging, quality management and marketing of produce to be able to market and sell their produce at existing markets in Umdoni LM. 4. Assist local sellers with their current needs (e.g. packaging, quality management and marketing) 5. Promote a SMME for hiring of farming implements, tools and machinery and other equipment
The actions requiring facilitation to support this programme include:
1. Audit existing cooperatives, determine what there challenges are and how they can be assisted. 2. Facilitate land acquisition for the development of a multi-purpose agricultural centre and distribution depot 3. Facilitate the establishment of well-advertised markets for emerging/ upcoming farmers
6.2.2 Thrust 2: Tourism Development and Sustainable Town Revitalisation Various policies at National, Provincial, District and Local level include the development of the tourism sector and indicate the importance of the aesthetic value for the development of towns and the attraction of investment, these include the National Government Key Outcomes, National Development Plan, New Partnership for Africa’s Development, National Framework for Local Economic Development, Provincial Growth and Development Plan, White Paper on the Development and Promotion of Tourism in KZN, KZN Tourism Master Plan, Provincial Spatial Economic Development Strategy, Ugu South Coast Development Strategy and Umdoni Tourism Marketing Plan, among many others.
It has been proven time and time again that investment is attracted to areas with well-maintained and efficient infrastructure and to areas which are aesthetically pleasing and environmentally sustainable. The tourism sector, along with the agriculture and manufacturing sector, is one of three sectors identified by the LED Department as well as local stakeholder. In accordance with the Province’s targeted priority economic sectors, the tourism sector needs to be focussed on and further developed to ensure job and wealth creation amongst local communities.
It is important to correctly package attractions, sites, products and experiences that make them easier to buy by the travelling public. It has been said that the simple objective of the tourism industry is to give people a reason to come, a reason to stop, a reason to stay and a reason to spend. This is achieved by making information available that is up-to-date, user-friendly, accurate and believable with regards to both tourism attractions, as well as existing investment opportunities.
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Various opportunities exist to develop tourism within the area especially around adventure and natural tourism. In order for Umdoni Local Municipality to attract investment and ensure sustained economic development, it is of vital importance to ensure that the municipality and its various functions operate efficiently and that the town centre is managed effectively.
Subsequently, the main purpose of this thrust is to: Increase the awareness and visibility of Umdoni’s tourism activities Further develop and diversity tourism activities Enhance current tourism strengths Beautify the streets through locally manufactured street furniture Promote recycling initiatives
A number of programmes and subsequent projects to execute the above are directly aimed at attracting investment and tourists to Umdoni Local Municipality and to ensure sustainable living conditions of residents while taking pride in their town and local environment.
The programmes forming the basis of this thrust are: Tourism industry development, enhancement and support Destination marketing, branding, promotion and awareness Town Revitalisation
Key Role-players Potential sources of funding TC Robertson Nature Reserve Committee South Coast Development Agency – Umdoni LM departments Tourism Support Programme Umdoni Park KZN EDTEA Rocky Bay Private investors Private Investors Ugu South Coast Tourism KZN EDTEA Umdoni Local Municipality Accommodation and Lodge Associations Gijima Fund Ugu South Coast Tourism Local community members Local Nursery or building suppliers Tourism SETA Recycling product expert
Programme 1: Tourism Industry Development, Enhancement and Support This programme is aimed at the expansion of existing tourism amenities in Umdoni Municipality, as well as the development of new facilities and tourism activities that will not only provide attractive destinations, but will also meet the accommodation and entertainment needs of the tourist, thereby ensuring that tourists linger in the Municipality for longer.
The predominance of nature reserves and the natural beauty occurring in Umdoni Municipality creates specific opportunities for the development of eco-tourism and adventure tourism activities, which could include hiking, horseback and mountain bike trails, quad bike adventures, etc. Other opportunities for development include the establishment of tourism facilities and products linked to natural resources such as bird watching. The key principles in developing new tourism products is to ensure, firstly, that markets for such products have been identified, and, secondly, that the new product will be located along strategic tourism corridors or flows or within, or adjacent to, established destinations. Any resource that lies too far from main routes and flows, or is not close to a place
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Apart from the attractions in and surrounding Aliwal Shoal, and the nature reserves as mentioned above, Umdoni Municipality also boasts a wide range of other attractions, based largely on the golfing and beach activities in the Municipality.
The implementations of the following projects are aimed at developing the Municipality’s tourism assets:
1. Develop a business plan to convert the TC Robertson Nature Reserve into a viable tourist destination with overnight facilities, guided trails, bird watching facilities, conferencing facilities, etc. 2. Establish a bird watching information centre whereby bird watching in Umdoni is promoted and a brand is created for marketing material. Branding material should be used to promote Umdoni as a Birding destination and should provide further information on various bird watching facilities (such as TC Robertson, Umdoni Park). 3. Maintain and market the Rocky Bay cycling and running trails. 4. Establishment of an adventure camp (veld school, special group camps, adventure camps, leadership camps, sports camps, etc.) and youth development centre with environmental and tourism awareness education. Activities could include mountain biking, water-based and adventure activities in rivers, e.g. rowing club, canoeing trips, kayaking, water slides, angling equipment rentals, guided river walks, orienteering, etc. 5. Develop and implement a Beach amenities upgrade and maintenance programme which is informed by the yearly inspections conducted by Ugu South Coast Tourism 6. Develop a Tourism Support Infrastructure Programme to ensure that it is adequately provided and maintained.
The actions requiring development facilitation to support this programme include:
1. Appoint a specialist task team to research bird watching offerings in Umdoni, including species, habitats, points of interests, etc. 2. Create private sector awareness of opportunities in developing potential partnerships with local communities and traditional authorities 3. Promote and support major annual events such as the Scottburgh Spring Festival and Sni2C mountain bike race 4. Identify areas that are in need of tourism signage 5. Provide support to the upgrading and maintenance of beach amenities 6. Develop Tourism infrastructure and maintain to avoid degradation
Programme 2: Destination Marketing, Branding, Promotion and Awareness This programme is aimed at tourism marketing and improving the usage of existing attractions as well as focusing on the development of new tourism attractions focussed on the local market. The area should be marketed in such a way to highlight its natural features and other events as well. It is essential to make use of electronic technology in conjunction with familiar marketing tools such as maps, guides, brochures and signposts. Tourism marketing should be done in association with Ugu
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South Coast Tourism to actively promote the wide variety of natural activities that are available in Umdoni.
As discussed above, tourism routes form an important part of the development of an area into a tourism destination. The development of tourism routes provide opportunities to link certain tourism attractions to one another, providing a package of related destinations or products around a central theme or targeting specific special interest visitors. This allows the tourist to be guided from one attraction to the next, increasing the overall value of the experience. Special interest routes could include market sectors such as bird watching, hiking, diving, golfing, or heritage and cultural activities.
Routes can also persuade general and special interest visitors to linger in the area for longer. It is also important that these routes provide visitors with appropriate interpretation, incorporating educational aspects into the overall experience. To achieve this, information cairns situated along these routes and next to the various attractions should provide visitors with relevant information related to the history, origin etc. of the attraction. Route maps and brochures showing the location of these attractions and information cairns could also be developed to enhance the experience.
The Municipality should also take advantage of existing tourism routes, by encouraging and facilitating the integration and packaging of local attractions into existing regional initiatives.
The projects that support this programme are:
1. Promote access to applications towards the hospitality training programmes provided by USCT , through providing a link on the municipal website. 2. Develop an Umdoni Tourism Development Plan. 3. Expand the existing municipal website to promote and provide more information on tourism activities and events, with links to other attractions and accommodation websites, maps, places to go and images of these areas. 4. Implementation of Beachfront Master Plan. This would include short term revitalisation of beach front and caravan park infrastructure and facilities as well as project packaging for private sector development opportunities (including contractual and financial aspects etc).
The actions requiring facilitation to support this programme include:
1. Facilitate training in the tourism and hospitality industry through accredited SETAs 2. Collaborate and support Ugu South Coast Tourism in their efforts to market and promote the Ugu District (focusing on what can be done to promote Umdoni and its tourism offerings).
Programme 3: Town Revitalisation The objective of this programme is to improve the aesthetics and environmental sustainability of Umdoni, through improving the natural environment as well as maintaining the infrastructure, in order to restore investment confidence. Umdoni is endowed with natural assets and unique natural attributes, which currently needs to be improved in order to have a positive impact. Focus should thus be placed on revitalising the town while promoting green economy development.
The municipality has a major role to play in strategic planning that will guide private sector investments in the tourism industry and this role extends to aspects such as training, support structures, etc. Umdoni Local Municipality has high volumes of traffic which it needs to accommodate
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Umdoni LED Strategy Review on its infrastructure and road networks. These have unfortunately have been over utilised in some cases, underutilised in other and in most cases not properly maintained.
The projects supporting the achievement of this programme are as follows:
1. Establish a street clean-up campaign and teams that are responsible for cleaning streets and public areas (informal trade stalls, parks etc.) 2. Place public furniture (benches, dustbins, streetlights etc.) and recycling bins at strategic places within Umdoni 3. Embark on a ‘tree per person’ project where every member of the community is provided with an indigenous tree to be planted and cared for in their town and neighbourhood (especially rural communities) 4. Plant indigenous water-wise flora on sidewalks and traffic islands 5. Appoint training providers and Sector Education Training Authorities (SETA) to teach community members how to manufacture goods from recycled materials to be utilised as street furniture and public/street art
The actions requiring facilitation to support this programme include:
1. Liaise with existing community committees, municipal social workers and other associations to drive the clean-up campaign 2. Source funding and establish implementation partnerships for the various beautification and clean-up projects. 3. Facilitate the skills development of recycled products to the community members 4. In collaboration with the Department of Environmental Affairs, source donors and/or funding for distributing a tree for every household in Umdoni
6.2.3 Thrust 3: Conservation and Green Economy Development South African’s economic growth model is heavily resource and energy intensive, thus causing more pressures on the environment, increased threat of climate change and diminishing natural resources. Therefore the transition to a more green economy on a local municipal level is vital as this aligns with National Legislation.
According to the United Nations Environmental Programme, a green economy can be defined as an economy that “results in human well-being and social equity, while significantly reducing environmental risks and ecological scarcities”. Therefore this thrust aims at promoting green economy development along with broadening the economic base in order to become more sustainable.
Subsequently, the main purpose of this thrust is to: Improve conservation initiatives in Umdoni Improve the natural disasters through addressing land degradation Promote recycling initiatives Promote the use of organic waste and sustainable farming Reduce the dependence on conventional bulk services through introducing alternative measures Create more environmental awareness Strengthen the ocean economy base
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This has been derived from various policies at National, Provincial, District and Local level, these include the National Government Key Outcomes, National Development Plan, New Partnership for Africa’s Development, Provincial Growth and Development Plan, Provincial Growth and Development Plan, White Paper on the development and promotion of tourism in KZN, KZN Tourism Master Plan, Ugu Growth and Development Strategy etc.
A number of programmes and subsequent projects to execute the above are directly aimed at attracting investment to Umdoni Local Municipality and to ensure sustainable living conditions of residents while diversifying the local economy.
The programmes forming the basis of this thrust are: Natural Environment Revitalisation and Conservation Green Economy Development Unlocking the Oceans Economy
Key Role-players Potential sources of funding Umdoni LED Unit KZN EDTEA Department of Agriculture Umdoni Local Municipality Ugu District LED Office Ugu District Municipality Famers Associations and co-operatives Department of Environmental Affairs Sezela Cane Growers Association Recycling initiatives South African Sugar Association Renewable energy investors Operation Vusulela (KZN EDTEA) Local accommodation associations Illovo Sugar South Africa (Sezela Mill) Recycling manufacturers Umdoni LM Department of Trade and Industry Local communities Department of Environmental Affairs Department of Environmental Affairs Culture, Arts, Tourism, Hospitality and Recycling co-operatives / initiatives Sports SETAs Renewable energy investors Ezemvelo KZN Wildlife Local accommodation associations Recycling manufacturers Operation Phakisa (USCDA) KZN EDTEA WESSA African Conservation Experience
Programme 1: Natural Environment Revitalisation & Conservation This programme aims to create an enabling environment which amplifies sustainable development and revitalises the natural environment in Umdoni. The conservation of the estuaries and natural environment is vital, not only for long term fauna and flora sustainability but also the fact that a clean environment and environmentally responsible towns will attract more investment and instil good living practice.
Majority (75%) of the natural environments (estuaries, riverines and coastal areas) have been transformed as a result of the developmental impacts in the Municipality. This was concluded by the Strategic Environmental Assessment (SEA) which was conducted during 2010/11. These “poor state of health” of environments therefore need to be improved.
The projects supporting the achievement of this programme are as follows:
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1. Mitigate and prevent land degradation through creating awareness regarding causes (such as overgrazing), developing capacity building initiatives within rural communities to address challenges faced and implementing land management systems. 2. An effort should be made to revive interest amongst the agricultural community in allowing tourists to visit farms and other places of interest involved with the planting, harvesting, packaging and processing of produce 3. Promote the conservation of Umdoni’s ecosystem through biological protection initiatives (e.g. management of alien invasive species, species conservation and management). 4. Formalise illegal mining activities and assist in obtaining the relevant permits/licenses
The actions requiring facilitation to support this programme include:
1. Facilitate the education of local communities in regards to environmental conservation 2. Identify stakeholders to champion ecosystem protection initiatives
Programme 2: Green Economy Development Stemming from the concept of sustainable development, a green economy has become recognised worldwide as it seen as a ground-breaking step towards a better future. The green economy is able to combine both economic development with social welfare as well as environmental protection. This programme therefore promotes the development of a green economy in Umdoni through supporting various recycling initiatives, the use of renewable energy and rainwater harvesting projects.
A relatively easy way to reduce the municipality’s carbon footprint is through recycling. Recycling is seen as a very positive and helpful initiative, as the demand for production of virgin materials decreases when no new materials are needed. Various products can be recycled, ranging from paper, plastic and glass to polystyrene and electronic devices.
By making use of designated or colour coded bins for glass, paper and plastic products around key nodes, recycling can be both easy and fun. Businesses should be encouraged to recycle as recycled materials can be utilised by community members and SMMEs to make arts and crafts, handmade paper and other gifts.
The establishment and continued support of communal vegetable gardens and promoting household vegetable gardens in Umdoni will facilitate increased basic skills whilst achieving food. These vegetable gardens should be grown through using food and plant rests for composting purposes so the use of harmful inorganic fertilisers are eliminated, and the strain on municipal landfills are decreased. The process of making compost is easy and cheap, as the idea is to use natural materials that originate from the kitchen or garden.
The municipality can ensure water saving through implementing and promoting rainwater harvesting (a term that refers to the installation of a water tank to gather rainwater from the roof’s gutters). This is a simple method that is easily achievable and water obtained in this manner can be used for irrigation and other household purposes.
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The projects supporting the achievement of this programme are as follows:
1. Conduct a feasibility study to establish a recycling cooperatives in Umdoni and the development of a Material Recovery Facility in Park Rynie which collects and produces recycled products such as packaging material, plastic furniture, gifts, arts and crafts and handmade paper, or compost from organic materials . These recyclable materials that are collected at various recycling collection points from the recycling co-operative in the relevant area. 2. Investigate the use of renewable energy at projects implemented through the LED Strategy (such as solar heaters) 3. Landfill gas to electricity project (such as Marriannhill site, Ethekwini ) 4. Investigate the potential of the establishment of a fully green and sustainable tourism development with solar heaters, rainwater tanks, bio-digester sanitation systems, etc. (e.g. The Bulungula Lodge in the Eastern Cape)
The actions requiring facilitation to support this programme include:
1. Liaise with existing community committees, municipal social workers and other local associations to drive the recycling, clean-up and ‘going-green’ campaign 2. Conduct on-going research in the planning department on sustainable development practices and obtain best case scenarios that are implementable in the local context 3. Liaise with the National Department of Human Settlements to secure funding and gain support for the incorporation of rainwater harvesting tanks and solar panels for all housing developments 4. Conduct research into the development of sustainable urban practices in terms of tourist accommodation
Programme 3: Unlocking the Ocean Economy The Ocean Economy is defined as the economic activity, which indirectly or directly uses the ocean as an input1. This includes all coastal sectors which includes construction, living resources, minerals, ship and boat building, tourism and recreation, as well as transportation.
According to the local residents and various stakeholders, majority of the visitors and investors in Umdoni contribute to the economy through the ocean facilities. These could be through recreation, accommodation or retail facilities. Therefore, to diversify the local economy this strength needs to build on to through promoting the Blue flag status of Pennington Beach, the promotion of marine activities and the conservation of the biological sensitive areas in Umdoni.
Blue Flag status is awarded to beaches across 41 countries, and indicates the water quality, environmental education and information, environmental management, and safety and other services that are available at these beaches. The beaches provide information to the public regarding the areas of safety, amenities, cleanliness and environmental standards of the beach.
The projects supporting the achievement of this programme are as follows:
1. Investigate the potential of linking up with aquaculture farming and aquaponics initiatives with Operation Phakisa, through the Ugu South Coast Development Agency.
1 www.oceaneconomics.org
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2. Hold awareness campaigns at local schools during National Marine Week (October) in partnership with KZN Department of Economic Development, Tourism and Environmental Affairs (edtea) and the Wildlife and Environment Society of South Africa (WESSA). 3. Promote, support and market marine tourism offerings and opportunities in Umdoni, especially related to luxury diving, Aliwal Shoal opportunities and Deep-sea Fishing 4. Increase efforts towards achieving Blue Flag status for the Umdoni beaches in conjunction with the Blue Fund and WESSA. 5. Investigate the possibility of implementing a Coastal Conservation and Education Project similar to the one being implemented in Plettenberg Bay by the African Conservation Experience
The actions requiring facilitation to support this programme include:
1. Facilitate awareness campaigns and identify stakeholders to champion this project. 2. Determine feasible methods of promoting the marine tourism in Umdoni and implement the marketing of the various tourism offerings and opportunities that are available. 3. Process and follow up on application for Blue Flag beach status’ as well as other possible beaches in Umdoni. 4. Facilitate the implementation of coastal conservation and education projects.
