Nodal Economic Profiling Project Umkhanyakude KwaZulu Nodal Economic Profiling Project Business Trust & dplg, 2007 Umkhanyakude Context

IInn 22000011,, SSttaattee PPrreessiiddeenntt TThhaabboo MMbbeekkii aannnnoouunncceedd aann iinniittiiaattiivvee ttoo aaddddrreessss uunnddeerrddeevveellooppmmeenntt iinn tthhee mmoosstt sseevveerreellyy iimmppoovveerriisshheedd rruurraall aanndd uurrbbaann aarreeaass ((““ppoovveerrttyy nnooddeess””)) iinn SSoouutthh AAffrriiccaa,, wwhhiicchh hhoouussee aarroouunndd tteenn mmiilllliioonn ppeeooppllee..

TThhee UUrrbbaann RReenneewwaall PPrrooggrraammmmee ((uurrpp)) aanndd tthhee IInntteeggrraatteedd SSuussttaaiinnaabbllee RRuurraall Maruleng DDeevveellooppmmeenntt PPrrooggrraammmmee Sekhukhune ((iissrrddpp)) wweerree ccrreeaatteedd iinn 22000011 ttoo address development in these Bushbuckridge address development in these aarreeaass.. TThheessee iinniittiiaattiivveess aarree Alexandra hhoouusseedd iinn tthhee DDeeppaarrttmmeenntt ooff Kgalagadi Umkhanyakude PPrroovviinncciiaall aanndd LLooccaall Government (dplg). Zululand Government (dplg). Maluti-a-Phofung Umzinyathi Galeshewe Umzimkhulu I-N-K Alfred Nzo Ukhahlamba Ugu

Central Karoo OR Tambo Chris Hani

Mitchell’s Plain Mdantsane Khayelitsha Motherwell

UUP-WRD-Umkhanyakude Profile-301106-IS 2 Nodal Economic Profiling Project Business Trust & dplg, 2007 Umkhanyakude Umkhanyakude poverty node

Activities z Research process Documents People z Overview

z Economy

– Overview

– Selected sector: Tourism

– Selected sector: Agriculture

z Investment opportunities

z Summary

z Appendix

UUP-WRD-Umkhanyakude Profile-301106-IS 3 Nodal Economic Profiling Project Business Trust & dplg, 2007 Research process Umkhanyakude Summary of what we have done

AAccttiivviittiieess DDooccuummeennttss PPeeooppllee

z Desk research z One SDF z Meetings with implementation government / public z Two visits to node: framework sector and private – 12-16 June 2006, sector / local residents z Two local government 26-30 June 2006 analyses – Ten meetings with – Understanding of district and local z Six IDP evaluation potential for municipalities, framework economic growth, Gijima KZN identifying specific z Two IDP development / – Fourteen meetings opportunities for action plan with SMMEs, investments z One IDT development independent – Visit to the plan consultants, money Dam, the Makhathini lenders and local z Two LED documents Flats area (both the residents Research Station z Two economic reports and the Agricultural compiled by an Forum), St Lucia, independent consultant and two cultural villages

UUP-WRD-Umkhanyakude Profile-301106-IS 4 Nodal Economic Profiling Project Business Trust & dplg, 2007 Umkhanyakude Umkhanyakude poverty node

z Research process

Introduction

z Overview Key data points

Current action z Economy

– Overview

– Selected sector: Agriculture

– Selected sector: Tourism

z Investment opportunities

z Summary

z Appendix

UUP-WRD-Umkhanyakude Profile-301106-IS 5 Nodal Economic Profiling Project Business Trust & dplg, 2007 Umkhanyakude Overview

IInnttrroodduuccttiioonn KKeeyy ddaattaa ppooiinnttss CCuurrrreenntt aaccttiioonn

Introduces the node; Lists pertinent facts Describes current summarises key issues and figures interventions

SSnnaappsshhoott GGeeooggrraapphhyy GGoovveerrnnaannccee

AArreeaa ssuummmmaarryy SSppaattiiaall ddeevveellooppmmeenntt IIDDPP aasssseessssmmeenntt

KKeeyy cchhaalllleennggeess DDeemmooggrraapphhyy DDeevveellooppmmeenntt pprroojjeeccttss

LLooccaall ppeeooppllee ppoorrttrraaiitt IInnccoommee aanndd eemmppllooyymmeenntt

EEdduuccaattiioonn

HHeeaalltthh

DDeevveellooppmmeenntt ssccoorreeccaarrdd

UUP-WRD-Umkhanyakude Profile-301106-IS 6 Nodal Economic Profiling Project Business Trust & dplg, 2007 Introduction Umkhanyakude Snapshot

Key information

Population: 2001 573,341

Area 12,818.18 km2 UUmmkkhhaannyyaakkuuddee Population density: 2001 44.73 / km2

Estimated GDP: 2004 R1,93bn

Province KwaZulu Natal

Main town / city (pop. 52,300)

OOvveerrvviieeww

zz UUmmkkhhaannyyaakkuuddee ccoovveerrss tthhee ““EElleepphhaanntt CCooaasstt””rreeggiioonn ooff KKwwaaZZuulluu NNaattaall

zz TThhee nnaammee ““UUmmkkhhaannyyaakkuuddee””mmeeaannss ""lliigghhtt iinn tthhee ddiissttaannccee"" aanndd ssiiggnniiffiieess aa ppllaaccee tthhaatt iiss ffuullll ooff hhooppee aanndd pprroommiissee

zz TThhee llooccaall ppeeooppllee ssuubbssccrriibbee ttoo tthhiiss nnaammee bbeeccaauussee tthheeyy bbeelliieevvee tthhaatt iitt iiss oonnllyy wwhheenn yyoouu eenntteerr tthhee aarreeaa aanndd rreeaallllyy eexxppeerriieennccee wwhhaatt iitt hhaass ttoo ooffffeerr,, tthhaatt iittss ttrruuee rriicchhnneessss ccaann bbee aapppprreecciiaatteedd

Source: Stats SA Census 2001 UUP-WRD-Umkhanyakude Profile-301106-IS 7 Nodal Economic Profiling Project Business Trust & dplg, 2007 Introduction Umkhanyakude Area summary

LLooccaattiioonn PPeeooppllee EEccoonnoommiicc cclliimmaattee

z Umkhanyakude District z Low-income housing z Some retail stores are Municipality is located and shanty houses are present in the biggest in Mkuze, which is common in the area towns, but the area is about an hour-and-a- z Families tend to be predominantly rural half’s drive from fairly large (on average z A large portion of the six or seven people) area is covered by z Mkuze is the main beautiful landscapes, town, with smaller which makes it very towns including Jozini, popular among tourists and St z There is great potential Lucia for both tourism and agriculture, in terms of economic growth and job creation

UUP-WRD-Umkhanyakude Profile-301106-IS 8 Nodal Economic Profiling Project Business Trust & dplg, 2007 Introduction Umkhanyakude Some observations about Umkhanyakude

“We have everything to develop the sector in the area, apart from funding for our projects. We even have agreements with big chains which will buy our products if we manage to upgrade our facilities” – Agricultural forum in Makhathini

“Most of the municipal employees are not originally from this area, do not live here over the weekend and do not have family here … This means that most of their salaries are spent elsewhere” – Independent consultant

“Cultural concepts combine the tourists’ interest in knowing our land with the communities’ interest in making some money out of it” – Tour operator

“Integration between blacks and whites is not yet fully realised and this prevents the realisation of the area’s full potential with regard to tourism” – Tour operator

“Infrastructure and lack of management skills are tremendous drawbacks in this area” – Independent consultant

UUP-WRD-Umkhanyakude Profile-301106-IS 9 Nodal Economic Profiling Project Business Trust & dplg, 2007 Introduction Umkhanyakude Key challenges

EEccoonnoommiicc ddeevveellooppmmeenntt IInnffrraassttrruuccttuurree cchhaalllleennggeess cchhaalllleennggeess

z Most of the people in the area z The young people in the area, need water supply and who represent the vast electricity majority of the population, find z Infrastructure needs to be it difficult to get a job upgraded or better maintained z Implementation and managerial skills seem to be missing within the municipal structures, even at the highest levels z The area is one of the most analysed in KwaZulu Natal (KZN), but is also one of the most underdeveloped because of the inability of local government representatives to follow up on projects and studies

UUP-WRD-Umkhanyakude Profile-301106-IS 10 Nodal Economic Profiling Project Business Trust & dplg, 2007 Introduction Umkhanyakude Local people portrait: Segments of local people

SSeeggmmeenntt 11 SSeeggmmeenntt 22 SSeeggmmeenntt 33

Name of segment Middle-aged male worker Working young woman Youth

Sub-contractor to Mondi Housekeeper at Unemployed, but has Economic activity cutting down trees tourist resort completed Grade 12

Expand the number of Find job opportunities for How to increase forests that they are spare time (e.g. afternoons their productivity? contracted to working on in her case) Increase job opportunities in the area, e.g. more game farms will lead to more jobs How could they He is planning to leave his Set up a dry-cleaning for guides increase their family and move to Vryheid service for the resorts of personal income? to get a better-paying job the area

How could they Find more cost-effective decrease their means of getting to work personal costs? and back (taxis too costly)

Lack of skills to try different There are many family Cannot find a stable job Constraints to options (farming, spaza members to support, and and not willing to work in economic growth shops) lack of water and electricity agriculture

Investment Expertise training on how to Basic business skills opportunities in this add value to the wood that training for cleaning service segment is cut and similar initiatives

UUP-WRD-Umkhanyakude Profile-301106-IS 11 Nodal Economic Profiling Project Business Trust & dplg, 2007 Introduction Umkhanyakude Local people portrait – Thobi

Thobi works as a housekeeper at Ghost Mountain Inn, a four-star hotel in Mkuze. Thobi is 24 and the second-oldest of seven children. She is single and lives with her family.

Thobi works at Ghost Mountain Inn from 6h00 to 13h00 and again from 17h00 to 22h00, seven days a week.

Her salary is around R1,500 a month. Other employees at GMI earn up to R2,500 depending on their years of experience. Thobi and her older brother, who moved to for work, are the only people employed in her family. Between them, they support six more people (five brothers and sisters and their mother). Thobi says her salary is enough to buy food for herself and her family and to build a house for them.

Thobi completed Grade 12 in 2002 and started working at Ghost Mountain Inn straight afterwards. She wanted to study to become a social worker, but she had to give up on these plans because financial constraints didn’t allow her to enrol at university.

She walks to work every day and the journey takes her about 20 minutes. However, most of the people in the district don’t have that option and spend a good portion of their salary and time on transport. Thobi used to walk home at night, but she feels that it is no longer safe to do so because there has been an increase in the crime rate. Together with the other housekeepers at Ghost Mountain Inn, she hires a taxi and pays for it monthly. The taxi costs around R60 a month per person, and she usually shares it with three others.

Thobi has poor access to capital because of her low income. Her family’s house doesn’t have water or electricity. However, they do have solar heating panels, which cost R120 to be installed and an additional monthly fee of R39.

Source: Qualitative interviews; Monitor analysis UUP-WRD-Umkhanyakude Profile-301106-IS 12 Nodal Economic Profiling Project Business Trust & dplg, 2007 Umkhanyakude Overview

IInnttrroodduuccttiioonn KKeeyy ddaattaa ppooiinnttss CCuurrrreenntt aaccttiioonn

Introduces the node; Lists pertinent acts and Describes current summarises key issues figures interventions

SSnnaappsshhoott GGeeooggrraapphhyy GGoovveerrnnaannccee

AArreeaa ssuummmmaarryy SSppaattiiaall ddeevveellooppmmeenntt IIDDPP aasssseessssmmeenntt

KKeeyy cchhaalllleennggeess DDeemmooggrraapphhyy DDeevveellooppmmeenntt pprroojjeeccttss

LLooccaall ppeeooppllee ppoorrttrraaiitt IInnccoommee aanndd eemmppllooyymmeenntt

EEdduuccaattiioonn

HHeeaalltthh

DDeevveellooppmmeenntt ssccoorreeccaarrdd

UUP-WRD-Umkhanyakude Profile-301106-IS 13 Nodal Economic Profiling Project Business Trust & dplg, 2007 Key data points Umkhanyakude Geography

MMaapp GGeeooggrraapphhiiccaall ffeeaattuurreess MMaajjoorr ttoowwnnss zz MMkkuuzzee zz JJoozziinnii zz SStt LLuucciiaa zz MMttuubbaattuubbaa

TTrraannssppoorrttaattiioonn zz MMkkuuzzeeiiss wweellll ccoonnnneecctteedd ttoo tthhee nnaattiioonnaall rrooaadd ssyysstteemm aanndd tthheerree aarree ddiissccuussssiioonnss aabboouutt bbuuiillddiinngg aann aaiirrppoorrtt cclloossee ttoo tthhee cciittyy..

