Nodal Economic Profiling Project OR Tambo Eastern Cape Nodal Economic Profiling Project Business Trust and dplg, 2007 OR Tambo 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 ((iissrrddpp)) wweerree ccrreeaatteedd iinn 22000011 ttoo Sekhukhune aaddddrreessss ddeevveellooppmmeenntt iinn tthheessee Bushbuckridge aarreeaass.. TThheessee iinniittiiaattiivveess aarree Alexandra hhoouusseedd iinn tthhee DDeeppaarrttmmeenntt ooff Kgalagadi Umkhanyakude PPrroovviinncciiaall aanndd LLooccaall GGoovveerrnnmmeenntt ((ddppllgg)).. Zululand 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-OR Tambo Profile-301106-IS 2 Nodal Economic Profiling Project Business Trust and dplg, 2007 OR Tambo OR Tambo poverty node

Activities

z Research process Documents

People z Overview

z Economy

– Overview

– Selected sector: Agriculture

– Selected sector: Tourism

z Investment opportunities

z Summary

z Appendix

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

AAccttiivviittiieess DDooccuummeennttss PPeeooppllee

z Desk research z Thirty-one different z Meetings with types of documents government / public z Two visits to node – five Integrated sector and private – 24-28 July 2006, Development Plan sector / local people (IDP) review 31 July-3 August documents – 13 meetings with 2006 – ten Local Economic district and local – understanding of Development (LED) municipalities potential for documents – seven meetings with economic growth, – seven business plans/feasibility SMMEs, big specific studies/proposals businesses, opportunities for – one economic profile independent investments of OR Tambo consultants, local – visits to potential – six documents people economic growth regarding economic sectors initiatives across the – two documents with tourism and listed projects agriculture sectors z Some of them available electronically

UUP-WRD-OR Tambo Profile-301106-IS 4 Nodal Economic Profiling Project Business Trust and dplg, 2007 OR Tambo OR Tambo 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-OR Tambo Profile-301106-IS 5 Nodal Economic Profiling Project Business Trust and dplg, 2007 OR Tambo 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-OR Tambo Profile-301106-IS 6 Nodal Economic Profiling Project Business Trust and dplg, 2007 Introduction OR Tambo Snapshot

Key information

Population: 2001 1 740 664

Area 15 535 km2 OORR TTaammbboo Population density: 2001 107.92 / km2

Estimated GDP: 2004 R 6.84 billion

Province Eastern Cape

Main town / city Mthatha

HHiissttoorriiccaall oovveerrvviieeww

AA mmaajjoorr ppaarrtt ooff tthhee ffoorrmmeerr TTrraannsskkeeii iiss ssiittuuaatteedd iinn OORR TTaammbboo

–– TThhee TTrraannsskkeeii wwaass oonnee ooff eeiigghhtt bbllaacckk hhoommeellaannddss ffoouunnddeedd iinn 11995599 bbyytthhee aappaarrtthheeiidd rreeggiimmee iinn oorrddeerr ttoo eetthhnniiccaallllyy ddiivviiddee tthhee ppeeooppllee ooff SSoouutthh AAffrriiccaa

IInn tthheeddeemmooccrraattiissaattiioonnpprroocceessss iinn 11999944 tthhee TTrraannsskkeeii bbeeccaammee ppaarrtt ooff SSoouutthh AAffrriiccaa

NNeellssoonn MMaannddeellaa,, SSoouutthh AAffrriiccaa''ss ffiirrsstt ddeemmooccrraattiicc pprreessiiddeenntt,, wwaass bboorrnn iinn tthhee TTrraannsskkeeii iinn 11991188,, aanndd ssttiillll hhaass aa hhoommee iinnQQuunnuu

TThhee rreeggiioonn iiss nnaammeedd aafftteerr OOlliivveerr TTaammbboo wwhhoo wwaass aann aannttii--aappaarrtthheeiidd ppoolliittiicciiaann aanndd cceennttrraall ffiigguurree ooff tthhee AAffrriiccaann NNaattiioonnaall CCoonnggrreessss ((AANNCC)).. HHee wwaass bboorrnn iinnMMbbiizzaannaaiinn 11991177 aanndd bbeeccaammee GGeenneerraall SSeeccrreettaarryy ooff tthhee AANNCC iinn 11995555

Source: Stats SA Census 2001, Eastern Cape Tourism, Wikipedia UUP-WRD-OR Tambo Profile-301106-IS 7 Nodal Economic Profiling Project Business Trust and dplg, 2007 Introduction OR Tambo Area summary – OR Tambo

zz AA vveerryy ddeennsseellyy ppooppuullaatteedd rruurraall rreeggiioonn ccoovveerriinngg mmoosstt ooff tthhee ffoorrmmeerr TTrraannsskkeeii

zz TThhee ddiissttrriicctt mmuunniicciippaalliittyy ((DDMM)) iiss ddiivviiddeedd iinnttoo sseevveenn llooccaall mmuunniicciippaalliittiieess ((LLMM))

zz MMtthhaatthhaa iiss tthhee llaarrggeesstt cciittyy aanndd tthhee ccoommmmeerrcciiaall cceennttrree ooff tthhee rreeggiioonn

zz BBeeaauuttiiffuull aanndd uunnttoouucchheedd WWiilldd CCooaasstt eexxtteennddiinngg ffoorr 112200 kkmm

zz CCooaassttaall cclliimmaattee wwiitthh 2255%% ooff aallll tthhee rraaiinnffaallll iinn SSoouutthh AAffrriiccaa

zz HHoommee ooff tthhee ggrreeaatt ffrreeeeddoomm ffiigghhtteerrss,, NNeellssoonn MMaannddeellaa aanndd OOlliivveerr TTaammbboo

zz VVeerryy ffeeww ccoommmmeerrcciiaall ffaarrmmeerrss

zz PPootteennttiiaall ffoorr ffoorreessttrryy aarroouunndd MMtthhaatthhaa aanndd iinn PPoonnddoollaanndd

Source: Monitor interviews, Monitor analysis UUP-WRD-OR Tambo Profile-301106-IS 8 Nodal Economic Profiling Project Business Trust and dplg, 2007 Introduction OR Tambo Some observations about OR Tambo

““IItt iiss jjuusstt ttoo ddiiffffiiccuulltt ttoo ggeett aannyytthhiinngg ddoonnee hheerree”” –– CCEEOO WWiillddeerrnneessss SSaaffaarrii

““OOuurr bbiiggggeesstt iinnvveessttmmeenntt ooppppoorrttuunniittyy iiss MMaaddiibbaa’’ss ffuuttuurree ggrraavvee”” –– EEaasstteerrnn CCaappee DDeevveellooppmmeenntt CCoorrppoorraattiioonn ((EECCDDCC)) MMtthhaatthhaa

““TThheerree aarree nnoo bbiigg pprroojjeeccttss iinn tthhee rreeggiioonn hheennccee tthhee ssmmaalllleerr oonneess ccaannnnoott ssuurrvviivvee”” –– MMuunniicciippaalliittyy mmaannaaggeerr

““TThhee IIDDPP oonnllyy ccoonnssiissttss ooff iinnaaccccuurraattee hhiigghh--lleevveell iinnffoorrmmaattiioonn”” –– MMuunniicciippaall mmaannaaggeerr

““IInn oouurr rreeggiioonn eevveerryybbooddyy iiss aa ffaarrmmeerr””–– DDeeppaarrttmmeenntt ooff AAggrriiccuullttuurree

““TThhee mmuunniicciippaalliittyy iiss nnoott ccoommppeetteenntt ttoo ddoo wwhhaatt iitt sshhoouulldd ddoo””––EECCDDCC MMtthhaatthhaa

““PPoorrtt SStt JJoohhnnss’’ llaanndd iiss uunnddeerr ssiieeggee””–– WWiilldd CCooaasstt DDeevveellooppmmeenntt FFoorruumm

““MMbbiizzaannaa ccaannnnoott bbuuiilldd hhoouusseess bbeeccaauussee ooff tteenn--yyeeaarr--oolldd llaanndd ccllaaiimmss””––WWiilldd CCooaasstt DDeevveellooppmmeenntt FFoorruumm

““SSiinnccee tthhee rreeggiioonn iiss bbeelliieevveedd ttoo bbee uunnssaaffee tthhee bbaannkkss ddoo nnoott wwaanntt ttoo iinnvveesstt””––DDeevveellooppmmeenntt BBaannkk ooff SSoouutthheerrnn AAffrriiccaa ((DDBBSSAA))

““EEvveerryybbooddyy iiss ddooiinngg eevveerryytthhiinngg””–– LLEEDD mmaannaaggeerr aabboouutt tthhee llaacckk ooff ccoommmmuunniiccaattiioonn aanndd ccoo--ooppeerraattiioonn

Source: Mail and Guardian Online 19 July 2006, Monitor interviews UUP-WRD-OR Tambo Profile-301106-IS 9 Nodal Economic Profiling Project Business Trust and dplg, 2007 Introduction OR Tambo Key challenges

PPoooorr rrooaaddss ssyysstteemm

LLiimmiitteedd sskkiillllss bbaassee

LLaacckk ooff aannyy llaarrggee--ssccaallee ccoommmmeerrcciiaall pprreesseennccee

Nodal economy Nodal economy NNoo ttrraaddiittiioonn ooff bbuussiinneessss oorr eennttrreepprreenneeuurrsshhiipp iinn tthhee nnooddee

PPoooorr iinndduussttrriiaall bbaassee

PPoooorr iinnffrraassttrruuccttuurree ssuuppppoorrtt ffoorr bbuussiinneessss//iinndduussttrriiaall ddeevveellooppmmeenntt

CCoommpplliiccaatteedd llaanndd tteennuurree ssyysstteemm

AAcccceessss ttoo llaanndd iiss hhiigghhllyy ccoommpplleexx,, lleeaaddiinngg ttoo ssllooww ddeevveellooppmmeenntt aanndd hhiigghh pprrooppeerrttyy pprriicceess NNooddaall ppoolliittiiccss

LLaacckk ooff ccoo--oorrddiinnaattiioonn ooff ggrroowwtthh iinniittiiaattiivveess

VVeerryy ddeennsseellyy ppooppuullaatteedd rreeggiioonn wwiitthh ffeeww ooppppoorrttuunniittiieess ffoorr llaarrggee--ssccaallee ffaarrmmiinngg

GGrroowwtthh ooff iinnffoorrmmaall sseettttlleemmeennttss iiss ddeepplleettiinngg vvaalluuaabbllee ggrraazziinngg llaanndd

Others Others TThhee rreeppuuttaattiioonn ooff tthhee ffoorrmmeerr TTrraannsskkeeii

HHiigghh ccrriimmee rraattee

Source: OR Tambo IDP Review 2006/2007, Monitor interviews, Monitor analysis UUP-WRD-OR Tambo Profile-301106-IS 10 Nodal Economic Profiling Project Business Trust and dplg, 2007 Introduction OR Tambo Local people portrait – Vuyiswa Dlabutshe

Background Vuyiswa Dlabutshe is an assistant at Qaqa clinic in Tabankulu. Vuyiswa, who is 36 years old, has a husband who is not working and four children who are 15, 11, 8 and 4 years of age.