6.2.4 Thrust 4: Industrial and Business Development Promotion The main objective of this thrust is for Umdoni Local Municipality to diversify and expand existing businesses through business support and networking, as well as to stimulate the development of new businesses and cooperatives. The same sort of strategy has been suggested by various policies at National, Provincial, District and Local level, these include the National Government Key Outcomes, National Development Plan, New Partnership for Africa’s Development, Growth Path for SA, Industrial Policy Action Plan, Medium Term Strategic Framework, Integrated Growth and Development Policy, Provincial Growth and Development Plan, KZN Education Strategic Plan, KZN Small Enterprise Development Strategy, Ugu Growth and Development Strategy, Ugu Local Economic Development Plan, Ugu Manufacturing Sector Plan, Ugu Trade Sector Strategy, Ugu Economic Planning Programme Umdoni’s previous LED Strategy, Umdoni Business Retention and Expansion Programme, Umdoni Industrial Sector Strategy etc.
It is important that existing local businesses and emerging entrepreneurs are supported in their development and growth and that the development of new SMMEs be stimulated. Many local businesses experience constraining factors such as lack of business and financial management skills. The Municipality should therefore provide support in the provision of skills training related to all of the sectors in the economy.
Support should also be given to small local businesses in gaining access to capital and financial sources. Local businesses should also be supported through mentorship programmes, whereby practical knowledge can be transferred from experienced business owners to entrepreneurs.
The following programmes have been identified under the SMME support and business development thrust: Business support & capacitation and Entrepreneurial Development SMME development & Integration of the informal economy Promotion of Industrial, Trade and Construction activities
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Marketing & Information Technology Platforms
Key Role-players Potential sources of funding Umdoni Local Municipality Departments Department of Trade and Industry Ugu District Municipality Department of Labour’s National Skills Fund KwaZulu Natal Provincial Government Development Bank of Southern Africa Umdoni Business Chamber Small Enterprise Development Agency Local Residents Sector Education Training Authorities Department of Education ESKOM Private investors KwaZulu Natal Provincial Government Local crafters Ugu District LED Unit Mahlongwa/Mandawe Micro Manufacturing Centre Umdoni Local Municipality Local Construction Companies Department of Roads and Transport KZN Gijima South Coast Development Agency – BBSDP Initiative Industrial Development Corporation EPWP
Programme 1: Business support & capacitation and Entrepreneurial Development This programme is designed to help community members and existing businesses develop skills and knowledge to be able to survive and grow within the local economy. In essence this programme involves determining the skills level of local community members and businesses, as well as providing guidance with regards to mentorship and accessing of financial resources and potential opportunities.
In order to support business expansion entrepreneurs need to be successfully equipped with the necessary business skills in order to have knowledge about developing new business enterprises, technological advances, business and financial planning, resource usage, etc. Support should also be given to small local businesses in gaining access to capital and financial sources. It is essential that knowledge and skills are transferred to up-coming business men and women. By hosting training workshops, new businesses can be supported through training and mentoring to make their manufacturing enterprises viable and successful.
The following projects were identified in support of this programme:
1. Compile and maintain an Umdoni Gateway 2 Opportunity database that will consist of a referral database of local maintenance and service providers with an associated list of references (to “man on side of the road” and a local business database (business directory) to ensure networks, linkages, etc.) 2. Collaborate with the KZN Provincial Treasury to assist qualifying local businesses to register on the National Treasury’s Central Supplier Databases (CSD) 3. Launch annual entrepreneur of the year competition and annually identify start-ups in tourism, agriculture, SMME as nominees 4. Create the required environment for public – private partnerships to take place; in particular supporting the Business Unity process that is currently taking place. 5. Facilitate sectoral discussion platforms to facilitate group learning, explore joint marketing and networking opportunities 6. Develop a partnership with businesses in Umdoni to establish a skills transfer programme whereby aspiring entrepreneurs/ students can do a short-term internship at existing businesses
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7. Undertake a skills review in relation to market demand with business organizations (particularly in tourism, manufacturing and agriculture) and connect current database to gaps in the market 8. Establish a local youth Drop-in Centre for youth to explore entrepreneurship, obtain basic skills development and to help them identify growth opportunities within the local community.
The actions requiring facilitation to support this programme include:
1. Set up a task team to undertake the opportunities audit and to maintain the completed database. 2. Assist the application process for local businesses to register on the National Treasury’s Central Supplier Databases 3. Setup criteria and selection process for the entrepreneur of the year competition. 4. Facilitate the development of public-private partnerships 5. Facilitate the development of discussion platforms to initiate marketing and networking opportunities 6. Develop entrepreneurial study material for skills transfer and short term internship’s at various businesses. 7. Create a task team to liaise with the local business sector to identify possible mentors as well as identifying any gaps and opportunities related to the local skills base. 8. Promote competition among businesses through free for all access of information in the various industries (business processes, prices, suppliers, manufacturing processes etc.) 9. Appoint a task team to identify opportunities for small businesses, based on skills identified in the skills register.
Programme 2: SMME development & Integration of the informal economy The main objective of this programme is for Umdoni Local Municipality to promote small businesses as well as provide support to informal sector businesses. The programme focuses on stimulating the development of new businesses and cooperatives.
It is important that existing local businesses be supported in their development and growth and that the development of new SMMEs be stimulated. Apart from providing the support for the establishment of new enterprises, the public and potential entrepreneurs should also be made aware of specific opportunities that exist for the establishment of new businesses. In this respect, the Municipality should make available and actively promote projects and opportunities, thereby enticing industrial/manufacturing businesses to develop.
The projects supporting the achievement of this programme are as follows:
1. Compile and maintain a funding resource database that can be distributed to entrepreneurs within rural areas and used to facilitate lobbying for financial resources for SMMEs 2. Promote the establishment of IT-related SMMEs providing support services to individuals and on issues related to technology, internet services and connectivity 3. Promote the establishment of a local sewing and handiworks SMME focusing on manufacturing uniforms and other equipment (e.g. tables and chairs) for the local schools, businesses, etc. 4. Establish a local youth small business development centre in partnership with local FET, SEDA, TIL, linked to career guidance with high-schools, entrepreneurship development, sponsored computers etc.
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5. Establish an Informal Economy Chamber for members of the Hawker Association as well as other informal businesses. 6. Revitalisation and formalisation of the hawkers stalls in Umzinto and Scottburgh. Provide support and increase accessibility of these stalls.
The actions requiring facilitation to support this programme include:
1. Set up a task team to undertake the funding resource database and to update the current assistance available for SMMEs 2. Develop entrepreneurial study material based on the local economic climate and opportunities for the training workshops and business courses to be hosted local youth small business development centre in conjunction with local FET, SEDA, etc. 3. Provide financial application assistance to IT-related SMME’s through making use of the DTI’s incentive programmes 4. Create a task team to liaise with the local business sector to identify possible mentors related career guidance, computer literacy or entrepreneurial skills development 5. Appoint a task team to identify opportunities for small businesses based on skills identified in the skills register
Programme 3: Promotion of Industrial, Trade and Construction activities This programme further development of industrial and trade activities, parallel to the continuation of construction activities. The programme includes the expansion of industrial areas, a diversification of manufacturing and trade opportunities, along with more local construction undertakings.
During consultations with the local business community, it was established that a number local construction companies and cooperatives do exist, but due to the fact that they do not comprise over the relevant certification and registration, they cannot contend for government tenders. According to the IDP, a number of housing projects are planned. Other sources of information also show that various other facilities will be constructed in 2016/17. Once registered and certified, these development projects allows an opportunity for local construction companies and cooperatives to take part in these projects and contribute towards the economy, and procurement of building materials which will contain spending within Umdoni Local Municipality.
After the consultation of the Umdoni Industrial Strategy (2009), it was evident that there is still areas for potential improvement or further development for the local economy with regards to industrial activities.
The following projects were identified in support of this programme:
1. Expand and integrate the Park Rynie industrial area to include the development of a manufacturing centre with various manufacturing activities 2. Develop Manufacturing Advice and Incubation Centre (MAC) to provide support, facilities and training to develop local manufacturers. 3. Establishment of the Mahlongwa / Mandawe Micro Manufacturing Centre for the disabled 4. Investigate possible linkages for light industry with the southern Durban area 5. Investigation into the establishment of Business Park(s). The two areas immediately identified include Park Rynie and Umzinto.
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6. Establish the qualifications and experience of construction companies and individuals and assist them with relevant certification and registration to be able to content for government tenders. This should be linked to the skills and “Gateway 2 Opportunity” database 7. Setup an Internal Industrial Development Task Team that can provide advice and feedback to developers and industrialist, and to implement red tape interventions 8. Implement an Industrial Marketing Strategy of availability and suitability of current industrial areas in Rynie Park and Umzinto North and South 9. Provide rate incentives for development that are in demand according to government policies 10. Develop guidelines for contractors development and programme alignment
The Actions requiring facilitation to support this programme include:
1. Market industrial and manufacturing opportunities and facilitate/fast-track the processing of applications 2. Identify the stakeholders who are interested in producing at the manufacturing centre 3. Create a task team who can be mentors at the MAC, through providing support, facilities and training 4. Facilitate skills development in construction industry such as bricklaying, painting, plumbing, etc. 5. Set up a task team to undertake the qualifications audit and to assist with registration of the construction companies and individuals
Programme 4: Marketing & Information Technology Platforms This programme is aimed at the influence and access that technology platforms can provide to businesses in Umdoni Local Municipality. By making use of these platforms it will allow for improved usage of existing business and networking groups as well as focusing on the development of new business assistance platforms.
In establishing new businesses and expanding existing business enterprises, it is also important for the Municipality to provide support by facilitating the establishment of business linkages between clients and suppliers, as well as facilitating networking opportunities and information sharing among businesses that provide similar commodities or services.
Networking is also an important business tool which allows small businesses to share information on current trends and new technologies and to work together to find solutions to the problems faced locally. In order to further expand the business sector in the Municipality, it is also essential that the Municipality facilitates and supports the establishment of a dedicated help desk where business can find e-learning centres, as well as assistance with other business documents such as business plans, tender applications or funding initiatives.
Furthermore, businesses in rural areas often do not have access to information in respect of new and emerging markets, the latest technology or business support services and the Municipality should ensure that support and information is also distributed into these areas where it is needed most.
The projects supporting the achievement of this programme are as follows:
1. Establish a municipal website and service desk/call centre where complaints as well as suggestions can be logged and tracked on the website
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2. Launch an LED opportunities marketing campaign by distributing poster/providing links on the municipal website to attract investors/entice business start-ups in projects identified in the LED strategy 3. Establish a tender, business plan, government incentives, local recruitment support desk 4. Undertake a feasibility for the creation of Wi-Fi zones in strategic places in Scottburgh and Umzinto where individuals can log onto the internet at a reduced cost 5. Development of e-learning centres within the rural nodes, providing rural communities with access to internet services, computers, etc.
The actions requiring facilitation to support this programme include:
1. Source funding to appoint and train a team to set up the monitoring database and run the municipal services complaints desk 2. Identify and promote economic opportunities for communities which will be developed through the implementation of the LED strategy 3. Communicate these opportunities to the community to entice individuals or businesses to take part 4. Identify stakeholders to champion a business support desk
6.2.5 Thrust 5: Regional & Rural Integration and Support The purpose of this Thrust is to improve the integration of the remote rural areas with the well- established urban area in Umdoni Local Municipality as well as the other Metropolitan and local municipalities. This thrust has been derived from various policies at National, Provincial, District and Local level, these include the National Government Key Outcomes, National Development Plan, New Partnership for Africa’s Development, Growth Path for SA, Comprehensive Rural Development Programme, Medium Term Strategic Framework, Integrated Growth and Development Policy, Provincial Growth and Development Plan, Provincial Spatial Economic Development Strategy, Ugu Growth and Development Strategy, Ugu Local Economic Development Plan, Ugu Trade Sector Plan, Ugu Economic Planning Programme, Ugu’s and Umdoni’s Integrated Development Plan, Umdoni’s previous LED Strategy, Umdoni Spatial Development Framework, Umdoni Industrial Sector Strategy etc.
Access is limited to the more rural areas in the municipality from the activity nodes, as well as the lacking communications and transport infrastructure in these areas. It is therefore necessary for business support to also stretch into these areas, allowing the advancement and further integration of these areas into the economy of the Municipality. This will also ensure that the rural areas are able to serve their own needs.
Subsequently, the main purpose of this thrust is to: Improve linkages in Umdoni Increase access to local and regional markets Increase knowledge of all stakeholders and leaders Create more community support initiatives Strengthen nodes through spatial implementation
The programmes forming the basis of this thrust are: Regional Integration
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Community LED education and capacitation Rural Integration and spatial planning
Key Role-players Potential sources of funding Umdoni Local Municipality departments Department of Human Settlements Ugu District Municipality Department of Trade and Industry Department of Transport Department of Roads and Transport Umdoni Business Chamber EPWP Passenger Rail Agency of SA (PRASA) Development Bank of Southern Africa Local traditional leaders / councils KwaZulu Natal Provincial Government Local community members KZN Department of Agriculture and Rural Development Ugu District LED Unit Umdoni Local Municipality Development & Planning South Coast Development Agency – Critical Infrastructure Programme PRASA
Programme 1: Regional Integration This programme aims at ensuring the sustainability and growth of businesses within the Municipality it is important to ensure regional integration and easy access to markets outside the municipal boundaries by developing linkages with other areas through logistics, transport and networks. The successful implementation of these projects requires the integration of efforts from several government departments at various levels as well as support service agencies.
The projects supporting the achievement of this programme are as follows:
1. Undertake a feasibility for the development of a truck stop which includes restrooms, a restaurant or take-away outlet and facilities where trucks can be parked for longer periods of time, whilst being repaired/serviced if necessary along the N2, R102 2. Investigate possible business opportunities around the current usage of the railway passing through Scottburgh by passenger railway lines 3. Create community support SMMEs in Umzinto that provides services such as car- pooling/affordable taxi services to and from Scottburgh for medical/educational/social special needs 4. Create business support SMMEs that provides truck-pooling services especially for wholesale purchases at larger centres such as Scottburgh 5. Umzinto – Park Rynie Corridor, including business park feasibility and concept plan for development of Umzinto. 6. The upgrading of roads, especially rural roads and roads that can create opportunities through linkages to larger economies 7. Investigate the possibility of improving and marketing the current train services for commuting between Durban and Scottburgh. Scottburgh being attractive as an alternative place to stay while working in Durban. 8. Form a ‘pothole brigade’ road repair team in conjunction with the Expanded Public Works Programme (EPWP) and Community Work Programme (CWP), that will focus on repairing the road surface and sidewalks in and around major nodes (tourism, industrial, etc.)
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The actions requiring facilitation to support this programme include:
1. Assist with securing funding for the development of the truck stop if the project is deemed feasible 2. Undertake negotiations with Transnet and PRASA in regards to the revitalisation and marketing of current train services 3. Establish communications with the organisations and national departments that are involved in existing pothole brigades and road maintenance projects in other municipalities to assist with training and funding for the pothole brigade
Programme 2: Community LED education and capacitation This programme focuses on providing traditional leaders and community based organisations (CBO’s) with educational background surrounding the developmental opportunities as well as the socio- economic impact that these developments could provide to the local community. These information packs and programmes will equip the traditional leaders and CBO’s with knowledge that can promote a participatory approach to rural development to ensure that rural communities are able to take full charge of their collective destinies.
The projects are centred on the social and economic mobilisation of rural communities, so that there can be ownership of rural development projects and programmes that are taken on by CBO’s.
The projects supporting the achievement of this programme are as follows:
1. Implement a capacity building programme to capacitate traditional leadership/councils on rural development principles 2. Train and educate traditional leaders/councils, rural communities, business and tourism associations/committees on the subject of economic and socio-economic development, and the role that the different structures play 3. Disseminate information to traditional leaders/councils, rural communities, business and tourism associations/committees on planned and proposed development projects 4. Train traditional leaders on land use management since they are responsible for the allocation of land rights. Training should focus on creating awareness of a broad brand of development and environmental legislation, implications for traditional leaders, and clarification of roles and responsibilities 5. Develop a model for cooperation on spatial planning and allocation of land rights for a range of uses. The most critical in this regard is the allocation of residential rights to members of the community. This may include the preparation of settlement plans which traditional leaders would use to allocate sites
The actions requiring facilitation to support this programme include:
1. Identify possible stakeholders to develop study material on development principles, economic and socio-economic development, roles and responsibilities of different structures, land-use management, environmental legislation, etc. 2. Distribute study material among traditional leaders/councils and provide a training programme 3. Implement the capacity building programme for traditional leaders/councils 4. Develop a model for cooperation on spatial planning & allocation of land rights for a range of uses
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5. Facilitate the establishment of a network of CBO’s to monitor service delivery, communicate share experiences, create gateways to financial and technical assistance and to support other CBO’s
Programme 3: Rural Integration and Spatial Planning This programme is aimed at promoting rural integration of through improving existing infrastructure, and implementing new infrastructure. Existing economic activities in Umdoni are also almost exclusively centred in Scottburgh, Park Rynie or Umzinto town, with rural villages and farm areas being separated from these activities. Through the implementation of spatial planning principles, activities will be more organised in activity nodes which can be linked through development corridors. Linkages through development corridors will create more movement between nodes therefore supply the businesses with the necessary connections to markets and customers.