TTeerrrraaiinn aanndd nnaattuurraall rreessoouurrcceess zz GGaammee ppaarrkkss zz GGrreeaatteerr SStt LLuucciiaa WWeettllaanndd PPaarrkk zz SSccuubbaa ddiivviinngg zz FFeerrttiillee aaggrriiccuullttuurraall llaanndd

Source: SA Explorer, Old Monitor profile UUP-WRD-Umkhanyakude Profile-301106-IS 14 Nodal Economic Profiling Project Business Trust & dplg, 2007 Key data points Umkhanyakude Geology The Kalahari rock type is found in a large area of Umkhanyakude

GGeeoollooggyy

Beaufort Bushmanland Cape Granite Drakensberg

Dwyka

Ecca

Kalahari Zululand Tugela

Soutpansberg Table Mountain Tarkastad

Note: After climate, geology is the second most important factor in the formation of soil-terrain landscapes. It affects natural fertility and erodibility, and is thus indirectly responsible for a variety of soil-plant niches or habitats. Source: Agricultural Geo-Referenced Information System UUP-WRD-Umkhanyakude Profile-301106-IS 15 Nodal Economic Profiling Project Business Trust & dplg, 2007 Key data points Umkhanyakude Vegetation Coastal tropical forest occurs along the coast, while savannah is found further inland

VVeeggeettaattiioonn ((AAccoocckkss vveellddttyyppeess))

Coastal Tropical Forest Types

Tropical Bush and Savanna Type

Source: Agricultural Geo-Referenced Information System UUP-WRD-Umkhanyakude Profile-301106-IS 16 Nodal Economic Profiling Project Business Trust & dplg, 2007 Key data points Umkhanyakude Aridity zones Aridity levels vary throughout Umkhanyakude

AArriiddiittyy zzoonneess

Semi-arid zone

Dry subhumid zone

Humid zone

Source: Agricultural Geo-Referenced Information System UUP-WRD-Umkhanyakude Profile-301106-IS 17 Nodal Economic Profiling Project Business Trust & dplg, 2007 Key data points Umkhanyakude Mean annual rainfall Umkhanyakude receives a medium to high level of annual rainfall

RRaaiinnffaallll ((MMeeaann aannnnuuaall))

0-200 mm

201-400 mm

401-600 mm

601-800 mm

801-1000 mm

>1000 mm

Source: Agricultural Geo-Referenced Information System UUP-WRD-Umkhanyakude Profile-301106-IS 18 Nodal Economic Profiling Project Business Trust & dplg, 2007 Key data points Umkhanyakude Spatial development There is a huge backlog in the provision of services

KKeeyy iinnddiiccaattoorrss:: 22000011 OObbsseerrvvaattiioonnss

zz PPooppuullaattiioonn ddeennssiittyy:: 4444..77 ppeerrssoonnss//kkmm22 TThhee mmaaiinn ttoouurriisstt aarreeaa iiss tthhee SStt LLuucciiaa WWeettllaanndd PPaarrkk,, wwhhiicchh iiss aa UUnniitteedd NNaattiioonnss EEdduuccaattiioonnaall,, SScciieennttiiffiicc aanndd CCuullttuurraall Organisation (UNESCO) World Heritage Site zz PPooppuullaattiioonn:: RRuurraall 9977..44%%,, uurrbbaann 22..66%% Organisation (UNESCO) World Heritage Site

TThhee MMaakkhhaatthhiinnii FFllaattss iiss aa vveerryy ffeerrttiillee aarreeaa ffoorr sseevveerraall z z DDwweelllliinnggss:: FFoorrmmaall 9966..33%%,, iinnffoorrmmaall 33..77%% aaggrriiccuullttuurraall pprroodduuccttiioonnss//ccrrooppss

TThheerree iiss aa nneeww hhoouussiinngg pprroojjeecctt iinn MMaakkhhaatthhiinnii FFllaattss

Households Without Access to Basic Services: 2001 Type of Housing: 2001 100% 92% Separate House or 26.2% Brick Structure 80% 78% 80% 76% s

d Traditional Housing with l 48.7% o Traditional Material h e

s 60%

u Flat in Blocks of Flats

o 13.3%

H or Town / Cluster /

f

o Semi-detached House 40% e

g 3.1%

a House / Flat / Room t

n in Backyard e c r 20% 3.7% e Informal Dwelling / P Shack 0% Other 5.1% Electricity Piped Water Waste Telephone Removal 0% 10% 20% 30% 40% 50% 60%

Note: Definitions of Basic Access: Electricity for lighting; piped water within 200m, waste removal by municipality or communal dump; phone or cellphone access Source: Stats SA Census 2001

UUP-WRD-Umkhanyakude Profile-301106-IS 19 Nodal Economic Profiling Project Business Trust & dplg, 2007 Key data points Umkhanyakude Demography As over 70% of the population is less than 29 years old, youth-development programmes are critical for stimulating growth in this node

Age Distribution: 2001 Gender Distribution: 2001 50% 100% 43.5% 40% TToottaall PPooppuullaattiioonn:: 557733,,334411 80%

s 45.2% s

t 49.0% t n

n Male e e 28.8% d d 30% i 60% i s s e e R R

f

f 20% 40% o

o 14.2%

Female % % 8.9% 54.8% 51.0% 10% 4.6% 20%

0% 0% 0-14 15-29 30-44 45-64 65 + Total Population Head of Household

Household Size: 2001 Language Distribution: 2001 80% 100% 97.7% TToottaall NNoo.. ooff HHoouusseehhoollddss:: 110011,,556633

s 80% s d

60% t l n o e h d e 42.0% i 60% s s u 40% 33.3% e o R

H f 24.7% 40% f o

o

%

% 20% 20% 0.7% 0.6% 0.4% 0.7% 0% 0% 1 to 3 people 4 to 7 people 8 + people IsiZulu SiSwati English Other

Source: Stats SA Census 2001 UUP-WRD-Umkhanyakude Profile-301106-IS 20 Nodal Economic Profiling Project Business Trust & dplg, 2007 Key data points Umkhanyakude Income and employment Only 12.7% of residents are employed and over 80% of people live below the poverty line

Annual Household Income: 2001 Employment Figures: 2001 80% 70% 69.8% 60% 65.8% s Household Subsistence Household Subsistence s d t l 60%

n 50% o LLeevveell:: RR1199,,220000 ppeerr aannnnuumm e h d e i 40% s s u

40% e o

R 30%

H

f 21.5%

f o

o 13.2% 20% 12.7% 20% %

% 9.3% 4.6% 10% 2.1% 1.0% 0% 0% Below R9,601 - R19,201 - R38,401 - R76,801 - Above Employed Unemployed Not Economically R9,600 19,200 38,400 76,800 153,600 R153,601 Active

Employment by Industry (Top five): 2001 Work Status: 2001

s 50% 100% n s o n s o r s e 40% r 80% 81.9% e P

32.7% P d

e d y

30% e 60% o y l o p l p m 20% 15.3% 40% m E

f 12.1% 12.1% E

o f

8.6% o

10% 20% % 10.0% % 3.7% 2.7% 1.8% 0% 0% Community, Undetermined Agriculture, Wholesale Private Paid Self- Employer Paid Family Unpaid Family Social and Hunting, and Retail Households Employee employed Worker Worker Personal Forestry and Trade Services Fishing

Source: Stats SA Census 2001 UUP-WRD-Umkhanyakude Profile-301106-IS 21 Nodal Economic Profiling Project Business Trust & dplg, 2007 Key data points Umkhanyakude Education The functional illiteracy rate is relatively high; less than 9,000 people have higher education

School attendance Education level Percentage of people (aged 5-24) in Umkhanyakude, all Education levels of people (aged 20+) in nodes, and rest of SA attending educational institutions Umkhanyakude, all nodes and the rest of SA 80% 80% 73% 74% 67% Umkhanyakude Umkhanyakude 60% 60% 53% 53% All nodes 46% All nodes 38% 40% Rest of SA 40% Rest of SA 30% 29% 27% 25% 22% 20% 20% 15% 12%13% 9% 3% 4% 5% 0% 1% 0% 0% None Pre-school & School Technikon / University / No Schooling Some Primary / Std 10 / Grade 12 Higher Education College / Adult Secondary Education Schooling

EEdduuccaattiioonn oovveerrvviieeww ¡ ¡ UUmmkkhhaannyyaakkuuddeeiiss cchhaarraacctteerriisseedd bbyy aa rreellaattiivveellyy hhiigghh ffuunnccttiioonnaall iillliitteerraaccyy rraattee.. AAbboouutt 111133,,886677 ppeeooppllee hhaavvee nnoosscchhooooll eedduuccaattiioonn wwhhiillee 3377,,887700 hhaavvee ssoommee pprriimmaarryy eedduuccaattiioonn.. OOnnllyy 88,,777700 hhaavvee hhiigghheerr eedduuccaattiioonn ¡ ¡ LLooww eedduuccaattiioonn lleevveellss mmaayy iimmppaacctt nneeggaattiivveellyy oonn tthhee aabbiilliittyy ooff tthheellooccaall rreessiiddeennttss ttoo ppaarrttiicciippaattee aaccttiivveellyy iinn aanndd bbeenneeffiitt ffrroomm tthhee oonnggooiinngg ddeevveellooppmmeenntt pprrooggrraammmmeess

OOtthheerr ffaaccttoorrss ¡ ¡ TThhee mmaajjoorriittyy ooff sscchhoooollcchhiillddrreenn ((9944%%)) hhaavveettoo wwaallkk ggrreeaatt ddiissttaanncceess ttoo sscchhooooll.. MMoorree tthhaann 5500%% wwaallkk ffoorr 3300 mmiinnuutteess oorr mmoorreeeeaacchh wwaayy

Note: A negligible “other” category has been excluded from the School Attendance graph. The national average for this category was less than 0.2%. Source: IDP, 2001; Stats SA Census Data UUP-WRD-Umkhanyakude Profile-301106-IS 22 Nodal Economic Profiling Project Business Trust & dplg, 2007 Key data points Umkhanyakude Health

Node Rest of South Health-related variables Explanation Umkhanyakude statistics average1 Africa average1

To be completed Number of clinics 49 fixed and 12 mobile clinics at the end - District municipality per capita Per capita expenditure: 2001 expenditure R166 R135 R199 Number of people per fixed To be completed Number of people per clinic clinic / fixed + mobile clinic 10,281 / 8,258 at the end - Average number of clinic visits Utilisation rate: 2004 per person per year 2.4 2.1 2.1 Number of patients per nurse Nurse clinical workload per clinical day 33 26.8 26.3 % of HIV positive clients HIV prevalence among antenatal clients tested 30% 24% 26% % of children weighed who had Children not gaining weight an episode of faltering growth 1.3% 1.7% 1.4% Diseases that are usually transmitted through person-to- Communicable diseases person contact or shared use TB / HIV / AIDS - - of contaminated instruments / materials Water-borne diseases (e.g. Issues that are likely to result cholera), lack of waste Environmental health issues in increased levels of health - - problems management and cemetery / crematorium facilities

Note: 1 Weighted to node population Source: Health Systems Trust Reports: The District Health Barometer, 2005 and Health and Related Indicators, 2005, Umkhanyakude Municipality IDP, KZN Department of Health website. UUP-WRD-Umkhanyakude Profile-301106-IS 23 Nodal Economic Profiling Project Business Trust & dplg, 2007 Key data points Umkhanyakude Development scorecard

Umkhanyakude development scorecard Difference vs Rural node All node National Rank out of 14 Umkhanyakude national average average average rural nodes average Poverty incidence (% of households 69.8% 87.4% 66.0% 49.4% 19.4% 6 below HSL)1

Employment rate 12.7% 15.4% 19.3% 33.7% 15.0% 12

Households without basic 75.7% 64.9% 55.1% 27.9% 47.8% 12 access to water2 Households without access to 79.9% 56.7% 50.3% 30.3% 49.6% 14 electricity3

% of adults with 66.4% 60.3% 54.1% 40.3% 26.1% 14 limited education4

Better than National Average Worse than National Average 1 = Best 14 = Worst

Note: 1HSL = Household Subsistence Level and is equal to R19,200 per annum (R1,600 per month); 2Defined as not having piped water within a distance of 200 m of dwelling (govt. policy on minimum basic human need); 3 Based on households that do not use electricity as a source for lighting; 4All adults aged 20+ with no schooling at secondary level or above (Stats SA indicator of educational deprivation) Source: Stats SA Census 2001

UUP-WRD-Umkhanyakude Profile-301106-IS 24 Nodal Economic Profiling Project Business Trust & dplg, 2007 Umkhanyakude Overview

IInnttrroodduuccttiioonn KKeeyy ddaattaa ppooiinnttss CCuurrrreenntt aaccttiioonn

Introduces the node; Lists pertinent acts and Describes current summarises key issues figures interventions

SSnnaappsshhoott GGeeooggrraapphhyy GGoovveerrnnaannccee

AArreeaa ssuummmmaarryy SSppaattiiaall ddeevveellooppmmeenntt IIDDPP aasssseessssmmeenntt

KKeeyy cchhaalllleennggeess DDeemmooggrraapphhyy DDeevveellooppmmeenntt pprroojjeeccttss

LLooccaall ppeeooppllee ppoorrttrraaiitt IInnccoommee aanndd eemmppllooyymmeenntt

EEdduuccaattiioonn

HHeeaalltthh

DDeevveellooppmmeenntt ssccoorreeccaarrdd

UUP-WRD-Umkhanyakude Profile-301106-IS 25 Nodal Economic Profiling Project Business Trust & dplg, 2007 Governance Umkhanyakude District and local municipality structure The Umkhanyakude District Municipality is based in Mkuze and comprises six local municipalities

UUmmkkhhaannyyaakkuuddee DDiissttrriicctt MMuunniicciippaalliittyy

TThhee BBiigg 55 DDiissttrriicctt MMttuubbaattuubbaa UUmmhhllaabbuuyyaa-- HHllaabbiissaaLLooccaall JJoozziinnii LLooccaall FFaallssee BBaayy MMaannaaggeemmeenntt LLooccaall lliinnggaannaaLLooccaall MMuunniicciippaalliittyy MMuunniicciippaalliittyy LLooccaall AArreeaa 2277 MMuunniicciippaalliittyy MMuunniicciippaalliittyy MMuunniicciippaalliittyy ((DDMMAA 2277))**

Note: *DMA 27 includes the Greater St Lucia Wetland Park and the -Imfolozi Game Reserve Source: IDP for Umkhanyakude UUP-WRD-Umkhanyakude Profile-301106-IS 26 Nodal Economic Profiling Project Business Trust & dplg, 2007 Governance Umkhanyakude Organisational chart for District Municipality

Organogram: Municipal Manager’s Department

MMuunniicciippaall MMaannaaggeerr DDrr BB..VV..TThhaabbeetthhee

PPuubblliicc RReellaattiioonnss IIDDPP//PPMMSS MMaannaaggeerr OOffffiicceerr VVaaccaanntt

DDiirreeccttoorr CCoorrppoorraattee DDiirreeccttoorr DDeevveellooppmmeenntt DDiirreeccttoorr FFiinnaannccee DDiirreeccttoorr WWSSAA DDiirreeccttoorr TTeecchhnniiccaall SSeerrvviicceess PPllaannnniinngg && TToouurriissmm

AAssssiissttaanntt AAssssiissttaanntt AAssssiissttaanntt AAssssiissttaanntt DDiirreeccttoorr DDiirreeccttoorr AAssssiissttaanntt AAssssiissttaanntt DDiirreeccttoorr DDiirreeccttoorr CCoorrppoorraattee CCoommmmuunniittyy DDiirreeccttoorr DDiirreeccttoorr WWaatteerr aanndd CCaappiittaall SSeerrvviicceess SSeerrvviicceess EEnneerrggyy TToouurriissmm SSaanniittaattiioonn PPrroojjeeccttss VVaaccaanntt VVaaccaanntt

LLEEDD OOffffiicceerr VVaaccaanntt

Source: Umkhanyakude Municipality website UUP-WRD-Umkhanyakude Profile-301106-IS 27 Nodal Economic Profiling Project Business Trust & dplg, 2007 Governance Umkhanyakude Sources of funding and budget breakdown

2004/2005 2005/2006 2006/2007 Contributions from Revenue 6,982,956 7,561,265 6,955,619