Education and career Vuyiswa grew up in Tabankulu where she attended school at Bomvini JSS Grade 1 to Grade 9. Thereafter, as there was no high school in the area of her home, she had to move to Sukude High School where she completed her matric. Due to the lack of funds she could not afford to further her education. In 2003 she joined a project which runs at the Bomvini location local clinic. While she was working as a gardener with two other women, they got an opportunity to be trained as assistant nurses. Income Vuyiswa earns R590 at the clinic and R570 from the children’s grant, making up R1,160 a month in total. She has the following spending pattern: R700 on food, R250 to buy food for her children who attend school in town, R60 to pay funeral cover, and R150 on other things.

Other thoughts Her parents passed away some years ago, so she has to look after those who come after her. Her husband left home in 2004 to seek employment in Gauteng and has not yet returned. She has a dream of becoming a professional nurse, and in 2007 plans to do a one-year course in nursing.

UUP-WRD-OR Tambo Profile-301106-IS 11 Nodal Economic Profiling Project Business Trust and dplg, 2007 OR Tambo 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-OR Tambo Profile-301106-IS 12 Nodal Economic Profiling Project Business Trust and dplg, 2007 Key data points OR Tambo Geography

Densely populated area

MMaapp GGeeooggrraapphhiiccaall ffeeaattuurreess

LLooccaall mmuunniicciippaalliittiieess,, ppooppuullaattiioonn aanndd mmaajjoorr ttoowwnnss ¡ ¡ KKiinnggSSaabbaattaa DDaalliinnddyyeebboo:: 442299,,000000 ((MMtthhaatthhaaaannddMMqqaannddiillii)) ¡ ¡ NNyyaannddeenniii:: 229944,,000000 ((LLiibbooddee)) ¡ ¡ QQaauukkeennii:: 226699,,000000 ((LLuussiikkiissiikkiiaanndd FFllaaggssttaaffff)) ¡ ¡ MMbbiizzaannaa:: 225555,,000000 ((MMbbiizzaannaa)) ¡ ¡ MMhhlloonnttlloo:: 221133,,000000 ((QQuummbbuuaannddTTssoolloo)) ¡ ¡ PPoorrtt SStt JJoohhnnss:: 115522,,000000 ((PPoorrtt SStt JJoohhnnss)) ¡ ¡ NNttaabbaannkkuulluu:: 112288,,000000 ((NNttaabbaannkkuulluu))

TTrraannssppoorrttaattiioonn ¡ ¡ AAiirrppoorrtt iinnMMtthhaatthhaawwiitthh ddaaiillyy fflliigghhttss ttoo JJoohhaannnneessbbuurrgg ¡ ¡ TThhee NN22 ccoonnnneeccttiinngg DDuurrbbaann wwiitthh CCaappee TToowwnn ppaasssseess tthhrroouugghh MMtthhaatthhaa –– TThhee pprrooppoosseedd NN22 ttoolll rrooaadd wwoouulldd ccoonnnneecctt aallssoo PPoorrtt SStt JJoohhnnss –– MMoosstt ssmmaallleerr rrooaaddss aarree iinn ppoooorr ccoonnddiittiioonn ¡ ¡ SSiixxttyy--ffiivvee ppeerr cceenntt ooff tthhee ppooppuullaattiioonn hhaavvee nnoo bbuuss sseerrvviiccee aanndd 2255%% aarree mmoorree tthhaann 3300 mmiinnuutteess aawwaayy ffrroomm aa ttaaxxii sseerrvviiccee ¡ ¡ PPrrooppoosseedd KKeeii RRaaiill wwiilll lliinnkkMMtthhaatthhaattoo EEaasstt LLoonnddoonn

TTeerrrraaiinn aanndd nnaattuurraall rreessoouurrcceess ¡ ¡ TThhee WWiilldd CCooaasstt iiss oonnee ooff SSoouutthh AAffrriiccaa’’ss mmoosstt bbeeaauuttififuull aanndd uunnssppooiillttrreeggiioonnss wwiitthh bbeeaacchheess,, wwaatteerr ffaalllss aanndd ffiisshhiinngg ¡ ¡ TTiimmbbeerr ppllaannttaattiioonnss cclloossee ttooMMtthhaatthhaaaanndd iinnPPoonnddoollaanndd ¡ ¡ MMaannyy rriivveerrss aanndd 2255%% ooff aalll tthhee rraaiinnffaalll iinn SSoouutthh AAffrriiccaa

Source: Municipal Demarcation Board, dplg, Stats SA Census 2001, Department of Transport UUP-WRD-OR Tambo Profile-301106-IS 13 Nodal Economic Profiling Project Business Trust and dplg, 2007 Key data points OR Tambo Geology Rock types vary throughout the node

GGeeoollooggyy

Adelaide

Drakensberg

Dwyka

Ecca

Witwatersrand

Zululand

Natal

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-OR Tambo Profile-301106-IS 14 Nodal Economic Profiling Project Business Trust and dplg, 2007 Key data points OR Tambo Vegetation Tropical forest occurs near the coast while other forest and scrub types may be found inland

VVeeggeettaattiioonn ((AAccoocckkss vveellddttyyppee ggrroouuppss))

Coastal tropical forest types

Karoo and Karroid types

Temperate and transitional forest and scrub

Pure grassveld types

False grassveld types

Source: Agricultural Geo-Referenced Information System UUP-WRD-OR Tambo Profile-301106-IS 15 Nodal Economic Profiling Project Business Trust and dplg, 2007 Key data points OR Tambo Aridity zones Most of OR Tambo is described as humid

AArriiddiittyy aaoonneess

Dry subhumid zone

Humid zone

Source: Agricultural Geo-Referenced Information System UUP-WRD-OR Tambo Profile-301106-IS 16 Nodal Economic Profiling Project Business Trust and dplg, 2007 Key data points OR Tambo Rainfall (mean annual) OR Tambo receives high levels of rainfall

RRaaiinnffaallll ((mmeeaann aannnnuuaall))

0-200 mm

201-400 mm

401-600 mm

601-800 mm

801-1,000 mm

> 1,000 mm

Source: Agricultural Geo-Referenced Information System UUP-WRD-OR Tambo Profile-301106-IS 17 Nodal Economic Profiling Project Business Trust and dplg, 2007 Key data points OR Tambo Spatial development

Predominantly rural without access to basic services

KKeeyy iinnddiiccaattoorrss:: 22000011 OObbsseerrvvaattiioonnss zz PPooppuullaattiioonn DDeennssiittyy:: 110077..99 ppeerrssoonnss//kkmm22 zz LLaacckk ooff hhoouussiinngg iinn mmoosstt ooff tthhee ttoowwnnss,, eessppeecciiaallllyy ffoorr tthhee mmiiddddllee--ccllaassss sseeggmmeenntt zz PPooppuullaattiioonn:: RRuurraall 9922..44%%,, UUrrbbaann 77..66%% zz AA vveerryy ddeennsseellyy ppooppuullaatteedd rreeggiioonn mmaakkeess llaarrggee-- zz Dwellings: Formal 97.3%, Informal 2.7% Dwellings: Formal 97.3%, Informal 2.7% ssccaallee ffaarrmmiinngg ddiiffffiiccuulltt

Households without access to basic services: 2001 Type of housing: 2001 100% 91% Separate House or 18.0% 84% Brick Structure 81% 80% 72% Traditional Housing with

s 67.2%

d Traditional Material l o h

e 60% Flat in Blocks of Flats

s 58%

u or Town / Cluster / 6.5% o

H Semi-detached House

f

o 41% 40% House / Flat / Room e 2.9% g

a in Backyard t 30% n 28% e

c Informal Dwelling / r 20% National Average

e 2.7% Shack P

0% Other 2.7% Electricity Piped Water Waste Telephone Removal 0% 20% 40% 60% 80% 100%

Note: Definitions of basic access: Electricity for lighting; piped water within 200 m; waste removal by municipality or communal dump; phone or cell phone Source: Stats SA Census 2001 UUP-WRD-OR Tambo Profile-301106-IS 18 Nodal Economic Profiling Project Business Trust and dplg, 2007 Key data points OR Tambo Demography A young, predominantly Xhosa-speaking population

Age distribution: 2001 Gender distribution: 2001 60% 100%

50% 45% TToottaall PPooppuullaattiioonn:: 11 667766 448822 80% 39%

s 45% s t t Male n n

40% e e d d i 60% i s s e

e 30% 27% R R

f

f 40% o o

20% 61%

13% % 55% % Female 10% 20% 10% 6%

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

Household size: 2001 Language distribution (mother tongue): 2001 80% 100% 98% TToottaall NNoo.. ooff HHoouusseehhoollddss:: 333399 227733

s 80% s d

60% t l n o e h 45% d e

i 60% s 38% s u 40% e o R

H f 40% f o

o 18% %

% 20% 20% 1% 0% 0% 0% 0% 0% 1 to 3 4 to 7 8 + IsiXhosa English IsiZulu Sesotho Afrikaans

Source: Stats SA Census 2001 UUP-WRD-OR Tambo Profile-301106-IS 19 Nodal Economic Profiling Project Business Trust and dplg, 2007 Key data points OR Tambo Income and employment The majority of the population is not economically active resulting in low household incomes

Annual household income: 2001 Employment figures: 2001 100% 80% 67% 70% Of this 67%, 51% are included in 74% HHoouusseehhoolldd SSuubbssiisstteennccee s this category because they are

75% s 60% d t l LLeevveell:: RR1199,,220000 ppeerr aannnnuumm n

o below the age of 14 or above the e h 50% d e

i age of 65 years s s u

50% e 40% o R

H f 30% f o 21%

o

25% % 20% % 13% 11% 6% 3% 2% 1% 10% 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 5): 2001 Work status: 2001 30% 100% 84% s s n n

o o 80% s s r r

e 18% e

P 20% P 16%

d d 60% e e y 12% y o o l l

p p 40%

m 10% m E E

f 6% 5% f

o o 20% 9%

% % 3% 2% 2% 0% 0% Community, Private Sector Wholesaler & Financial & Construction Paid Employee Self-Employed Paid Family Employer Unpaid Family Social & Private Sector Business Worker Worker Personal Services Services Source: Stats SA Census 2001 UUP-WRD-OR Tambo Profile-301106-IS 20 Nodal Economic Profiling Project Business Trust and dplg, 2007 Key data points OR Tambo Education Low education levels in the node

