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Final LED Strategy March 2007

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Final LED Strategy March 2007 LOCAL ECONOMIC DEVELOPMENT STRATEGY-LEPELLE-NKUMPI MUNICIPALITY LEPELLELEPELLE--NKUMPINKUMPI LOCALLOCAL MUNICIPALITYMUNICIPALITY LOCALLOCAL ECONOMICECONOMIC DEVELOPMENTDEVELOPMENT PLAN STRATEGY MARCH 2007 SUPPORTED BY: PREPARED BY: Development Services (Pty) Ltd Reg No. 1999/12439/07 P.O. Box 13359 Hatfield 0028 Tel: 012 430 2888 0 Fax: 012 430 2979 LOCAL ECONOMIC DEVELOPMENT STRATEGY-LEPELLE-NKUMPI MUNICIPALITY Table of Contents 1. INTRODUCTION AND BACKGROUND ................................................................. 2 1.1 Background and purpose of LED strategy............................................................... 2 1.2 Clarification of LED roles and responsibilities .......................................................... 3 1.3 Study Area ........................................................................................................... 6 1.4 Methodology ...................................................................................................... 10 1.5 Structure of the remainder of the Report ............................................................. 14 2. POLICY FRAMEWORK DIRECTING FUTURE DEVELOPMENT ........................... 15 2.1 National polices and programmes ........................................................................ 15 2.2 Provincial Policies and Strategies ......................................................................... 23 2.3 Municipal Policies and Strategies ......................................................................... 34 3. MACRO AND LOCAL ECONOMIC PROFILE ....................................................... 50 3.1 Socio-economic profile ........................................................................................ 50 3.2 Economic profile ................................................................................................. 65 3.3 Development constraints and opportunities .......................................................... 77 4. SECTORAL ANALYSIS ....................................................................................... 81 4.1 Agricultural sector .............................................................................................. 81 4.2 Manufacturing sector ......................................................................................... 104 4.3 Tourism, recreation and sport sector .................................................................. 111 4.4 Mining sector .................................................................................................... 124 4.5 Transport sector ................................................................................................ 131 4.6 Construction sector............................................................................................ 136 4.7 Wholesale, retail and trade sector ...................................................................... 138 4.7 Development constraints.................................................................................... 154 4.9 Development opportunities ................................................................................ 155 5. LOCAL ECONOMIC DEVELOPMENT FRAMEWORK .......................................... 158 5.1 Introduction ...................................................................................................... 158 5.2 Thrust 1: Local business support and stimulus .................................................... 161 5.3 Thrust 2: Restructuring & diversifying rural economic base .................................. 167 5.4 Thrust 3: Agriculture sector expansion and promotion of local value-adding .......... 174 5.5 Thrust 4: Mining sector expansion and promotion along value-chains ................... 179 5.6 Thrust 5: Tourism development and promotion ................................................... 182 5.7 Prioritisation ...................................................................................................... 188 5.8 Summary of thrusts, programmes and projects ................................................... 190 6. IMPLEMENTATION GUIDELINES ................................................................... 197 6.1 Introduction ...................................................................................................... 197 6.2 Institutional framework ...................................................................................... 197 6.3 Implementation guidelines for high priority projects ............................................ 209 6.4 Monitoring and evaluation plan .......................................................................... 227 0 Abbreviations: ARC Agricultural Research Council BBBEE Broad Based Black Economic Empowerment CDM Capricorn District Municipality DEAT Department of Environmental Affairs & Tourism DEDET Provincial Department of Economic Development, Environment & Tourism DFED Department of Finance & Economic Development DHSD Department of Health and Social Development DME Department of Minerals & Energy GDP Gross Domestic Product IDP Integrated Development Plan ITP Integrated Transport Plan LED Local Economic Development Plan LIBSA Limpopo Business Support Agency LIMAC Limpopo Manufacturing Advisory Centre Programme LIMDEV Limpopo Economic Development Enterprise LNLM Lepelle -Nkumpi Local Municipality LT&PB Limpopo Tourism & Parks Board NAFCOC National African Federated Chamber of Commerce and Industry‘s PS Private Sector Service Provider SDF Spatial Development Framework SDF Spatial Development Framework SDI Spatial Development Initiatives SEDA Small Enterprise Development Agency SETA Services Sector Education and Training Authority SMME Small Medium & Micro Enterprises T/A Tribal Authority TIL Trade and Investment Limpopo 0 Executive Summary Lepelle-Nkumpi Municipality appointed Kayamandi Development Services (Pty) Ltd to undertake a Local Economic Development Strategy (LED) for the Municipality. The strategy provides the Municipality with guidelines to create and facilitate economic development, realise the underlying economic development potential, and encourage private sector investment and job creation. Lepelle-Nkumpi Municipality is located at the southern tip of the Capricorn District Municipality (which is located in the centre of the Limpopo Province). Lepelle-Nkumpi Municipality covers an area of approximately 3.500 km2 and comprises approximately 20% of the Capricorn District Municipal area. The municipality consists of 27 wards and 110 settlements. The town of Lebowakgomo is located in Lepelle-Nkumpi Municipality, and all the sittings of the Provincial Legislature takes place at Lebowakgomo in the parliamentary buildings of the former Lebowa homeland. A number of important national and regional routes transverse the area, of which the R37 (Polokwane-Burgersfort) is the most important, there is also the R579 between Chueniespoort and Jane Furse, R519 between Kushke and Roedtan, R518 between Mokopane and Lebowakgomo, Moletlane to Magatle, and Hlahla to Mathabatha. The Department of Economic Development, Environment and Tourism have identified the R37 road between Polokwane and Burgersfort as a SDI route. Development should be focussed along this route. Large areas of land in the municipality (approximately 95% of the land) forms part of the former Lebowa homeland and is now held in trust for tribal and community authorities. These traditional authorities play a very important role in terms of their traditional culture and have a major influence in the manner in which land is made available to individuals for settlement, as well as the use thereof for economic purposes (e.g. agriculture, tourism, etc.). A further constraint in respect of development potential and investor confidence in the municipality is the large proportion of land subject to land claims. In Lepelle-Nkumpi Municipality, nearly half of the municipal area is affected by land claims. As this process is turning out to be rather lengthy, some uncertainty is created, and investors are becoming reluctant to invest in land until the land claim issues are resolved. Furthermore, no development can take place on land that has been claimed until the claim has been settled. In terms of the socio-economic characteristics of the population, slightly more than 20% of the population is economically active, while nearly 20% of the population has no form of schooling whatsoever. The population therefore has low levels of skills, which is further evident from the fact that nearly a quarter of the economic active population are employed in elementary occupations, which does not require extensive qualifications. This, to some extent, constrains the development potential in the municipality for development of more advanced industries. While the low skills and education, levels to some extent constrain development potential, education levels have increased between 1996 and 2001, with more people obtaining schooling. If this trend continues, opportunities for more advanced industries could increase in the future. MARCH 2007 The large population size also exercises considerable pressure on the water resources, with the effect that progressively less water will be available for secondary purposes such as agriculture and mining. Shortage of water in rivers during winter is also a constraint faced by these sectors. The local municipality also experiences the following environmental problems namely overgrazing, deforestation, urban sprawl, uncontrolled veld fires, and asbestos pollution
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