Government Grants and Subsidies 85,331,000 87,765,000 81,237,000

Total Financing 92,313,956 95,326,265 88,192,619

Total Expenditure / Budgeted Expenditure 93,396,912 95,326,265 88,192,619

Budgeted expenditure per capita 163 166 154

Local Economic Development General Services: 2004/05 Expenditure Programme: 2004/05 40 4 ¢ 35.9 ¢ 3.5 IInn 22000055//0066 aanndd 22000066//0077 bbuuddggeettss,, GGeenneerraall SSeerrvviicceess EExxppeennddiittuurree wwiillll ssttiillll bbee 30 3 focused on water and 2.7 focused on water and Millions Millions ssaanniittaattiioonn,, bbuutt iitt wwiillll ffooccuuss of of oonn ddiiffffeerreenntt aarreeaass ooff tthhee Rands Rands nnooddee ¢

20 2 ¢ IInn 22000055//0066 aanndd 22000066//0077,, tthhee 15.1 bbuuddggeett ffoorr LLEEDD pprroojjeeccttss wwiillll iinnccrreeaassee bbyy 66%% aannnnuuaalllyy ¢ ¢ 10 1 0.85 HHoowweevveerr,, ssppeecciiffiicc iinniittiiaattiivveess (e.g. tourism or HIV/AIDS) 5.2 (e.g. tourism or HIV/AIDS) hhaavvee nnoott bbeeeenn bbuuddggeetteedd ffoorr iinn 22000055//0066 aanndd 22000066//0077 0 0 Water Sanitation Bulk LED Tourism HIV/AIDS Services Projects Source: IDP for Umkhanyakude UUP-WRD-Umkhanyakude Profile-301106-IS 28 Nodal Economic Profiling Project Business Trust & dplg, 2007 Governance Umkhanyakude Overview of management of Umkhanyakude

CCaappaabbiilliittyy aanndd mmoottiivvaattiioonnss zz TThheerree iiss aa ccaappaacciittyy ggaapp wwiitthh rreeggaarrdd ttoo pprroojjeecctt mmaannaaggeemmeenntt aanndd iimmpplleemmeennttaattiioonn sskkiillllss zz AA nnuummbbeerr ooff mmuunniicciippaall eemmppllooyyeeeess aarree bbeelliieevveedd ttoo hhaavvee bbeeeenn aappppooiinntteedd bbaasseedd oonn tthheeiirr ppoolliittiiccaall aaffffiilliiaattiioonn,, aanndd nnoott oonn mmeerriitt zz TThheerree aappppeeaarrss ttoo bbee aa llaacckk ooff mmoottiivvaattiioonn ssiinnccee mmoosstt mmuunniicciippaall eemmppllooyyeeeess ((iinncclluuddiinngg tthhoossee iinn tthhee sseenniioorr lleevveellss)) aarree nnoott oorriiggiinnaallllyy ffrroomm tthhee aarreeaa aanndd ddoo nnoott aaccttuuaallllyy lliivvee tthheerree

NNooddaall ppoolliittiiccss zz TThheerree iiss aa ppeerrcceeppttiioonn tthhaatt tthhee mmuunniicciippaall ssttaaffff aarree nnoott wwiilllliinngg ttoo iimmpplleemmeenntt iinniittiiaattiivveess wwhhiicchh ccoommee ffrroomm pprroovviinncciiaall // nnaattiioonnaall bbooddiieess bbeeccaauussee ooff ddiiffffeerreenncceess iinn ppoolliittiiccaall aaffffiilliiaattiioonn

CCoorrrruuppttiioonn zz RReecceennttllyy,, tthhrreeee mmuunniicciippaall ssttaaffff mmeemmbbeerrss ooff tthhee UUmmkkhhaannyyaakkuuddee DDiissttrriicctt MMuunniicciippaalliittyy wweerree aarrrreesstteedd iinn ccoonnnneeccttiioonn wwiitthh tthhee mmiissaapppprroopprriiaattiioonn ooff RR66 mmiilllliioonn ffrroomm tthhee mmuunniicciippaall bbuuddggeett

Source: Monitor interviews UUP-WRD-Umkhanyakude Profile-301106-IS 29 Nodal Economic Profiling Project Business Trust & dplg, 2007 IDP assessment Umkhanyakude Key facts of the IDP

GGeeooggrraapphhiicc aarreeaa £ The whole of the Umkhanyakude District (five local municipalities Covers more than the node X Covers exactly the node covered and one district management area) covered Covers less than the node £ MMoonntthh // yyeeaarr ooff llaatteesstt Latest revision in November 2004 ppuubblliiccaattiioonn £ Originally produced in October 2002

£ 77 pages (48 pages for the IDP, 4 pages for the budget, 25 pages LLeennggtthh // ffoorrmm for the SDF) £ Slide format

X Mainly public sector Mainly private sector £ AAuutthhoorr // mmaaiinn Originally written by outside consultants Both equally contributors £ Annual revisions by district municipality staff contributors X Includes consultants Does not include consultants Relies only on consultants

£ The original document from Oct 2002 is updated annually by May / June (just before the financial year end of 30 June)

TTiimmiinngg £ It is not clear how much time is spent on this, but there seems to be little change in the information from year to year PPrroocceessss ooff

ccrreeaattiioonn £ The Executive Committee (Exco) uses the mayoral roadshow to KKeeyy receive feedback from the various local municipalities aassppeeccttss £ The departments within the district municipality submit reports of their progress on different projects to a central point for collation £ OOtthheerr rreellaatteedd kkeeyy Local Economic Development Plan ddooccuummeennttss £ Spatial Development Framework

UUP-WRD-Umkhanyakude Profile-301106-IS 30 Nodal Economic Profiling Project Business Trust & dplg, 2007 IDP assessment Umkhanyakude Key characteristics of the IDP

£ Challenges like poverty, unemployment and underdevelopment Provides mainly insight X Provides mainly information FFooccuuss // ppuurrppoossee £ Performance systems and implementation programmes Both equally £ Not available on the district municipality website Easy to find / access £ AAcccceessssiibbiilliittyy A Google search allows one to find the report after browsing a few X Difficult to find / access links £ The demographic data are precise, but most other sections are X Generally, very vague PPrreecciissiioonn very vague (in particular, the summary of key developmental Generally, quite precise priorities)

£ X Mainly government AAccttuuaall uusseerr ggrroouupp // kkeeyy The current recipients are mainly municipal people and local current recipients politicians, as well as some independent consultants Mainly private sector current recipients Both equally

£ Some of the concepts expressed may become guiding concepts, Is viewed as key guiding document EExxtteenntt ooff uussaaggee // iimmppaacctt however, the document itself remains too vague to have an impact X Is used minimally, very little impact

£ Some sections (i.e. the demographic information) are relatively precise, but there is not a clear link between each of the sections

£ Ideas and projects mentioned in the IDP are a good talking point among local politicians, however, there is no prioritisation of OOtthheerr aassppeeccttss developmental projects and no clear strategy on how to implement them

£ The document is sometimes too high level. The consequence is that some concepts sound impressive, but don’t have a follow-up / implementation plan

UUP-WRD-Umkhanyakude Profile-301106-IS 31 Nodal Economic Profiling Project Business Trust & dplg, 2007 IDP assessment Umkhanyakude Contents of the IDP relevant to Umkhanyakude

TTyyppeess ooff iinnffoorrmmaattiioonn ccoonnttaaiinneedd iinn tthhee IIDDPP AAsssseessssmmeenntt

Examples of key issues areas Examples of key issues areas Typical level of detail provided Examples of key issues areas Examples of key issues areas Typical level of detail provided Highly comprehensive covered not covered across issue areas covered not covered across issue areas breadth depth £ £ £ £ MMuunniicciippaall ddeemmooggrraapphhiiccss £ EEccoonnoommiicc iinnffoorrmmaattiioonn £ IInnffoorrmmaattiioonn iiss ggeenneerraalllyy ppiittcchheedd £ £ £ £ KKeeyy ddeevveellooppmmeenntt pprriioorriittiieess IInnffoorrmmaattiioonn oonn tthhee pprriivvaattee aatt aa vveerryy hhiigghh lleevveell,, bbuutt bbrrookkeenn £

£ down for the six local PPeerrffoorrmmaannccee mmaannaaggeemmeenntt sseeccttoorr down for the six local £

£ municipalities ssyysstteemmss IInnffoorrmmaattiioonn oonn sscchhoooollss,, municipalities £ £ IImmpplleemmeennttaattiioonnpprrooggrraammmmee hhoouussiinngg aanndd aacccceessss ttoo £

£ healthcare LLiissttss ooff pprroojjeeccttss healthcare Key issues not covered

QQuuaalliittyy ooff iinnffoorrmmaattiioonn ccoonnttaaiinneedd iinn tthhee IIDDPP AAsssseessssmmeenntt £ £ IInnffoorrmmaattiioonn oonn ddeemmooggrraapphhiiccss iiss uussuuaalllyy bbaasseedd oonn ddaattaa,, bbuutt tthhee ddaattaa sseeeemm ttoo bbee qquuiittee oolldd ((CCeennssuuss 22000011 Highly iinn mmoosstt ccaasseess)) ––nnoo aatttteemmpptt hhaass bbeeeenn mmaaddee ttoo eessttimimaattee ffiigguurreess ffoorr tthhee llaatteesstt yyeeaarr

£ reliable £ TThhee ddeevveellooppmmeenntt pprriioorriittiieess lliisstteedd aappppeeaarr ttoo bbee aa ccoommpprreehheennssiivvee wwiisshh--lliisstt.. TThheerree iiss nnoo pprroocceessss ffoorr iiddeennttiiffyyiinngg tthhee pprriioorriittyy nneeeeddss £ £ TThheerree iiss ggoooodd iinnffoorrmmaattiioonn oonn kkeeyy ppeerrffoorrmmaannccee aarreeaass aanndd tthhee pprrooggrreessss mmaaddee tthhuuss ffaarr iinn rreeaacchhiinngg tthhee ttaarrggeettss £ £ TThhee lliisstt ooff pprroojjeeccttss ggiivveess lliittttllee iinnffoorrmmaattiioonn oonn wwhhaatt tthheeyy aarree aalll aabboouutt.. IInn mmaannyy ccaasseess,, tthheeyy aarree mmeerreellyy nnaammeedd,, aanndd iinn ssoommee ccaasseess aa rreeqquuiirreedd ffuunnddiinngg aammoouunntt isis ggiivveenn.. HHoowweevveerr,, tthheerree iiss nnoo iinnddiiccaattiioonn ooff tthhee ssttaattuuss ooff eeaacchh pprroojjeecctt oorr tthhee nneexxtt sstteeppss ttoo bbee ffoollloowweedd Very risky to use for investment decisions

UUP-WRD-Umkhanyakude Profile-301106-IS 32 Nodal Economic Profiling Project Business Trust & dplg, 2007 IDP assessment Umkhanyakude Action orientation of the IDP for Umkhanyakude

AAccttiioonnss pprrooppoosseedd AAsssseessssmmeenntt

EExxaammpplleess ooff kkeeyy aaccttiioonnss pprrooppoosseedd iinn IIDDPP EExxaammpplleess ooff kkeeyy aaccttiioonnss nnoottpprrooppoosseedd iinn IIDDPP Highly action oriented £ £ £ CCoooorrddiinnaattiioonn aanndd aalliiggnnmmeenntt ttoo pprreevveenntt tthhee £ VVeerriiffiiccaattiioonn pprrooggrreessss ooff ddififffeerreenntt ddeevveellooppmmeenntt nneeggaattiivvee iimmppaacctt ooff HHIIVV//AAIIDDSS oobbjjeeccttiivveess wwiitthhiinn cceerrttaaiinn KKeeyy PPeerrffoorrmmaannccee AArreeaass £ £ SSkkiilllss ddeevveellooppmmeenntt ttoo ddiivveerrssiiffyy tthhee eeccoonnoommiicc ((KKPPAAss)) bbaassee –– IInncceennttiivveess rreellaatteedd ttoo tthhee ppeerrffoorrmmaannccee ooff £ £ SSMMMMEE ddeevveellooppmmeenntt ttoo aacchhiieevvee LLEEDD aanndd rreessppoonnssiibbllee ooffffiicceess // ppeeooppllee ((iinnddiiccaatteedd iinn tthhee eeccoonnoommiicc ggrroowwtthh ““rreessppoonnssiibbiilliittyy””ccoolluummnn)) £ £ PPrroommoottiioonn aanndd ssuuppppoorrtt ooff ccoommmmuunniittyy ppaarrttiicciippaattiioonn iinn ccrriimmee pprreevveennttiioonn Key action areas not covered

SSuuppppoorrtt ooff iimmpplleemmeennttaattiioonn ooff tthhee pprrooppoosseedd aaccttiioonnss AAsssseessssmmeenntt £ £ SSoommee ddeeaaddlliinneess hhaavvee bbeeeenn ggiivveenn,, bbuutt tthheerree iiss nnoo cclleeaarr iinnddiiccaattiioonnooff hhooww ttoo iimmpplleemmeenntt tthhee aaccttiioonnss

£ Drives £ MMoosstt ddeevveellooppmmeenntt pprroojjeeccttss hhaavvee aa ddeeaaddlliinnee,, bbuutt nnoo iinntteerriimm mmiilleessttoonneess hhaavvee bbeeeenn idideennttiiffiieedd implementation well £ £ IInn mmoosstt ccaasseess,, rreessppoonnssiibbllee ppeeooppllee hhaavvee nnoott bbeeeenn iiddeennttiiffiieedd,, bbuutt tthhee ooffffiicceess rreessppoonnssiibbllee aarree iinnddiiccaatteedd ((ii..ee.. CCoorrppoorraattee SSeerrvviicceess oorr FFiinnaannccee)) –– HHoowweevveerr,, tthheerree iiss nnoo iinnddiiccaattiioonn ooff wwhhaatt tthhee rreessppoonnssiibbllee ooffffiiccee oorr ppeerrssoonn iiss eexxppeecctteedd ttoo ddoo aanndd hhooww ttoo gguuiiddee tthhee pprroojjeecctt ttoo ccoommpplleetteerreeaalliissaattiioonn

Does not drive implementation

UUP-WRD-Umkhanyakude Profile-301106-IS 33 Nodal Economic Profiling Project Business Trust & dplg, 2007 IDP assessment Umkhanyakude General assessment of the IDP in relation to Umkhanyakude