SScchhooooll aatttteennddaannccee EEdduuccaattiioonn lleevveell

Percentage of OR Tambo, nodal and non-nodal populations Education levels of OR Tambo, nodal and non-nodal (aged 5-24 years) attending educational Institutions populations (aged 20+ yrs) 80% 80% 75% 74% OR Tambo OR Tambo 67% 60% 60% 53% Nodes Nodes 49% 53% Rest of South Africa 38% Rest of South Africa 40% 40% 30% (non-nodes) 29% (non-nodes) 25% 24% 22% 20% 20% 15% 13% 9% 9% 3% 5% 5% 1% 1% 0% 0% None Pre-school & School Technikon / University / No Schooling Some Primary / Grade 12 Higher Education College / Adult Secondary Education Schooling

EEdduuccaattiioonn oovveerrvviieeww ¢ ¢ CCoommppaarreedd wwiitthhtthhee rreesstt ooff SSAA aanndd eessppeecciiaallllyy wwiitthhtthhee ootthheerr nnooddeess,, tthhee eedduuccaattiioonn lleevveellss iinn OORR TTaammbbooaarree vveerryy llooww ¢ ¢ TThheerree iiss oonnee uunniivveerrssiittyy bbaasseedd iinn MMtthhaatthhaa((TThhee UUnniivveerrssiittyy ooff WWaalltteerr SSiissuulluu))

OOtthheerr ffaaccttoorrss ¢ ¢ 9955%%ooff aalll lleeaarrnneerrss wwaallkk ttoo sscchhooooll,, ooff wwhhiicchh 3366%% wwaallkk ffoorr lloonnggeerr tthhaann 3300 mmiinnuutteess.. TThhiiss mmeeaannss tthhaatt tthheerree aarree 224455,,000000 cchhiillddrreenn wwhhoo wwaallkk ffoorr mmoorree tthhaann aann hhoouurr aa ddaayy ttoo ggeettttoo aanndd ffrroomm sscchhooooll

Note: A negligible ‘other’ category has been excluded from the School Attendance graph (the ‘rest of South Africa’ average amounted to 0.2%) Source: Stats SA Census Data 2001; Monitor analysis; Department of Transport UUP-WRD-OR Tambo Profile-301106-IS 21 Nodal Economic Profiling Project Business Trust and dplg, 2007 Key data points OR Tambo Health

Node Rest of South Health-related variables Explanation OR Tambo statistics average1 Africa Average1

Number of clinics 169 N/A

Per capita expenditure: 2001 R91 R135.29 R199.28

Number of people per clinic 10,300 N/A

Average number of clinic Utilisation rate: 2004 visits per person per year 1.9 2.08 2.08

Number of patients per Nurse clinical workload nurse per clinical day 22.6 26.78 26.31 Percentage of HIV-positive HIV prevalence clients among antenatal 25.4% 24% 26% clients tested Diseases that are usually transmitted through person- Communicable diseases to-person contact or shared TB / HIV / AIDS - - use of contaminated instruments/materials No licensed waste site; sewerage Environmental health Issues discharging directly into the Mthatha - - River

Better than national avg. Worse than national avg. Note: 1Weighted to node population. The number of clinics refer to health clinics, community health centres and district hospitals Source: Health Systems Trust Reports: The District Health Barometer, 2005, and Health and Related Indicators, 2005; OR Tambo IDP; Monitor analysis, Department of Health UUP-WRD-OR Tambo Profile-301106-IS 22 Nodal Economic Profiling Project Business Trust and dplg, 2007 Key data points OR Tambo Development scorecard Overall OR Tambo falls below the average for rural poverty nodes in the areas of household income, employment and water provision OR Tambo development scorecard Difference vs Rural node All node National Rank out OR Tambo national average average average urban nodes average 1=Best, 14=Worst Poverty incidence (% of households 88.0% 84.7% 81.0% 65.3% 22.7% 13 below HSL)1

Employment rate 11.0% 15.4% 19.3% 33.7% -22.7% 14

Households without basic 84.0% 64.9% 55.1% 27.9% 56.1% 14 access to water2 Households without access to 72.0% 56.7% 50.3% 30.3% 41.7% 11 electricity3 Percentage of adults with low / no 63.4% 60.3% 54.1% 40.3% 23.1% 12 education4

Better than national average Worse than national average

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 (government policy on minimum basic human need); 3Based on households that do not use electricity as a source for lighting; 4All adults aged 20+ years with no schooling at secondary level or above (Stats SA indicator of educational deprivation) Source: Stats SA Census 2001 UUP-WRD-OR Tambo Profile-301106-IS 23 Nodal Economic Profiling Project Business Trust and dplg, 2007 OR Tambo 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-OR Tambo Profile-301106-IS 24 Nodal Economic Profiling Project Business Trust and dplg, 2007 Governance OR Tambo District and Local Municipality structure

OORR TTaammbboo DDiissttrriicctt MMuunniicciippaalliittyy

KKiinnggSSaabbaattaa NNyyaannddeennii QQaauukkeennii MMbbiizzaannaa PPoorrtt SStt JJoohhnnss NNttaabbaannkkuulluu MMhhlloonnttlloo DDaalliinnddyyeebboo LLooccaall Local LLooccaall LLooccaall LLooccaall LLooccaall LLooccaall Local MMuunniicciippaalliittyy Municipality MMuunniicciippaalliittyy MMuunniicciippaalliittyy MMuunniicciippaalliittyy MMuunniicciippaalliittyy MMuunniicciippaalliittyy Municipality

The Wild Coast

Source: OR Tambo IDP 2006/2007; The Wild Coast Spatial Development Initiative UUP-WRD-OR Tambo Profile-301106-IS 25 Nodal Economic Profiling Project Business Trust and dplg, 2007 Governance OR Tambo Political structure of the OR Tambo District Municipality

DDiissttrriicctt MMuunniicciippaalliittyy

OOffffiiccee ooff tthhee OOffffiiccee ooff tthhee MMaayyoorr SSppeeaakkeerr

OOffffiiccee ooff tthhee MMuunniicciippaall MMaannaaggeerr

FFiinnaannccee aanndd AAsssseett CCoommmmuunniittyy DDeevveellooppmmeenntt HHuummaann RReessoouurrcceess IInnffrraassttrruuccttuurraall MMaannaaggeemmeenntt DDeevveellooppmmeenntt PPllaannnniinngg DDeeppaarrttmmeenntt DDeeppaarrttmmeenntt DDeeppaarrttmmeenntt DDeeppaarrttmmeenntt DDeeppaarrttmmeenntt

Responsible for IDP

Source: OR Tambo District Municipality UUP-WRD-OR Tambo Profile-301106-IS 26 Nodal Economic Profiling Project Business Trust and dplg, 2007 Governance OR Tambo Sources of funding and budget breakdown

2004/2005 (actual) 2005/2006 (full year forecast) 2006/2007 (budget) Operating revenue 305,821 238,050 227,314

Grants and subsidies 422,952 520,716 468,180

Total financing 728,773 758,766 695,494

Total expenditure / Budgeted expenditure 612,860 758,381 693,890

Operating expenditure: Budget year 2006-2007 300 ¢ ¢ 250 37.5 3.3 227.1 6677%% ooff tthhee ttoottaall ffiinnaanncciinngg iiss 0.1 government grants Millions government grants 24.3 of 200 25.1 ¢ Rands ¢ AA mmuunniicciippaalliittyy iinniittiiaattiivvee ttoo 150 4.0 6.4 1.8 8.5 2.0 5.9 rraaiissee mmoorree rreevveennuuee iiss 67.7 ddiissccuusssseedd iinn tthhee llaatteesstt IIDDPP 100 rreevviieeww

50 40.4

0 t t il n h s g y n t r r l c i n lt e n t o n o te ity m ta n m e a c si fe ti e p c is o u d m e i u a c m s a ri r T o p H rv o S te e n W t u C A lo e o g ra c o & e S H ic r a le T & v l l P n T E e e a b l a d ve c i u a a ti n D c P t M o u a o n r c in & S e e R e F g m t x in & n a E n ity ro W n n vi e la u n st P m E a m W o C Note: All amounts are given in R1,000 Source: IDP OR Tambo 2006/2007 UUP-WRD-OR Tambo Profile-301106-IS 27 Nodal Economic Profiling Project Business Trust and dplg, 2007 Governance OR Tambo Overview of nodal management – private sector point of view

Capability ¢ Lack of understanding of LED at local and district municipality level – More focus on social uplifting than economic development ¢ Lack of strategic insight ¢ Generally low skills level ¢ Consultants generate key documentation

Inter-nodal politics ¢ Lack of communication between local municipalities ¢ Evidence of antagonistic relationship between local municipalities and district municipalities – “Local municipalities want to belong to KwaZulu Natal (KZN)” ¢ Although the IDP for the district should be based on the local IDPs, this district IDP was completed before

Corruption ¢ Media coverage indicates – Ghost workers – Nepotism – Theft

Source: Based on Monitor interviews of private sector participants UUP-WRD-OR Tambo Profile-301106-IS 28 Nodal Economic Profiling Project Business Trust and dplg, 2007 Governance OR Tambo Assessment of nodal managers Very poor communication between district and local municipalities

CCoommmmuunniiccaattiioonn CCaappaabbiilliittyy £ £ £ £ LLaacckk ooff ccoommmmuunniiccaattiioonn bbeettwweeeenn llooccaall mmuunniicciippaalliittiieess LLaacckk ooff uunnddeerrssttaannddiinngg ooff LLEEDD aatt llooccaall aanndd ddiissttrriicctt mmuunniicciippaalliittyy lleevveell £ £ EEvviiddeennccee ooff aannttaaggoonniissttiicc rreellaattiioonnsshhiipp bbeettwweeeenn llooccaall mmuunniicciippaalliittiieess –– MMoorree ffooccuuss oonn ssoocciiaall uupplliiffttiinngg tthhaann eeccoonnoommiicc ddeevveellooppmmeenntt £

and district municipalities £ and district municipalities LLaacckk ooff ssttrraatteeggiicc iinnssiigghhtt £

– “Local municipalities want to belong to KZN” £ – “Local municipalities want to belong to KZN” GGeenneerraalllyy llooww sskkiilllss lleevveell £ £ £

Although the IDP for the district should be based on the local IDPs, £ Although the IDP for the district should be based on the local IDPs, CCoonnssuullttaannttss ggeenneerraattee kkeeyy ddooccuummeennttaattiioonn tthhiiss ddiissttrriicctt IIDDPP wwaass ccoommpplleetteedd bbeeffoorree