The projects supporting the achievement of this programme are as follows:
1. Implement nodal development principles by creating a specific identity for each of the Future Urban area nodes. Market demand and property feasibilities should be conducted to determine the specific identities 2. Cluster and concentrate public and private development in the Future Urban areas/nodes in order to promote infill development 3. Consolidate public services in identified nodes according to hierarchy and function to promote the movement of population to desired areas 4. Create and/or strengthen key urban nodes or activity centres that will provide opportunity for the concentration of economic and employment activities in the area 5. Promote private investment towards a range of housing/residential systems that will provide the local residents with a choice of residential area, housing type and density 6. Strengthen partnerships and cooperation between Vulamehlo LM and Umdoni LM in implementing supportive LED projects and activities
The actions requiring facilitation to support this programme include:
1. Identify an aesthetic vision urban areas in order to allow for nodes to be developed according to these. This will create a sense of place for visitors and residents alike. 2. Identify activities which causes agglomeration, in order to cluster similar businesses and provide investment, employment and economic opportunities 3. Promote infill development within activity nodes. 4. Facilitate the implementation of public services according to node hierarchy 5. Compile an investment profile for possible investors for various housing/ residential developments 6. Provide communication linkages and enhance cooperation between partnerships in Umdoni and Vulamehlo LM to combine or support LED projects
6.2.6 Summary of Thrusts, Programmes, Projects and Facilitation Actions Having described the aims of each of the thrusts and specific programmes required to ensure the successful implementation of the thrusts, Table 6.2 – Table 6.6 provides a summary of all the strategic programmes, projects (or potential local community-owned businesses) and development facilitation actions developed per Thrust as part of the LED framework presented by this Strategy.
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TABLE 6.2: SUMMARY OF THRUST 1: AGRICULTURAL SUPPORT, GROWTH AND LOCAL VALUE ADDING Sustainable and diversified Agro-processing development and Market development & creating Emerging farmer support and skills development agricultural development expansion an enabling environment Promote and assist the Develop a central mentorship programme for Investigate niche agro-processing Develop a multi-purpose establishment of vegetable emerging/upcoming farmers as well as small-scale farmers to products development/small-scale agricultural centre and distribution production SMME and encourage enable them to manage a productive farming unit beneficiation such as macadamia nut depot. commercialisation Develop a skills development programme aimed specifically at products, sugar-based products, Initiate a study to identify niche Support and enhancement of the emerging youth and women farmers cassava processing etc. markets in agriculture suitable for small grower sugarcane sector Bring commercial farmers and emerging/upcoming farmers Based on successful implementation small farmers. Establish hydroponic and organic together through Agri-BEE partnerships of aquaculture initiatives and projects Assist small-scale and emerging farming methods to produce a Create a farming education and information sharing centre for from USCDA, investigate the farmers in terms of packaging,
variety of niche products farmers to share information on farming practices, attend extension of aquaculture value chain quality management and Within the forestry sector, training seminars and access local and affordable inputs for linkages with Umdoni. marketing of produce to be able to
Projects opportunities for new entrants farming Processing of canned products such market and sell their produce at the include tree-felling, harvesting and Revitalise current dilapidated tunnel farming initiatives at as jam, bottled vegetables and existing markets in Umdoni LM. planting, and production of related Philani Clinic community gardens. preserve processing, juice Assist local sellers with their products such as honey, bark and Promote food security through the development of community production, drying of fruit and the current needs (e.g. packaging, coal should be investigated or household gardens/poultry projects and school feeding semi-processing of vegetables quality management and initiatives Promote a tin processing SMME to marketing) Female farmer of the Year award produce packaging materials to use Promote a SMME for hiring of Young farmer of the Year award for the proposed non-perishable food farming implements, tools and processing plant. machinery and other equipment Identify and approach possible Create a database of retired farmers and possible mentors and Facilitate public-private partnerships Audit existing cooperatives, niche markets for vegetable incorporate into the Central Mentorship database and joint venture establishments for determine what there challenges
production Identify and approach candidates to become mentors development of agro-processing are and how they can be assisted Communicate with the small Identify and approach candidates for commercial farmers to be facilities Facilitate land acquisition for the growers sugarcane sector to paired with upcoming farmers Facilitate the acquisition of suitable development of a multi-purpose determine their needs and means Appoint an agricultural professional or knowledgeable person to land as well as the development of a centre and distribution depot of assisting the enhancement of manage the information sharing centre for farmers processing plant Facilitate the establishment of well- the association Facilitate the acquisition of suitable land for sustainable small Facilitate the development of a advertised markets for emerging/ Ensure continued discussion with farming enterprises processing SMME/community upcoming farmers institutions to formulate financing Facilitate access to training for youth and women farmers initiative for packaging materials mechanisms for the establishment Development FacilitationDevelopment Identify the need and provide assistance with infrastructure Facilitate training in agro-processing, of small scale and upcoming needs for tunnel farming and develop and maintain a database farming enterprises of trained individuals
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TABLE 6.3: SUMMARY OF THRUST 2: TOURISM DEVELOPMENT & SUSTAINABLE TOWN REVITALISATION Destination marketing, branding, promotion & Town Revitalisation Tourism industry development, enhancement & support awareness Develop a business plan to convert the TC Robertson Nature Promote access to applications towards the hospitality Establish a street clean-up campaign and teams that Reserve into a viable tourist destination with overnight facilities, training programmes provided by USCT, through are responsible for cleaning streets and public areas guided trails, bird watching facilities, conferencing facilities, etc. providing a link on the municipal website. (informal trade stalls, parks etc.) Establish a bird watching information centre whereby bird Develop an Umdoni Tourism Development Plan Place public furniture (benches, dustbins, watching in Umdoni is promoted and a brand is created for Expand the existing municipal website to promote and streetlights etc.) and recycling bins at strategic marketing material. Branding material should be used to provide more information on tourism activities and places within Umdoni promote Umdoni as a Birding destination and should provide events, with links to other attractions and Embark on a ‘tree per person’ project where every further information on various bird watching facilities (such as accommodation websites, maps, places to go and images member of the community is provided with an TC Robertson, Umdoni Park). of these areas. indigenous tree to be planted and cared for in their
Maintain & market the Rocky Bay cycling and running trails Implementation of Beachfront Master Plan. This would town and neighbourhood (especially rural Establishment of an adventure camp (veld school, special group include short term revitalisation of beach front and communities) camps, adventure camps, leadership camps, sports camps, etc.) caravan park infrastructure and facilities as well as Plant indigenous water-wise flora on sidewalks and Projects and youth development centre with environmental and tourism project packaging for private sector development traffic islands awareness education. Activities could include mountain biking, opportunities (including contractual and financial aspects Appoint training providers and Sector Education water-based and adventure activities in rivers, e.g. rowing club, etc). Training Authorities (SETA) to teach community canoeing trips, kayaking, water slides, angling equipment members how to manufacture goods from recycled rentals, guided river walks, orienteering, etc. materials to be utilised as street furniture and Develop and implement a Beach amenities upgrade and public/street art maintenance programme which is informed by the yearly inspections conducted by Ugu South Coast Tourism Develop a Tourism Support Infrastructure Programme to ensure that it is adequately provided and maintained. Appoint a specialist task team to research bird watching Facilitate training in the tourism and hospitality industry Liaise with existing community committees,
offerings in Umdoni through accredited SETAs municipal social workers and other associations to Create private sector awareness of opportunities in developing Collaborate and support Ugu South Coast Tourism in drive the clean-up campaign partnerships with local communities their efforts to market and promote the Ugu District Source funding and establish implementation Promote and support major annual events (focusing on what can be done to promote Umdoni and partnerships for the various beautification and Identify areas that are in need of tourism signage its tourism offerings). clean-up projects. Provide support to the upgrading and maintenance of beach Facilitate the skills development of recycled amenities products to the community members Facilitate the development of a Tourism Support Infrastructure In collaboration with the Department of Programme Environmental Affairs, source donors and/or Development FacilitationDevelopment funding for distributing a tree for every household in Umdoni
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TABLE 6.4: SUMMARY OF THRUST 3: CONSERVATION AND GREEN ECONOMY DEVELOPMENT Natural environment revitalisation & Green economy development Unlocking the Oceans Economy conservation Mitigate and prevent land degradation Conduct a feasibility study to establish a recycling cooperatives in Investigate the potential of linking up with aquaculture through creating awareness regarding Umdoni and the development of a Material Recovery Facility in Park farming and aquaponics initiatives with Operation Phakisa, causes (such as overgrazing) and developing Rynie which collects and produces recycled products such as through the Ugu South Coast Development Agency capacity building initiatives within rural packaging material, plastic furniture, gifts, arts and crafts and Hold awareness campaigns at local schools during National communities to address challenges faced, handmade paper, or compost from organic materials . These Marine Week (October) in partnership with KZN Department and implement land management systems recyclable materials that are collected at various recycling collection of Economic Development, Tourism and Environmental Affairs An effort should be made to revive interest points from the recycling co-operative in the relevant area. (edtea) and the Wildlife and Environment Society of South
amongst the agricultural community in Investigate the use of renewable energy at projects implemented Africa (WESSA). allowing tourists to visit farms and other through the LED Strategy (such as solar heaters) Promote, support and market marine tourism offerings and places of interest involved with the planting, Landfill gas to electricity project (such as Marriannhill site, Ethekwini ) opportunities in Umdoni, especially related to luxury diving,
Projects harvesting, packaging and processing of Investigate the potential of the establishment of a fully green and Aliwal Shoal opportunities and Deep-sea Fishing produce sustainable tourism development with solar heaters, rainwater tanks, Increase efforts towards achieving full Blue Flag status for the Promote the conservation of Umdoni’s bio-digester sanitation systems, etc. (Such as the Bunlungula Lodge in Umdoni beaches in conjunction with the Blue Fund and ecosystem through biological protection the Eastern Cape) WESSA. initiatives (e.g. management of alien Investigate the possibility of implementing a Coastal invasive species, species conservation and Conservation and Education Project similar to the one being management) implemented in Plettenberg Bay by the African Conservation Formalise illegal mining activities and assist Experience in obtaining the relevant permits/licenses Facilitate the education of local communities Liaise with existing community committees, municipal social workers Facilitate awareness campaigns and identify stakeholders to
in regards to environmental conservation and other local associations to drive the recycling, clean-up and champion this project. Identify stakeholders to champion ‘going-green’ campaign Determine feasible methods of promoting the marine tourism ecosystem protection initiatives Conduct ongoing research in the planning department on sustainable in Umdoni and implement the marketing of the various development practices and obtain best case scenarios that are tourism offerings and opportunities that are available. implementable at local level Process and follow up on application for Blue Flag beach Liaise with the National Department of Human Settlements to secure status’ as well as other possible beaches in Umdoni. funding and gain support for the incorporation of rainwater Facilitate the implementation of coastal conservation and harvesting tanks and solar panels for all housing development education projects.
Development FacilitationDevelopment Conduct research into the development of sustainable urban practices in terms of tourist accommodation
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TABLE 6.5: SUMMARY OF THRUST 4: INDUSTRIAL AND BUSINESS DEVELOPMENT PROMOTION Business support & capacitation and SMME development & Integration of the Promotion of Industrial, Trade and Construction Marketing & Information Entrepreneurial Development informal economy activities Technology Platforms Compile and maintain an Umdoni Gateway 2 Compile & maintain a funding resource Expand & integrate the Park Rynie industrial area Establish a municipal website Opportunity database database Develop Manufacturing Advice & Incubation Centre and service desk/call centre Assist qualifying local businesses to register on Promote establishment of IT-related (MAC) Launch an LED opportunities National Treasury’s CSD SMMEs Establishment of the Mahlongwa / Mandawe Micro marketing campaign Launch annual entrepreneur of the year Promote the establishment of a local Manufacturing Centre Establish a tender, business competition sewing & handiworks SMME focusing on Investigate possible linkages for light industry with plan, government incentives, Create the required environment for public – manufacturing uniforms and other the southern Durban area local recruitment support private partnerships to take place equipment Investigation into the establishment of Business desk Facilitate sectoral discussion platforms Establish a local youth small business Park(s). Undertake a feasibility for
Projects Develop a partnership with businesses in development centre Support and training of Local Construction the creation of Wi-Fi zones in Umdoni to establish a skills transfer Establish Informal Economy Chamber companies, SMME’s and individuals strategic places in Scottburgh programme Revitalisation & formalisation of hawkers Facilitate skills development in construction industry and Umzinto where Undertake a skills review in relation to market stalls in Umzinto & Scottburgh. Setup an Internal Industrial Development Task Team individuals can log onto the demand Implement an Industrial Marketing Strategy internet at a reduced cost Establish a local youth Drop-in Centre Provide rate incentives for developers Development of e-learning Develop guidelines for contraction development & centres within the rural programme alignment nodes. Set up a task team to undertake opportunities Set up a task team to undertake the Market industrial and manufacutirng opportunities Source funding to appoint audit & maintain database. funding resource database and to update and facilitate/fast track the processing of and train a team to set up Assist local businesses to register on CSD the current assistance available for SMMEs applications the monitoring database and Setup criteria and selection process for the Develop entrepreneurial study material for Identify the stakeholders who are interested in urn municipal services entrepreneur of the year competition. the training workshops to be hosted by producing at the manufacturing centre complaints desk Facilitate development of public-private the local youth small business Create a task team who can be mentors at the Identify and promote partnerships development centre MAC, through providing support, facilities and economic opportunities for Facilitate the development of discussion Provide financial application assistance to training communities platforms to initiate marketing & networking IT-related SMME’s through making use of Facilitate skills development in construction such as Communicate these opportunities the DTI’s incentive programmes bricklaying, painting, plumbing, etc. opportunities to the Develop entrepreneurial study material for Create a task team to liaise with the local Set up task team to undertake qualifications audit community to entice skills transfer & short term internships business sector to identify possible and to assit with registration of companies individuals or businesses to Create a task team to liaise with the local mentors related career guidance, take part
Development Facilitation Development business sector computer literacy or entrepreneurial skills Identify stakeholders to Promote competition among businesses development champion a business support through free for all access of information in Appoint a task team to identify desk the various industries opportunities for small business based on Appoint a task team to identify opportunities skills identified in the skills register for small businesses and cooperatives
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TABLE 6.6: SUMMARY OF THRUST 5: REGIONAL AND RURAL INTEGRATION & SUPPORT Regional Integration Community LED education & capacitation Rural Integration and spatial planning Undertake a feasibility for the development of a truck stop Implement a capacity building programme to capacitate Implement nodal development principles by creating a which includes restrooms, a restaurant or take-away outlet traditional leadership/councils on development principles specific identity for each of the Future Urban area and facilities where trucks can be parked for longer periods Train and educate traditional leaders/councils, rural nodes. Market demand and property feasibilities should of time communities, business and tourism associations/ be conducted to determine the specific identities Investigate possible business opportunities around the committees on the subject of economic and socio-economic Cluster and concentrate public and private development current usage of the railway passing through Scottburgh development in the Future Urban areas/nodes in order to promote Create community support SMMEs in Umzinto that provides Disseminate information to traditional leaders/councils, infill development services such as car-pooling/affordable taxi services to and rural communities, business and tourism associations/ Consolidate public services in identified nodes according from Scottburgh committees on planned & proposed development projects to hierarchy and function to promote the movement of
Create business support SMMEs that provides truck-pooling Train traditional leaders on land use management since population to desired areas services especially for wholesale purchases at larger centres they are responsible for the allocation of land rights. Create and/or strengthen key urban nodes or activity
Projects such as Scottburgh Training should focus on creating awareness of a broad centres that will provide opportunity for the Umzinto – Park Rynie Corridor, including business park brand of development and environmental legislation, concentration of economic and employment activities in feasibility and concept plan for development of Umzinto. implications for traditional leaders, and clarification of roles the area The upgrading of roads, especially roads that can create and responsibilities Promote private investment towards a range of opportunities through linkages to larger economies Develop a model for cooperation on spatial planning and housing/residential systems that will provide the local Investigate the possibility of improving & marketing current allocation of land rights for a range of uses. The most critical residents with a choice of residential area, housing type train services for commuting between Durban & Scottburgh. in this regard is the allocation of residential rights to and density Form a ‘pothole brigade’ road repair team that will focus on members of the community. This may include the Strengthen partnerships and cooperation between repairing the road surface and sidewalks in and around preparation of settlement plans which traditional leaders Vulamehlo LM and Umdoni LM in implementing major nodes (tourism, industrial, etc.) would use to allocate sites supportive LED projects and activities Assist with securing funding for the development of the Identify possible stakeholders to develop study material on Identify an aesthetic vision urban areas in order to allow truck stop if the project is deemed feasible development principles, economic and socio-economic for nodes to be developed according to these. This will Undertake negotiations with Transnet and PRASA in regards development, roles and responsibilities of different create a sense of place for visitors and residents alike. to the revitalisation and marketing of current train services structures, land-use management, environmental Identify activities which causes agglomeration, in order Establish communications with the organisations and legislation, etc. to cluster similar businesses and provide investment, national departments that are involved in existing pothole Distribute study material among traditional leaders/councils employment and economic opportunities brigades and road maintenance projects in other and provide a training programme Promote infill development within activity nodes. municipalities to assist with training and funding for the Implement the capacity building programme for traditional Facilitate the implementation of public services pothole brigade leaders/councils according to node hierarchy Develop a model for cooperation on spatial planning and Compile an investment profile for possible investors for allocation of land rights for a range of uses various housing/ residential developments
Development Facilitation Development Facilitate the establishment of a network of CBO’s to Provide communication linkages and promote monitor service delivery, communicate share experiences, cooperation between partnerships in Umdoni and create gateways to financial and technical assistance and to Vulamehlo LM to combine or support LED projects support other CBO’s
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6.3 Project Prioritisation
The projects were prioritised based on the level of importance as judged by the relevant stakeholders and project steering committee members during the first workshops held regarding LED in Umdoni Local Municipality. Further internal deliberations finalised the list of projects that tackle the most pressing needs in the Municipality, that will have the largest impact within the local economy and which thus need to be implemented first (within the 5-year timeframe of the LED Strategy). As such, the projects were prioritised in terms of those that need to be implemented immediately in order to create an immediate impact on the local economy.
6.3.1 Prioritised projects The prioritised projects are provided in Table 6.7. These projects should be implemented as a priority, requiring the facilitation of actions to commence immediately after approval of this LED Strategy. Annexure B can be consulted for a list of potential funding sources for the priority and other projects.