GGeenneerraall aasssseessssmmeenntt ––DDooeess tthhee IIDDPP ddeelliivveerr wwhhaatt iitt pprroommiisseess?? AAsssseessssmmeenntt £ £ Overall, the IDP contains the type of information that would be required to satisfy the mandate of a plan Overall, the IDP contains the type of information that would be required to satisfy the mandate of a plan Highly for improving quality of life and stimulating economic growth for improving quality of life and stimulating economic growth satisfactory £ £ HHoowweevveerr,, tthhee ddooccuummeenntt iiss mmoorree ooff aa ddaattaa--ccoollleeccttiioonn eexxeerrcciissee,, aanndd lleessss ooff aanniimmpplleemmeennttaabblleeppllaann £ £ TThheerree iiss nnoopprriioorriittiissaattiioonnooff iinniittiiaattiivveess;; nnoo ttrraaddee--ooffffss aappppeeaarr ttoo hhaavvee bbeeeenn mmaaddee £ £ TThhee IIDDPP iiss aaccttiioonn--oorriieenntteedd,, bbuutt iinn tthhee sseennssee tthhaatt iitt oouuttlliinneess wwhhaatt ttoo ddoo,, rraatthheerr tthhaann hhooww ttoo ddoo iitt £ £ IItt iiss uunncclleeaarr iiff aanndd hhooww tthhee pprrooggrreessss oonn tthhee iiddeennttiiffiieedd pprroojjeeccttsswwiilll bbee mmoonniittoorreedd,, oorr wwhhaatt ggoovveerrnnaannccee mmeeaassuurreess hhaavvee bbeeeenn ppuutt iinn ppllaaccee £ £ TThheerree iiss nnoo pprroocceessss ffoorr iinnvvoollvviinngg tthhee pprriivvaattee sseeccttoorr oorr tthhee ccoommmmuunniittyy

Delivers less than it promises

IIDDPP ccoonnttrriibbuuttiioonn ttoo ssttiimmuullaattiinngg eeccoonnoommiicc ggrroowwtthh AAsssseessssmmeenntt

WWhhaatt ttoo kkeeeepp ddooiinngg WWhhaatt ttoo ddoo ddiiffffeerreennttllyy Very useful to growth debate £ £ £ CCrreeaattee tthhee bbaassiicc sseett ooff ddeemmooggrraapphhiicc ddaattaa ffoorr £ UUppddaattee ddaattaa mmoorree ffrreeqquueennttlyly,, aanndd aadddd tthhee aarreeaa eeccoonnoommiicc ddaattaa ((sseeccttoorr--lleevveell ddaattaa,, iiff ppoossssiibbllee)) £ £ £ IIddeennttiiffyy tthhee lliisstt ooff ddeevveellooppmmeenntt nneeeeddss £ PPrriioorriittiisseebbeettwweeeenn ddiiffffeerreenntt pprroojjeeccttss bbyy £ £ IIddeennttiiffyy rreessppoonnssiibbllee ppeeooppllee ffoorr imimpplleemmeennttiinngg iiddeennttiiffyyiinngg tthhee mmoosstt ccrriittiiccaall nneeeeddss aanndd lliinnkkiinngg tthhee iiddeennttiiffiieedd nneeeeddss tthheessee ttoo tthhee aavvaaiillaabbllee bbuuddggeett £ £ CCrreeaattee ccoommpprreehheennssiivvee pprroojjeecctt ppllaannss ffoorr ddeelliivveerriinngg oonn pprroojjeeccttss £ £ IInnvvoollvvee tthhee pprriivvaattee sseeccttoorr aanndd tthhee ccoommmmuunniittyy Does not contribute iinn tthhee pprroocceessss to growth debate

UUP-WRD-Umkhanyakude Profile-301106-IS 34 Nodal Economic Profiling Project Business Trust & dplg, 2007 IDP assessment Umkhanyakude Summary of IDP assessments

LLeevveell ooff ddeettaaiill AAccttiioonnss pprrooppoosseedd DDeelliivveerryy

Highly comprehensive Highly Highly breadth depth action oriented satisfactory

Key issues Key action areas Delivers less than not covered not covered it promises

QQuuaalliittyy ooff SSuuppppoorrtt ooff CCoonnttrriibbuuttiioonn ttoo iinnffoorrmmaattiioonn iimmpplleemmeennttaattiioonn ssttiimmuullaattiinngg ggrroowwtthh

Highly Drives Very useful to reliable implementation well growth debate

Very risky to use for Does not drive Does not contribute investment decisions implementation to growth debate

UUP-WRD-Umkhanyakude Profile-301106-IS 35 Nodal Economic Profiling Project Business Trust & dplg, 2007 Development projects Umkhanyakude Local Economic Development (LED) initiatives

Project Funding Financial Funding No Status Responsibility Funding source details amount years status

District-wide LED Planning & Umkhanyakude 1 In progress 3,000,000 2003/2004 Yes Projects Tourism District Industrial Economic Planning & Development 3 Development Completed 500,000 2003/2004 Yes Tourism Corporation / Agency Umkhanyakude 4 Umkhanyakude Completed Planning & 2003/2004 Yes Umkhanyakude LED Unit Tourism District Emthonjaneni Umkhanyakude 6 Completed Technical 247,000 2003/2004 Yes Market Stalls District Nibela Umkhanyakude 9 Community Completed Technical 494,000 2003/2004 Yes District Gardens Coastal Cashew 13 Ongoing Technical 18,000,000 2003/2004 Yes Ithala Nuts Department of Block-making Economic programme per Planning & To be 16 Feasibility 2003/2004 No Development, local muncipality determined Tourism Environment and (LM) Tourism (DEDT)

Source: Umkhanyakude IDP 2005/2006 UUP-WRD-Umkhanyakude Profile-301106-IS 36 Nodal Economic Profiling Project Business Trust & dplg, 2007 Umkhanyakude Umkhanyakude poverty node

z Research process

z Overview

z Economy

¢ GDP and employment

– Overview ¢ Prioritisation of economic sectors – Selected sector: Tourism

– Selected sector: Agriculture

z Investment opportunities

z Summary

z Appendix

UUP-WRD-Umkhanyakude Profile-301106-IS 37 Nodal Economic Profiling Project Business Trust & dplg, 2007 Overview Umkhanyakude Nodal and provincial GDP The GDP per capita for the node has grown at a much lower rate than that for the province. The same is true for the GDP

GDP per Capita: 2004 (Constant 2000 Prices) Total GDP per Node (Constant 2000 Prices) 25,000 3.0 CAGR (1995-2004) CAGR (1995-2004) = 2.6% 2.5 3 s 7 3 9 9 d

1.4% 8 2 GDP per capita for the node . 8 7 6 7 . 5 . 3 n . 7 1 6 6 4 1 6 . 1 6 a 1 . 2.0 . . . 5 GDP per capita for the province 5.4% 1 1 1 . 1 R 1

1 f 9 o 2

1.5 20,000 0 0 4 s 7 , 3 7 2 4 n 3 8 3 9 1 1 , 0 6 6 o 1 9 , 7 6 i 7 7 5

l 1.0 , 5 , 3 l 7 3 , 1 i 1 , 6 , 6 1 , 6 6 1 6 B 1 6 1 1 1

1 0.5

15,000 0.0 4 3 2 1 0 9 8 7 6 5 5 0 0 0 0 0 9 9 9 9 9 s 2 0 0 0 0 0 9 9 9 9 9 d 2 2 2 2 2 2 1 1 1 1 1 , n 1 a 1 R

10,000 Total GDP per Province (Constant 2000 Prices) 200 174 CAGR (1995-2004) = 7.4% 162 166 151 158 s 160 138 142 143 144 d n a 9 6 7 0 6 6 8 5 4 9 2 R 4 8

5,000 5 120

6 4 5 9 4 3 3 f 2 1 1 , 0 0 0 , 9 0 92 , 9 , , , , o , , , 3

3 3 3 3 3 3 2 3 2 s

n 80 o i l l i

B 40 0 4 3 2 1 0 9 8 7 6 5 0 0 0 0 0 9 9 9 9 9 0 0 0 0 0 0 9 9 9 9 9 4 3 2 1 0 9 8 7 6 5 2 2 2 2 2 1 1 1 1 1 0 0 0 0 0 9 9 9 9 Comparison of 9 0 0 0 0 0 9 9 9 9 9 2 2 2 2 2 1 1 1 1 GDP per capita 1 with provincial 26.2% 18.7% 18.4% 18.6% 18.5% 18.3% 18.8% 18.3% 19.1% 18.5% average

Source: Quantec, Monitor analysis UUP-WRD-Umkhanyakude Profile-301106-IS 38 Nodal Economic Profiling Project Business Trust & dplg, 2007 Overview Umkhanyakude Contribution to GDP and employment by economic sector Government remains by far the largest employer and the largest contributor to GDP in Umkhanyakude, although tourism is quite large as well

Contribution to GDP by Sector: 2004 Contribution to Employment by Sector: 2004 (Constant 2000 Prices) Transport & Mining Communication 2.4% Mining Electricity & 10.6% Electricity & 2.4% Water Construction Water Construction 1.3% 4.1% 1.3% 3.0%

Manufac- Manufac- turing General turing 8.2% Government 6.6% General Government Community, Services Finance & Services Social & Other 24.9% Business Personal Services Services 28.3% 9.9% 10.3% Agriculture, Agriculture, Forestry & Wholesale & Forestry & Retail Trade; Fishing Fishing Community, Catering & 10.4% 10.6% Social & Other Accommodation Wholesale Finance & Personal Services Business 18.3% & Retail Trade; 22.6% Services Catering & Transport & Accommodation 10.6% Communication 13.6% 10.6%

Source: Quantec, Monitor analysis UUP-WRD-Umkhanyakude Profile-301106-IS 39 Nodal Economic Profiling Project Business Trust & dplg, 2007 Overview Umkhanyakude GDP by sector Combining size and growth rate helps to identify sectors that may have good growth potential

GDP by Sector: 2004 (Constant 2000 Wholesale & Retail Trade; Prices) Transport & Communication Catering & Accommodation 500 Transport Communication Trade Catering General Government Services 450 121 90 2004 315 38

57% 43% 4 400 89% 11% 0

0 Average CAGR Wholesale & 2

: Retail Trade;

s 350 for GDP: 2.6%

d Catering & 98 32 1995 175 29 n Accommodation a R

300 75% 25% 86% 14% f o

s Finance & 0 60 120 180 240 0 100 200 300 400 n Transport & o 250 i

l Business l

i Communication Agriculture, Forestry & Fishing Services Manufacturing M 200 Agriculture, n Food Wood Other

i Community, Social Forestry & Fishing

P & Other Personal D 150 Manufacturing Services 201 2004 73 26 60 G 46% 16% 38% 100

Mining Construction 50 180 1995 65 27 47 Electricity & Water 47% 20% 34% 0 -2% 0% 2% 4% 6% 8% 0 70 140 210 0 50 100 150 200 CAGR: 1995-2004

Source: Quantec, Monitor analysis UUP-WRD-Umkhanyakude Profile-301106-IS 40 Nodal Economic Profiling Project Business Trust & dplg, 2007 Overview Umkhanyakude Employment by sector In terms of jobs created, Government and Community Services are the most significant sectors

Wholesale & Retail Trade; Employment by Sector Finance & Business Services Catering & Accommodation 9,000 General Finance Business Trade Catering Government 8,000 services 540 2,554 2004 3,253 862

Community, 17% 83% 79% 21% 7,000 Social and Average CAGR Other Personal Services 1995 6,000 for Employment: 1.4% 347 1,302 2,317 1,146 4 0

0 21% 79% 67% 33% 2

:

t 5,000 n Wholesale & 0 1,000 2,000 3,000 4,000 0 2,000 4,000 6,000 e

m Retail Trade;

y Agriculture, Forestry & Fishing Manufacturing 4,000 Catering & o l

p Accommodation Food Wood Other Agriculture, m

E 3,000 Forestry & Fishing Finance & 3,210 2004 560 515 923 Business 2,000 Manufacturing Services 28% 26% 46%

Construction 1,000 3,193 1995 694 472 1,031 Mining Transport & Communication Electricity & Water 32% 21% 47% 0 -15% -10% -5% 0% 5% 10% 0 700 1,400 2,100 2,800 3,500 0 1,000 2,000 3,000 CAGR: 1995-2004

Source: Quantec, Monitor analysis UUP-WRD-Umkhanyakude Profile-301106-IS 41 Nodal Economic Profiling Project Business Trust & dplg, 2007 Overview Umkhanyakude Quantitative prioritisation using economic data The average index (from 100, high, to 0, low) represents a quantitative assessment of the potential for economic growth and job creation of the ten different sectors

GDP Employment

2004 GDP in Sectors Employment Average index constant 2000 GDP index Number of prices employees: index (Millions of 2004 High rands)

General Government Services 480 100 8,532 100 100

Wholesale & Retail Trade; Catering 353 72 4,115 47 60 & Accommodation Community, Social & Other 192 37 6,814 80 58 Personal Services

Agriculture, Forestry & Fishing 201 39 3,210 37 38

Finance & Business Services 205 40 3,094 35 37

Manufacturing 159 29 1,997 22 26

Transport & Communication 211 41 632 6 23

Construction 57 7 1,229 13 10

Mining 47 5 402 3 4 Low

Electricity & Water 26 0 124 0 0

Source: Quantec, Monitor analysis /100 /100 /100 UUP-WRD-Umkhanyakude Profile-301106-IS 42 Nodal Economic Profiling Project Business Trust & dplg, 2007 Overview Umkhanyakude Qualitative prioritisation of the top five sectors

Average Sectors Potential for growth Assessment index

¤ Most local government staff live outside the node, hence they spend their income largely General outside the node Government 100 ¤ There are no monopoly endowments in this sector in the node, as far as governance skills Services and capabilities are concerned ¤ Most of the local people don’t have the skills for the kinds of jobs in this sector

¤ The node has great tourism resources which are only partly exploited, including many Wholesale & game parks, the Greater St Lucia Wetland Park, the coastline, etc Retail Trade; ¤ This sector has huge potential to attract an inflow of money, because the resources it has 60 Catering and are in high demand outside the node but not readily available elsewhere Accommodation ¤ There are many employment opportunities in tourism establishments for the local people, which require minimal skills / training

¤ Most of the staff live in the node but a large portion of their incomes is remitted to Community, relatives outside the node

Social & Other ¤ 58 There are no monopoly endowments in this sector in the node, as far as skills and Personal capabilities are concerned

Services ¤ Most of the local people don’t have the skills to do the kinds of jobs in this sector

¤ The published GDP for agriculture in this node excludes all non-commercial farming ¤ The node has rich, vast agricultural resources which are utilised to a very low extent Agriculture, – The Makhathini Flats area is very fertile with good access to water (i.e. Jozini Dam) Forestry & 38 ¤ The demand for the types of agricultural products produced in the node (especially fruit Fishing and vegetables) is high outside the node, hence there is huge potential to stimulate an inflow of money to the node ¤ Most local people have the skills to work in this sector

Finance & ¤ There are no monopoly endowments in this sector in the node, as far as skills and Business 37 capabilities are concerned Services ¤ Most of the local people don’t have the skills to be hired for the kinds of jobs in this sector