CCaappaacciittyy CCoorrrruuppttiioonn £ £ £ MMoottiivvaattiioonn lleevveellss nnoott ooppttiimmaall £ MMeeddiiaa ccoovveerraaggee iinnddiiccaatteess £ £ NNoo sseeccttoorr eexxppeerrttss ((ffoorreessttrryy)) –– GGhhoosstt wwoorrkkeerrss £ £ FFeeww ppeeooppllee hhaavvee ttoo ccoovveerr aalll rreelleevvaanntt sseeccttoorrss –– NNeeppoottiissmm –– CCoommppaarreedd wwiitthhootthheerr nnooddeess,,tthhee nnuummbbeerr ooff LLEEDD mmaannaaggeerrss iiss llooww –– TThheefftt

Source: Monitor interviews, Daily Dispatch 28 July 2006 UUP-WRD-OR Tambo Profile-301106-IS 29 Nodal Economic Profiling Project Business Trust and dplg, 2007 Governance OR Tambo Example of political mismanagement Report shows examples of fraud and nepotism in KSD1 local municipality

The council is paying people who do not exist

Manager was paid two salaries for Employee resigned in more than a year 2004 but was paid until 2006

Note: 1KSD = King Sabata Dalindyebo (one of seven local municipalities) Source: Daily Dispatch, Friday 28 July 2006 UUP-WRD-OR Tambo Profile-301106-IS 30 Nodal Economic Profiling Project Business Trust and dplg, 2007 IDP assessment OR Tambo Key facts of the IDP £ GGeeooggrraapphhiicc aarreeaa OR Tambo District Municipality Covers more than the node covered – Includes seven local municipalities Covers exactly the node covered Covers less than the node

Month / year of latest £ Month / year of latest 2006 ppuubblliiccaattiioonn

£ The actual document is 77 pages in length including 20 pages of tables showing focus areas and budget breakdown LLeennggtthh // ffoorrmm £ Mainly text and tables; four maps in total

£ Compiled by the Department of Planning and Development at Public sector mainly OR Tambo District Municipality Private sector mainly Author / main Both equally Author / main – No use of external consultants ccoonnttrriibbuuttoorrss – Mayors, managers and local municipalities contributed through Includes consultants mass meetings Does not include consultants Relies only on consultants

£ Process started with the five-year plan in 2000 – Focused on improving the lives of the people through TTiimmiinngg development and addressing service backlogs

£ Annual reviews with refinements of the strategy PPrroocceessss ooff ccrreeaattiioonn

KKeeyy £ N/A aassppeeccttss

£ The Wild Coast spatial development framework OOtthheerr kkeeyy rreellaatteedd £ For each local municipality ddooccuummeennttss – Separate IDP – The LED strategy

Source: IDP Review 2006/2007, Monitor analysis, Monitor interviews UUP-WRD-OR Tambo Profile-301106-IS 31 Nodal Economic Profiling Project Business Trust and dplg, 2007 IDP assessment OR Tambo Key characteristics of the IDP £ Provides insight into needs and the strategy for growth and Provides insight mainly development on a district level Focus / purpose Provides information mainly

Focus / purpose £ Does not provide much information / data Both equally

Easy to find / access £ AAcccceessssiibbiilliittyy IDP reports from 2003 are available online Difficult to find / access

£ Generally high level needs assessment and objectives Generally, very vague PPrreecciissiioonn £ Lack of precision for growth strategies and understanding of LED Generally, quite precise £ AAccttuuaall uusseerr ggrroouupp // kkeeyy Focuses entirely on government and municipality Government mainly Private sector mainly current recipients £ current recipients Very few ideas for the private sector Both equally

Is viewed as key guiding document £ EExxtteenntt ooff uussaaggee // iimmppaacctt N/A Is used minimally, very little impact

£ Even if the IDP review does not provide many details for growth initiatives there is a project databank available online – For each project, well defined goals, strategies and target groups are presented – Most of the projects have the nature of social upliftment (e.g. HIV OOtthheerr aassppeeccttss awareness campaign) rather than economic growth

£ The IDP review of the district municipality should be based upon the IDP review of the seven local municipalities – This is obviously not the case since the IDP review for OR Tambo DM was finished several months before the local IDPs

Source: IDP Review 2006/2007, Monitor analysis, Monitor interviews UUP-WRD-OR Tambo Profile-301106-IS 32 Nodal Economic Profiling Project Business Trust and dplg, 2007 IDP assessment OR Tambo Contents of the IDP relevant to the node

TTyyppeess ooff iinnffoorrmmaattiioonn ccoonnttaaiinneedd iinn tthhee IIDDPP AAsssseessssmmeenntt

EExxaammpplleess ooff kkeeyy iissssuuee aarreeaass EExxaammpplleess ooff kkeeyy iissssuuee aarreeaass TTyyppiiccaall lleevveell ooff ddeettaaiill pprroovviiddeedd ccoovveerreedd nnoott ccoovveerreedd aaccrroossss iissssuuee aarreeaass

£ Highly comprehensive £ £ £ £ IIDDPP ppllaannnniinngg pprroocceessss £ LLeessssoonnss aanndd ffoolllooww--uuppss ffrroomm DDeettaaiilleedd ddeessccrriippttiioonn ooff tthhee current situation and key breadth depth pprreevviioouuss IIDDPP rreevviieewwss current situation and key £ £ Current situation cchhaallleennggeess Current situation £ £ OOnnllyy ssiixx ((oouutt ooff tthhee ttoottaall 7777)) £

£ pages describe the DDeevveellooppmmeenntt ssttrraatteeggyy pages describe the ddeevveellooppmmeenntt ssttrraatteeggyy,, aanndd nnoo

£ data are given

£ data are given £ IIDDPP iimmpplleemmeennttaattiioonn ppllaann £ HHaarrddllyy aannyy ddeettaaiillss aarree ggiivveenn

£ about the relevant sectors or

£ about the relevant sectors or SSeeccttoorr ppllaann aaccttuuaall pprroojjeeccttss £ £ The sector plans are high-level The sector plans are high-level Key issues ssuummmmaarriieess ooff LLEEDD ppllaannss oorr ssppaattiiaall ddeevveellooppmmeenntt not covered ffrraammeewwoorrkkss

QQuuaalliittyy ooff iinnffoorrmmaattiioonn ccoonnttaaiinneedd iinn tthhee IIDDPP AAsssseessssmmeenntt

£ Highly £ TThhee IIDDPP 22000066//22000077 iiss bbaasseedd oonn tthhee CCeennssuuss 22000011 ddaattaa reliable £ £ TThheerree iiss rreeaassoonn ttoo bbeelliieevvee tthhaatt tthhee ddaattaa aarree nnoott aaccccuurraattee –– TThhee cceennssuuss ssuurrvveeyy ooff OORR TTaammbboo wwaass ddoonnee wwhheenn tthheerree wwaass vviioolleennccee iinn ssoommee rreeggiioonnss –– SSttaattiissttiiccss ffoorr ssoommee ooff tthhee rreeggiioonnss aarree bbaasseedd oonn gguueesssseess

Very risky to use for investment decisions

Source: IDP Review 2006/2007, Monitor analysis, Monitor interviews UUP-WRD-OR Tambo Profile-301106-IS 33 Nodal Economic Profiling Project Business Trust and dplg, 2007 IDP assessment OR Tambo Action orientation of the IDP for the node

AAccttiioonnss pprrooppoosseedd AAsssseessssmmeenntt

EExxaammpplleess ooff kkeeyy aaccttiioonnss pprrooppoosseedd iinn IIDDPP EExxaammpplleess ooff kkeeyy aaccttiioonnss nnoottpprrooppoosseedd iinn IIDDPP Highly action-oriented £ £ £ TThhee IIDDPP rreevviieeww llaacckkss pprrooppeerr kkeeyy aaccttiioonnss.. TTeenn £ SSkkiilllss ddeevveellooppmmeennttpprrooggrraammmmeeffoorr mmuunniicciippaall ppaaggeess ooff ttaabblleess wwiitthh kkeeyy ppeerrffoorrmmaannccee aarreeaass mmaannaaggeerrss £ aanndd rreelleevvaanntt pprroojjeeccttss aarree pprreesseenntteedd wwiitthhoouutt £ IIddeeaass ooff hhooww sseerrvviiccee ddeelliivveerryy ccoouulldd bbee aannyy ffoorrmm ooffpprriioorriittiissaattiioonn iimmpprroovveedd ((ee..gg.. ppeerrffoorrmmaannccee mmeeaassuurreemmeenntt))

Key action areas not covered

SSuuppppoorrtt ooff iimmpplleemmeennttaattiioonn ooff tthhee pprrooppoosseedd aaccttiioonnss AAsssseessssmmeenntt

£ Drives £ IImmpplleemmeennttaattiioonn ppllaann iiss aavvaaiillaabbllee implementation well –– NNoott aa ssiinnggllee pprroojjeecctt iiss aassssoocciiaatteedd wwiitthh aa ttiimmee lliinnee –– KKeeyy ppeerrssoonnss ffoorr tthhee pprroojjeeccttss hhaavvee oonnllyy bbeeeenn iiddeennttiiffiieedd ffoorr pprroojjeeccttss iinnvvoollvviinngg eexxtteerrnnaall ssttaakkeehhoollddeerrss lliikkee ggoovveerrnnmmeenntt ddeeppaarrttmmeennttss oorr pprriivvaattee iinniittiiaattiivveess

Does not drive implementation

Source: IDP Review 2006/2007, Monitor analysis, Monitor interviews UUP-WRD-OR Tambo Profile-301106-IS 34 Nodal Economic Profiling Project Business Trust and dplg, 2007 IDP assessment OR Tambo General assessment of the IDP in relation to the node

GGeenneerraall aasssseessssmmeenntt ––DDooeess tthhee IIDDPP ddeelliivveerr wwhhaatt iitt pprroommiisseess?? AAsssseessssmmeenntt

Highly £ £ TThhee imimppoorrttaanntt ggooaall ooff ““pprroovviiddiinngg eeffffiicciieenntt aanndd eeffffeeccttiivvee sseerrvviiccee ddeelliivveerryy””iiss nnoott ccoonnssiisstteenntt wwiitthh ggiivviinngg tthhee satisfactory lloowweesstt ppoossssiibbllee pprriioorriittyy ttoo tthhee ttwwoo oobbjjeeccttiivveess –– FFaacciilliittaattee tthhee pprroovviissiioonn ooff eelleeccttrriicciittyy –– CCoo--oorrddiinnaattee ppuubblliicc ttrraannssppoorrtt sseerrvviicceess £ £ IIff tthhee pprroommiisseedd eeccoonnoommiicc ggrroowwtthh iiss ttoo bbee aacchhiieevveedd mmoorree ffooccuuss oonn LLEEDD rraatthheerr tthhaann ssoocciiaalluupplliiffttmmeennttiiss nneeeeddeedd

