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Tongaat Local Economic Development Strategy 2008 2 ETHEKWINI MUNICIPALITY 1 Tongaat Local EconomicAND Development THE KWAZULU Strategy 2008 NATAL - DEPARTMENT OF ECONOMIC DEVELOPMENT Tongaat Local Economic Development Strategy October 2008 Submitted to: ETHEKWINI ECONOMIC DEVELOPMENT UNIT (EDU) AND URBAN-ECON: KZN DEPARTMENT OF ECONOMIC DEVELOPMENT Development Economists P O Box 50834 41 Margaret Mncadi Avenue MUSGRAVE Rennie House 4062 th 11 Floor TEL: 031-2029673 Durban FAX: 031-2029675 E-mail: durban@urban- econ.com In Association with URBAN-ECON TOURISM AND GABHISA PLANNING Prepared by Urban-Econ: Development Economists & INVESTMENTS Tongaat Local Economic Development Strategy 2008 2 ETHEKWINI MUNICIPALITY AND KWAZULU- NATAL DEPARTMENT OF ECONOMIC DEVELOPMENT Tongaat Local Economic Development Strategy Report October 2008 Submitted to: ETHEKWINI ECONOMIC DEVELOPMENT UNIT AND KZN DEPARTMENT OF ECONOMIC DEVELOPMENT 41 Margaret Mncadi Avenue Rennie House 11th Floor Durban URBAN-ECON: Development Economists P O Box 50834 MUSGRAVE 4062 TEL: 031-2029673 FAX: 031-2029675 E-mail: [email protected] In Association with URBAN-ECON TOURISM AND GABHISA PLANNING AND INVESTMENTS Prepared by Urban-Econ: Development Economists Tongaat Local Economic Development Strategy 2008 3 ACKNOWLEDGMENT The production of this LED strategy would not have been possible without the support and assistance of the following: o The Honourable Deputy Minister of Communication, Mr Radhakrishna L. Padayachie o Prof Michael Abraham: Ward 61 Councillor o Miss Nompumelelo Mabaso: Ward 62 Councillor o Mr. Mxolisi Kennett- Ndzimbomvu: Ward 58 Councillor o Ms Marcelle Abraham: KwaZulu-Natal Department of Economic Development o Bongani Mkhize: KwaZulu-Natal Department of Economic Development o Ayanda Goba: KwaZulu-Natal Department of Economic Development o Steve Angelos: eThekwini Economic Development Unit o Helene Epstein: eThekwini Development Planning o Ken Breetzke: eThekwini Engineers o Grishka Naidoo: eThekwini Transport Authority o Ajiv Maharaj: eThekwini Economic Development Unit o Busi Mlotshwa: eThekwini Business Support Unit o Ian Hunter: Tongaat Hulett Development o Gumede Bongani: Tongaat Hulett Development o Siva Naidoo: Tongaat Civic Association o Logan Naidoo: Tongaat Chamber of Commerce and Industry o Mlibo Bantwini: Dube Trade Port o Mthethwa Sifiso: Tongaat Youth Forum o Vijay Ori: Vijay Ori and Associates cc o Michael Phungula: SEDA Tongaat It should be noted that the above list is not exhaustive and our acknowledgment goes to all the other stakeholders including provincial governments, municipal officials, households, businesses, shoppers and informal traders who participated in interviews and surveys as well as those who attended the workshops in March and June 2008. Prepared by Urban-Econ: Development Economists Tongaat Local Economic Development Strategy 2008 4 ABBREVIATIONS TERM DEFINITION ASGISA Accelerated and Shared Growth Initiative of South Africa BEE Black Economic Empowerment BRS Business Retention Strategies CBD Central Business District DACT Department of Arts, Culture and Tourism (KZN) DEAT Department of Environmental Affairs and Tourism DED Department of Economic Development DM District Municipality DPLG Department of Provincial and Local Government DTP Dube Trade Port EIA Environmental Impact Assessment GDP Gross Domestic Product GTA Greater Tongaat Area ICT Information and Communication Technology IDP Integrated Development Plan IDS Industrial Development Strategy KSIA King Shaka International Airport KZN KwaZulu-Natal LED Local Economic Development LM Local Municipality LTDF Long-term Development Framework NGDS National Growth and Development Strategy PGDS Provincial Growth and Development Strategy PSEDS Provincial Spatial Economic Development Strategy SEDA Small Enterprise Development Agency SETA Sector Education and Training Authority SMME Small, Medium and Micro Enterprise SWOT Strengths, Weaknesses, Opportunities, Threats DTI Department of Trade and Industry THETA Tourism, Hospitality and Sport Education and Training Authority TKZN Tourism KwaZulu-Natal WTO World Tourism Organisation Prepared by Urban-Econ: Development Economists Tongaat Local Economic Development Strategy 2008 5 TABLE OF CONTENTS Acknowledgment 3 Abbreviations 4 Table Of Contents 5 Executive Summary 6 Section 1: Introduction 16 1.1 Project Purpose and Background 16 1.2 Methodology 17 1.3 Source of Information 19 1.4 Report Outline 21 Section 2: Situational Analysis 22 2.1 Macro Economic Overview of Tongaat 22 2.2 Spatial Planning and Infrastructure 28 2.3 Demographic and Socio-economic Analysis 36 2.4 Property Economics (Land and Housing) 50 2.5 Retail and Commerce 57 2.6 Industry 63 2.7 Tourism 74 2.8 Informal Economy and SMMEs 82 2.9 SWOT Analysis 88 Section 