= High potential = Low potential

UUP-WRD-Umkhanyakude Profile-301106-IS 43 Nodal Economic Profiling Project Business Trust & dplg, 2007 Umkhanyakude Umkhanyakude poverty node

z Research process

z Overview

z Economy

– Overview ¥ Description of current value chain

¥ Growth constraints and solutions

– Selected sector: Tourism ¥ Potential for sector

¥ Past and current efforts – Selected sector: Agriculture

z Investment opportunities

z Summary

z Appendix

UUP-WRD-Umkhanyakude Profile-301106-IS 44 Nodal Economic Profiling Project Business Trust & dplg, 2007 Selected sector: Tourism Umkhanyakude Overview

IInnppuuttss PPrroodduuccttiioonn TTaarrggeett mmaarrkkeettss

WWhhaatt ddoo tthheeyy ddoo // pprroodduuccee?? WWhhoo ddoo tthheeyy sseerrvvee // ttaarrggeett // WWhhaatt ddoo tthheeyy rreellyy oonn?? HHooww?? sseellll ttoo?? ¥ ¥ The abundance of wildlife and ¥ Establishments ranging from About 60% of visitors are natural beauty includes: basic chalets, to B&Bs and domestic, and 40% are five-star game lodges international – Big Five ¥ Major activities include: – Domestic visitors come – Bird species mainly from KZN – Game drives – Rare plant species – International visitors come

¥ – Whale watching Pristine beaches and marine mainly from Europe life – Scuba diving (Germany, Netherlands, France), the UK and the – Whales – Canoeing USA

– Turtles – Cultural tours ¥ Aim to grow their share of – Dolphins ’s international

¥ tourist arrivals Ecotourism ¥ Market mainly through tour – Greater St Lucia Wetland operators, brochures and own Park websites

UUP-WRD-Umkhanyakude Profile-301106-IS 45 Nodal Economic Profiling Project Business Trust & dplg, 2007 Selected sector: Tourism Umkhanyakude Inputs The major tourism resources cover about a third of the area of the node

Area Covered Name of Resource (km2) and % Key Attractions for Tourists of Node Area

GSWP Terrestrial Area1 1,410 ¤ Nature walks / hiking trails ¤ 11.0% Forest landscapes

GSWP Marine Reserve2 796 ¤ Scuba diving, whale watching, canoeing 6.2% ¤ Largest freshwater lake in SA

Hluhluwe-Imfolozi 665 ¤ Game drives

Game Reserve ¤ 5.2% Virtual guarantee of spotting the Big Five

Mkuzi Game Reserve 365 ¤ Game drives (viewing some of the Big Five) 2.8% ¤ Vast bird and plant life

Tembe Elephant Park 301 ¤ Largest African elephants in the world 2.3%

Ndumu Game Reserve 119 ¤ Game drives (viewing some of the Big Five) 0.9%

Private Conservation 626 ¤ High-end accommodation in the Areas and Game Parks middle of a game park 4.9%

Total 4,283 33.4%

Note: 1 Excluding Mkuzi Game Reserve, 2 Including Lake St Lucia and Lake Sibaya Source: District Tourism Plan UUP-WRD-Umkhanyakude Profile-301106-IS 46 Nodal Economic Profiling Project Business Trust & dplg, 2007 Selected sector: Tourism Umkhanyakude Production ± Types of establishments The tourism sector is geared towards to the domestic market, which is of lower value than the international market

Distribution of Tourism Establishments and Beds by Location Distribution of Beds by Type of Establishment 5,000 Hotels B&Bs / Guest Houses 4.7% St Lucia (Mainly 4.7% 4,000 B&Bs and Chalets) Sodwana Bay Game

s (Mainly Chalets and Lodges d 3,000 e Campsites) B 10.6%

f o

Caravans & . Holiday o 2,000 Camping N Flats 49.3% Mkuze (Mainly 15.1% 1,000 Game Lodges) Hluhluwe-Imfolozi Huts & (Mainly High-end Game Chalets Lodges) 17.3% 0 0 10 20 30 40 50 60

No. of Establishments Total Beds = 11,208

Accommodation in the area is predominantly self-catering, which tends to be geared towards domestic tourists. The self-catering establishments are mainly found in the Greater St Lucia Wetland Park. Only about 15% of available beds (approximately 1,722 beds) appear to be targeted at high- end tourists. Source: Grant Thornton Kessel Feinstein Study, 1999, District LED Report, 2003 UUP-WRD-Umkhanyakude Profile-301106-IS 47 Nodal Economic Profiling Project Business Trust & dplg, 2007 Selected sector: Tourism Umkhanyakude Production ± Pricing and employment

PPrriicciinngg EEmmppllooyymmeenntt

zz Pricing of Accommodation IItt iiss eessttiimmaatteedd tthhaatt aapppprrooxxiimmaatteellyy 33,,000000 people were employed within the tourism Rate per Person Sharing per people were employed within the tourism Accommodation Grade Night1 (incl. breakfast) sseeccttoorr iinn tthhee UUmmkkhhaannyyaakkuuddee aarreeaa iinn 2006 R350 2006

R600

R2,500

Pricing of Popular Activities / Packages

Description of Activity Price1

Full and half day trips to Hluhluwe-Imfolozi, Dumazulu, False Bay Park (historic), St Lucia (boat R400 pp cruises & walks), private reserves, & Ilala Weavers R300 pp (lunch Diving day trips to Sodwana included) Three-day game reserve stay, including visits to R4,000 pp Mkuzi and Hluhluwe-Imfolozi

Note: 1 Approximate average prices Source: Tourist brochures, establishments’ own websites UUP-WRD-Umkhanyakude Profile-301106-IS 48 Nodal Economic Profiling Project Business Trust & dplg, 2007 Selected sector: Tourism Umkhanyakude Target markets

MMaarrkkeettss MMaarrkkeettiinngg,, CChhaannnneellss aanndd CCoommppeettiittoorrss ¤ ¤ MMaarrkkeettiinngg tteennddss ttoo hhaappppeenn tthhrroouugghh ttoouurr ooppeerraattoorrss,, bbrroocchhuurreess oorr 500 150 oowwnn wweebbssiitteess Other (9) – The Elephant Coast Tourism Association publishes an International N. America (7) – The Elephant Coast Tourism Association publishes an 400 Domestic 120 iinnffoorrmmaattiioonn bbrroocchhuurree ffoorr tthhee aarreeaa 32 Rest of Europe – However, there is a perception among smaller s – However, there is a perception among smaller d

n 300 145 90 ((pprreeddoommiinnaannttllyy bbllaacckk--oowwnneedd)) bbuussiinneesssseess tthhaatt tthheeyy aarree nnoott a s UK given adequate exposure in the brochure u 47 given adequate exposure in the brochure o

h 200 60 –– SSoommee bbuussiinneessss oowwnneerrss ((eevveenn SSMMMMEEss)) hhaavvee ssttaarrtteedd T aatttteennddiinngg iinntteerrnnaattiioonnaall ttoouurriissmm ffaaiirrss ttoo sshhoowwccaassee tthheeiirr 100 217 30 50 Germany pprroodduuccttss ¤ 0 0 ¤ MMoosstt iinntteerrnnaattiioonnaall vviissiittoorrss aarree aattttrraacctteedd vviiaa ttoouurr ooppeerraattoorrss No. of Tourists No. of Tourists –– TThheessee ssaalleess uussuuaalllyy ffoorrmm ppaarrtt ooff aa llaarrggeerr ppaacckkaaggee tthhaatt iinncclluuddeess ZZuulluullaanndd ccuullttuurraall ttoouurrss,, tthhee DDrraakkeennssbbeerrgg,, tthhee ¤

¤ Garden Route and Cape Town AAlltthhoouugghh 4400%% ooff tthhee aarreeaa’’ss ttoouurriissttss aarree ffrroomm wweeaalltthhyy oovveerrsseeaass Garden Route and Cape Town – Some sales take place via the website, but these are less ccoouunnttrriieess,, tthhee aaccccoommmmooddaattiioonn rraannggee iiss nnoott eeqquuiippppeedd ttoo ccaatteerr ffoorr – Some sales take place via the website, but these are less common for SMMEs because of poor access to IT systems tthhiiss mmaarrkkeett common for SMMEs because of poor access to IT systems – Highlights: game viewing (Big Five), natural environment,

– Highlights: game viewing (Big Five), natural environment, ¤ ¤ The region views the Kruger Park as its major competitor, largely uunnssppooiillttbbeeaacchheess The region views the Kruger Park as its major competitor, largely bbeeccaauussee ooff tthhee wwiillddlliiffee ssiimmiillaarriittyy –– DDiissaappppooiinnttmmeennttss:: llooww qquuaalliittyy ooff sseerrvviicceess aatt eessttaabblliisshhmmeennttss,, – Its view is that Kruger has too many years of history, brand oovveerr--bbooookkiinnggss ooff pprriimmee aattttrraaccttiioonnss,, llaacckk ooff aaddeeqquuaattee ppuubblliicc – Its view is that Kruger has too many years of history, brand exposure and too large a budget for them to compete head- ffaacciilliittiieess ffoorr llaarrggee ggrroouuppss ((aabblluuttiioonnss,, ppiiccnniicc ssiitteess,, eettcc..)) exposure and too large a budget for them to compete head-

¤ on

¤ on TThhee mmaajjoorriittyy ooff ddoommeessttiicc vviissiittoorrss tteenndd ttoo bbee ffrroomm KKZZNN –– IItt ffeeeellss tthhaatt tthhee ggaammee ppaarrkkss iinn tthhee aarreeaa sshhoouulldd bbee ssoolldd iinn – They tend to stay in self-catering accommodation or caravan – They tend to stay in self-catering accommodation or caravan ccoonnjjuunnccttiioonn wwiitthh KKrruuggeerr,, ttoo ggiivvee vviissiittoorrss aa ppeerrssppeeccttiivvee ooff tthhee parks / campsites (which the area caters well for) parks / campsites (which the area caters well for) ddiiffffeerreenncceess bbeettwweeeenn tthhee ttwwoo ((ppaarrttiiccuullaarrllyy tthhee ddiiffffeerreenntt ¤ ¤ HHiigghh sseeaassoonn iiss ffrroomm OOccttoobbeerr ttoo AApprriill,, llooww sseeaassoonn ffrroomm MMaayy ttoo JJuullyy llaannddssccaappee aanndd vveeggeettaattiioonn)) ¤ ¤ OOccccuuppaannccyy rraatteess rraannggee ffrroomm 8800--9900%% iinn tthhee hhiigghh sseeaassoonn,, ttoo 4400-- –– TThhee mmaaiinn sseellliinngg ppooiinntt iiss aa uunniiqquuee ““bbeeaacchh aanndd bbuusshh”” 5500%% iinn tthhee llooww sseeaassoonn eexxppeerriieennccee

Source: LED Plan, Tour operators UUP-WRD-Umkhanyakude Profile-301106-IS 49 Nodal Economic Profiling Project Business Trust & dplg, 2007 Selected sector: Tourism Umkhanyakude Barriers / Solutions related to inputs

Barrier / Constraint Potential Solution

¦ Land-claims issues ¦ Proactively address land claims – Uncertainty over who owns the land to be developed – Work with the Land Claims Commission to resolve has hampered investment in the area, particularly in existing claims high-end products – Prioritise land that has high tourism potential, and use this as a lever to convince the key stakeholders of the economic benefit of expediting the process

¦ Lack of skills and/or motivation among municipal ¦ Create more rigorous governance structures staff – Set up a board for the municipality which has an – There is a perception that municipal staff do not have equal representation between the public and private the skills required to implement projects because they sectors are not hired on merit – Ensure that staff are hired on merit – There is also a perception that because many of the – Institute programmes to identify talent from within the municipal staff live outside the district, they are not poverty node to fill key municipal positions motivated to bring about change in the district

¦ Access to information ¦ Ensure linkage between provincial tourism bodies – The local people do not have easy access to and South African Tourism (Satour) information on what the needs of consumers are, and – This will allow the local tourism stakeholders to on how to utilise the tourism resources in the area to leverage off Satour’s research to better understand meet those needs consumers’ needs

¦ Lack of skills amongst local people ¦ Enlist the help of mentorship organisations – The local people do not have an understanding of – Municipalities should develop relationships with what is required to run a tourism business organisations that provide business skills training and successfully mentorship (particularly in tourism) and create the channels for putting them in touch with entrepreneurs

UUP-WRD-Umkhanyakude Profile-301106-IS 50 Nodal Economic Profiling Project Business Trust & dplg, 2007 Selected sector: Tourism Umkhanyakude Barriers / Solutions related to inputs (Continued)

Barrier / Constraint Potential Solution

¦ Absence of a proper tourism-development plan ¦ Create a tourism development plan – Even with appropriate skills in the municipality, – Engage a research firm with strong tourism expertise, tourism development would still be hampered by the if necessary, to write a plan that outlines which areas absence of a cogent tourism plan and spatial in the node to use for what type of tourism enterprise. development framework to guide the optimal The plan should include a list of priority projects and a utilisation of tourism resources “how to” guide for each project’s implementation needs – Involve existing tourism business owners as well as local people, to ensure that all constituents’ needs are catered for

¦ Lack of cooperation between public and private ¦ Promote relationship building between public and sector private sector – Most business owners feel that the municipalities are – Encourage involvement of the private sector in incapable of mobilising tourism budgets effectively municipal tourism department initiatives, including and therefore do not interact with them on issues of project identification, prioritisation of budget, land-use promoting the area designations, etc. – Municipalities feel that the private sector is not – Encourage municipalities to become actively involved dedicated to transformation and need to change their in the activities of the tourism association mindset – Encourage Previously Disadvantaged Individuals (PDIs) with private sector interests and good relationships with the public sector to help bridge the divide between the two

UUP-WRD-Umkhanyakude Profile-301106-IS 51 Nodal Economic Profiling Project Business Trust & dplg, 2007 Selected sector: Tourism Umkhanyakude Barriers / Solutions related to target markets

Barrier / Constraint Potential Solution

¦ Lack of knowledge among consumers of what the ¦ Increase exposure of the area’s value proposition area has to offer – Don’t focus too heavily on the game park / Big Five – The tourism establishments constantly hear the experience following type of comments from people at tourism – Promote the marine wildlife concept, the beaches and fairs: “We didn’t know you had that in the Elephant the natural beauty Coast!” – Play up the unique concept of being able to experience “beach and bush in one location”

¦ Suboptimal accessibility ¦ Development of access by air – The driving distance to get there from major markets – Improve the airport facilities at Mkuze like Durban and is comparable to – Negotiate regular flights to the area from major driving to the Kruger Park or flying to Botswana centres with the commercial airlines