TABLE 6.7: PRIORITIES PROJECTS PER THRUST Agricultural Support, Growth and Local Value-Adding Develop a Multi-purpose Agricultural Centre and Distribution Depot Support and enhancement of the small grower sugarcane sector Tourism Development and Sustainable Town Revitalisation Business Plan for TC Robertson Nature Reserve Implementation of the Beachfront Master Plan Conservation and Green Economy Development Conduct a feasibility to establish a Recycling Centre in Umdoni Accreditation of Umdoni Beaches to Blue Flag Status Industrial and Business Development Promotion Compile and maintain an Umdoni Gateway 2 Opportunity Database Establish a local youth small business development centre Regional and Rural Integration and Support Investigate possibility of a Commuter System with new passenger railway linkages/routes
For each of the priority projects, the following two sheets are provided to assist with marketing and implementation: Project Marketing Information Sheet: o Project description o Proposed location and beneficiaries o Opportunities and potential impacts o Target market o Role-players o Approximate capital cost Project Implementation Sheet: o Position of project in strategy o Project priority o Key success factors o Key risks and challenges o Key role players o Potential funding and training sources
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o Facilitation actions o Implementation actions o Total project implementation budget o Municipal budget pre financial year
The Project Marketing Information sheets are in shades of grey, while the Project Implementation sheets are in shades of blue. These are provided hereunder.
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UmdoniPROJECT LED MARKETING Strategy SHEETReview PROJECT Compile and Maintain an Umdoni Gateway 2 Opportunity Database PROJECT DESCRIPTION The project consists of the compilation and maintenance of a Gateway 2 Opportunity (G2O) database for the Umdoni Local Municipality. The database will focus on the creation of a database of local service providers and local businesses directory. The envisioned results of the project are to set-up the database and that the database be linked to the municipal website, whereby marketing of this website can be done through word-of- mouth (such as like through local radio stations and internal communication channels). The database would then allow businesses and/or individuals to register on the database.
The project will aim to create the business database which will contain information about all businesses within the Umdoni Local Municipality. The project will entail the identification of all businesses as well as to attain further information of those businesses such as contact information, business description, services, needs and advantages. The information gathered, will be compiled into a central database which provides added advantages such as; reducing complexity; centralisation of information; distribution of information; marketing and advertising of local businesses; and enabling networking and linkages. The database will further act as a mechanism for creating linkages and information sharing opportunities between local businesses within the municipality.
In conjunction to the business database, a skills, talents and abilities audit should be done in order to fully understand the supply of skills within the various towns and villages within the municipality. The database will be linked to the G2O database to enable networking, linkages and targeted job opportunities.
The G2O database will, through the registration of individuals and businesses on the database, provide individuals the opportunity to access employment, training and skills development. The benefits of the G2O database extend to both employers and employees through which both parties will be linked to available skills development and employment opportunities in the municipality from a central system. The system will in turn provide comprehensive career guidance information, inclusive of industry trends and occupational outlooks, linking job seekers with all available job opportunities in the area and enabling employers to recruit on-line and immediately access the candidate database for suitable applicants. STRENGTHS AND OPPORTUNITIES POTENTIAL IMPACTS Access to training and mentorship improved Procurement of locally produced products Business start-ups and sustainability increased and services Access to start-up capital and funding improved Centralised business support Access to larger markets and contracts improved POTENTIAL BENEFICIARIES TARGET MARKET Unemployed skilled work seekers Local small and micro businesses Local emerging businesses & entrepreneurs Unemployed, yet skilled individuals Local employers or contractors ROLEPLAYERS APPROXIMATE CAPITAL COST Umdoni Local Municipality departments R 230 000 - The capital cost will include the Ugu District Municipality development of the database as well as the skills Umdoni Business Chamber audit R 200 000 is budgeted for the updating, maintenance and marketing of database, although this could be an internal function
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PROJECT IMPLEMENTATION SHEET PROJECT Compile and Maintain an Umdoni Gateway 2 Opportunity Database THRUST Industrial and Business Development Promotion PROGRAMME Business Support & Capacitation and Entrepreneurial Development PROJECT PRIORITY 1 KEY SUCCESS FACTORS KEY RISKS AND CHALLENGES Buy-in from business support agencies Limited involvement by support agencies Up-to-date and relevant information Exclusivity of support to specific sectors Support from marketing methods Support from communities POTENTIAL SOURCES OF FUNDING South Coast Development Agency – BBSDP incentive DTI - THRIP KEY IMPLEMENTERS Umdoni Local Municipality LED Unit Umdoni Local Municipality IT department/ web-developer
FACILITATION ACTIONS 2016 2017 2018 2019 2020 COST Identify responsible internal person/entity for database Liaise with local business Internal forums/chambers to identify their involvement Liaise with funding sources TOTAL DEVELOPMENT FACILITATION BUDGET Internal IMPLEMENTATION 2016 2017 2018 2019 2020 COST ACTIONS Create a database for all members Link up database on web R 230 000 Undertake marketing of database through local marketing networks Maintenance and R 200 000 updating of database TOTAL IMPLEMENTATION BUDGET R 430 000 MUNICIPAL BUDGET PER 2016 2017 2018 2019 2020 COST FINANCIAL YEAR R 230 000 R 50 000 R50 000 R50 000 R 50 000 R 430 000
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PROJECT MARKETING SHEET PROJECT Implementation of the Beachfront Master Plan PROJECT DESCRIPTION The project involves the development of the Beachfront Master plan in order to balance the coastal recreational need with the broader coastal tourism and economic development opportunities. A high quality and publicly accessible beachfront area will act as a catalyst and will enhance real estate value, tourism value and assessment value and it will create spin-off effects within the local area.
The project will aim to assist with the location of funding for the various phases that have been identified in the Final Beachfront Report. These include the short, medium and long term implementation. The areas for development that are included in the short term phase (0-3years) are the Lagoon Site, Rail Deck, Caravan Park and Beach Head-Pavilion. The medium term phase (3-5years) includes the release of private sector development opportunities, lagoon terrace new park and recreation area and redevelopment of south beach. The final phase (5+ years) includes the reconfiguration of the caravan park, Cordiner gateway and skybridge.
The development of this project will create a quality environment though the upgrading of public realm, improving safety and access to the beach as these will unlock economic opportunities for both formal and informal economies.
Through making the beachfront aesthetically attractive, tourists and visitors will spend more time in the area, potential investors are more likely to invest in opportunities and therefore economic growth will be achieved. The implementation of two phases before 2021 is crucial, as Durban will be hosting the Common Wealth Games in 2022, and the likelihood of spillage of tourists to more “swimming friendly beaches” will be in high demand. Various jobs will be created, commercial and business centres will be enhanced and property values will increase. A development of this scale will ensure that income is generated for its investors for many years to come. STRENGTHS AND OPPORTUNITIES POTENTIAL IMPACTS Increased access to the beachfront Improved coastal amenities and service Increased mobility for pedestrians, cyclists and offering within Umdoni Local Municipality motorists Increased value for time and money Creation of a sense of place for residents and experienced by visitors visitors Aesthetically pleasing beachfront environment More diverse portfolio of activities for visitors POTENTIAL BENEFICIARIES TARGET MARKET Tourists and visitors to Umdoni Local Municipality Coastal activities Local tourism product owners Tourists and visitors Local tourism activity operators Residents Local and regional residents ROLEPLAYERS APPROXIMATE COST Umdoni Local Municipality departments R 314 870 000 – Phase 1 & 2 (2016-2020) Ugu South Coast Tourism Private investors R 45 300 000 – Phase 3 (2020-2023)
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PROJECT IMPLEMENTATION SHEET PROJECT Implementation of the Beachfront Master Plan THRUST Tourism Development and Sustainable Town Revitalisation PROGRAMME Tourism Industry Development, Enhancement and Support PROJECT PRIORITY 2 KEY SUCCESS FACTORS KEY RISKS AND CHALLENGES Buy-in from municipality and tourism agencies Lack of funding Successful marketing methods Lack of support Support from communities Lack of maintenance leading deteriorating facilities POTENTIAL SOURCES OF FUNDING South Coast Development Agency – Tourism Support Programme KEY IMPLEMENTERS Umdoni Local Municipality TC Robertson Nature Reserve Committee FACILITATION ACTIONS 2016 2017 2018 2019 2020 COST Identify and appoint a R 0 project champion for Develop funding strategy R150 000 Urban management & R0 enforcement of bylaws Legal requirements (applications & R50 000 authorisations) Initiate public R0 participation process Provision and maintenance of support R 400 000 services TOTAL DEVELOPMENT FACILITATION BUDGET R 600 000 IMPLEMENTATION 2016 2017 2018 2019 2020 COST ACTIONS Investigate structural influence of the Pavilion R150 000 building Undertake an EIA R60 000 Initiate a funding scheme R0 Set up a programme to R80 000 undertake detailed design Develop a programme for R80 000 construction of project Construction of project Private TOTAL IMPLEMENTATION BUDGET R370 000 MUNICIPAL BUDGET PER 2016 2017 2018 2019 2020 COST FINANCIAL YEAR R570 000 R 100 000 R 100 000 R 100 000 R 100 000 R 970 000
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PROJECT MARKETING SHEET PROJECT Accreditation of Umdoni Beaches to Blue Flag Status PROJECT DESCRIPTION A Blue Flag is an international award given to beaches, boats and marinas that meet excellence in the areas of safety, amenities, cleanliness and environmental standards. The strict criteria of the programme are set by the international coordinators of the Blue Flag campaign in Europe, the Foundation for Environmental Education (FEE). In South Africa, the programme is managed by WESSA (the Wildlife and Environmental Society of South Africa), along with participating local authorities. South Africa was the first country outside of Europe to win Blue Flag accreditation for its beaches. The Blue Flag assures you that the beaches are clean, safe and environmentally friendly. The award also helps to educate the community about the need to care for our coastline. Blue Flag promotes one of South Africa’s national treasures, our magnificent coast. The Blue Flag campaign is proving highly successful and there has been a significant increase in response from local authorities wishing to implement the campaign. The number of beaches entering the campaign as pilot is indicative of the growing interest in Blue Flag in this country.
The most recent announcement of WESSA 2015/2016 South African Blue Flag Sites indicates that the surrounding coastal municipalities of the Hibiscus Coast and Ethekweni already has numerous full status or pilot status Blue Flag accredited beaches, while the Umdoni Municipality has none. It is therefore proposed that the Umdoni Municipality register the main beaches (especially Scottburgh and Kelso) with WESSA as pilot status beaches. The pilot phase is provided as a stepping stone toward full status. Applicants can be in this phase for 1-3 years before applying for full status. The necessary water quality sampling must be conducted during this phase and it is recommended that this phase be used for all other necessary upgrading of facilities required for full status certification. During this phase the Blue Flag Programme will work closely with each beach to ensure that they are meeting the objectives of building toward Full Status. The Beach will receive a certificate from WESSA Blue Flag to acknowledge their commitment to the Programme. Financial assistance from Blue Flag supporters can be sourced during this time. Blue Flag is receiving increasing support from the corporate sector; provincial government and local businesses. Blue Flag SA is here to facilitate the process and conduct informative assessments that will assist in preparations for full status. STRENGHTS AND OPPORTUNITIES POTENTIAL IMPACTS Availability of shark nets and lifeguards Increase in tourist numbers Planned beachfront developments at Scottburgh Employment creation (beach clean-up, and Kelso Beach lifeguards, etc.) POTENTIAL BENEFICIARIES TARGET MARKET Local businesses Local beaches Tourism activities and facilities ROLEPLAYERS APPROXIMATE CAPITAL COST Umdoni LED unit R 620 000 includes minimum requirement Ugu District LED/Tourism Office developments/facilities. Ugu South Coast Tourism WESSA Continued compliance will be internal/done by the Blue Flag SA Beach Management Committee Local businesses
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PROJECT IMPLEMENTATION SHEET PROJECT Accreditation of Umdoni Beaches to Blue Flag Status THRUST Green Economy Development & Diversification PROGRAMME Unlocking the Oceans Economy PROJECT PRIORITY 3 KEY SUCCESS FACTORS KEY RISKS AND CHALLENGES Obtain support from WESSA and local area committees Continuous monitoring to ensure compliance POTENTIAL SOURCES OF FUNDING KEY IMPLEMENTERS Ugu South Coast Tourism Umdoni Local Municipality LED Unit Local businesses/investors Ugu District LED Unit WESSA Blue Flag FACILITATION ACTIONS 2016 2017 2018 2019 2020 COST Ensure compliance with minimum criteria once approval is obtained Establish a beach management committee Internal Partner with Department of Environmental Affairs and local tourism operators to ensure compliance TOTAL DEVELOPMENT FACILITATION BUDGET Internal IMPLEMENTATION 2016 2017 2018 2019 2020 COST ACTIONS Take a minimum of 20 water quality samples one R 50 000 year prior to application Ensure access to beaches R 100 000 Compile all necessary documents and apply to R 50 000 WESSA Blue Flag Develop Information R 100 000 boards Host & promote awareness Projects/Clean-up R 120 000 campaigns Development of beach amenities such as disposal R200 000 bins, ablutions, etc. TOTAL IMPLEMENTATION BUDGET MUNICIPAL BUDGET PER 2016 2017 2018 2019 2020 COST FINANCIAL YEAR R 150 000 R 50 000 R 340 000 R 40 000 R 40 000 R 620 000
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PROJECT MARKETING SHEET PROJECT Business plan for TC Robertson Nature Reserve PROJECT DESCRIPTION The project involves the development of a business plan to source funding for the upgrading and continued maintenance of the TC Robertson Nature Reserve.
The project will aim to create a business plan detailing all the guidelines and actions that are needed to facilitate the implementation. These include the project description, vital issues that need to be addressed before the business can be started, economic impact, key role-players that need to take responsibility for the development, nature and possible sources of additional financing for the business, facilitation plan, implementation timeframe and phasing, institutional arrangements, operating plan, forecasts and financial requirements, income creation to ensure breaking-even, final capital costs, operating costs, outputs and outcomes, resource requirements, budget, cash flow, investment opportunities, returns, income/expenditure and revenue stream, balance sheets etc.
The project will entail the identification of all opportunities surrounding the nature reserve and tourism industry whilst also attaining further information of those opportunities. Some of these opportunities have been identified as overnight facilities, guided trails, birdwatching facilities, conferencing facilities, etc.
The business plan needs to include an attainable vision, goals, strategies and objectives for TC Robertson Nature Reserve. It also needs to include details surrounding the outcomes and project indicators, alignment to policy frameworks, obtain a detailed understanding of the risks to ensure effectiveness. STRENGTHS AND OPPORTUNITIES POTENTIAL IMPACTS Increased rich biodiverse and conservation areas Increased and improved tourism activities Tourism Development Corridor within Umdoni Local Municipality Untapped bird watching market Increased value for time and money More diverse portfolio of activities for visitors experienced by visitors POTENTIAL BENEFICIARIES TARGET MARKET Tourists and visitors to Umdoni Local Municipality Nature tourism activities Local tourism product owners Business conferences Local tourism activity operators Team building groups Local and regional residents Tourists and visitors ROLEPLAYERS APPROXIMATE CAPITAL COST Umdoni Local Municipality departments R 450 000 – includes Business Plan development Ugu District Municipality as well as marketing and promotion Ugu South Coast Tourism South Coast Development Agency The capital costs required for the development of TC Robertson directing board additional facilities will be determined and based on the Business Plan.
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PROJECT IMPLEMENTATION SHEET PROJECT Business plan for TC Robertson Nature Reserve THRUST Tourism Development and Sustainable Town Rehabilitation PROGRAMME Tourism Industry Development, Enhancement and Support PROJECT PRIORITY 4 KEY SUCCESS FACTORS KEY RISKS AND CHALLENGES Buy-in from municipality and tourism Lack of funding agencies Lack of support Successful marketing methods Lack of maintenance leading to a deteriorated Support from communities Nature Reserve POTENTIAL SOURCES OF FUNDING South Coast Development Agency – Tourism Support Programme KEY IMPLEMENTERS Umdoni Local Municipality TC Robertson Nature Reserve Committee
FACILITATION ACTIONS 2016 2017 2018 2019 2020 COST Identify and appoint consultants for the development of a business plan Liaise with local tourism forums/stakeholders to Internal identify their involvement Identify possible development opportunities Obtain the sufficient funding TOTAL DEVELOPMENT FACILITATION BUDGET Internal IMPLEMENTATION 2016 2017 2018 2019 2020 COST ACTIONS Develop bankable business plan and R 250 000 implementation plan Costs to be determined Facilitate development of based on additional facilities Business Plan Marketing and promotion R 200 000 TOTAL IMPLEMENTATION BUDGET R 400 000 MUNICIPAL BUDGET PER 2016 2017 2018 2019 2020 COST FINANCIAL YEAR R 0 R 300 000 R 50 000 R 50 000 R 50 000 R 450 000
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PROJECT MARKETING SHEET PROJECT Support and enhancement of the small grower sugarcane sector PROJECT DESCRIPTION The sugar cane and sugar industry is a critically important industry in KwaZulu-Natal that supports the livelihoods and incomes of a large percentage of households in the province. The objective of this project is to provide support to existing sugarcane small growers, as well as establishing new cooperatives/small farmers, in order to ensure a constant supply of sugarcane towards the Sezela Mill and the general market. Sugarcane can be used in a variety of ways, the most common being sugar production. However, in a recent study (2013) conducted by Conningarth Economists on behalf of the National Agricultural Marketing Council it was concluded that co-generation of electricity from sugar bagasse is economically and financially viable and would benefit the mill owners, cane suppliers and rural population in general. The aim of this project is thus to support and enhance sugarcane production by small growers in the Umdoni area to ensure a constant supply to the Sezela Mill and other markets, and also to encourage value-chain activities in the long term.