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 £ £ £ IInn iittss ccuurrrreenntt ssttaattuuss tthhee IIDDPP ddooeess nnoott £ MMoorree ffooccuuss oonn eeccoonnoommiicc ggrroowwtthh £ ccoonnttrriibbuuttee ttoo rreeaall eeccoonnoommiicc ggrroowwtthh £ MMoorree ffooccuuss oonn imimpprroovveemmeennttss ooff bbaassiicc iinnffrraassttrruuccttuurree

Does not contribute to growth debate

Source: IDP Review 2006/2007, Monitor analysis, Monitor interviews UUP-WRD-OR Tambo Profile-301106-IS 35 Nodal Economic Profiling Project Business Trust and dplg, 2007 IDP assessment OR Tambo Summary of IDP assessments

IIDDPP ddeelliivveerrss wwhhaatt iitt LLeevveell ooff ddeettaaiill AAccttiioonnss pprrooppoosseedd pprroommiisseess 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-OR Tambo Profile-301106-IS 36 Nodal Economic Profiling Project Business Trust and dplg, 2007 Development projects OR Tambo Examples of Ntinga Development Agency1 initiatives The development agency implementing LED projects focuses on too many different areas and on developing Mthatha and its surroundings Current and proposed projects by Ntinga OR Tambo Development Agency1: 2004/05

Project Description Status

Public private partnership (PPP) for the development of a cultural precinct in Nelson Mandela Cultural Precinct Proposal Mthatha

Site allocated National stadium seating 35,000 people to be used as venue for 2010 World Cup Multi-purpose sports stadium and investments (demonstration and warm-up games) in infrastructure

Feasibility study Academy of Sports National sports academy for all Olympic sports needed

Ninety per cent Shopping centre (25,000 square metres) on site of the Independence Stadium Mthatha Plaza Shopping Centre let with large national tenants

Proposal for the development of a 15,000 square metre office park and lifestyle Owen Dam Office Park Proposal centre

Nduli Knuckle Game Park and “Revitalisation of game park essential to the future of Mthatha as a tourism node” Proposal Tourism Centre

Development of residential accommodation to supply much needed middle- and Opportunity for Residential housing development upper-income housing lenders to invest

Note: 1Ntinga OR Tambo Development Agency facilitates and implements the LED initiatives of the municipality Source: Ntinga OR Tambo Development Agency 2004/05 Annual Performance Review UUP-WRD-OR Tambo Profile-301106-IS 37 Nodal Economic Profiling Project Business Trust and dplg, 2007 Development projects OR Tambo Examples of Ntinga Development Agency1 initiatives (continued) The development agency implementing LED projects focuses on too many different areas and on developing Mthatha and its surroundings Current and proposed projects by Ntinga OR Tambo Development Agency1: 2004/05

Project Description Status

Several projects focusing on £ Grain clusters £ Maize production £ Vegetable production Agricultural development £ Sorghum production Running £ Essential oils £ Beef production £ Sheep production £ Goat production High level tourism plan with the following objectives £ Increasing business opportunities for emerging entrepreneurs

Tourism development £ Running Creating employment £ Increasing contribution from tourism to the gross geographic product

OR Tambo District Municipality Timer Massive programme to use the potential for forestry and to ensure that the whole Running Cluster Concept – Langeni district benefits from the production

Note: 1Ntinga OR Tambo Development Agency facilitates and implements the LED initiatives of the municipality Source: Ntinga OR Tambo Development Agency 2004/05 Annual Performance Review UUP-WRD-OR Tambo Profile-301106-IS 38 Nodal Economic Profiling Project Business Trust and dplg, 2007 OR Tambo OR Tambo poverty node

z Research process

z Overview

z Economy

¢ GDP and employment

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

– Selected sector: Tourism

z Investment opportunities

z Summary

z Appendix

UUP-WRD-OR Tambo Profile-301106-IS 39 Nodal Economic Profiling Project Business Trust and dplg, 2007 Economy overview OR Tambo Nodal and provincial GDP The GDP per capita for the node has grown at a much lower rate than that for the province, and the same has occurred for the total GDP

GDP per capita: 2004 (constant 2000 prices) Total GDP per node (constant 2000 prices) 18,000 10 CAGR (1995-2004) CAGR (1995-2004) = 1.5% 4 1 6 7 1 8 s 1 7 1 7 8 0 . 5 4 5 . 1 d 3 . 2 2 2 . -0.1% . GDP per capita for the node 6 . 6 . . 0 . 6 n 6 6 .

16,000 6 6 6 6 a GDP per capita for the province 0.9% 6 R 6

f o

9 s 9 14,000 2 7 n 4 3 3 9 , o i 0 l 8 2 , l , 1 5 4 i 9 4 1 2 6 8 1 9 5 1 8 7 B 1 5 2 1 0 0 0 9 9 2 , , 8 8 , , , , 12,000 , 1 1 1 0 0 0 0 1 1 1 1 1 1 1 0 4 3 2 1 0 9 8 7 6 5 0 0 0 0 0 9 9 9 9 10,000 9 s 0 0 0 0 0 9 9 9 9 9 d 2 2 2 2 2 1 1 1 1 1 n a

R 8,000 Total GDP per province (constant 2000 prices) 90 6,000 CAGR (1995-2004) = 2.5% 3 0 9 9 3 3 5 0 4 9 4 4 4 7 . 1 5 8 7 6 3 1 0 3 0 7 9 2 s 6 . 4 0 4 9 9 . 9 9 9 9 9 9 8 8 4 d , . 0 , , 9 0 8 , , , , , , , . 7 8 2 4 5 7 n 9 3 3 5 8 3 3 3 3 3 . 3 3 5 6 7 . . 4 7 . a

60 2 7 . 4,000 0 0 9 7 R 7 7 7

6 f 6 o

s

2,000 n o i

l 30 l i B 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 1 capita with the 36.3% 36.3% 36.0% 36.0% 36.0% 35.8% 32.4% 35.3% 31.5% 33.1% provincial average

Source: Quantec, Monitor analysis. GDP Gross Domestic Product; CAGR Compound Annual Growth Rate UUP-WRD-OR Tambo Profile-301106-IS 40 Nodal Economic Profiling Project Business Trust and dplg, 2007 Economy overview OR Tambo Contribution to GDP and employment by economic sector Government remains by far the largest employer and the largest contributor to GDP in the node, although tourism is quite large as well

Contribution to GDP by sector 2004 Contribution to employment by (constant 2000 prices) sector: 2004

Electricity and Water 1.0% Mining 1.4% Transport and Electricity and Agriculture, Forestry & Fishing Mining Communication Water 0.4% 1.9% 0.4% 1.7% Agriculture, Forestry & Fishing Construction 3.4% 3.9% Manufacturing Construction 4.3% 5.2% Manufacturing Transport & 5.3% Communication General General 9.3% Government Government Services Finance and Services 33.6% Business 35.0% Community, Services Social and Other 9.8% Personal Services Wholesale and 12.7% Retail Trade; Catering & Wholesale and Finance and accomm Community, Retail Trade; Business 13.7% Social and Other Catering & Services Personal Services accommodation 18.1% 24.7% 14.5%

Source: Quantec, Monitor analysis UUP-WRD-OR Tambo Profile-301106-IS 41 Nodal Economic Profiling Project Business Trust and dplg, 2007 Economy overview OR Tambo GDP by sector Combining size and growth rate allows us to start identifying sectors that may have good growth potential

GDP by sector: 2004 Wholesale & Retail Trade; (constant 2000 prices) Transport & Communication Catering & Accommodation 2,500 Average CAGR Transport Communication Trade Catering General Government Services for GDP: 1.5% 432 203 2004 900 91

2,000 68% 32% 91% 9% 4 0 0 2

1995

: 359 106 828 110 s d

n 77% 23% 88% 12%

a 1,500 R

f Finance & Business Services 0 200 400 600 800 700 800 900 1,000 1,100 o

s n

o Wholesale & Retail Trade; i

l Finance & Business Services Construction l i 1,000 Catering & Accommodation

M Finance Business

n Community, Social & i Other Personal Services P 459 781 2004 234 D Transport & G 500 Communication 37% 63% Manufacturing Agriculture, Electricity Forestry & Fishing Construction 382 640 1995 109 and water Mining 0 37% 63%

0% 2% 4% 6% 8% 10% 0 500 1,000 1,500 0 100 200 300 CAGR: 1995-2004

Source: Quantec, Monitor analysis UUP-WRD-OR Tambo Profile-301106-IS 42 Nodal Economic Profiling Project Business Trust and dplg, 2007 Economy overview OR Tambo Employment by sector In terms of jobs created, government and community services are the most significant sectors

Wholesale and Retail Trade; Employment by sector Finance and Business Services Catering and Accommodation 30,000 Average CAGR Finance Business Trade Catering

for employment: -0.6% 5

General 5 1,811 5,451 9,031 1

2004 ,

government 1 25,000 services 25% 75% 89% 11%

1995 20,000 1,627 2,781 7,062 2,872 4

0 Community, social and

0 37% 63% 71% 29%

2 other personal services

: t

n 0 2,000 4,000 6,000 8,000 0 5,000 10,000 15,000 e 15,000 m

y Transport and Communication Manufacturing o l

p Transport Communication Food Wood Other m Wholesale and retail trade; E 2

10,000 Catering and accommodation 789 482 1,380 7 1,949

2004 5 Finance and business 62% 34% 37% 20% 43% services 5,000 Manufacturing 4 3

Agriculture, Construction 1150 688 1995 2,158 1 2,478 , Forestry and fishing Transport and communication 1 Mining Electricity and water 63% 37% 35% 15% 50% 0 -12% -9% -6% -3% 0% 3% 6% 0 500 1000 1500 2000 0 2,000 4,000 6,000 8,000 CAGR (1995-2004)

Source: Quantec, Monitor analysis UUP-WRD-OR Tambo Profile-301106-IS 43 Nodal Economic Profiling Project Business Trust and dplg, 2007 Economy overview OR Tambo 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

Sectors 2004 GDP at Number of Average index Employment constant 2000 GDP index employees: index prices (Rmillion) 2004

1 General government services 2,301,807,460 100 26,023 100 100 High

2 Community, social and other 865,793,155 37 18,345 70 54 personal services 3 Wholesale and retail trade; 991,012,074 42 10,186 39 40 Catering and accommodation 2,301,807,460