¦ Unfounded negative perceptions of the area ¦ Address perceptions head-on – There is a perception that hijackings are rife in the – Develop a comprehensive understanding of the area negative perceptions of the area among the target – Malaria has been practically eradicated from the area market (through market research) but this is not common knowledge among consumers – Fashion the marketing messages to allay these fears

¦ Mismatch between supply and demand ¦ Develop a comprehensive understanding of demand – The Tourism Association is keen on growing its share – Perform market research to understand the highest of SA’s international tourist arrivals, but the current priority needs among key target markets accommodation is geared more towards the domestic – Incorporate new information into the tourism- market development plan to ensure that any planned supply meets the identified demand

UUP-WRD-Umkhanyakude Profile-301106-IS 52 Nodal Economic Profiling Project Business Trust & dplg, 2007 Selected sector: Tourism Umkhanyakude Assessment of the potential of the tourism sector

NNeeww aaiirrppoorrtt aatt MMkkuuzzee,, hhiigghh--eenndd PPrreeddoommiinnaannttllyy rreessoorrtt aatt CCaappee hhiigghheerr--eenndd RR112255 mmiilllliioonn VViiddaall && mmoorree ttoouurriissttss iinn aaddddiittiioonnaall ffooccuusseedd mmaarrkkeettiinngg × RR22,,550000 aavveerraaggee = rreevveennuuee 5500,,000000 aaddddiittiioonnaall ssppeenndd ppeerr ttoouurriisstt ttoouurriissttss ppeerr yyeeaarr

NNeeww aaiirrppoorrtt aatt MMkkuuzzee,, hhiigghh--eenndd rreessoorrtt aatt CCaappee VViiddaall && mmoorree 11 nneeww jjoobb ffoorr 440000 nneeww jjoobbss ffooccuusseedd mmaarrkkeettiinngg × eevveerryy 112200 ttoouurriissttss** = ccrreeaatteedd 5500,,000000 aaddddiittiioonnaall ttoouurriissttss ppeerr yyeeaarr

Note: *This figure is based on the current ratio of 3,000 employees in the tourism sector and 362,000 arrivals per year Source: District Tourism Plan UUP-WRD-Umkhanyakude Profile-301106-IS 53 Nodal Economic Profiling Project Business Trust & dplg, 2007 Selected sector: Tourism Umkhanyakude Barriers / Solutions to investments

Idea Business Plan Funding Implementation ¤ ¤ ¤ ¤ No tourism Lack of skills in writing a business Land claims and presence of Lack of skills and association at the plan tribal communities / rules motivation among the district level – The consequence is that the ¤ Small businesses don’t get municipal staff ¤ No creative ways of person usually gives up on the funding for marketing – They have plenty of linking the tourist idea initiatives studies conducted by Barriers / products (i.e. game ¤ Lack of funding to outsource the ¤ Small businesses are hesitant consultants and reserves, St Lucia writing of a business plan to borrow from the banks (i.e. researchers, but Blockages area, Sodwana) with – However, when business plan not willing to pay interest) and don’t know how to the local people and writing is outsourced, the initial prefer to wait until they have implement them with direct benefits idea of the entrepreneur can be earned enough money on their ¤ Small businesses don’t for them misrepresented due to own to start a business or to have funding to train miscommunication expand their workforce ¤ ¤ Encourage the ¤ Training on how to write a business ¤ Engage Land Claims Institute rigorous existing tourism plan Commission to expedite the processes for hiring the association to widen ¤ Initiatives like Gijima KZN, which process appropriate skills, on its coverage and help people develop compelling ¤ Encourage tourism merit include all types of plans association and municipalities ¤ Educate SMMEs on how tourism players from to dedicate a larger slice of the to appropriately budget Potential across the area budget to promoting SMMEs for both capital and ¤ Solutions Develop information ¤ Expose SMMEs to different operational funding centres for local funding sources needs people to access ¤ Educate SMMEs on the ideas for benefits of funding a business participating in the through borrowing tourism sector

UUP-WRD-Umkhanyakude Profile-301106-IS 54 Nodal Economic Profiling Project Business Trust & dplg, 2007 Selected sector: Tourism Umkhanyakude Key contacts

Position / Name Reason to Contact Organisation

Roland Vorwerk Media and ¦ Represents the Elephant Coast association Communications ¦ Understands the dynamics of the tourism industry in the node Coordinator, St Lucia ¦ Has ideas on how to link the area to other tourist locations

Park ¦ Is responsible for coordinating marketing efforts and promoting the area

James Seymour General Manager, KZN ¦ Has a deep understanding of the tourism challenges in KZN and in Tourism Umkhanyakude itself ¦ Is well networked in the sector across the country ¦ Possesses reports containing key statistics and development / investment needs for the area

Elliot Nkosi IFA Group ¦ His company proposed the idea of developing a large resort at Cape Vidal ¦ Is able to provide valuable information on the project status and barriers

Andrew Zaloumis CEO: Greater St Lucia ¦ Is able to provide more detail on proposed investments in the park, Wetland Park Authority and ideas for involving local people in the tourism industry

Gareth Coleman Gijima KZN ¦ Formerly CEO of KZN Tourism ¦ Can provide information on investment opportunities in the node

Greg Ogle Independent Consultant ¦ Is planning on researching the feasibility of the airport at Mkuze, and ways of involving more local people in the tourism industry

UUP-WRD-Umkhanyakude Profile-301106-IS 55 Nodal Economic Profiling Project Business Trust & dplg, 2007 Umkhanyakude Umkhanyakude poverty node

z Research process

z Overview

z Economy

– Overview

– Selected sector: Tourism ¦ Description of current value chain

¦ Growth constraints and solutions

– Selected sector: Agriculture ¦ Potential for sector

¦ Past and current efforts z Investment opportunities

z Summary

z Appendix

UUP-WRD-Umkhanyakude Profile-301106-IS 56 Nodal Economic Profiling Project Business Trust & dplg, 2007 Selected sector: Agriculture Umkhanyakude Overview

IInnppuuttss PPrroodduuccttiioonn TTaarrggeett mmaarrkkeettss

WWhhaatt ddoo tthheeyy ddoo // pprroodduuccee?? WWhhoo ddoo tthheeyy sseerrvvee // ttaarrggeett // WWhhaatt ddoo tthheeyy rreellyy oonn?? HHooww?? sseellll ttoo?? ¦ ¦ Vast tracts of rich, fertile soil ¦ Main crops produced are: Sugar cane is mainly sold to the local sugar mills – About 20% of the area is – Sugar cane considered high potential ¦ Fruit, vegetables and poultry – Cotton land for agriculture are largely sold to people in the – Fruit and vegetables node – The area at Makhathini ¦ Flats has been termed “the ¦ There is also cattle and poultry Access to large markets bread basket of the farming and timber plantations (Durban, Johannesburg) is

country” ¦ poor (lack of good roads, Majority of farming ventures

¦ transport vehicles and Temperate, subtropical climate are subsistence business contacts), but and presence of Jozini Dam – Only about 10% of the high potential is huge – Allows for a large variety of potential land is used for crops to be grown commercial farming

¦ Consistent rainfall pattern – Reduces the need for irrigation systems

UUP-WRD-Umkhanyakude Profile-301106-IS 57 Nodal Economic Profiling Project Business Trust & dplg, 2007 Selected sector: Agriculture Umkhanyakude Inputs The area is blessed with vast amounts of high potential arable land, and an abundant water supply from the nearby dam

AAggrriiccuullttuurraall rreessoouurrcceess CCaappiittaall aanndd hhuummaann aasssseettss ¦ ¦ CCaappiittaall aasssseettss:: Lower rainfall, which makes –– JJoozziinniiDDaamm:: tthhee tthhiirrdd--llaarrggeesstt ddaamm iinn tthhee ccoouunnttrryy,, irrigation systems largely under-utilised but with great potential to be necessary; more broken largely under-utilised but with great potential to be Non-arable topography (land small and uusseedd ffoorr iirrrriiggaattiioonn Land fragmented) 3.9%

High Potential Land Medium 20.3% Potential Land Fertile soil, Low 51.6% consistent rainfall Potential patterns, tropical Land –– PPoooorr iirrrriiggaattiioonn ssyysstteemm aanndd aa hhaallff--ccoommpplleetteedd ccoolldd and subtropical 24.2% storage facility at Makhathini Flats climate which storage facility at Makhathini Flats ¦ allows for a wide ¦ HHuummaann aasssseettss:: range of crops (including tropical –– AAvvaaiillaabbllee wwiitthh rreeggaarrdd ttoo aa ssuubbssiisstteennccee aapppprrooaacchh ttoo fruits on the tthhee ccoommmmoonnllyy pprroodduucceedd ccrrooppss ((ssuuggaarr ccaannee,, ccoottttoonn,, coastal plain) to timber) be grown timber) –– NNeeeedd ttrraaiinniinngg oonn ggrroowwiinngg tthhee mmoorree pprrooffiittaabbllee ccrroopp ttyyppeess ((ffrruuiitt aanndd vveeggeettaabblleess)) aanndd oonn hhooww ttoo eemmppllooyy aa mmoorree ccoommmmeerrcciiaall aapppprrooaacchh Source: District Tourism Plan, LED Plan UUP-WRD-Umkhanyakude Profile-301106-IS 58 Nodal Economic Profiling Project Business Trust & dplg, 2007 Selected sector: Agriculture Umkhanyakude Production A proper plan needs to be instituted to prioritise the growth of high-value crops

EEmmppllooyymmeenntt

100% 30 100% Formal Informal 24 80% 21.2 80% 52% Other sectors 60% 18 60% s 89% Other sectors d n

40% a 18.0 s 12 40% u o

48% Agriculture h 20% T 6 20% 3.2 11% Agriculture 0% 0 0% Informal Jobs No. of Employees Formal Jobs

) Number of Hectares per Crop, and Profitability s

d 70

n Timber a Production and profitability s Production and profitability u o § § h 35 Sugar cane t Cotton profitability: extremely low on dry land, slightly

( Cotton profitability: extremely low on dry land, slightly

p hhiigghheerr oonn iirrrriiggaatteedd llaanndd;; iinntteerrnnaattiioonnaall pprriiccee iiss ttoooo llooww o r § §

C 0 Sugar cane: medium-high profitability, but transportation to

Sugar cane: medium-high profitability, but transportation to r

e 0 1 2 3 4 5 tthhee mmiilll iiss eexxppeennssiivvee aanndd wwaasstteess ssoommee ooff tthhee pprroodduucctt p §

§ s 5 TTiimmbbeerr:: mmeeddiiuumm pprrooffiittaabbiilliittyy bbeeccaauussee ooff tthhee lloonngg ppeerriioodd e r Pineapples necessary to harvest it (seven to eight years) a necessary to harvest it (seven to eight years)

t Cotton § c Fruit & Veg § e 3 FFrruuiitt aanndd vveeggeettaabblleess:: hhiigghh ddeemmaanndd eessppeecciiaalllyy ffoorr bbaabbyy H

f vveeggeettaabblleess aanndd ttrrooppiiccaall ffrruuiittss;; eeaarrlliieerr rriippeenniinngg ttiimmeess tthhaann o

. eellsseewwhheerree iinn tthhee ccoouunnttrryy o § 0 § N PPiinneeaapppplleess:: bbiigg pprroodduuccttiioonn nnoorrtthh ooffHHlluuhhlluuwwee;; ssmmaalll ffaarrmmeerrss 0 1 2 3 4 5 sseelll aalloonngg tthhee mmaaiinn rrooaadd,, bbuutt pprroodduuccee iiss aallssoo sseenntt ttoo DDuurrbbaann Low Qualitative Assessment of Profitability High

Source: Umkhanyakude Economic Themes Report by Humphrey Glass, 2006, Interviews UUP-WRD-Umkhanyakude Profile-301106-IS 59 Nodal Economic Profiling Project Business Trust & dplg, 2007 Selected sector: Agriculture Umkhanyakude Target markets Improved access to markets is likely to increase exports significantly

EExxppoorrtt ttrreennddss CChhaannnneellss,, mmaarrkkeettiinngg aanndd ccoommppeettiittoorrss

zz CChhaannnneell // IInntteerrffaaccee –– CCuurrrreennttllyy rreettaaiilleerrss –– SSoommee aaggrreeeemmeennttss wwiitthh bbiigg cchhaaiinnss ((ii..ee.. WWoooollwwoorrtthhss,, PPiicckk ’’nn PPaayy)) bbuutt nneeeedd ttoo aaddoopptt iinntteerrnnaattiioonnaall ssttaannddaarrddss iinn tthheeiirr pprroodduuccttiioonn,, ssoorrttiinngg aanndd ssttoorraaggee mmeetthhooddss Gauteng Mpumalanga Medium zz MMaarrkkeettiinngg potentiaVle getable, poultry land and cattle sold to –– TThhee MMaakkhhaatthhiinnii FFllaattss RReesseeaarrcchh SSttaattiioonn iiss people in the node Poor access to major ppaarrtt ooff tthhee NNaattiioonnaall AAggrriiccuullttuurree RReesseeaarrcchh Low 4M9e.3d%ium markets like potential potenEtxipaol rt of sugarcane CCoouunncciill aanndd tthhee DDeeppaarrttmmeenntt ooff AAggrriiccuullttuurree.. Johannesburg land landto Mtubatuba mill TThhee aarreeaa rreecceeiivveess eexxppoossuurree aass aa pprriimmee Kw1a7ZL.3uo%lwu 49.3% aaggrriiccuullttuurraall ssiittee tthhrroouugghh sshhaarriinngg ooff Natal potential Export of pineapples iinnffoorrmmaattiioonn aammoonngg rreesseeaarrcchheerrss land and fruit to Durban for 17.3% archer production zz CCoommppeettiittoorrss // TThhrreeaatt ooff SSuubbssttiittuuttee PPrroodduuccttss –– CCoottttoonn ccaann bbee bboouugghhtt aatt mmuucchh lloowweerr pprriicceess ffrroomm MMaallaawwii

Source: District Tourism Plan, LED Plan UUP-WRD-Umkhanyakude Profile-301106-IS 60 Nodal Economic Profiling Project Business Trust & dplg, 2007 Selected sector: Agriculture Umkhanyakude Barriers / Solutions related to inputs

Barrier / Constraint Potential solution

¦ Land-claims issues ¦ Proactively address land claims – Land claims are present on the majority of State – Work with the Land Claims Commission to resolve land. Such land is unavailable for development existing claims until the claims are resolved – Prioritise land that has high agriculture potential, and use this as a lever to convince the key stakeholders of the economic benefit of expediting the process

¦ Lack of an appropriate irrigation scheme at ¦ Upgrade the current irrigation system and the links to Makhathini Flats and elsewhere the Jozini Dam – A reliable source of water for irrigation is necessary to shift the production towards more profitable crops