The envisioned support services that will be provided to the small growers/cooperatives in conjunction with the Department of Agriculture are as follows: Skills development Mentoring from existing and knowledgeable sugarcane farmers Capacity building Support to access finance and markets Agricultural farming practice training
In addition to the support service listed above it is proposed that Participatory planning workshops are held with farmers to find solutions and getting growers own the change process. Remedial actions may include reconstitution of farmers associations, improving accountability, governance and reducing “free riding”. Institutional changes may include the introduction of a formal land rental model, consolidation and joint management of individual farming units, as well as improving the management of communal irrigation infrastructure. Where required, emerging/upcoming farmers can be assisted with detailed business planning and in some cases additional grant funding to set up the new projects. STRENGHTS AND OPPORTUNITIES POTENTIAL IMPACTS Availability of existing market (Sezela Mill) Growth of small farmers in the agricultural Decrease in commercial production presents sector. opportunities for small-scale farmers Development of small-scale and emerging Labour intensive farming (employment creation) farmers Skills development Knowledge and skills sharing amongst farmers POTENTIAL BENEFICIARIES TARGET MARKET Local small-scale and emerging farmers Local small-scale and emerging farmers Rural communities ROLEPLAYERS APPROXIMATE CAPITAL COST Umdoni LED unit R 740 000 which includes initial farming equipment Department of Agriculture purchases, contract negotiations and continued Ugu District LED Office mentoring and support. Farmers Associations and co-operatives Small-scale emerging farmers This project requires partnerships and support Agri-SETA from a variety of organisations. The most critical is Sezela Cane Growers Association the support from the municipality to provide South Africa Cane Growers Association support. The second is the buy-in and support from South African Sugar Association the DoA and extension officers which essentially will enable them to maximise their offerings to all Operation Vusulela (KZN EDTEA) the emerging and small-scale farmers in Umdoni. Illovo Sugar South Africa (Sezela Mill)
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PROJECT IMPLEMENTATION SHEET PROJECT Support and enhancement of the small grower sugarcane sector THRUST Agriculture Support, Growth and Local Value-Adding PROGRAMME Sustainable and diversified agricultural development PROJECT PRIORITY 5 KEY SUCCESS FACTORS KEY RISKS AND CHALLENGES Obtain support from DoA, SASA, SACGA, etc. Inadequate tariff protection and fluctuating sugar Implementing successful ripening programmes prices Partnership with Sezela Mill Water availability Property development pressures on cane land POTENTIAL SOURCES OF FUNDING KEY IMPLEMENTERS Department of Agriculture Umdoni Local Municipality LED Unit KZN Agribusiness Development Agency (ADA) Ugu District LED Unit Gijima KZN Department of Agriculture KZN EDTEA FACILITATION ACTIONS 2016 2017 2018 2019 2020 COST Identify lessons learnt from existing cooperatives/ farmers Internal Identify potential and DoA beneficiaries Facilitate development of start-up/cooperatives TOTAL DEVELOPMENT FACILITATION BUDGET Internal IMPLEMENTATION 2016 2017 2018 2019 2020 COST ACTIONS Develop and equip R 520 000 cooperative farming unit Undertake training of DoA cooperative members Negotiate contracts with R 100 000 Sezela Mill for supply Provide support and R 120 000 mentorship to cooperatives TOTAL IMPLEMENTATION BUDGET R 740 00 MUNICIPAL BUDGET PER 2016 2017 2018 2019 2020 COST FINANCIAL YEAR R0 R 450 000 R 210 000 R40 000 R40 000 R 740 000
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PROJECT MARKETING SHEET PROJECT Develop a Multi-purpose Agricultural Centre and Distribution Depot PROJECT DESCRIPTION This project is aimed at better utilisation of the underutilised and undeveloped municipal land in Park Rynie whilst simultaneously supporting the agricultural sector. The proposed project entails developing a multi- purpose agricultural centre and distribution depot to support the small-scale and emerging agricultural sector within Umdoni Local Municipality. As part of the services that will be offered by the Agricultural centre, it is proposed that through the Department of Agriculture shared equipment such as tractors, trucks, etc be made available. Truck pooling and pooling of other essential equipment will enable a greater spread resources to small-scale farmers that do not necessarily have the resources or means to successfully grow their business, too do so. The idea is that the centre provide a whole bundle of activities. Youth development in agriculture and renewed interest in agriculture; regular livestock auctions; central meeting point for commodity group associations and interactions; truck pooling; equipment sharing; weekly markets for sale of vegetables and crops; weekly/monthly central agricultural training and farmer advice from the Department of Agriculture’s extension farmers as opposed to having to spread themselves to visit individual farmers; support and knowledge sharing; the creation of a platform where commodity groups can share knowledge regarding challenges, solutions, joint association possibilities, etc; central point for access to agricultural inputs: pesticides, seedlings, etc; a local community owned nursery with seedlings for crops; a central point where agricultural retailers can sell their farming products; skills development training; demonstration plots; agri suppliers; etc. It is also proposed that the Agricultural Hub link up with the Esayidi TVET College in Port Shepstone to provide training and skills development in agricultural practices and even demonstration plots at the centre. This should be coupled with a weekly farmers market which will enable local emerging farmers and cooperatives to sell their products to the local residents and businesses. With sufficient demand, and possible joint marketing of produce, the agricultural centre could also develop into a central beneficiation space that can specialise in packaging, storage, distribution and processing of fresh produce and livestock with having regular livestock auctions. It is further proposed that at the agricultural centre, an annual show be developed that focuses on small scale farmers, training in new development and innovation, youth development in agriculture, livestock auctions and commodity groups (support systems). The LM can link with the Department of Agriculture for facilitation support and should take into account that suppliers to the Agricultural sector can play a major role in the success of such a show. STRENGHTS AND OPPORTUNITIES POTENTIAL IMPACTS Availability of locally produced agricultural produce Growth of small farmers in the agricultural from emerging farmers who currently have limited sector. access to markets Development of small-scale and emerging Vacant and undeveloped municipal land farmers Skills development Knowledge and skills sharing amongst farmers POTENTIAL BENEFICIARIES TARGET MARKET Local small-scale and emerging farmers Local small-scale and emerging farmers Local commercial farmers Local commercial farmers Suppliers to the agricultural sectors Suppliers to the agricultural sectors ROLEPLAYERS APPROXIMATE CAPITAL COST Umdoni LED unit R300 000 for Business Plan development. Department of Agriculture Ugu District LED Office This project requires partnerships and support Esayidi TVET College from a variety of organisations. The most critical is Farmers Associations and co-operatives the support from the municipality to provide the Small-scale emerging farmers land. The second is the buy-in and support from the DoA and extension officers which essentially will enable them to maximise their offerings to all the emerging and small-scale farmers in Umdoni. This project can start off small (once a month) followed by weekly, and growing into daily activities and further beneficiation, etc.
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PROJECT IMPLEMENTATION SHEET PROJECT Develop a Multi-purpose Agricultural Centre and Distribution Depot THRUST Agriculture Support, Growth and Local Value-Adding PROGRAMME Market development & creating an enabling environment PROJECT PRIORITY KEY SUCCESS FACTORS KEY RISKS AND CHALLENGES Access to undeveloped and vacant municipal Safety and security at the proposed centre land Support from the DoA Buy-in from local emerging and small-scale farmers Annual farmers show POTENTIAL SOURCES OF FUNDING KEY IMPLEMENTERS Department of Agriculture Umdoni Local Municipality LED Unit KZN Agribusiness Development Agency (ADA) Ugu District LED Unit Gijima KZN Department of Agriculture KZN EDTEA FACILITATION ACTIONS 2016 2017 2018 2019 2020 COST Appoint service provider to development a Business Plan to determine development objectives, farming programme, R300 000 capital requirements, support and sponsor requirements, financial and economic viability Secure support for implementation of project, raise capital from sponsors, Internal obtain support from suppliers, etc. TOTAL DEVELOPMENT FACILITATION BUDGET R 300 000 IMPLEMENTATION 2016 2017 2018 2019 2020 COST ACTIONS Identify target beneficiaries, undertake marketing and promotion of centre Form commodity Internal associations and DoA Ensure sufficient beneficiary training programmes Undertake continuous monitoring and evaluation TOTAL IMPLEMENTATION BUDGET R 0 MUNICIPAL BUDGET PER 2016 2017 2018 2019 2020 COST FINANCIAL YEAR R 0 R 0 R 200 000 R 100 000 R 0 R 300 000
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PROJECT MARKETING SHEET PROJECT Establish a local youth small business development centre PROJECT DESCRIPTION This project entails the development of local Youth small business development centre to provide a place for young people where they can receive up to date news regarding the local business environment. This should include the current economic environment both locally, provincially and nationally, future developments in Umdoni and new market demands. The development centre should provide access to skills development as well as character building activities that will help them in their personal development. The proposal is that the youth small business development centre offers a number of programmes and also life skills, entrepreneurial skills, business development skills, etc. It is proposed that the youth small business development centre be established in partnership with the local FET, SEDA, TIL linked to career guidance with high-school, entrepreneurship development, sponsored computers etc. The Coastal KZN FET College should be approached to provided free educational services for out of school youth, project linked trainees ranging from learners with a low academic background to those who have had opportunities to enhance their educational level. The partnerships could also provide free youth career guidance, entrepreneurship workshops, and small business development workshops for the Centre. It is important that a partnership be formed with the FET college, the municipality, and SEDA, to provide assistance, funding, etc. It is also proposed that the youth small business development centre link up with community e- centres through partnerships/sponsorships with the Vodacom Foundation and/or Microsoft. There is a huge shortage of ICT resources in rural areas and therefore sharing of resources is very important. Partnerships can also be formed with the Umzumbe Municipality’s Youth Office, which informs the youth about the opportunities available to them in the municipality, they also motivate the small business owners to do proper booking as this will assist them when they need funding. Once-up and running the establishment of a mobile ICT resource/computer centre can be developed to possibly link up to the rural settlements, especially those that lack ICT resources. The key goal of the computer centre is to create a link to rural areas, enable online schooling, and during the day, and to enable maximisation of shortage of resources. During school hours, entrepreneurs, or small businesses in the area are then also able to make use of the facilities at the youth small business development centre. STRENGTHS AND OPPORTUNITIES POTENTIAL IMPACTS Increases in training and skills development Awareness creation of opportunities A more equipped and business savvy youth Youth and entrepreneurial development Business start-ups and sustainability increased On-line schooling Information communication for rural areas Small business development POTENTIAL BENEFICIARIES TARGET MARKET Unemployed youth Young entrepreneurs Local emerging businesses & entrepreneurs Local community’s young people Local unskilled youth ROLEPLAYERS APPROXIMATE CAPITAL COST Coastal KZN FET College R260 000 for start-up equipment as well as Department of Education marketing and promotion. Department of Social Development The proposed youth small business development Department of labour centre entail partnerships between the LED unit, Umdoni Local Municipality departments FET colleges, SEDA, TIL etc. Possible sponsorships Ugu District Municipality for the mobile education could include the Umdoni Business Chamber Vodacom mobile education programme (www.digitalclassroom.co.za)
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PROJECT IMPLEMENTATION SHEET PROJECT Establish a local youth small business development centre THRUST Industrial and Business Development Promotion PROGRAMME SMME Development & Integration of the informal economy PROJECT PRIORITY 7 KEY SUCCESS FACTORS KEY RISKS AND CHALLENGES Sponsorship/Funding Lack of funding / donations Experienced and qualified mentors and Lack of training (youth development coordination) trainers Buy-in form the FET College Monitoring and evaluation of candidates Limited involvement by support agencies Entrepreneurial development Youth development Small business development POTENTIAL SOURCES OF FUNDING South Coast Development Agency – BBSDP incentive Vodacom mobile education KZN DEDT – RLED Programme KEY IMPLEMENTERS Umdoni Local Municipality LED Unit Coastal KZN FET College SEDA FACILITATION ACTIONS 2016 2017 2018 2019 2020 COST Undertake discussions & obtain buy-in with key roleplayers/ stakeholders especially the FET college Obtain information Internal regarding sponsors: Vodacom, Microsoft, etc. Apply for sponsorships Consult & approach partners: SEDA, TIL etc. TOTAL DEVELOPMENT FACILITATION BUDGET Internal IMPLEMENTATION 2016 2017 2018 2019 2020 COST ACTIONS Identify vacant municipal R 0 building/ space Equip space with R 200 000 resources Identify mentors and training programme R 0 through SEDA and the like Promote centre through R 60 000 local radio stations Ensure continued support & promotion of services/ R0 training programmes TOTAL IMPLEMENTATION BUDGET R 0 sponsors MUNICIPAL BUDGET PER 2016 2017 2018 2019 2020 COST FINANCIAL YEAR R 0 R 0 R 0 R220 000 R40 000 R 260 000
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PROJECT MARKETING SHEET PROJECT Investigate the business opportunities surrounding the current usage of railway and possible passenger railway PROJECT DESCRIPTION This project aims at determining the local demand for commuter services from Durban and Port Shepstone to the three railway stations in Umdoni. The implementation of a commuter system in Umdoni will not only improve the integration of large metropolitan’s and other local municipalities to Umdoni it will also improve the accessibility and travel time and costs currently incurred for commuters.
Access is limited to the more rural areas in the municipality from the activity nodes, it is therefore necessary for to connect commuters to the north and south of the Municipality. Therefore the improvement of linkages to Umdoni will increase access to local and regional markets and strengthen nodes through spatial connectivity. This project will assist with the sustainability and growth of businesses within the Municipality through regional integration and linkages to markets outside the municipal boundaries.
As a result of railway tracks further south of the current stations in Umdoni, there is potential to enhance Umdoni’s public transport network, as these lines are already electrified and in use by Spoornet. It is proposed that the current use of railway lines for commodities be extended to include the creation of passage railway lines in order to connect people to potential business opportunities. The implementation of such a project will promote Umdoni’s strategic location and the opportunities for business development. STRENGTHS AND OPPORTUNITIES POTENTIAL IMPACTS Transport sector spin-offs Job creation from spin-offs including business, Increased access to markets utilities, transport. Capitalise on regional buyers, tourists, business Ease of access to other major areas visitors Decreased travel time Capitalise on the regional location of Umdoni Decrease in traveling expenses Common Wealth Games in Durban in 2022 POTENTIAL BENEFICIARIES TARGET MARKET All residents and visitors both locally and All local commuters and tourists regionally ROLEPLAYERS APPROXIMATE CAPITAL COST Umdoni Local Municipality departments R 300 000 for the investigation into market Ugu District Municipality demand and supply for the use passenger railway Department of Transport in Umdoni Local Municipality. An additional Umdoni Business Chamber R250 000 budgeted for compliance and marketing Passenger Rail Agency of South Africa (PRASA) purposes.
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PROJECT IMPLEMENTATION SHEET PROJECT Investigate the business opportunities surrounding the current usage of railway and possible passenger railway THRUST Regional and Rural integration and support PROGRAMME Regional Integration PROJECT PRIORITY 8 KEY SUCCESS FACTORS KEY RISKS AND CHALLENGES Detailed needs and potential market available High capital investment for passenger carts Targeted promotion of opportunities available Lack of buy-in from local business communities through the use of such a service Safety and security issues of passengers POTENTIAL SOURCES OF FUNDING South Coast Development Agency – Critical Infrastructure Porgramme Department of Transport Transnet / Passenger Rail Agency of South Africa KEY IMPLEMENTERS Umdoni Local Municipality LED Unit Department of Transport FACILITATION ACTIONS 2015 2016 2017 2018 2019 COST Identify and appoint consultants for a market analysis for a passenger railway line Liaise with local stakeholders to identify Internal their involvement Identify possible business development opportunities Develop partnership with PRASA for the project TOTAL DEVELOPMENT FACILITATION BUDGET Internal IMPLEMENTATION 2015 2016 2017 2018 2019 COST ACTIONS Develop market demand R 300 000 and supply analysis Comply with legislative and customs R 100 000 requirements and procedures Negotiate and establish PRASA passenger networks Assist in marketing and promoting products and R150 000 services TOTAL IMPLEMENTATION BUDGET R 550 000 MUNICIPAL BUDGET PER 2015 2016 2017 2018 2019 COST FINANCIAL YEAR R 0 R 0 R 0 R200 000 R 350 000 R 550 000
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PROJECT MARKETING SHEET PROJECT Conduct a feasibility to establish a recycling cooperative in Park Rynie PROJECT DESCRIPTION The aim of this project is to establish various recycling cooperatives in Umdoni Local Municipality. The project entails the establishment of recycling collection points at strategic locations within the Municipal area (such as beaches, shopping centres, etc.) and the development of recycled products. The recycled goods are then collected transported to the Cooperative at the Material Recovery Facility(possibly in Park Rynie), where they will be processed and various products can be manufactured from the recycled goods, such as packaging material, plastic furniture, gifts, arts and crafts, ,handmade paper and compost from organic materials. It is important to have a mixture of informal and formal collection /sorting /recovering and recycling activities. The most effective method of informal collection of waste for these recycling activities is through the establishment of various cooperatives in the smaller towns or rural areas. This allows the municipality to initiate a plan which promotes social involvement together a more pro-poor focus in the implementation of waste services. The municipality needs to provide land or dedicated areas with adequate infrastructure where selected wastes can be provided and sorted by pickers in the co-operative. A number of small sized co- operatives with 2-5 members each are envisioned in order to cover all the towns or small areas in Umdoni Local Municipality. In the long term, the roll-out of these co-operatives will work along the lines of an “octopus” analogy, where the body of the octopus represents the Materials Recovery Facility (recycling facility) and the tentacles of the co-operative are envisioned to be at the various drop-off/collection points which serve poorer areas. These waste drop-off points are envisioned to be managed by cooperatives. The proposed initiative intends to contribute to the improvement of municipal waste services through community-based recycling in the form of co-operatives as a means to foster job opportunities for disadvantaged persons. The Materials Recovery Facility then proceeds to produce various recycled products for the sale to the public. Through this project, a culture of recycling will be developed within the local municipality. A lot of money is spent yearly to clear up litter and illegally dumped rubble which could have been better utilised for socio-economic development. Separating recyclable materials, glass, paper, metals and plastics out of the waste streams, reduces the bulk of waste going to landfills, eases the strain on natural resources, and helps to create employment in both the informal and formalised waste reclamation sectors. STRENGHTS AND OPPORTUNITIES POTENTIAL IMPACTS Undeveloped and vacant municipal land in Park Income generation Rynie Cleaner environment Improving the overall state of the environment Showcasing the Municipality as “going green” and concerned with sustainability and community involvement POTENTIAL BENEFICIARIES TARGET MARKET Local communities Local beaches and shopping centres Local unemployed –especially women, youth & National Recycling Forum, and/or its associated disabled members ROLEPLAYERS APPROXIMATE CAPITAL COST Umdoni Local Municipality R 150 000 for the feasibility study. Local communities R 280 000 for the recycling bins at strategic Department of Environmental Affairs locations and for the establishment of the Recycling Centre/Cooperative & partnerships
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PROJECT IMPLEMENTATION SHEET PROJECT Conduct a feasibility to establish a recycling cooperative in Park Rynie THRUST Green Economy Development & Diversification PROGRAMME Green economy development PROJECT PRIORITY 9 KEY SUCCESS FACTORS KEY RISKS AND CHALLENGES Buy-in from local communities and awareness Buy-in and cooperation from local community amongst them Reluctance of people to work in a dirty environment Partnership between the Recycling Manufacturing Centre and local strategic points (beaches/shops) POTENTIAL SOURCES OF FUNDING KEY IMPLEMENTERS Umdoni Local Municipality Umdoni Local Municipality LED Unit Ugu District Municipality Department of Environmental Affairs Department of Environmental Affairs Recycling industries FACILITATION ACTIONS 2016 2017 2018 2019 2020 COST Identify LED facilitator Liaise with potential roleplayers to attain buy-in Internal Create awareness and enthusiasm TOTAL DEVELOPMENT FACILITATION BUDGET Internal IMPLEMENTATION 2016 2017 2018 2019 2020 COST ACTIONS Undertake feasibility and R 150 000 business plan development Establish a cooperative/ centre for the R 200 000 manufacturing of recycled products Facilitate the finalisation of partnerships between recycling cooperative and R 80 000 strategic points (beaches, shops) Continue working with the community to establish and Internal maintain a recycling culture Monitor and evaluate Internal project TOTAL IMPLEMENTATION BUDGET R 430 000 MUNICIPAL BUDGET PER 2016 2017 2018 2019 2020 COST FINANCIAL YEAR R 0 R 0 R 0 R 150 000 R 280 000 R 430 000
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6.3.2 Summary of prioritised projects The table below provides a summary of the prioritised projects as discussed in the preceding section.