3. Strategy Formulation 93 3.1 Key Developmental Issues of Tongaat 93 3.2 Vision, Goals and Strategies 98 Section 4. Implementation Framework 110 4.1. Upgrading of the commercial function and facilities of Tongaat including the renewal of the 111 Town Centre 4.2. Infrastructure Development 118 4.3 Tongaat Manufacturing Cluster Development 123 4.4 Tongaat Culture and Heritage Route 132 4.5 Development of the Informal Economy and SMMEs 142 4.6 Making Land Available For Developments 145 4.7 Formulation of an Institutional Structure 148 4.8 Other Identified Projects 156 Section 5. General Conclusion 160 Annexure 1 Common LED Terms 163 Annexure 2 Stakeholders List 167 Annexure 3 Policy Framework 169 References 180 Prepared by Urban-Econ: Development Economists Tongaat Local Economic Development Strategy 2008 6 EXECUTIVE SUMMARY A. INTRODUCTION This local economic development strategy project has been commissioned by the eThekwini Municipality and the KwaZulu-Natal Department of Economic Development. As an emanation of the eThekwini Municipality, the LED Strategy is developed in alignment with the Integrated Development Plan of eThekwini. South Africa is faced with the challenge of improving the quality of life of the poor and marginalised in an ever globalising world. Local government has been given the responsibility to improve the overall economic and social conditions within their respective local areas in order to encourage economic and employment growth and development. Local municipalities are mandated to develop local economic development (LED) strategies and plans that will assist them and their economic partners to work together to address the challenges facing their respective local economies in an effort to improve the economic future and the quality of life for all the residents in the area. The approach towards local economic development in Greater Tongaat has been ad hoc and fragmented until now, lacking a strategic framework to guide strategic economic development interventions that encourage economic and employment growth and development in the local economy. In order to address the above issue, the purpose of the current study is, therefore: 1. To undertake a thorough consultative approach with business, communities and stakeholders. 2. To create a vision and strategy for the Tongaat area. 3. To assess and rationalise the existing economic situation analyses of the study area. 4. To examine and define the strategic role of the Tongaat area 5. To provide a set of plans that translate existing policy. 6. To identify the strategic and detailed responses necessary to turn around the decline in businesses in Tongaat and to achieve poverty alleviation. 7. To identify potential areas for industrial development. 8. To undertake an implementation framework giving due consideration to institutional mechanisms to drive growth in the area. B. SITUATIONAL ANALYSIS The history of Tongaat shows that the present site of Tongaat was selected in 1846 by a government commission as one of a number of villages, which it was hoped, would be established through emigration. The village was initially named „Victoria.‟ It developed into a town in the 19th Century because of the successful cultivation of sugar cane in the area. B1. SPATIAL LOCATION Tongaat is one of eight economic zones in the eThekwini municipality falling within the northern area that is bounded by the Umgeni River in the south, the Tongaat River in the north and the rural tribal area of Ndwedwe in the west. Geographically Tongaat is surrounded by the following areas: Ballito Prepared by Urban-Econ: Development Economists Tongaat Local Economic Development Strategy 2008 7 and Stranger in the North, Pietermaritzburg in West, Durban in the South and the Indian Ocean in the East. Tongaat is located in one of the highest growth potential areas in KZN as it is found between Durban and Richards Bay corridor development. This strategic location coupled with its proximity to the Dube Trade Port, means that Tongaat is facing exceptional growth and development over the next 20 years and requires a fundamental review of its current spatial framework. The DTP development, situated 6km from Tongaat will provide many job opportunities estimated at thousands - approximately 156,747 new sustainable jobs (estimated 16,268 direct and 140,479 indirect in the rest of the economy) will be provided by 2025, and DTP is likely to be a considerable economic boost to the greater Tongaat area. The greater Tongaat area also provides road and rail access for the rural communities to the Durban Metropolitan area. It is also the first and most accessible area for other surrounding rural communities. Tongaat is therefore an important commercial transit node for many of the people living beyond the metro fringe. B2.
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