¦ Widespread presence of subsistence farming ¦ Demonstrate to sceptical subsistence farmers that – Focus tends to be on food security when selecting commercial farming methods can be more productive crops and agriculture practices and more profitable by performing a pilot on adjacent – Shift to commercial farming is difficult and requires land traditional mindsets to be changed

UUP-WRD-Umkhanyakude Profile-301106-IS 61 Nodal Economic Profiling Project Business Trust & dplg, 2007 Selected sector: Agriculture Umkhanyakude Barriers / Solutions related to target markets

Barrier / Constraint Potential solution

¦ No sugar mills in the area of Makhathini Flats ¦ A major sugar mill seems to be in the pipeline at – Sugar cane is transported to mills in Mtubatuba or Mjindini in the Makhathini Flats Pongola – Planned project consists of 14,000 hectares (ha) – The transport costs are too high for many farmers of State land and 11,000 ha of private land, and to turn a profit has budget of R100 million

¦ Lack of adequate storage and transportation ¦ Complete the cold storage facility at Makhathini Flats, facilities up to the required standard – Big chains require international standards of ¦ Complete the construction of the road linking production and storage that the Makhathini Flats Makhathini Flats to the freeway and other areas cannot meet as yet – Refrigerated trucks, as well as good roads, are needed to transport goods to the market in good condition

¦ Poor access to large markets (Durban, Johannesburg) and to export points (Richards Bay)

¦ Cotton is produced elsewhere at more competitive ¦ Eliminate cotton production (or relegate it to medium production costs potential, dry land) and focus on higher margin crops, – The world price doesn’t allow for production costs such as as high as they are in this node – Tropical fruits – Baby vegetables – Possibly short term crops so that more people can cultivate them

UUP-WRD-Umkhanyakude Profile-301106-IS 62 Nodal Economic Profiling Project Business Trust & dplg, 2007 Selected sector: Agriculture Umkhanyakude Assessment of the potential of the agriculture sector

Potential to Increase Size of Income per Annum from Fruit Area to be Farmed & Vegetable Farming 35,000 900

800 30,000 700 12,000 Other § 25,000 ) Revenue of R240,000 per s n 600 o s ha per annum for veg (± i l l e i r 50% profit margin) a

M 600 t 20,000

c 500 d § e Revenue of R30,000 per ha n a H 5,000 Veg f per annum for fruit (± 50% R

( 825 o

400 . 15,000 profit margin) e o m N § o

Approximately 1 ha per c 300 n 10,000 farmer I 15,000 Fruit 200

5,000 100 225

3,000 0 0 Area Farmed Area to be Fruit Veg Total Currently Farmed with Upgrade to Facilities § § AApppprrooxxiimmaatteellyy 11 hhaa ppeerr ffaarrmmeerr,, tthhuuss 2299,,000000 nneeww jjoobbss ccrreeaatteedd § § AApppprrooxxiimmaatteellyy 2200,,000000 ffaarrmmeerrss ddooiinngg ffrruuiitt &&vveegg,, wwiitthh iinnccoommee ooff ±±RR33,,550000 ppeerr ffaarrmmeerr ppeerr mmoonntthh

Source: Estimates from farmers at Makhathini Flats, Monitor analysis UUP-WRD-Umkhanyakude Profile-301106-IS 63 Nodal Economic Profiling Project Business Trust & dplg, 2007 Selected sector: Agriculture Umkhanyakude Barriers / Solutions to investments

Idea Business plan Funding Implementation

§ No value chain or cluster § Farmers don’t have approach enough working capital to – Necessary, run the farms at full because the land capacity is commonly – Working capital Blockages / owned and they would also enable also need to focus them to make the Barriers on associated soil more industries productive § No agriculture § Land claims and association at the district presence of tribal level communities / rules

§ Industry associations § Educate farmers on the need to be formed to various means of applying identify and capitalise on for funding cluster benefits § Engage Land Claims Potential Commission to expedite Solutions the process

UUP-WRD-Umkhanyakude Profile-301106-IS 64 Nodal Economic Profiling Project Business Trust & dplg, 2007 Selected sector: Agriculture Umkhanyakude Key contacts

Position / Name Reason to contact Organisation

Juri Steyn Researcher at ¦ Represents both the Agriculture Research Council and the Institute Makhathini Flats for Industrial Crops Research Station ¦ Has detailed knowledge of the Cassava Project; responsible for researching the different varieties and cultivation techniques

Dennis Nyawo Makhathini Flats ¦ Represents the different crops cultivated in Makhathini Agricultural Forum ¦ Knows the challenges faced by and the opportunities present in the Makhathini Flats area

Charl Senekal Private businessman ¦ Owns large sugar cane farms in Mkuze and Jozini ¦ Has very good knowledge of the agricultural sector, barriers to growth and priorities for development

Musoni Tembe Cashew factory owner ¦ Owns a cashew nut factory on the coast near Sodwana Bay ¦ Is able to provide information on the viability of large-scale groundnut production in the area

Khosi Bhengu Umkhanyakude District ¦ In charge of creating the spatial development framework for the Municipality node ¦ Has detailed knowledge of the agricultural sector and its potential in the node

Mr Msibi KZN Department of ¦ Responsible for agriculture development in the node, and is well Agriculture connected with the farmers in the area

Nelly Sibisi KZN Department of ¦ Responsible for programme planning across the province Agriculture ¦ Is able to provide more information on funding initiatives and funding sources for agriculture-related projects

UUP-WRD-Umkhanyakude Profile-301106-IS 65 Nodal Economic Profiling Project Business Trust & dplg, 2007 Umkhanyakude Umkhanyakude poverty node

z Research process

z Overview

z Economy

– Overview

– Selected sector: Tourism

– Selected sector: Agriculture

z Investment opportunities

z Summary

z Appendix

UUP-WRD-Umkhanyakude Profile-301106-IS 66 Nodal Economic Profiling Project Business Trust & dplg, 2007 Investment opportunities Umkhanyakude Improvement of storage and transport facilities for farmers

Concept Data and commentary

Description § Complete the construction of the cold storage facility at Makhathini Flats, which is only partly ready (i.e. a refrigerator and sorting facility are installed, but there is no canteen or ablution facilities) § Complete the access road to the cold storage facility, which is only half ready § Purchase a refrigerated truck to transport the produce § Size of the project: R7.8m for the cold storage facility; R24m for the road (R4m per km, a further 6 km to be completed)

Economic § The project would improve access to markets for farmers at rationale Makhathini Flats § It would allow the area to meet the standards required by The existing sorting and big chains like Pick ’n Pay and Woolworths

refrigeration facility § Employment The completed project would create over 1,000 jobs in the area § Some of the skills (management, finance) are not available in the area

Enabling § The Mkuze Airport project, if realised, would further conditions strengthen the ability of the area to export

Badly maintained road § Other They have an understanding in place with both Pick ‘n Pay means poor access to and Woolworths, who will take their full production markets § They currently farm 3,000 ha, but there are 30,000 ha available in the area Contact details Dennis Nyawo Documentation Interviews, feasibility study of the area’s agricultural potential (by Dennis Nyawo) Untarred road to facility

UUP-WRD-Umkhanyakude Profile-301106-IS 67 Nodal Economic Profiling Project Business Trust & dplg, 2007 Investment opportunities Umkhanyakude Production of starch from cassava

Concept Data and commentary

Description § The project involves growing cassava (a root vegetable with a high starch content) in the Makhathini Flats area. The starch will be extracted and sold to paper manufacturers § Size of the project: R250m investment (required funding at a conceptual stage) § The factory would work 180,000 tons of cassava per annum, aiming to extract 40,000-50,000 tons of starch § On dry land, 20 tons of cassava per hectare: 9,000 hectares required. On irrigated land, 45 tons per hectare: 4,000 hectares required

Economic § A factory would be set up to extract the starch and sell it to the paper rationale industry Cassava will be grown on the banks of the § South Africa currently imports 60 tons of starch annually; this Pongolo River production would aim to substitute part of these imports

Employment § Partnership between the Agriculture Research Council, providing the technical input for cultivation, and local farmers managing the production and getting a share of the profits from the starch sales § Local farmers have the skills required; approximately 10,000 farmers will be involved

Enabling § Resolution of access to land issues conditions § Changing the mindset of farmers from subsistence to commercial

Other § Challenges: land is owned by the State, but there is a strong presence of tribal control and local communities; hence, the government has asked the project managers to negotiate with those communities and come to a mutually agreed decision regarding the access to the land Contact details Juri Steyn (Institute for Industrial Crops), Peter Prince (PGA Consultants) Illustrative examples of machinery that could be Documentation Humphrey Glass Report, interviews used in the extraction of starch from cassava

UUP-WRD-Umkhanyakude Profile-301106-IS 68 Nodal Economic Profiling Project Business Trust & dplg, 2007 Investment opportunities Umkhanyakude High-end hotel resort development

Concept Data and commentary

Description § A high-end, luxury resort at Cape Vidal with golf course, spa facilities, access to whale watching, canoeing, boat trips, game drives, etc § The IFA group is currently analysing this opportunity, with a view to investing R240m

Economic § It would appeal to wealthy domestic tourists with families, rationale and high-spending overseas tourists

Cape Vidal is famous § Employment Local people would be employed as housekeepers, waiters, for its beaches and receptionists, etc

marine wildlife § Training would be provided to enable local people to assume managerial roles as well § It is expected to create 300 direct jobs

Enabling § Improvement of road infrastructure and airport access will conditions be required § Signage, public ablution facilities, and better booking systems for local attractions will need to be developed

Other § The resort is expected to have 400 bedrooms § An economic impact assessment has been done to determine how to implement the project while avoiding any damage to the local ecosystem Contact details Elliot Nkosi, IFA Group Documentation Interviews

Illustrative examples of luxury resorts

UUP-WRD-Umkhanyakude Profile-301106-IS 69 Nodal Economic Profiling Project Business Trust & dplg, 2007 Investment opportunities Umkhanyakude Budget game lodge within local community

Concept Data and commentary

Description § Three-star lodge near the entrance to the Hluhluwe Game Reserve, and adjacent to a local community

Economic § The location will allow for easy access to the game reserve, rationale as well as guided tours through the community to get a feel for how the local people live, while providing consumers with comfortable, reasonably priced accommodation

Employment § Management would most likely come from elsewhere, but most of the staff positions (i.e. waiters, housekeepers, local The lodge would be near the Hluhluwe Game Reserve guides) would be filled by local people

Enabling § Greater marketing exposure is needed on the concept of conditions “cultural tours”. While most overseas visitors who do a cultural tour really enjoy it, they only do it if it is part of their package; they do not know enough about what is on offer to request it from their travel agent

Other § An environmental impact assessment is currently being undertaken

Contact details Siphile Mdaka, Mbonise Cultural Concepts Documentation Interviews

Guided tours through the community would be part of the offer

UUP-WRD-Umkhanyakude Profile-301106-IS 70 Nodal Economic Profiling Project Business Trust & dplg, 2007 Investment opportunities Umkhanyakude Upgrading of Mkuze Regional Airport

Concept Data and commentary

Description § Upgrade the existing airstrip at Mkuze to a regional airport with adequate facilities to handle commercial flights on Boeing 737s § The project is planned to cost R56m: R10m will be provided from DEAT to resurface the airstrip; the rest of the funding will be used put up a new terminal and build hangars and a craft centre

Economic § It would boost the tourist activity in the area by providing rationale easier access § It would also stimulate the export of agricultural products

Employment § Presumably, the airport itself would create a limited number No real airport building infrastructure of jobs for the local people § DEAT has agreed to use 30% local labour force in its share of the project § However, it would stimulate the two key sectors of the nodal economy and this would create jobs indirectly

Enabling § Improvement of the road infrastructure would be necessary conditions to ensure a consistent experience around ease of access § Supporting jobs would be created for maintenance of the runway, fuelling and maintenance of planes, pick-up / drop- off services, etc.

Other § Risks: a more detailed analysis of the demand side would be required; estimates that over 30,000 passengers would fly there in the first year and 50,000 at full capacity seem optimistic Contact details Greg Ogle Documentation Interviews Well-maintained runway

UUP-WRD-Umkhanyakude Profile-301106-IS 71 Nodal Economic Profiling Project Business Trust & dplg, 2007 Investment opportunities Umkhanyakude Development of hydro-electric power plant at Jozini Dam

Concept Data and commentary

Description § To develop a hydro-electric power plant at Jozini Dam to produce electricity for the area § Will require funding of R50m

Economic § Enough electricity would be produced to electrify the whole rationale area, as well as to sell electricity to other parts of the country and to and Swaziland. Revenues from these sales would be used to address public service backlogs, which would have a multiplier effect on economic Water stored in the dam development

Employment § To be completed

Enabling § Land claims issues are hampering the project getting off the conditions ground § Department of Water Affairs has not confirmed the allocation of water resources to the project

Other § The project should take four years to complete

Contact details Mr T-G Mchunu (District Municipality), Ranveer Persad (KZN Department of Economic Development) Documentation Interviews

Rear view of the dam wall

UUP-WRD-Umkhanyakude Profile-301106-IS 72 Nodal Economic Profiling Project Business Trust & dplg, 2007 Umkhanyakude Umkhanyakude poverty node

z Research process

z Overview

z Economy

– Overview

– Selected sector: Tourism

– Selected sector: Agriculture

z ¨ Investment opportunities Understanding the node

¨ Potential sources of economic growth – Short term

z Summary ¨ Potential sources of economic growth – Long term

¨ Assessment of current activities z Appendix ¨ What needs to be done now?

UUP-WRD-Umkhanyakude Profile-301106-IS 73 Nodal Economic Profiling Project Business Trust & dplg, 2007 Summary Umkhanyakude Understanding the poverty node of Umkhanyakude

Key characteristics of node

§ Initial impressions of the node are that it is largely impoverished and desolate, as evidenced by informal housing, poor roads and OOvveerrvviieeww run-down vehicles § But what is also striking is the natural beauty that permeates the entire area, and contrasts with the lack of development elsewhere §

The economy depends largely on agriculture and tourism, with a ¨ few indications of manufacturing Huge potential Economic ¨ Economic § overview Its potential is not being realised because the municipalities lack Mismanaged overview the expertise to effectively utilise the rich natural resources at their ¨ disposal “Investment-ready”

¨ Public-private § It is fragmented, with little integration across different service animosity providers in terms of marketing ¨ § Black entrepreneurs feel that existing white-owned businesses are Most poorly TToouurriissmm unwilling to transform educated population § The value proposition of the area is unique, exciting and of all the nodes compelling

§ It has huge potential, with fertile soils and a favourable climate § Agriculture The potential does not seem to have been recognised, so the Agriculture sector is under-funded and the development of an enabling environment has not been given priority

UUP-WRD-Umkhanyakude Profile-301106-IS 74 Nodal Economic Profiling Project Business Trust & dplg, 2007 Summary Umkhanyakude Potential sources of economic growth ± Short term

Economic growth of firm in node

Increase sales? Decrease cost?