TABLE 6.8: SUMMARY OF PRIORITISED PROJECTS
Implementation Total municipal Approximate Municipal budget (if budget (if Project Name capital facilitation implemented implemented
Priority requirement budget internally) internally) Umdoni Gateway 2 1 R 430 000 R 0 R 430 000 R 430 000 Opportunity database Beachfront Master Plan 2 R 360 million R 600 000 R 370 000 R 970 000 implementation Blue Flag accreditation 3 R 620 000 R 0 R 620 000 R 620 000 TC Robertson Nature To be 4 R 0 R 450 000 R 450 000 Reserve upgrading determined Revitalise small grower 5 R 740 000 R 0 R 740 000 R 740 000 sugarcane sector Multi-purpose To be 6 R 300 000 R 0 R 300 000 Agricultural centre determined Youth Small Business 7 R 260 000 R 0 R 260 000 R 260 000 Development Centre Railway Commuter To be 8 R 0 R 550 000 R 550 000 System determined Recycling Centre/ To be 9 R 0 R 430 000 R 430 000 Cooperatives determined
The following table (Table 6.9) provides an indication of the budget roll-out for project implementation from the LED unit.
TABLE 6.9: BUDGET ROLL-OUT FOR IMPLEMENTATION OF PRIORITY LED PROJECTS Budget (in Rands) per Financial Year Project Name 2016 2017 2018 2019 2020 Umdoni Gateway 2 R 230 000 R 50 000 R 50 000 R 50 000 R 50 000 Opportunity database Beachfront Master Plan R 570 000 R 100 000 R 100 000 R 100 000 R 100 000 implementation Blue Flag accreditation R 150 000 R 50 000 R 340 000 R 40 000 R 40 000 TC Robertson Nature R 0 R 300 000 R 50 000 R 50 000 R 50 000 Reserve upgrading Revitalise small grower R 0 R 450 000 R 210 000 R 40 000 R 40 000 sugarcane sector Multi-purpose R 0 R 0 R 200 000 R 100 000 R 0 Agricultural centre Youth Small Business R 0 R 0 R 0 R 220 000 R 40 000 Development Centre Railway Commuter R 0 R 0 R 0 R 200 000 R 350 000 System Recycling Centre/ R 0 R 0 R 0 R 150 000 R 280 000 Cooperatives Total R 950 000 R 950 000 R 950 000 R 950 000 R 950 000
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The following table (Table 6.10) provides an indication of the stakeholders to be involved with the priority projects and the potential sources of funding. In most instances the lead role-player is the LED Unit if Umdoni LM as it is the custodian of the LED Strategy and local economic development from a governmental point of influence.
Key supporting roleplayers include the entities or bodies that directly implement and facilitate the roll- out of the project, beyond the scope of the Umdoni LED unit. Often these role-players are also the funders of the project or action. Their position, in the context in which the project or action is intended to be implemented, is often of much importance.
On the other hand, some of these role-players do not as yet have a stake in the project or action, but if buy-in and support is attained from them during the course of the roll-out, their roles may become increasingly important.
TABLE 6.10: PRIORITY PROJECTS STAKEHOLDER MATRIX Potential funding Priority Project Lead Support role-players sources IDC Umdoni Gateway Ugu DM DTI 2 Opportunity Umdoni LED unit Umdoni IT dept SEDA database SCDA Beachfront Ugu DM Private investors Master Plan Umdoni LED unit USCT USCT implementation
USCT Ugu District Private investors Blue Flag WESSA Blue Flag Umdoni LED unit Dept. of Tourism accreditation USCT Dept. of Local businesses Environmental Affairs
Ugu DM USCT TC Robertson Umdoni LED unit SCDA Ezemvelo KZN Nature Reserve TC Robertson Nature Ezemvelo KZN Wildlife upgrading Reserve committee Wildlife Local community Dept. of Tourism
Ugu District Farmers Associations Department of & cooperatives Agriculture Agri-SETA Revitalise small KZN Agribusiness Umdoni LED unit Sezela Cane Growers grower sugarcane Development Agency Dept. of Agriculture Association sector (ADA) SACGA Gijima KZN SASA KZN edtea EDTEA Sezela Mill
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Potential funding Priority Project Lead Support role-players sources
Ugu district Dept of Agriculture Esavidi TVET College KZN Agribusiness Multi-purpose Umdoni LED unit Farmers associations Development Agency Agricultural Ugu District LED unit & cooperatives (ADA) centre Dept. of Agriculture Small-scale emerging Gijima KZN farmers KZN edtea
Ugu DM Dept. of Education FET College Dept. of Social SEDA Development Youth Small Dept. of Basic National Youth Umdoni LED unit Business Education Service SEDA Development Dept. of Social Vodacom mobile FET College Centre development education Dept. of labour South Coast Umdoni Business Development Agency Chamber KZN edtea
Ugu DM Railway SCDA Umdoni LED unit Dept. of Transport Commuter Dept. of Transport PRASA/Transnet Umdoni Business System Transnet/PRASA Chamber
Local communities Dept. of Ugu DM Recycling Centre/ Umdoni LED unit Environmental affairs Dept. of Cooperatives Ugu DM Environmental Affairs Recycling industries
6.3.3 Location of Priority Projects Once the project to be implemented has been identified, the next step would be to determine where it will be location. These considerations include the area and town of choice. Thereafter it is important to see whether there is land available. Aspects that investors look to when doing a site assessment includes: Proximity and accessibility to transport routes and/or the target market Proximity to the inputs such as raw materials and labour Communities that are forward looking and exhibit a high standard of land management Informed communities who understand the value of the development and also have data on their own needs, strengths and weaknesses That proper due diligence of the site has been conducted in terms of any rezoning or Environmental Impact Assessment Planning procedures to be followed and that the bulk and geotechnical capacity is appropriate for the development
The following table (Table 6.11) indicates the suggested locations for the identified and prioritised projects in terms of area.
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TABLE 6.11: SUGGESTED LOCAITONS FOR THE PRIORITISED PROJECTS Project Suggested Locaion Should include businesses/service providers Umdoni Gateway 2 Opportunity database from across the municipality Beachfront Master Plan implementation Scottburgh Blue Flag accreditation Scottburgh, Pennington, Kelso Beach, Park Rynie TC Robertson Nature Reserve upgrading Scottburgh (TC Robertson Nature Reserve) Revitalise small grower sugarcane sector Across the municipality Multi-purpose Agricultural centre Umzinto Youth Small Business Development Centre Umzinto Existing railway stations (Scottburgh, Railway Commuter System Pennington) Recycling Centre in Park Rynie, and collection Recycling Centre/ Cooperatives points across Municipality
The following chapter provides implementation guidelines in order to draw a map of the thought processes in planning project implementation.
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Section 7: Implementation Guidelines Section 7 provides guidelines for the preparation and implementation of the identified LED projects. It will service as an LED implementation manual for the Umdoni Local Municipality’s LED unit after the completion of the LED Strategy.
7.1 Priority Projects Implementation Guidelines
The purpose of this sub-section is to facilitate the streamlined and fast-tracked delivery of the LED Strategy, its Thrusts and Programmes, through the effective implementation of a number of key projects and development facilitation actions. In order to successfully implement the projects, a number of implementation tasks typically need to be undertaken. The following aspects typically need to be addressed in order to facilitate the implementation of projects: Obtain ongoing funding Appoint implementer Finalise ownership Develop detailed business plan Location and facilities (if need arises) Management team Staffing Human resource development Financial and accounting system
These are detailed upon hereunder.
7.1.1 Obtain ongoing funding There are numerous funding sources through which the Municipality can secure financial assistance or loans to support the implementation of the proposed projects. These sources include both private sector establishments and public sector resources. A complete list of potential funding institutions is provided in Annexure A. Find ways to obtain and secure capital; Determine how much money the owners/members have, how much the owners/members are willing to risk, how much they are going to invest, etc. Determine whether or not the owners are going to obtain a loan or make use of investors; Contact all funding sources and development programmes to obtain buy-in and support; Utilise a feasibility study to market the project to potential funders; Compile and submit applications for funding. Please note that funding of development is often one of the most constraining issues faced during the implementation of projects. Development funds is a scarce resource and all sources should be mobilised with due care; Ensure alignment of project with Council policies in order to get funding; Government support mechanism for the SMMEs also need to obtained, as well as other support mechanisms. These programmes aim to assist people to apply for new projects (e.g. close corporation), expansion of an existing project and skills support programmes. Consider utilising an external implementer to attain funding on behalf of the municipality for priority projects on a risk basis. I.e. the external entity is not remunerated for work undertaken in order to
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obtain funding, but should funding be obtained, the said external implementer needs to be appointed to undertake the project implementation (remuneration of which typically entails a 10- 15% implementation fee of the funding obtained).
7.1.2 Appoint an implementer In order to implement the project successfully, a dedicated person needs to take responsibility for the implementation. This can either be done in-house if sufficient capacity and know-how exists, or can be put out on tender for development facilitators (in the short term) or in the medium term obtain assistance from the Ugu District LED Unit. In order to ensure that the implementation and management of the proposed project is driven successfully, the implementer must ensure that the project produces the deliverables to the required standard of quality and facilitate handover of the successfully implemented project. Consequently, the implementer must be appropriately empowered and provided with sufficient decision-making authority to fulfil his or her responsibilities; The project implementer needs to meet regularly with the community/potential owners of the project, as well as with the relevant LED coordinator / tourism & SMME officer/ agriculture and environmental officer (whichever is applicable) on a weekly basis to ensure that the learning process is shared with all members and to effectively evaluate the progress of the project. This will ensure that the LED Unit is capacitated to in future implement projects internally; The implementer must also take responsibility for the following: liaising with the Municipality, project programming and execution, monitoring overall performance of members, undertaking accounting administration of project, time frame management, setting up implementing user agreements, monitoring and managing risks, establishing and enhancing reporting mechanisms, conducting regular team meetings, monitoring quality assurance and deliverable acceptance, monitoring construction and skills training phases, producing monthly progress reports and status reports in order to ensure that the project aligns with the required outputs, timeframe and budget.
7.1.3 Finalise ownership Identify stakeholders/businesses/community members interested in becoming involved in the proposed project; Identify local communities and role-players/stakeholders (such as Government departments, Traditional Authorities, parastatals, NGOs, CBOs, emerging SMMEs, etc.) that need to be involved in planning and decision-making processes; Undertake strategic workshops to engage with relevant project stakeholders. This includes obtaining local business interests with regards to the projects and to obtain community-based interests. It is essential that this participation be fostered, as the acceptance of the outputs of the project needs to be in line with business and community desires. The purpose of these workshops will also be to ascertain stakeholder visions for the project, so that key issues not previously raised can be taken into consideration. It is essential to obtain such input from the start of the project; Undertake negotiations with the community, private sector businesses/funders interested in partnerships, government departments, support organisations, etc. to finalise ownership. The negotiations should include determining what possible partnerships can be forged with; and Hold introductory meetings with existing (or proposed beneficiaries) of the proposed projects. The purpose of this introductory meeting will be to explain the purpose of the project to the beneficiaries so that they are able to make informed decisions regarding the project at a later stage.
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7.1.4 Develop a detailed business plan Once the body responsible for implementation (either internal or external) has been identified, such a person needs to develop a detailed action plan (as part of the business plan), which consists of: project scope and work breakdown structure, programme and milestones, agenda’s and minutes of meetings, correspondence, progress reports, communication schedule, coordination of parties involved, timeframe management, working capital, liaison with end users, ongoing monitoring plan, facilitation and final handover, etc. The action plan needs to identify: whether each action is really required for reaching the vision; will these actions allow you to reach all of the defined objectives; will these actions remove all of the identified issues; will these actions allow you to reach the identified critical success factors; and can you do these actions for the expected investment? A detailed business plan needs to be developed and should contain the following guidelines and actions to facilitate the implementation: project description, vital issues that need to be addressed before the business can be started, economic impact, key role-players that need to take responsibility for the development, nature and possible sources of additional financing for the business, facilitation plan (what needs to be done to ensure successful implementation), implementation timeframe and phasing, institutional arrangements (Legal form of ownerships and responsibilities, strategic partners, organisational structure, internal monitoring mechanisms), operating plan, forecasts and timeframes, financial requirements, income creation to ensure breaking-even, final capital costs, operating costs, outputs and outcomes, resource requirements, budget, cash flow, funding sources, investment opportunities, returns, income/expenditure and revenue stream, balance sheet, etc. Such a business plan is often required in order to obtain funding (see first step – Obtain ongoing funding). Business plan assessment and refinement is also needed. This entails: ensuring attainable vision, goals, strategies and objectives, ensuring that detailed outcomes and project indicators exist, ensuring alignment to policy frameworks, obtaining a detailed understanding of risks and identifying risk ameliorations, verifying timeframes for implementation, revising financial plans and resource requirements, ensuring effectiveness – to ensure it contains all that investors need to know, etc. Other actions that need to be undertaken to ensure the successful implementation of a project include: determining the income and expenditure of the project over a three-year period, giving an indication of the monthly profit/loss, establishing how any profits will be re-invested into the project, how the project will break even and the sustainability of the project; determine what type of record keeping will be required; identify which associations need to be joined; etc.
7.1.5 Location and facilities (if need arises) Finalise location and position of the potential project; Determine requirements in terms of location such as identifying local authority regulations and permits needed for business in the area; Insure acceptance of location by those involved; Appoint architect/specialist for design of floor layout plan to ensure most efficient layout of space; Determine detailed costs of the buildings required in terms of size, parameters, and rental requirements, where applicable; Appoint specialists as and when needed, such as quantity surveyor, architect, construction company, etc.
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Fast track approval of building plans, the provision of bulk services, etc. Provide assistance with regards to preparations of the sites and buildings to accommodate the project, as well as the purchase of equipment and tools required; Obtain quotes for costs and discuss with owners; and The construction processes also need to be monitored to ensure its timely completion and to ensure that all aspects of the project are implemented successfully.
7.1.6 Management Team Finalise partnerships with other entities/support organisations/initiatives where appropriate; Finalise exact legal requirements for type of company/co-operative/association; Contact institute involved and obtain requirements for the registration of the company; and The personality, professional and social competence, and motivation of the team also need to be evaluated so as to ensure successful implementation.
7.1.7 Staffing Assist with the identification and appointment of a manager. This position is extremely important, as the manager will drive the entire project and provide the necessary assistance and mentorship to members/staff/permanent workforce. Ensure that adequately skilled workers are appointed (where appropriate) for the proposed project; and Develop detailed job descriptions in association with owners, including roles and responsibilities.
7.1.8 Human Resource Development Identify needs through research, meetings, seminars and workshops with similar type projects and related staff; Undertake the identification of training and technical needs of similar type companies in collaboration with relevant and interested organisations, e.g. SEDA; Identify cost of training required. The training required should include access to technical training in order to operate the machinery involved in manufacturing processes if projects require this type of skill; Identify sources of training; Negotiate with existing similar type business owners and managers in Umdoni Local Municipality who are willing to be involved in skills transfer, mentorship and assistance in respect of business management, market penetration, registration, etc. Request assistance from the LED forum members in this regard. Contact and rope in relevant SETA’s; Monitor the training programmes to meet these needs; and Ensure that staffing teams have: complementary skills and strengths, shared vision, flexible approach to problems, sticks together etc.
7.1.9 Financial and accounting system Effectively manage cash flow and funding resources of the proposed project; Efficient management of working capital includes the following: reducing the duration of the working capital shortage (and hence reducing the cost of the product due to lower interest expense), selecting the best option available for financing any working capital shortfall, ensuring that the time
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required to bring the product to the market is not underestimated, ensuring that market acceptance is not overestimated – realistic goals are required, the need for increased working capital must be taken into consideration as turnover rises, not to use short-term finance for long-term requirements, make allowance for peak cash requirements just prior to month end, make allowance for monthly salary deductions, determining how large the companies’ capital requirements will be until break- even, etc. How much cash will be needed in the worst case? Determining where the capital will come from, what returns investors can expect, determining how profits can be realised, etc.; and The financial and accounting system needs to be implemented.