3 Finance and business services 1,239,855,229 53 7,262 27 40

5 Transport and communication 635,387,818 27 1,272 4 15

6 Manufacturing 354,012,136 14 3,900 14 14

7 Construction 234,131,813 9 3,159 11 10

8 Agriculture, forestry and 129,838,260 5 2,889 10 7 fishing

9 Mining 24,166,848 0 1,017 3 1 Low 10 Electricity and water 68,314,190 2 265 0 1

2,301,807,460 /100 /100 /100

Source: Quantec, Monitor analysis UUP-WRD-OR Tambo Profile-301106-IS 44 Nodal Economic Profiling Project Business Trust and dplg, 2007 Economy overview OR Tambo Qualitative prioritisation of top five sectors

Sectors Average index Potential for growth Assessment

General ¤ Limited opportunities for growth government 100 – Lack of suitable intervention points services – No sustainable wealth creation for the people who live in the node

Community, ¤ Limited opportunities for growth social and other 54 – Lack of suitable intervention points personal services – No sustainable wealth creation for the people who live in the node

¤ Huge potential for growth Wholesale and – Untapped market in tourism retail trade, 40 – Many areas of unique natural beauty Catering and accommodation – Large variety in leisure activities – Historically significant area (birthplace of many freedom fighters)

Finance and business ¤ Some potential for growth, but linked to performance of the other sectors (tourism) 40 services – Very skills intensive

¤ Limited potential for growth – Very capital intensive Transport and 15 – Lack of supportive infrastructure communication – Growth in other sectors is needed to create the right demand

Low growth High growth potential potential Source: Monitor analysis UUP-WRD-OR Tambo Profile-301106-IS 45 Nodal Economic Profiling Project Business Trust and dplg, 2007 Economy overview OR Tambo Agriculture as a prioritised sector Although its current contribution to the OR Tambo economy is limited, the agriculture / forestry / fishing sector presents good opportunities for growth

¥ Rainfall and soil quality make the area well suited to agricultural production

¥ Although the number of commercial farmers is small there are many subsistence farmers whose production could be increased

Agriculture ¥ Agriculture With increasing demand from the bio-fuel industry, maize could potentially be ((ccrrooppss aanndd exported lliivveessttoocckk)) ¥ Additionally, the area has ample grazing land for livestock and dairy farming

¥ Additional value can be extracted through the development of downstream processing industries

¥ The Eastern Cape (EC) has been identified as one of the only areas remaining in South Africa that is available for new forestation AAggrriiccuullttuurree ¥ Furthermore, demand for timber products is strong in South Africa and abroad ((ffoorreessttrryy)) ¥ OR Tambo has potential for large-scale forestation, especially of pine ¥ The components of a forestry cluster are already emerging, with billion-rand investments in the nearby nodes of Ukhahlamba and Alfred Nzo

Source: Monitor interviews UUP-WRD-OR Tambo Profile-301106-IS 46 Nodal Economic Profiling Project Business Trust and dplg, 2007 OR Tambo OR Tambo 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-OR Tambo Profile-301106-IS 47 Nodal Economic Profiling Project Business Trust and dplg, 2007 Selected sector: Tourism OR Tambo Overview of the tourism sector Unique potential exists for tourism development

IInnppuutt PPrroodduuccttiioonn TTaarrggeett mmaarrkkeettss

WWhhaatt ddoo tthheeyy ddoo // WWhhoo ddoo tthheeyy sseerrvvee // WWhhaatt ddoo tthheeyy rreellyy oonn?? pprroodduuccee?? ttaarrggeett // sseellll ttoo??

z Home of the great z Adventure-based z Many domestic leaders Nelson tourism tourists but few of Mandela and Oliver – Most hotels along them use the hotel Tambo the coast offer establishments z Wild Coast, 120 km of hiking, horse – The region unspoilt beauty riding, canoeing, suffers from a z Ecotourism etc. bad reputation – Natural beauty z Mainly 2- and 3-star z International tourists, – Endemic species accommodation especially z backpackers, make z Lack of good The Xhosa cultural up the major group heritage accommodation in Mthatha of visitors z Pondoland with traditional Amampondo lifestyle

Source: Monitor interviews UUP-WRD-OR Tambo Profile-301106-IS 48 Nodal Economic Profiling Project Business Trust and dplg, 2007 Selected sector: Tourism OR Tambo Inputs The beautiful beaches together with places of historical and cultural significance are the major attractions Map showing attractions in the OR Tambo node

TToouurriissmm aaccttiivviittiieess ¥ ¥ EExxcceelllleenntt bbeeaacchheess ¥ ¥ HHiikkiinngg,, ffiisshhiinngg,, hhoorrssee rriiddiinngg aanndd wwhhaallee wwaattcchhiinngg ¥ ¥ 44xx44 ddrriivviinngg Mkambathi Nature Wild Coast Reserve Sun Casino ¥ ¥ TThhee WWiilldd CCooaasstt SSuunn CCaassiinnoo Mthatha and ¥ ¥ TThhee NNeellssoonn MMaannddeellaa lleeggaaccyy Nelson Mandela Waterfall Bluff Museum –– MMuusseeuumm iinnMMtthhaatthhaa Port St Johns –– SScchhooooll hhoouussee iinnQQuunnuu Qunu Mvezo –– BBiirrtthhppllaaccee iinnMMvveezzoo ¥ ¥ WWaatteerrffaallll BBlluuffff Coffee Bay –– OOnnee ooff tthhee ffeeww wwaatteerrffaallllss ggooiinngg rriigghhtt iinnttoo tthhee oocceeaann Hole in the Wall

TToouurriissmm eevveennttss ¥ ¥ IImmaannaaMMoouunnttaaiinn BBiikkee RRiiddee

Major attraction

Source: Eastern Cape Tourism Board (ECTB) UUP-WRD-OR Tambo Profile-301106-IS 49 Nodal Economic Profiling Project Business Trust and dplg, 2007 Selected sector: Tourism OR Tambo Production Lack of quality accommodation drives up prices and occupancy rates

PPrroodduuccttss PPrriicceess ¤ ¤ ¤ TThhee WWiilldd CCooaasstt hhaass aabboouutt 7700 eessttaabblliisshhmmeennttss ¤ PPrriicceess ((ppeerr ppeerrssoonn ppeerr nniigghhtt)) ffoorr aaccccoommmmooddaattiioonn oonn tthhee WWiilldd Coast22 –– BBeettwweeeenn CCooffffeeee BBaayy aanndd PPoorrtt SStt JJoohhnn’’ss tthheerree aarree aabboouutt 33,,225500 Coast bbeeddss ccaatteerriinngg ffoorr tthhee 22--aanndd 33--ssttaarr mmaarrkkeettss –– UUppmmaarrkkeett RR660000--RR11,,220000 1 –– TThhee UUppppeerr WWiilldd CCooaasstt1ooffffeerrss 110000 ccaammpp ssiitteess aanndd 11,,778833 bbeeddss –– MMiidd--mmaarrkkeett RR440000--RR11,,000000 ddiissttrriibbuutteedd aaccccoorrddiinngg ttoo –– LLooww RR8800--RR665500 ¦ ¦

Top end (5-star): none ¤ Top end (5-star): none ¤ HHiigghh ddeemmaanndd aanndd llaacckk ooff ffaacciilliittiieess ddrriivvee uupp tthhee ccoosstt ooff ¦ ¦ UUppmmaarrkkeett ((44--ssttaarr)):: 771155 ((7711%% ooccccuuppaannccyy)) aaccccoommmmooddaattiioonn iinn MMtthhaatthhaa ¦ ¦ MMiidd--mmaarrkkeett ((33--ssttaarr)):: 337733 ((7722%% ooccccuuppaannccyy)) –– TThhee GGaarrddeenn CCoouurrtt hhootteell cchhaarrggeess RR669999 pppp wwiitthhoouutt mmeeaallss ¦ ¤ ¦ LLooww ((11--22 ssttaarr)):: 669955 ((3377%% ooccccuuppaannccyy)) ¤ TThhee NNeellssoonn MMaannddeellaa mmuusseeuumm iiss ffrreeee ooff cchhaarrggee –– TThhee UUppppeerr WWiilldd CCooaasstt iiss mmaaiinnllyy ddoommiinnaatteedd bbyy ttwwoo eessttaabblliisshhmmeennttss,, ii..ee.. WWiilldd CCooaasstt SSuunn aanndd UUmmnnggaazziiRRiivveerr LLooddggee PPrrooffiittaabbiilliittyy ¤ ¤ IInn aaddddiittiioonn ttoo tthhee ccooaassttaall eessttaabblliisshhmmeennttss tthhee nnuummbbeerr ooff iinnllaanndd BB&&BBss aanndd gguueesstt hhoouusseess iiss ggrroowwiinngg ¤ –– IInn MMtthhaatthhaa tthhee hhootteellss ccaatteerr mmaaiinnllyy ffoorr tthhee mmaannyy bbuussiinneessss ¤ TThhee WWiilldd CCooaasstt mmaarrkkeett iiss hhiigghhllyy sseeaassoonnaall wwiitthh 4400%% ooff tthhee vviissiittoorrss ttrraavveellleerrss bbeettwweeeenn DDeecceemmbbeerr aanndd AApprriill ¤ ¤ LLooww pprriicceess aanndd ooccccuuppaannccyy rraatteess dduurriinngg ooffff--sseeaassoonn iinnddiiccaatteess llooww ¤

¤ profitability TThhee NNeellssoonn MMaannddeellaa MMuusseeuumm wwiitthh 4444,,770088 vviissiittoorrss iinn 22000033//0044 profitability ¤ ¤ TThhee uuppmmaarrkkeett eessttaabblliisshhmmeennttss ((ee..gg.. WWiilldd CCooaasstt SSuunn)) aarree uussuuaalllyy fully booked the whole year round ¤ fully booked the whole year round ¤ TThhee WWiilldd CCooaasstt SSuunn CCaassiinnoo wwiitthh 556633,,000000 vviissiittoorrss ppeerr aannnnuumm

Note: 1The Upper Wild Coast is defined as the region between Port St Johns and Port Edward 2The lower prices represent low season and the higher represent high season Source: Ntinga OR Tambo Development Agency, SA Casino Group, Nelson Mandela Museum; Monitor analysis UUP-WRD-OR Tambo Profile-301106-IS 50 Nodal Economic Profiling Project Business Trust and dplg, 2007 Selected sector: Tourism OR Tambo Production (continued) Most of the accommodation in the area is in Coffee Bay, Port St Johns and Mthatha

Accommodation by type OR Tambo Included in this region are OR Tambo aaccccoommmmooddaattiioonn Mthatha, Coffee Bay, ¥ Butterworth, Mazeppa Bay, ¥ 2211 HHootteellss // mmootteellss // Qolora Mouth and Qunu iinnnnss ¥ ¥ 2299 BB&&BBss // gguueesstt hhoouusseess ¥ ¥ 1100 SSeellff--ccaatteerriinngg ¥ ¥ 55 OOtthheerr