Purchases Labour Infra- Other Provide new Increase quality of structure product / service current offering

For Import Skills Other export substitution

Where to focus?

Rationale Rationale Rationale Rationale § § § § Huge potential in Reduce import of Enable SMMEs in Create more vibrant agriculture agricultural products by tourism to address marketing campaigns (especially fruit and taking advantage of the consumers’ most around the unique vegetables) node’s ample resources critical needs “beach and bush” §

§ experience Sale of electricity Enable farmers to be through hydro- more productive electric plant at Jozini Dam Not a Key Focus Focus Area Area

UUP-WRD-Umkhanyakude Profile-301106-IS 75 Nodal Economic Profiling Project Business Trust & dplg, 2007 Summary Umkhanyakude Potential sources of economic growth ± Long term

Economic growth of firm in node

Increase sales? Decrease cost?

Purchases Labour Infra- Other Provide new Increase quality of structure product / service current offering

For Import Skills Other export substitution

Where to focus?

Rationale Rationale §

§ Upgrade access routes, Possibility of signage and public developing the facilities (ablutions, picnic leather production sites, etc) to improve the sector due to tourism experience abundance of cattle

= High focus = Low focus

UUP-WRD-Umkhanyakude Profile-301106-IS 76 Nodal Economic Profiling Project Business Trust & dplg, 2007 Summary Umkhanyakude Assessment of current activities

WWhhaatt iiss bbeeiinngg ddoonnee??

§ Municipalities generally lack the skills or the motivation to implement projects. Many are hired due to their affiliations rather than on merit. Most of them also live outside the node, so they have no vested interest in getting things done

§ Cooperation between the public and private sectors on the tourism front is virtually non-existent. They have different ideas about how investment in the node should be spent, therefore their initiatives tend to conflict with each other. This may be due to the perception that the private sector is not committed to transformation

§ There is no clear focus on addressing land claims issues, or on developing a spatial development programme that will inform the zoning of the node for different economic activities

Strategic choice

Do more of Do different things; the same do things differently

Rationale

§ Hiring the right skills will enable the node to utilise the wealth of research available to its full extent

§ Cooperative working arrangements will lead to greater efficiency

§ Uncertainty over land ownership and usage seem to be the biggest impediments to attracting investment and stimulating economic growth

UUP-WRD-Umkhanyakude Profile-301106-IS 77 Nodal Economic Profiling Project Business Trust & dplg, 2007 Summary Umkhanyakude What needs to be done now?

SSoolluuttiioonnss ttoo CCoonnssttrraaiinnttss // IInnvveessttmmeenntt ooppppoorrttuunniittiieess

§ A large, landmark tourism investment is needed to increase the profile of the area substantially. This will have positive spin-offs for small businesses as well

§ The agricultural potential of the area needs to be realised through provision of funding for local subsistence farmers to upscale to commercial ventures, and upgrading of infrastructure such as irrigation systems, market access routes, storage facilities, etc

§ Investments which provide direct revenue for the municipality will help to address public service backlogs. The proposed hydro-electric plant at the Jozini Dam is a prime example of this, since it will address electricity backlogs, and will also generate revenue through the sale of electricity to other parts of the country and neighbouring states

Requires involvement of key stakeholders

§ District and Local Municipalities

§ KZN Department of Agriculture

§ Land Claims Commission

§ Large hotel & resort developers

§ Large supermarket chains

§ Department of Public Enterprises

UUP-WRD-Umkhanyakude Profile-301106-IS 78 Nodal Economic Profiling Project Business Trust & dplg, 2007 Umkhanyakude Umkhanyakude poverty node

z Research process

z Overview

z Economy

– Economic overview

– Selected sector: Tourism

– Selected sector: Agriculture

z Investment opportunities

z

Summary ¨ Itineraries of field trips

¨ Key stakeholders

z ¨ Appendix Key documentation

¨ Photo collages

UUP-WRD-Umkhanyakude Profile-301106-IS 79 Nodal Economic Profiling Project Business Trust & dplg, 2007 Appendix Umkhanyakude Itineraries of field trips

TTrraavveell sscchheedduullee // LLooccaattiioonnss MMaaiinn aaccttiivviittiieess CCoommmmeennttss § 9h50 flight to Richards Bay, §

Transfer to Mkuze and hotel § arriving at 11h30 Long drive from airport to Mkuze Monday, 12 June § Monday, 12 June Phone calls to arrange interviews means almost half the day is 2006 § 1.5 hr drive to Ghost Mountain

2006 § spent in transit Inn, Mkuze Three interviews conducted

© 8h30 meeting with Zanele § §

Two morning interviews in Mkuze © 9h30 interview with Jonty Ndlazi Quite a bit of driving between Tuesday, 13 June § From 11h30 to 13h00, transfer to Mkuze and St Lucia, but

Tuesday, 13 June © 13h15 interview with Roland Vorwerk 22000066 St Lucia worthwhile for some very © § Then transfer to Mtubatuba 15h00 interview with Mr Mbogazi insightful interviews (local worker) in Mtubatuba § § Visit of the Jozini Dam

Document collection at § Jozini Dam needs to be Umkhanyakude District § Wednesday, 14 June Interview with Jozini local investigated further Wednesday, 14 June Municipality municipal manager §

2006 § Makhathini Flats area quite 2006 Travel to Jozini and Makhathini § Interview at Agricultural Research interesting for agricultural projects Flats Station (Makhathini Flats)

§ Interviews in Mkuze with banks, § § Visit Mkuze money lenders, shops and local Information on the local people, Thursday, 15 June local businesses and micro- Thursday, 15 June § people Trip to and Jozini for finance situation in the area 22000066 § interview and pictures Interview with local councillor in provides good data for portraits Ingwavuma

§ Transfer to Richards Bay Airport

FFrriiddaayy,, 1166 JJuunnee 22000066 § public holiday public holiday 11h50 flight to Johannesburg

UUP-WRD-Umkhanyakude Profile-301106-IS 80 Nodal Economic Profiling Project Business Trust & dplg, 2007 Appendix Umkhanyakude Itineraries of field trips (Continued)

TTrraavveell sscchheedduullee // LLooccaattiioonnss MMaaiinn aaccttiivviittiieess CCoommmmeennttss § § § James seems supportive and has 8h25 flight to Durban, arriving at Transfer to Durban city centre first a deep knowledge of the tourism 9h55 and to Mkuze and hotel later MMoonnddaayy,, 2266 JJuunnee sector § § 22000066 0.5 hr drive to Durban City Centre Phone calls to arrange interviews § Very long drive from Durban to § § 4 hr drive to Mkuze afterwards One interview conducted Mkuze means that more than half the day is spent in transit § § § Meeting at 9h00 with the local Group session with the Not too happy to talk again to champion and transfer to Makhathini Agricultural Forum consultants with apparently no

Tuesday, 27 June § Tuesday, 27 June Makhathini Flats Discussion on current status and economic return (i.e. funding) §

2006 § 2006 Afterwards, transfer to Hluhluwe potential opportunities Genuinely interested in giving

and hotel § Visit of some areas information and share ideas § § 9h30 interview with Greg on All the three interviews useful in § Transfer to Mkuze for interview general context and specific big understanding in more detail

WWeeddnneessddaayy,, 2288 JJuunnee § Then return to Hluhluwe for projects some aspects (politics and

§ institutions, local community 22000066 interview and visit of local tourism 13h30 interview with Siphiwe business owners involvement in tourism, B&B § 16h00 interview with Mike dynamics)

§ Transfer to St Lucia for interview § 9h30 interview with Sipho and §

§ Social and cultural tensions are Short visit of St Lucia lake TThhuurrssddaayy,, 2299 JJuunnee Jeffrey at Fafa Tours still a strong factor in preventing § 22000066 Second interview in early § 12h00 interview with Marrah at further integration / development afternoon and transfer back to the Veyane Cultural Village of the tourism sector hotel

§ Transfer to Durban and the hotel § § § Integration of the week’s findings Meeting with IFA was cancelled. Friday, 30 June 2006 Flight to Jo’burg the following Friday, 30 June 2006 § morning (Saturday, 1 July) at Interview write-ups / slide creation Telephone interview scheduled. 9h40

UUP-WRD-Umkhanyakude Profile-301106-IS 81 Nodal Economic Profiling Project Business Trust & dplg, 2007 Appendix Umkhanyakude Key stakeholders, actors, information carriers

PPrriivvaattee sseeccttoorr // GGoovveerrnnmmeenntt PPuubblliicc sseeccttoorr LLooccaall ppeeooppllee NNGGOOss OOtthheerr BBuussiinneessss

Mr N N Nkosi Mr Jonty Ndlazi Mr Senekal Thobi Peter Prince Jozini Local Municipal Gijima KZN, Mkuze Land owner in Jozini Ghost Mountain Inn PGA Consultants Manager Area Manager and Mkuze Housekeeper

Mr M T-G Mchunu Mr Juri Steyn Mr Roland Vorwerk Dir. Development Mr Mbokazi Makhathini Sub- St Lucia Park, Media Planning & Tourism, Mondi subcontractor Umkhanyakude DM Station Manager Coordinator

Mr Gavin Wiseman Craig Rutherford Mr MP Mthiyane Ntando IDC Coordinator for Ghost Mountain Inn PIMMS Manager Unemployed local girl Cassava Project Owner

Ms Nelly Sibisi James Seymour Musoni Tembe Programme Planning General Manager KZN Cashew Factory & Technical Assistant Tourism Information

Greg Ogle Elliot Nkosi Zanele Independent IFA Group LED Specialist Consultant St Lucia Resort

Ntombi Mike Els Ingwavuma Vice Vakasha B&B Councilor (Hluhluwe)

Mr A Mngadi Siphile Mdaka Big 5 False Bay Local Mbonise Cultural Municipal Manager Concepts

Mr Mkhize Makhathini Flats Mtubatuba Local Agricultural Forum Municipal Manager

= have appointment = have met = key person, suggest to involve in future discussions

UUP-WRD-Umkhanyakude Profile-301106-IS 82 Nodal Economic Profiling Project Business Trust & dplg, 2007 Appendix Umkhanyakude Key stakeholders, actors, information carriers (Continued)

PPrriivvaattee sseeccttoorr // GGoovveerrnnmmeenntt PPuubblliicc sseeccttoorr LLooccaall ppeeooppllee NNGGOOss ootthheerr BBuussiinneessss Ranveer Persad Sipho Mthiyane KZN Dept of Economic Fafa Tours Owner Development

Jeffrey Mcambi Financial Planner (St Lucia)

Marrah Nene Veyane Cultural Village

= have appointment = have met = key person, suggest to involve in future discussions

UUP-WRD-Umkhanyakude Profile-301106-IS 83 Nodal Economic Profiling Project Business Trust & dplg, 2007 Appendix Umkhanyakude Key documentation

AAuutthhoorr // TTiittllee MMaaiinn iissssuueess ccoovveerreedd YYeeaarr OOrrgg..

Overview of the major development plans within the Spatial Iver Rothaug Umkhanyakude SDF Implementation Framework 12/2005 Development Framework (SDF) Project Team X

Big Five Municipality Evaluation Framework 2006 X

A guideline to assess a credible IDP and to establish its / Jozini / Mtubatuba / Umhlabuyalingana Local quality. A set of criteria is employed to assist the assessors IDP 05/2006 Municipality Evaluation Framework X during the analysis

A guideline to assess a credible IDP and to establish its Umkhanyakude District Municipality Evaluation Framework quality. A set of criteria is employed to assist the assessors IDP 04/2006 X during the analysis

Analysis of six strategic issues (Governance, Human Umkhanyakude District Municipality Lekgotla Report Resource Development, Municipal Services and Finance, 2006 X Economic and Social Development)

Local Government Review & Strategic Priorities for the Next Strategic priorities for Governance Assessment 03/2006 Term of Local Government (2006-2011) X

Umkhanyakude Governance: development challenges, proposed Municipal IDP Action Plan District - IDP 05/2006 interventions, target dates and responsible agents X Engagement

Revision of the IDP and of the District. Three sections: Umkhanyakude District Municipality Integrated current reality, strategic framework, implementation IDT 08/2002 Development Plan X framework.

tick if on file

UUP-WRD-Umkhanyakude Profile-301106-IS 84 Nodal Economic Profiling Project Business Trust & dplg, 2007 Appendix Umkhanyakude Key documentation (Continued)

AAuutthhoorr // TTiittllee MMaaiinn iissssuueess ccoovveerreedd YYeeaarr OOrrgg..

List of projects reporting: project details, responsibility, Umkhanyakude LED Projects 2003 2003/2004 funding amount, funding status and funding source PIMMS X

Socio-economic profile of the district as well as sectoral Maseko Hlongwa & Associates, Umkhanyakude District Municipality LED Strategy 05/2003 analyses. Contextual and strategic frameworks introduce Development X LED programmes Planning Consultants

Tourism Development Plan – A guide to tourism planning, promotion, management and Dennis Moss financial decision-making in the Umkhanyakude District for Partnership, Urban 03/2002 X Main Report and Executive Summary the 2002-2007 period Econ

Identify current and potential LED activities and recommend Humphrey Glass Umkhanyakude Economic Themes Report strategies to unlock them, within the tourism and agriculture (commissioned by 03/2006 X economic themes IDT)

Municipal demographics, key development priorities, IDP Umkhanyakude Integrated Development Plan, 2005-2006 IDP 11/2004 mission and implementation programme X

Feasibility Study for Hydro-electric Scheme Jozini Municipality

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UUP-WRD-Umkhanyakude Profile-301106-IS 85 Nodal Economic Profiling Project Business Trust & dplg, 2007 Photo collage #1: Umkhanyakude Constraints to economic growth

UUP-WRD-Umkhanyakude Profile-301106-IS 86 Nodal Economic Profiling Project Business Trust & dplg, 2007 Photo collage #2: Umkhanyakude Opportunities for investment

UUP-WRD-Umkhanyakude Profile-301106-IS 87 Nodal Economic Profiling Project Business Trust & dplg, 2007 Photo collage #3: Umkhanyakude People of the node

UUP-WRD-Umkhanyakude Profile-301106-IS 88 Nodal Economic Profiling Project Business Trust & dplg, 2007 Photo collage #4: Umkhanyakude Businesses of the node

UUP-WRD-Umkhanyakude Profile-301106-IS 89