7.2 Conclusion
While all of the aspects covered in the preceding subsections need to be addressed in implementation, some of the critical success factors required to ensure successful implementation include:
The development of a feasibility and business plan Lodging applications with financial sources and lobbying and determination of the amount of subsidies available The identification of appropriate partners/beneficiaries and type of ownership The identification of skills requirements The establishment of appropriate linkages with existing similar type enterprises for the provision of practical advice and mentorship, as well as the possible formation of an advisory board
Furthermore, Section 6 of this strategy provided the complete LED Framework with a comprehensive list of Programmes, Projects and Development Facilitation Actions. If these are addressed, and implemented successfully, the Municipality should be able to reach its goals of poverty alleviation through the creation of employment opportunities by primarily utilising local resources.
However a ‘vital issues’ approach needs to be undertaken. That is, not all of the above-indicated programmes, projects and actions, should or could (given financial and human resources constraints) be implemented simultaneously. The Economic Framework set out in this Strategy should thus be implemented in a phased manner, necessitating a focussed and progressive approach towards the implementation of certain programmes and projects throughout the LED Process. Nonetheless, equal attention should be given to each of the thrusts so as to avoid the creation of economic sector dominance on the one hand and dependence on the other.
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Section 8: Strategic Framework The purpose of this section is to provide a strategic framework for the implementation of the LED Strategy. This Section address strategic aspects of Local Economic Development, such as institutional arrangements, the relationship of LED to other municipal, provincial and government structures, factors in development facilitation, marketing, integrated programming and performance monitoring.
This Section constitutes the following: Legislative background and LED roles and responsibilities An analysis of the existing institutional structure and framework Recommendations regarding the most appropriate institutional structure and organogram Monitoring and Evaluation Guidelines & Procedures
8.1 Legislative Background & LED Roles and Responsibilities
This sub-section is aimed at firstly clarifying the legislative background against which Municipalities are tasked to implement local economic development in their areas of jurisdiction and the roles and responsibilities.
The cornerstone for all legislation and policy-making in South Africa is the Constitution (No 108 of 1996). Chapter 7 of the Act defines the role of local government in its community, and five objectives of local government are outlined in section 152: To provide democratic and accountable government for local communities. To ensure the provision of services to communities in a sustainable manner. To promote social and economic development. To promote a safe and healthy environment. To encourage the involvement of communities and community organisations in the matter of local government.
Furthermore, section 153 of the Constitution stipulates the following developmental duties of all municipalities: A municipality must structure and manage its administration, budgeting and planning processes to give priority to the basic needs of the community, and to promote social and economic development. A municipality must participate in national and provincial development programmes.
The Medium Term Strategy Framework builds on the successes of democracy, and is a framework which identifies South Africa’s development challenges and outlines the medium-term strategy for improvements in the conditions of life of the citizens of South Africa. The aim of the MTSF is focussed on sustaining higher GDP growth, job creation, investment and exports, as well as broadening economic participation and activity through Black Economic Empowerment and enterprise development. Planning and resource allocation across all the spheres of government should be guided by the MTSF. The MTSF provides: A translation of the electoral mandate. Priorities for the next 5 years Focus on economic investment and growth
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An expansionary fiscal outlook
The South African Government has also determined that a growing consensus exists in that to create decent work, reducing inequality and defeating poverty a new growth path has to be established through the restructuring of the South African economy to improve its performance in terms of labour absorption as well as the composition and rate of growth in the New Growth Path for South Africa. The new growth path has been developed to be a new alignment of economic objectives and growth initiatives building on the previous growth initiatives GEAR and AsgiSA which sought to half poverty by 2014 and create economic recovery by raising economic growth to 6%. The new growth path is based on determining: Where employment opportunity creation is possible, both within economic sectors as conventionally defined and in cross-cutting activities and, Analysis of the policies and institutional developments required to take advantage of these opportunities.
National Government have designed 14 Outcomes for Government and all its service delivery functions. The 14 Outcomes are based on a concept of The Outcomes Approach which is essentially a strategic approach which focuses on achieving the expected real improvements in the life of all South Africans. The outcomes approach broadly defines what is expected to be achieved, how it is to be expected to be achieved and whether the outcomes are being achieved. The overall goal of the 14 outcomes that have been designed is to ensure that government does not just carry out the functions it is supposed to but to ensure that results from these functions are achieved and show impacts on the lives of South Africans. The outcomes approach mainly: Focuses on results, Makes explicit and testable the chain of logic in our planning, so we can see the assumptions we make about the resources that are needed, Links activities to outputs and outcomes and to test what works and what doesn’t, Ensure expectations are as clear and unambiguous as possible, Provides clear basis for discussion, debate and negotiation about what should be done and how it should be done, Enables learning and regularly revising and improving policy, strategy and plans through experience, and Makes co-ordination and alignment easier.
The 14 Outcomes have been based on the Election Manifesto and the Medium Term Strategic Framework (2014-2019), as well as consultation on ministerial and administrative levels. The outcomes are a representation of the desired development impacts to be achieved by government’s policy priorities. The 14 Outcomes are listed as: Quality basic education A long and healthy life for all South Africans All people in South Africa are and feel safe Decent employment through inclusive growth A skilled and capable workforce to support an inclusive growth path An efficient, competitive and responsive economic infrastructure network Vibrant, equitable and sustainable rural communities towards food security for all Sustainable human settlements and improved quality of household life
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Responsive, accountable, effective and efficient local government Protect and enhance our environmental assets and natural resources Create a better South Africa and contribute to a better Africa and a better World An efficient, effective and development orientated public service A comprehensive, responsive and sustainable social protection system A diverse, socially cohesive society with a common national identity
The KwaZulu-Natal Provincial Growth and Development Strategy (2011-2030), acknowledges the need to promote and accelerate economic growth and development; and has identified the following strategic goals and objectives for the 20 year period: Strategic Goal: Job creation o Unleash Agricultural Potential o Enhance Industrial Development through Trade, Investment and Exports o Expand Government-led Job creation programmes o Promote SMME, Entrepreneurial and Youth Development o Enhance the Knowledge economy Strategic Goal: Human Resource Development o Improve Early Childhood Development, Primary and Secondary Education o Support Skills alignment to Economic Growth Strategic Goal: Strategic Infrastructure o Develop Ports and Harbours o Develop Road and Rail networks o Develop ICT infrastructure o Improve Water Resource Management and Supply o Improve Energy Production and Supply Strategic Goal: Human and Community Development o Alleviate Poverty and Improve Social Welfare o Enhance Health of Communities and Citizens o Safeguard Sustainable Livelihoods & Food Security o Sustain Human Settlements o Enhance Safety & Security o Advance Social Cohesion o Promote Youth, Gender and Disability Advocacy & Advancement of Women Strategic Goal: Environmental Sustainability o Increase productive use of land o Advance Alternative Energy Generation o Manage pressures on Biodiversity o Manage Disaster Strategic Goal: Governance and Policy o Strengthen Policy, Strategy coordination and IGR o Build Government capacity o Eradicate Fraud and Corruption o Promote participative, facilitative and accountable governance Strategic Goal: Spatial Equity o Promote Spatial Concentration
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o Facilitate integrated Land Management & Spatial Planning
The National Framework for LED aims to serve as a guide that seeks to ensure an understanding of LED and has put forward a strategic implementation approach that municipalities, provinces, national government, state-owned enterprises and communities can follow to improve local economic development. The NFLED seeks to mobilise local people and local resources in an effort to fight poverty. This framework also seeks to guide the implementation of the LED Key Performance Indicator of the 5- year Local Government Strategic Agenda.
LED is not conducted in isolation by a particular municipal department or private sector organisation. It is an integrated strategy that involves a number of key role players, who are responsible for a variety of activities that are imperative to the potential success of any LED strategy. Almost every LED action will, or should, involve the local government to some degree. This is because they are deeply involved in local business activity as suppliers of infrastructure, as tax collectors, through service delivery, resource allocation and as regulators of land, buildings and activities.
National roles and responsibilities are outlined below: Provide an overall policy and strategic framework for LED at provincial & local government levels; Provide legislative framework for LED; Provide a framework for provincial and municipal capacity-building and support systems; Support for key institutions; Obtain support for commitment towards LED; Maintain strong inter-governmental relationships using and strengthening existing IGR institutions; Disseminate information to provincial and local government levels about LED support; Increase administrative efficiency, and Monitor and evaluate the impact of LED nationally
Provincial roles and responsibilities are as follows: Provide a strategic vision and strategy for integrated economic, social and community development through the Provincial Growth and Development Plan (PGDP); Vertical and horizontal integration of the municipal IDPs Training and capacity building for LED; Facilitate LED through financial and technical resources to implement and sustain LED in municipalities; Share information (e.g., provincial economic trends, land use, investment); and Monitor and evaluate the impact of LED provincially.
District roles and responsibilities are as follows: Establish a LED institution which includes the DM and LMs to foster cooperation and coordinate LED policies, structures and projects in the district municipality; Identify “lead” LED sectors within the district that can drive development, by undertaking economic analysis and studies; Collect and disseminate information to assist local municipalities with LED interventions; Identify resource availability (grants available at provincial level, land, infrastructure); Maintain strong relationship with the province;
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Build capacity of LMs in its area to perform their LED functions; Monitor and evaluate LED strategy within the IDP framework. Provide assistance to local municipalities in the accessing of funding; Develop a district-wide LED/Economic Development strategy.
The roles and responsibilities of local municipalities are as follows: Coordinate & manage LED planning within the LM Implement LED projects; Source funding from government and private sector for the implementation of LED projects; Establish a LED institution to coordinate LED activities; Build local capacity over the long term as LED becomes embedded within the municipality’s priorities; Encourage and facilitate public participation in LED; Promote inter-departmental collaboration; Promote and organise PPPs Establish sector linkages; and Monitor and evaluate the implementation of the LED strategy and specific LED projects.
The roles and responsibilities of other roleplayers are as follows: Private Sector: o Establishment, management and operation of business enterprises to the benefit of the enterprise and the community of the local area; o Sustainable employment creation, income generation and investment; and o Capacity building of personnel. Labour/NGO/CBO sector: o Provide support to economic growth and development policies, strategies and the implementation of opportunities within the context of sustainable development. Local/national/international donor organisations: o Provide funding and economic development support and services within the legislative and institutional context of economic development at national, provincial and local level National & Provincial Development Agencies: o Provide funding and economic development support and services within the legislative and institutional context of economic development at national, provincial and local level.
Appropriate partnership mechanisms between government, the private sector and civil society can enhance the ability of the private sector to accelerate job creation within an LED programme. This is to ensure that social capital is nurtured at the local level, empowered and drawn upon. Overall, in line with international best practice, local government is allocated a facilitative or enabling role in LED processes.
Outside of government, an important role is played in LED by a number of other key stakeholders, namely the South African Local Government Association (SALGA), the Development Bank of Southern Africa (DBSA), Department of Local Government (DPLG), Department of Trade and Investment (Dti), Integrated Development Corporation (IDC), Small Enterprise Development Agency (SEDA), etc. The aforementioned should all engage in a process which defines complementary roles for each partner rather than the existing situation of overlapping roles and responsibilities. Finally, a valuable role is assumed in the
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8.2 Institutional Structure of Umdoni LED Unit
8.2.1 Existing Institutional Structure of the LED Unit The function of Local Economic Development (and the current LED Unit) falls under the Directorate Planning and Development, which reports to the Municipal Manager. Figure 8.1 presents the current organisational structure of the Directorate Planning and Development. It should be noted that vacant positions are indicated by a green colour, whereas filled positions are indicated by blue. As is evident from the Figure, the Directorate is currently severely under capacitated, with 9 vacant positions.
From the current organogram, it is clear the LED Unit is severely understaffed and not multi-disciplinary, with only a Manager for Development currently being employed on a 5 year fixed term contract. It is a great concern that the LED unit does not have LED officers to be able to undertake the work. Based on the organogram, it is clear that the LED unit currently has no capacity and it is therefore evident that the municipality will not be able to achieve its targets in terms of local economic growth given the institutional capacity.
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FIGURE 8.1: CURRENT ORGANISATIONAL STRUCTURE: DIRECTORATE PLANNING AND DEVELOPMENT
Source: Umdoni LM LED Unit, 2015
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8.2.2 Programme and Project Implementation Requirements of the LED Unit Developing an effective institutional structure and framework for a municipality such as Umdoni Local Municipality is often challenged by various factors such as funding availability to employ more LED officers, identifying the skills shortages and filling the gaps where responsibilities of the LED Unit are not being met, working within the political and economic context of the municipality and being able to construct an institutional structure and framework that will appropriately address needs of that context.
The purpose of this section is to offer viable options for the institutional arrangements of the LED Unit of Umdoni LM, taking into account the proposed organisational structure (as illustrated in Figure 7.2). Recommendations will be provided for the short-, medium-, and long- term restructuring possibilities.
To ensure that the LED Strategy is properly implemented and focuses on key LED factors such as poverty alleviation, job creation, SMME development there are several standard actions that key roleplayers must undertake. These include: Capacitate the LED Unit with competent and relevantly skilled people before beginning with implementation of LED programmes and projects Facilitate the successful roll-out of programmes and projects by implementing those that have been identified as immediate priority, followed by the medium- and long-term projects as prioritised in the previous Section. Develop reasonable timeframes and monitor the time schedule monthly or weekly in order to effectively evaluate the progress of all necessary actions Create a balance between noticeable economic growth and stimulating local community empowerment in order to have more sustained LED Job creation and implementation of projects must be primarily undertaken by the local community, not through the utilisation of external service providers and workers Ensure that vital financial resources, equipment and human capital are have been accessed and are in place for utilisation prior to the roll-out of programmes and projects.
Appointed LED institutions/role-players must be operational at Programme- and at Project level. At Programme level, institutions are tasked with coordinating development initiatives (see Figure 8.2); while at Project level the institutions have definitive tasks, budgets and timeframes.
The priority LED Programmes that require coordination are: Mentorship and Support Agro-processing and niche produce development Emerging farmer support and Skills Development Sustainable and diversified agricultural development Green Economy Promotion SMME and Business Development Tourism Growth and Development
Whereas LED projects may be managed and driven through the support from a number of different institutions. The Municipality however needs to coordinate the project initiatives by drawing them together into a coherent LED Programme for the area. However, while Project level institutions can comprise institutional arrangements outside of the Municipality, it should be stressed at the outset that Municipalities remain politically accountable for LED and cannot delegate political responsibility to other
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FIGURE 8.2: RESPONSIBILITIES OF PROGRAMME LEVEL INSTITUTIONS WITH PRIORITY PROGRAMMES IDENTIFIED IN THE LED STRATEGY
Given the large variety of projects that could be implemented as part of local economic development, it is impossible to provide details of specific institutional arrangements for each project. However, certain aspects are characteristic of successful Project level institutions, regardless of the projects they are involved in.
The priority projects with definitive tasks, budgets and timeframes to be implemented include: Develop a Multi-purpose Agricultural Centre and Distribution Depot Support and enhancement of the small grower sugarcane sector Business Plan for TC Robertson Nature Reserve Implementation of the Beachfront Master Plan Conduct a feasibility to establish a Recycling Centre in Umdoni Accreditation of Umdoni Beaches to Blue Flag Status Compile and maintain an Umdoni Gateway 2 Opportunity Database Establish a local youth small business development centre Investigate possibility of a Commuter System with new passenger railway linkages/routes
8.2.3 Proposed Institutional Structure of the Umdoni LED Unit The Umdoni Local Municipality has a dedicated LED unit which does not share its functions with IDP unlike many other municipal organisation structures in the country. It is however imperative that the capacity of the LED Unit and any shortcomings in this respect is addressed at the outset, to ensure the efficient implementation of this Strategy.
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The capacity of any LED unit is dependent on its staffing levels, the levels of skills possessed by appointed staff, the available budget for the operation of the unit and for the implementation of projects, the commitment on the part of the Municipality and the presence of the necessary facilities to effectively complete its tasks.
Figure 8.3 presents the proposed organisational structure for the Umdoni Local Municipality’s Planning and Development Division, focusing on the proposed changes to the LED unit. It is evident from the figure that focus is being placed on tourism, agriculture and SMME creation, with each of these sectors having a proposed dedicated LED officer.
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FIGURE 8.3: PROPOSED DRAFT ORGANISATIONAL STRUCTURE: ECONOMIC DEVELOPMENT AND PLANNING
Source: Kayamandi, 2015
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8.2.4 Outsourcing Projects for Implementation A specific role for the implementation of projects also needs to be created within the LED Unit, to ensure that LED initiatives do not remain only identified projects, but is successfully facilitated. Dedicated LED implementing post is thus needed and it is suggested that the Senior LED Officer fulfil this role. This role requires focussed management and development facilitation of specific projects, including the targeting of support agencies and funding sources, the development of the required infrastructure, etc. This would include determining the feasibility of the projects in terms of demand and supply factors, potential stakeholders, potential impact in terms of employment, economic development potential, etc. Once feasibilities have been undertaken, promotion of the feasible projects to private sector stakeholders and funding institutions, and development facilitation to identifying stakeholders/partners, identifying suitable location and building, appointment of specialists (as and when required), providing training on way forward for implementation, etc. follows. The first step prior to implementation is to submit applications for funding and the ensure capacity- building and availability for project implementation.
As such, it is advised that an interim or second option entail outsourcing of the projects for development facilitation, to overcome budget and capacity constraints. In this instance the LED Unit could play a larger coordinating role at programme level, concentrating its efforts on the identification of LED programmes and projects, planning for LED programmes, consultations, etc. The implementation of specific projects can then be outsourced as many municipalities are currently undertaking. This means that all of the time consuming aspects such as feasibilities, marketing, sourcing financing, sourcing investors, undertaking training, etc. are all outsourced. It is thus suggested as an interim measure that the implementation of projects get outsourced.