Hotel / motel / inn B&B / guest house

Self-catering Other

= 15 places for accommodation

Source: Grant Thornton UUP-WRD-OR Tambo Profile-301106-IS 51 Nodal Economic Profiling Project Business Trust and dplg, 2007 Selected sector: Tourism OR Tambo Target markets – Overview The Wild Coast attracts many international backpackers and adventure-seeking tourists

MMaarrkkeett//ccuussttoommeerrss ¤ ¤ TThhee VVFFRR ((vviissiittiinngg ffrriieennddss aanndd rreellaattiivveess)) ggrroouupp iiss tthhee mmaajjoorr ddrriivveerr ffoorr tthhee ddoommeessttiicc mmaarrkkeett iinn OORR TTaammbboo –– MMoosstt vviissiittoorrss aarree ffrroomm WWeesstteerrnn CCaappee,, EEaasstteerrnn CCaappee aanndd GGaauutteenngg ¤ ¤ TTwwoo--tthhiirrddss ooff tthhee vviissiittoorrss aatt eessttaabblliisshhmmeennttss aalloonngg tthhee WWiilldd CCooaasstt aarree ffoorreeiiggnneerrss

MMaajjoorr mmaarrkkeett sseeggmmeennttss

WWiilldd CCooaasstt MMtthhaatthhaa ¤ ¤ ¤ MMaannyy iinntteerrnnaattiioonnaall bbaacckkppaacckkeerrss ¤ MMuunniicciippaalliittyy aanndd ggoovveerrnnmmeenntt wwoorrkkeerrss aatttteennddiinngg ccoonnffeerreenncceess aanndd workshops ¤ workshops ¤ TThhee aaddvveennttuurroouuss ttyyppee eennjjooyyiinngg 44xx44 ddrriivviinngg,, ssuurrffiinngg aanndd hhoorrssee ¤ rriiddiinngg ¤ BBuussiinneessss ppeeooppllee ¤ ¤ EEiigghhttyy--ffiivvee ppeerr cceenntt ooff tthhee vviissiittoorrss ttoo tthhee WWiilldd CCooaasstt SSuunn CCaassiinnoo oorriiggiinnaattee ffrroomm DDuurrbbaann

CCoommppeettiittoorrss // tthhrreeaattooff ssuubbssttiittuuttee pprroodduuccttss ¤ ¤ ¤ ¤ BBeeaacchh aanndd sscceenniicc ccooaasstt HHiissttoorryy aanndd ccuullttuurree – Better-known establishments like Robben Island in Cape – The Garden Route – Better-known establishments like Robben Island in Cape – The Garden Route PPrroovviinnccee oorr tthhee AAppaarrtthheeiidd MMuusseeuumm iinn GGaauutteenngg ¤ –– TThhee SSuunnsshhiinnee CCooaasstt iinn EEaasstteerrnn CCaappee ¤ CCaassiinnoo –– TThhee SSoouutthh CCooaasstt iinn KKZZNN –– PPooppuullaarr eessttaabblliisshhmmeennttss iinn PPoorrtt EElliizzaabbeetthh aanndd EEaasstt LLoonnddoonn –– SSeevveerraall ccaassiinnooss iinn KKZZNN Source: Eastern Cape Tourism Board, SA Casino Group, Travel Africa, National Gambling Board, Monitor interviews UUP-WRD-OR Tambo Profile-301106-IS 52 Nodal Economic Profiling Project Business Trust and dplg, 2007 Selected sector: Tourism OR Tambo Domestic target markets Eastern Cape is the third most popular domestic destination and almost half the tourists in EC go to the Wild Coast / Transkei / Ciskei

Destinations for Domestic Types of Domestic Trips to Eastern Overnight Trips in 2002/2003 Cape: 2000/01 30% Tsitsikamma 28% Karoo 5% Heartland 5% 25%

Sunshine 20% Coast & Country Wild 17% Coast/Transkei/ 15% 22% Ciskei 15% 43% 11% Amathole 9% 10% 7% 7% 6% 5% Friendly N6 5% 22% 2%

0%

l g e o e t a e ta n p pe p t s g p a te a a o ta e n a -N u C C p S W la C lu a n n im e h a n u G r r L e rt m r Z te te r o u he a s s F N p rt w a e M o K E W N

Source: SA Tourism UUP-WRD-OR Tambo Profile-301106-IS 53 Nodal Economic Profiling Project Business Trust and dplg, 2007 Selected sector: Tourism OR Tambo Domestic target markets (continued) VFR1 is the major reason for domestic tourism in OR Tambo

Types of trips to Wild Coast / Transkei / Ciskei: Types of trips to the Sunshine Coast May 2000-April 2001 and Country: May 2000-April 2001

Health Health Business 1.6% 0.4% 1.2% Business Religious Religious 2.7% 7.8% 8.3%

Leisure 20.4% Leisure 37.5%

VFR VFR 51.1% 69.0%

Note: 1VFR = Visiting Friends and Relatives Source: SA Tourism 2001 UUP-WRD-OR Tambo Profile-301106-IS 54 Nodal Economic Profiling Project Business Trust and dplg, 2007 Selected sector: Tourism OR Tambo International target markets Few international tourists go to the Eastern Cape

Provincial distribution of foreign tourists: Q4 2004 75%

49.6% 50%

Percentage of all visitors 25.9% 25% 20.8% 15.2% 9.7% 8.9% 8.5% 5.3% 2.5% 0% l g e a a t e e e n t g s p t o p e p a n e ta p a t a N a W a o u C l C S p C a n lu a th n e im rn G r u m r r re L e te Z u o te F h s a p N s rt e w M a o W K E N

Source: SA Tourism UUP-WRD-OR Tambo Profile-301106-IS 55 Nodal Economic Profiling Project Business Trust and dplg, 2007 Selected sector: Tourism OR Tambo International target markets (continued) The beaches are the major attraction in Eastern Cape

Attractions / landmarks visited by foreign tourists in Eastern Cape: Q4 2004

75%

61.2% 58.4%

50%

Percentage of 36.2% all visitors 23.9% 25% 14.3% 12.3% 10.2% 8.3% 0.6% 0.5% 0% l l s t y ts e y rs s l l e s a n a u n a a rv a B ke o B o h M M e o r T o s C ’s a N e J g s e d y m fe ip t in re il re ft f h S p c R ff a o s t p a e W e r C n r o n r / J C w o h e tu s / P S e a e o r ts T lk G N ch e a a rk e a W B m rd a a le o F B

Attraction relevant to OR Tambo

Source: SA Tourism UUP-WRD-OR Tambo Profile-301106-IS 56 Nodal Economic Profiling Project Business Trust and dplg, 2007 Selected sector: Tourism OR Tambo International target markets (continued) Only a small portion of the international tourists visit the Wild Coast

Attractions / landmarks in OR Tambo visited by The major attraction, foreign tourists in Eastern Cape, Q4 2004 except for Coffee Bay and Port St Johns on the Wild 75% ¥ Coa¥ sTTte,e xixstt the Wild Coast Sun Casino, close to –– TTeexxtt Bizana 58.4% Eighty-five per cent of the visitors are domestic originating from Durban 50% Approximately 15% of the % of all tourists visiting Visitors the coastline in EC go to the Wild Coast 25%

12.3% 8.3%

0% Beach / Wild Coffee Bay Port St Johns Coast

Source: SA Tourism, Eastern Cape Tourism Board, Monitor analysis UUP-WRD-OR Tambo Profile-301106-IS 57 Nodal Economic Profiling Project Business Trust and dplg, 2007 Selected sector: Tourism OR Tambo Barriers / solutions related to inputs

Barrier / constraint Potential solution

Very poor infrastructure Main focus for municipality is to guarantee good A big problem especially for the backpacker market infrastructure which generally depends on public transport

Land claim and land tenure issues prohibit many Government initiative to facilitate and add projects and investments transparency to the land claim process

The region has no tradition of entrepreneurship Teach people the value of the tourism market and within the tourism sector help them to get to the market with their products and services

Competing projects like the proposed Xolobeni N/A Mineral Mining Project

Source: Monitor analysis UUP-WRD-OR Tambo Profile-301106-IS 58 Nodal Economic Profiling Project Business Trust and dplg, 2007 Selected sector: Tourism OR Tambo Complexity of land claim process The diagram below describes the process and time lags experienced by a property developer for a development in Coffee Bay

(Represented in a trust) Consult and appoint steering committee Private Sector Investor Community ¤ Chiefs ¤ Municipalities Form a Joint Venture (JV) (Negotiate an equity and profit share) ¤ Development agencies

Theoretical process as noted by Wild Appoint Environmental Prepare Technical Coast tourism development policy Assessors Proposal for Lease

Step 1: Preparation of a properly prepared Provincial Department of technical proposal 1 Year Land Affairs (DLA)

Step 2: Submission of application to the Environmental Impact ¤ Investigation if all parties are happy Department of Land Affairs (DLA) and Assessment (EIA) National DLA Conducts Department of Economic Affairs, Approved Investigation ¤ Finalised with steering committee Environment & Tourism (DEAET) (and Department of Water Affairs and Forestry [DWAF] where applicable) once it has the Put out Public Notice support required Five Step 3: Approval by DLA of transparent and JV Makes Changes Years democratic procedures and approval by DEAET (and DWAF) of compliance with prevailing tourism related policy and strategy Final Report context Preparation of Ministerial Step 4: Proposal Accepted in Principle by Stakeholders Memorandum by the Eastern Cape DLA; DEAT (National and Provincial); Provincial Land Reform Office on the basis Steering Committee of the proposal as well as the inputs from Preparation of Ministerial Memo by Provincial DLA DLA and DEAET Step 5: Negotiation of terms related to the Dept Environmental Affairs & Tourism (DEAT) Signs cost (rental / lease fee) of the ‘head lease’ Lease One payable to government and other contracts Year + with respect to the lease Record of Decision Issued by Provincial DLA

Source: Monitor work on tourism Total time = Six years + UUP-WRD-OR Tambo Profile-301106-IS 59 Nodal Economic Profiling Project Business Trust and dplg, 2007 Selected sector: Tourism OR Tambo Barriers / solutions related to target markets

Barrier / constraint Potential solution

Especially among domestic tourists, the Wild Coast Train South African Police Services (SAPS) has a bad reputation and is believed to be unsafe personnel Teach the local population the value of tourism

Lack of tourism statistics – no proper survey of District initiative to do a survey visitors in OR Tambo is available

Not enough good accommodation in Mthatha to Develop more facilities, especially in the upmarket cater for visitors to the Nelson Mandela Museum, segment Qunu and Mvezo