Throughout the country limited success is being achieved with regards to implementation of LED strategies. Umdoni Local Municipality should move beyond strategy development by implementing project opportunities contained in the LED strategy in order to obtain much needed local economic development. However, lack of funding, shortage of resources, and lack of capacity are some of the most constraining issues faced during the implementation of projects.
As such, it is proposed that implementing agents be endorsed by the Municipal Manager to submit applications for funding to various entities such as the DBSA, IDC, DTI, etc. of projects contained within the approved LED strategy of the municipality. This will greatly assist the municipality, because in order to attain economic development it is critical that funding for priority projects be obtained so that the municipality can move beyond strategy development into actual delivery and job creation in line with national and provincial policy directives.
Implementing agents thus require permission to apply for funding to initiate the process of getting the projects on the ground through packaging funding applications accompanied with covering letters, motivations, concepts, etc. The professional work to be undertaken could be borne by the implementing agents on a risk basis and all professional work undertaken will be voluntarily and without payment. In return, the implementing agents will obtain funding for being the project implementers as part of the grant applications and will thus ensure implementation and realisation of the projects, for which funding has been obtained. In this regard, the implementing agents will have separate agreements in place with potential funding providers. The municipality will thus in no way be liable for providing the implementing agents with any fees related to professional work for
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The purpose of endorsing professionals is thus merely to provide the implementing agents with consent to apply for funding of Local Economic Development (LED) projects within the jurisdiction of the local municipality, as identified in the municipalities approved LED strategy, in order to initiate the process of getting LED projects on the ground.
8.3 Capacitation and Human Capital Development
The following local conditions contribute deeply to the building blocks of LED and needs to be in place to ensure economic growth within the Local Municipality: A strong local institutional presence with a variety of organisations, financial bodies, business chambers, trade unions, local and regional authorities, development agencies, innovation centres and marketing entities are vital to provide an ensemble of services and representative functions A high level of interaction between local organisations, in the form of regular formal and informal communication and at all levels of authority. Information exchanges, collaborations and cooperation between these entities are also necessary and provide the opportunity for organisations to adjust to the changing economic environment in relation to one another. Social norms and behaviour will collectively shape a certain social atmosphere which will help build trusting relationships between people and organisations Shared awareness of being part of a common enterprise. This will produce a common agenda which can both develop and influence patterns of relative power to establish trusting relations and local legitimacy. A widely held and accepted project will mobilise a large area of stakeholders with efficiency and speed Patterns of coalition and structures of power will decrease silo-behaviour or sectionalism. It will assist with coordination of projects and the sharing of costs. The structure of the entity relationships in the region will reflect on the power base of the organisations, their resources, the financial capacity and stability, and their independence from influential external factors.
It is this concept that will inform the elements of capacity building and human capital development that are discussed below.
8.3.1 LED Unit Capacity Building and Human Capital Development It is not sufficient to only increase the number of personnel that is employed, but also that the right personnel with the appropriate qualifications, experience and training is appointed. None the less, it may be necessary for staff appointed to the LED Unit to undergo training specific to local economic development in Umdoni Local Municipality.
This training could include aspects such as the context-specific economic theories that underline local economic development, basic concepts and influences on economies, procedures related to LED in Umdoni Local Municipality, and undertaking situational analyses to understand the socio-economic and economic profiles of the Municipality. Training should also include the skills to identify opportunities and constraints and the conversion of these opportunities and constraints into programmes and viable projects, learning how to compile and evaluate feasibility studies, gain access
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8.3.2 Financial Capacity Building In addition, the financial capacity of the LED Unit must be continuously improved and maintained. It has been indicated that the Local Municipality have a budget available of an annual amount of R 950 000 for the implementation of viable LED projects that are able to make as sustainable difference in the local economy.
It should however be anticipated that the Municipality will not always be able to commit to such as generous budget towards LED. It is therefore suggested that an alternative such as a pool fund be considered, which is a fund that receives contributions from different agencies, and also internally, to finance a set of budget lines or activities agreed as eligible in support to a sector programme. As such eligibility criteria need to be agreed upon. LED projects requiring grants can then loan from and repay from this LED pool fund so as to ensure continued funds are available for future LED projects.
An interim alternative aimed at overcoming the limitations of the current LED Unit in terms of capacity (and potential future budgetary) constraints, involves the outsourcing of the projects for implementation by separate implementing agencies.
8.3.3 Capacity of the Implementing Agent Certain characteristics of implementing agents/institutions are essential for successful project delivery. These characteristics must be actively sought in the institutions to which tenders are awarded or to implementing agents that are endorsed to obtain funding for the implementation of LED Projects. The implementers appointed should: Have the ability to produce effective results Have sufficient staff capacity to implement the project efficiently Have the ability to mobilise sufficient finance and human resources for the project Have the ability to transfer skills from any outside agents involved to the municipality and community members to build in-house capacity where applicable Match LED objectives and strategies of the project Build and inspire confidence among the stakeholders Minimise the potential liability of the LED programme institution, the Municipality and other stakeholders if the project experiences problems Monitor the progress of the project Meet the requirements of government legislation and commercial law
Should the route of appointing external expertise be followed in the interim period, it is imperative that the implementers appointed contribute to the building of in-house capacity in the medium term, thereby ensuring that the Municipality will eventually be able to implement many of the projects on their own. In other words it is suggested that the implementers whom get appointed create a fitting understanding of the underlying theoretical aspects influencing LED in the Umdoni Local Municipality, equip the local role-players to initiative and drive LED activities, and to enable the generation of LED momentum.
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This can be achieved by involving the LED Unit in the hands-on implementing process of projects from start to finish, allowing the transfer of skills to LED officials. This almost ‘on-the-job’ training approach could include training related to: Identification of local people to become involved in ownership of projects Undertaking strategic workshops to engage relevant project stakeholders Negotiating with communities, traditional authorities, , land owners (where applicable), etc. in finalising ownership Putting projects out to tender by advertising and promoting opportunities for development of projects and evaluating tenders Finding ways to obtain and secure start-up capital Utilising feasibility studies to market projects to potential funders Submitting applications for funding Developing detailed business plans Determining requirements in terms of location, such as licensing and rental, etc. Determining infrastructure requirements of project Obtaining quotes for costs and appointing specialists Finalising legal requirements/registration related to management of projects Appointing appropriately skilled staff and developing suitable job descriptions Identifying training and technical needs of members and sourcing appropriate training Drawing up detailed marketing plans and understanding the markets Developing and implementing efficient financial and accounting systems Undertaking progress and performance monitoring Providing ongoing support and mentorship
8.3.4 External Stakeholder Relations Essentially, the LED Unit cannot undertake local economic development in isolation, particularly in view of its currently constrained capacity. It should seek guidance and involvement from external institutions which could assist in achieving a dynamic, diverse and sustainable economy. It is, therefore, necessary for the LED unit to build relations and coordinate the involvement of various community groups, support service agencies and government structures to successfully implement the Programmes and Projects identified and described in this Strategy.
LED involves local, national and international partnerships (e.g. twinning) between communities, businesses and governments to solve problems; create joint business ventures and build up local areas. It is also necessary that the Umdoni Local Municipality should make use of external support mechanisms by establishing linkages beyond the municipality with a wider group of stakeholders. Appropriate partnership mechanisms between government, the private sector, non-governmental organisations (NGOs) and civil society can enhance the ability of the private sector to accelerate job creation within an LED programme. In this way social capital is nurtured at the local level, empowered and drawn upon by the private sector and active external entities. The roles of these entities are defined below: Private Sector: o Establishment, management and operation of business enterprises to the benefit from the enterprise and the community of the local area; o Sustainable employment creation, income generation and investment; and
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o Capacity building of personnel Labour/NGO/CBO sector roles and responsibilities: o Provide support to economic growth and development policies, strategies and the implementation of opportunities within the context of sustainable development. Local/national/international donor organisations roles and responsibilities: o Provide funding and economic development support and services within the legislative and institutional context of economic development at national, provincial and local level National & Provincial Development Agencies’ roles and responsibilities o Provide funding and economic development support and services within the legislative and institutional context of economic development at national, provincial and local level.
Beyond government, an important role is played in LED by a number of other key stakeholders, namely the South African Local Government Association (SALGA), the Development Bank of Southern Africa (DBSA), Department of Local Government (DPLG), Department of Trade and Investment (DTI), Integrated Development Corporation (IDC), Small Enterprise Development Agency (SEDA), etc. The aforementioned should all engage in a process which defines complementary roles for each partner rather than the existing situation of overlapping roles and responsibilities. A valuable role is also assumed by the activities of the group of international donors, including the European Union, The World Bank, GIZ and DFID.
Successful LED depends on the collective efforts of the public, private and community sectors. Formal and informal structures and processes should be established to ensure all stakeholders are involved and the planning process is well managed.
Figure 8.4 illustrates government support mechanisms that could aid investment promotion in the Umdoni Local Municipality.
The advantages to involving stakeholders include: Stakeholders bring specialist knowledge and different perspectives making the planning process more robust They bring professional, financial and physical resources to the table They legitimise the process by being involved They forestall problems by being engaged in the process Business partners are likely to know much more than local government representatives about the true state of the competitive position of the community By involving higher tiers of government, strategies are likely to benefit from their support (including financial) Local community representatives are likely to be best informed about local problems and opportunities that could be addressed by the LED strategy By involving communities, it is more likely that a volunteer effort could be established to support LED implementation programs Jobs and economic growth are created in the private sector. Government is usually merely a facilitator in this process.
However a ‘vital issues’ approach needs to be undertaken. That is, not all of the above-indicated programmes, projects and actions, should or could (given financial and human resources constraints)
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FIGURE 8.4: GOVERNMENT SUPPORT MECHANISMS
8.4 Monitoring & Evaluation
As highlighted by the LED South African Network, all LED strategies and projects must have specific goals and objectives in order to ensure success. These goals and objectives need to have effective monitoring and evaluation (M&E) focus points that will help guide implementation and deliver successful results.
The Monitoring and Evaluation Pan is an important component of the LED Strategy, as it allows the Umdoni Local Municipality to assess and report on how well it is performing in implementing the Strategy and reaching its goals in terms of local economic development. Monitoring and evaluation can effectively be used to improve how the LED Unit achieves results, as it provides set benchmarks
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Monitoring and evaluation are two separate, but interrelated strategies, which involve the collection of data and reporting on the findings, allowing the Municipality to assess its performance. The monitoring component of the Plan involves the continuous collection and analysis of information in order to compare how well the Strategy and its component Thrusts are performing against expected results. Results-based monitoring, therefore, demonstrates whether a project, programme, or policy is achieving its stated goals.
The evaluation component of the Plan involves assessing the information received during the monitoring process to measure how well local economic development is being implemented in the Municipality. It, therefore, entails analysis of the information and data collected during the monitoring phase. The evaluation component of the Monitoring and Evaluation Plan assesses the efficiency, effectiveness, and sustainability of any individual intervention in the local economy, as put forth by the LED Strategy. The evaluation component is also intended to incorporate lessons learnt into the decision-making process when implementing further development programmes. Both components are essential in the successful implementation of both the Umdoni Local Municipality LED as a whole and the individual Programmes themselves.
Three main priority areas can be identified within the LED Strategy that constitutes the main development thrusts. Proxies to measure success in implementation can be developed for each of these thrusts: Thrust 1: Agriculture support, growth & local value adding Thrust 2: Tourism development & sustainable town revitalisation Thrust 3: Conservation and Green Economy development Thrust 4: Industrial and Business Development Promotion Thrust 5: Regional and Rural Integration and Support
Examples of performance indicators have been selected for each of the three thrusts in order to develop an index to measure the success of each thrust. The following indicators were selected for each thrust:
8.4.1 Agricultural Growth & Local value-adding Index Employment and GDP growth in the agricultural and agro-processing sectors are used as indicators of the development and expansion of the agricultural sector, on the bases that as the sector develops there will be increasing opportunities for job and GDP growth, and in addition the number of new agriculture products introduced to the area will provide further indication of expansion within this sector. The following proxies are used to measure this thrust/index: Agriculture sector GDP Agriculture sector employment Agro-processing sector GDP Agro-processing sector employment Number of new agricultural products introduced to the LM
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8.4.2 Tourism Development and Sustainable Town Revitalisation Index In monitoring the performance of the Tourism Development and Sustainable Town Revitalisation Thrust a number of indicators in regards to the various aspects are taken into account, namely the Tourism Sector as well as creating Sustainable Towns. The proxy indicators utilised in this index are: Catering and Accommodation GDP Catering and Accommodation employment Number of establishments accredited by the Tourism Grading Council of South Africa (TGCSA) Number of tourism-related events hosted annually Number of indigenous trees planted annually Number of successful clean-up campaigns hosted annually
8.4.3 Conservation & Green Economy Development Index This thrust is aimed at building the green economy while at the same time conserving the natural resources of Umdoni LM. The following proxies are used to measure this thrust/index: Number of green economy initiatives established/implemented annually Number of Conservation initiatives (e.g. biological protection initiatives) implemented annually Number of illegal mining operations formalised Number of Blue Flag Accredited Beaches Number of marine awareness campaigns held annually
8.4.4 Industrial and Business Development Promotion Index This thrust focuses on development of new businesses, SMMEs and the industrial sector. It is aimed at providing local business owners and entrepreneurs with the necessary skills and knowledge to effectively manage their businesses, as well as providing financial support and increasing access to external markets. The successful implementation of this Thrust would not only see increased direct employment, but also the generation of indirect job opportunities and further spin-off effects in the local economy. The Thrust is also aimed at seeing GDP growth, thereby increasing the incomes of local people and improving their quality of life. The indicators used in this index are: Overall GDP Tress index for GDP Overall employment Number of registered SMMEs Number of SMMEs successfully implemented/supported Number of cooperatives registered Number of cooperatives successfully implemented/supported
8.4.5 Regional and Rural Integration and Support Index This trusts focuses on the integration of the remote rural areas with the well-established urban area in Umdoni Local Municipality as well as the other Metropolitan and local municipalities (regional). The indicators used in this index are: Number of transport-related projects (improving connectivity) implemented Number of traditional leaders/councils/community members capacitated in terms of local economic development
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8.4.6 LED Implementation Index This Index seeks to measure the effectiveness of the LED Unit in implementing the Projects and Programmes identified in the LED Strategy. Through this Index, the LED Unit can measure its performance in implementing the Strategy, as well as its effect on the local economy. The number of LED projects successfully implemented and the number of LED actions per programme successfully facilitated by the Umdoni Local Municipality LED unit gives an indication of how effective the Unit is in the implementation of the LED Strategy. The number of direct job opportunities created through the implementation of certain projects and actions is a further measure of the Unit’s effectiveness in meeting the employment generation goals and objectives of the LED Strategy.
The indicators utilised as performance proxy for the LED unit are: Number of LED projects successfully implemented Number of LED actions per programme successfully facilitated Number of direct permanent employment opportunities created Number of direct temporary employment opportunities created Number of indirect permanent employment opportunities created
The following table provides an example of the indicator that can be used to measure the performance of the LED Strategy and LED implementation.
TABLE 8.1: MONITORING AND EVALUATION MATRIX BASELINE 2016/ 2017/ 2018/ 2019/ INDEX PROXY INDICATORS (2016) 2017 2018 2019 2020 Agriculture sector GDP Agriculture sector
employment Agricultural Agro-processing sector
Support, Growth GDP & Local Value Agro-processing sector
Adding Index employment Number of new agricultural products introduced to the LM Catering and
Accommodation GDP Catering and Accommodation employment Tourism Number of Development & establishments Sustainable accredited by TGCSA Town Number of tourism- Revitalisation related events hosted Index annually Number of indigenous
trees planted annually Number of successful clean-up campaigns hosted annually
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BASELINE 2016/ 2017/ 2018/ 2019/ INDEX PROXY INDICATORS (2016) 2017 2018 2019 2020 Number of green economy initiatives
established/implemen ted annually Number of Conservation initiatives (e.g. Conservation biological protection and Green initiatives) Economy implemented annually Development Number of illegal Index mining operations formalised Number of Blue Flag
Accredited Beaches Number of marine awareness campaigns held annually Overall GDP Tress index for GDP Overall employment Number of registered
SMMEs Number of SMMEs successfully
Industrial and implemented/ Business supported Development Number of Promotion Index cooperatives registered
Number of cooperatives successfully implemented/ supported
Number of transport- related projects (improving connectivity) Regional and implemented Rural Integration and Support Number of traditional Index leaders/councils/com munity members
capacitated in terms of local economic development
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BASELINE 2016/ 2017/ 2018/ 2019/ INDEX PROXY INDICATORS (2016) 2017 2018 2019 2020 Number of LED projects successfully implemented Number of LED actions per programme successfully facilitated Number of direct LED permanent
Implementation employment Index opportunities created Number of direct temporary employment opportunities created Number of indirect permanent
employment opportunities created
8.5 Way Forward
A critically important aspect for the successful implementation of the LED Strategy in Umdoni Local Municipality is the need to ensure that all stakeholders and parties involved in the LED process take ownership of the Programmes and Projects identified. It is also important that the monitoring and evaluation elements of the Strategy are incorporated into the performance management system of the Local Municipality. This will ensure accountability and responsibility for the implementation of the LED Strategy and its Programmes
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Annexure A: Potential Funding Sources Department of Human Settlements (DHS) Department of Trade and Industry (DTI) Department of Environmental Affairs (DEA) Department of Roads and Transport (DoT) Department of Labour’s National Skills Fund (NSF) EPWP (National Dept. of Public Works) Industrial Development Corporation (IDC) Development Bank of Southern Africa (DBSA) Small Enterprise Development Agency (SEDA) Culture, Arts, Tourism, Hospitality and Sports Sector Education and Training Authority (CATHSETA) Sector Education Training Authorities (SETA) ESKOM KwaZulu Natal Provincial Government KZN Department of Economic Development, Tourism and Environmental Affairs (edtea) KZN Department of Agriculture and Rural Development (DARD) KZN Gijima Ezemvelo KZN Wildlife Ugu District LED Unit Umdoni Local Municipality Development & Planning
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