Source: Monitor analysis UUP-WRD-OR Tambo Profile-301106-IS 60 Nodal Economic Profiling Project Business Trust and dplg, 2007 Selected sector: Tourism OR Tambo Assessment of the potential of the tourism sector If basic infrastructure and the land claims issue could be improved, the region has huge growth potential

CCuurrrreenntt ssiittuuaattiioonn

CCrreeaattee tthhee rriigghhtt eennvviirroonnmmeenntt ffoorr pprriivvaattee sseeccttoorr iinnvveessttmmeenntt ¤ ¤ LLaanndd tteennuurree pprroocceessss ¤ ¤ MMuunniicciippaalliittyy ccaappaabbiilliittyy ttoo ddeeaall wwiitthh ttoouurriissmm iinnvveessttmmeenntt ¤ ¤ TTrraannssppaarreenntt iinnvveessttmmeenntt pprroocceessss

PPllaattffoorrmm ffoorr ggrroowwtthh

SSkkiilllss ffoorr ttoouurriissmm wwoorrkkeerrss ((uunnddeerrssttaannddiinngg ooff ppootteennttiiaall ffoorr ttoouurriissmm)) MMaarrkkeettiinngg ssttrraatteeggyy

FFuullll uussaaggee ooff ppootteennttiiaall

DDoouubblliinngg tthhee nnuummbbeerr ooff ddoommeessttiicc aanndd ffoorreeiiggnn ttoouurriissttss iinn OORR TTaammbboowwoouulldd mmeeaann aapppprrooxxiimmaatteellyy:: ¥ ¥ 440000,,000000 mmoorree ttoouurriissttss eevveerryy yyeeaarr ¥ ¥ 11,,220000 ddiirreecctt eemmppllooyymmeennttss

Source: Stats Census 2001, SA Tourism, Monitor analysis UUP-WRD-OR Tambo Profile-301106-IS 61 Nodal Economic Profiling Project Business Trust and dplg, 2007 Selected sector: Tourism OR Tambo Tourism – Barriers / solutions to investments

Idea Business plan Funding Implementation

People have no People have no security Political mismanagement experience of writing a to warrant a loan from a and complicated proper business plan bank bureaucracy

The bad reputation of the Land tenure and land Blockages / region makes the banks claims issues barriers reluctant to invest in the node No tradition of business and entrepreneurship means that many investors are met with mistrust Municipality initiative to Workshops and training Locally-based initiatives More transparency in guarantee the basic offered by the Chamber for investment within the approval and land claim infrastructure of Commerce node processes

Potential A proposed centre of excellence (CoE) to solutions support municipality and local government and to bring investor confidence

UUP-WRD-OR Tambo Profile-301106-IS 62 Nodal Economic Profiling Project Business Trust and dplg, 2007 Selected sector: Tourism OR Tambo Key contacts

Position / Name Reason to contact organisation

Vijay Makanjee CEO Hluma (Joint ¥ Runs a R500 million investment fund venture by DBSA ¥ Wants to invest in the Wild Coast and Old Mutual) ¥ Showed great interest in the Investment Atlas

Phumi Mokoena Co-ordinator: ¥ Has good understanding of potential investments Eastern Cape ¥ Engaged in fast-tracking stalled projects Development Corporation

Nokuzola Tetani Co-ordinator: Nelson ¥ Key person for discussions about the proposed Freedom Route Mandela Museum, ¥ Has good understanding of the tourism sector in the area around Mthatha Mthatha ¥ Involved in developing a master plan for attractions around Nelson Mandela

Lope Quist LED Manager, Port ¥ Has a good understanding of LED St Johns ¥ Involved in developing Port St Johns as a major tourism centre

N/A Wilderness ¥ A key person to involve in discussions about investments and Foundation constraints on the Wild Coast ¥ Experienced how a major investment became stranded ¥ Could be used to test the concept of CoE

UUP-WRD-OR Tambo Profile-301106-IS 63 Nodal Economic Profiling Project Business Trust and dplg, 2007 Selected sector: Tourism OR Tambo Stranded projects Many projects have failed in the implementation phase

IIddeeaa BBuussiinneessss ppllaann FFuunnddiinngg IImmpplleemmeennttaattiioonn

RReeaassoonnss ffoorr ffaaiilluurree ¤ ¤ LLaacckk ooff ttrraannssppaarreennccyy iinn tthhee llaanndd ccllaaiimmss pprroocceessss ¤ ¤ CCoommpplliiccaatteedd bbuurreeaauuccrraaccyy –– AA ppllaannnneedd RR8800 mmiillliioonn iinnvveessttmmeenntt wwaass ddeellaayyeedd ffoorr ffiivvee yyeeaarrss bbeeffoorree aapppprroovvaall wwaass ggiivveenn ¤ ¤ LLaacckk ooff ccaappaabbiilliittyy wwiitthhiinn tthhee mmuunniicciippaalliittyy –– NNoo ssppaattiiaall ddeevveellooppmmeenntt ffrraammeewwoorrkk ¤ ¤ LLaacckk ooff ccaappaacciittyy wwiitthhiinn tthhee mmuunniicciippaalliittyy –– AA RR6600 mmiillliioonn pprroojjeecctt hhaass bbeeeenn ssttaallleedd bbeeccaauussee ddooccuummeennttaattiioonn wwaasslloosstt bbyy tthhee iinnvvoollvveedd ddeeppaarrttmmeenntt ¤ ¤ CCoommppeettiittiioonn bbeettwweeeenn ddiiffffeerreenntt ggoovveerrnnmmeenntt ddeeppaarrttmmeennttss –– SSeevveerraall eexxaammpplleess ooff hhooww cclloosseedd ddeeaallss wweerree ddeeccllaarreedd iinnvvaalliidd bbeeccaauussee cceerrttaaiinn ssttaakkeehhoollddeerrss ffeelltt lleefftt oouutt Source: Eastern Cape Development Corporation; Monitor interviews

UUP-WRD-OR Tambo Profile-301106-IS 64 Nodal Economic Profiling Project Business Trust and dplg, 2007 Selected sector: Tourism OR Tambo Stranded Project – Hlungulwana Cultural Village in Coffee Bay

M u n ic ip a Concept Data and Commentary li ty d Description The plan is to develop a resort facility with: e

¤ la Twenty free-standing self-catering units each accommodating five to six people y

¤ s Five boat houses ¤ A meeting hall/boma ¤ Slipway for ski-boat launching Project cost R 22 million

Employment Direct: 25, indirect: 50

Reason for delay in Project was held up due to the absence of spatial development planning framework for the approval area. The process of reaching the decision took approximately 22 months

Current status Awaiting the completion of the spatial development framework by KSD Municipality

Contact ECDC – Mthatha office

Source: ECDC Mthatha UUP-WRD-OR Tambo Profile-301106-IS 65 Nodal Economic Profiling Project Business Trust and dplg, 2007 Selected Sector: Tourism OR Tambo Stranded project – Mapuzi Fishing Village in Coffee Bay

M u n ic ip a Concept Data and commentary li ty d e Description The plan is to develop a resort facility with: l

¤ a Thirty rondawel-style accommodation units ( a traditional village) ys

¤ A restaurant seating 50 people

¤ Boardwalk and steps to provide access to the beach Project cost R12 million

Employment Direct: 10, indirect: 24

Reason for delay in Project was held up due to the absence of spatial development planning framework approval for the area. The process of reaching the decision took approximately 22 months

Current status Awaiting the completion of the spatial development framework by KSD Municipality

Contact ECDC – Mthatha office

Source: ECDC Mthatha UUP-WRD-OR Tambo Profile-301106-IS 66 Nodal Economic Profiling Project Business Trust and dplg, 2007 Selected sector: Tourism OR Tambo Stranded project – The Ridge development in Coffee Bay

F Concept Data and commentary i ve - Description The plan is to develop a resort facility with: ye a ¤ r Fifty single-storey chalets d ¤ e A restaurant seating 50 people la ¤ Traditional boma accommodating 100 people y

¤ Bar and lounge seating for 150 people

¤ Swimming pool

¤ Curio shop

¤ Informal craft market

Project cost R80 million

Employment Direct: 48, indirect: 200

Reason for delay in Five years of delays before approval was given approval

Current status Commencement has begun and the construction should be completed by 2008

Contact ECDC – Mthatha office

Source: ECDC Mthatha UUP-WRD-OR Tambo Profile-301106-IS 67 Nodal Economic Profiling Project Business Trust and dplg, 2007 Selected sector: Tourism OR Tambo Stranded project – Mkhweni Lodge in Pondoland

S ta Concept Data and commentary lle d

Description The developer, partnered with the community, to develop a resort establishment with

¤ Thirty-two luxury chalets overlooking Mpande Estuary just south of Port St Johns

¤ Restaurant and bar seating 30 people

¤ Swimming pool

¤ Boat launching area Project cost R12 million

Employment Direct: 24, indirect: 80

Reason for delay in Decision is being upheld due political interference by outsiders who feel left out of approval the process. A meeting has been scheduled for 25 August 2006 to attempt to solve the impasse. This development has been in the making for the past 11 years Current status Project has been stalled

Contact ECDC – Mthatha office

Source: ECDC Mthatha UUP-WRD-OR Tambo Profile-301106-IS 68 Nodal Economic Profiling Project Business Trust and dplg, 2007 Selected sector: Tourism OR Tambo Stranded project – Mpande resort in Pondoland

P o l iti ca l m i sm a n a Concept Data and commentary g e m Description The developer envisaged developing an 80-room hotel on a site from where his e n family was forcefully removed in the seventies. The development has been in the t making since 1996 when the developer won the land claim case. A school, a clinic, as well as road, water and electricity infrastructure would have been made available to the community as part of the development Project cost R60 million

Employment Direct: 40, indirect: 100

Reason for delay in All the necessary steps were taken as dictated by the various government approval departments involved but a PTO (Permission To Occupy) was not granted due to the interference of senior people Current status The project has to be restarted due to lost documentation by government departments

Contact ECDC – Mthatha office

Source: ECDC Mthatha UUP-WRD-OR Tambo Profile-301106-IS 69 Nodal Economic Profiling Project Business Trust and dplg, 2007 Selected sector: Tourism OR Tambo Stranded project – Mkambathi Nature Reserve in Pondoland

P o l iti ca l Concept Data and commentary in te r Description Wilderness Safari, the largest eco-tourism company in South Africa, planned a major fe re investment including a 5-star lodge in the reserve n c e

Project cost R150 million

Employment N/A

Reason for delay in § Conflicts between factions of the provincial African National Congress approval § According to the recently fired Eastern Cape Tourism and Economic Affairs minister the deal was invalid and must return to the drawing board

§ Department of Land Affairs could not agree on the land tenure conditions in the deal

Current status § After spending more than R14 million on marketing, Wilderness Safari decided to stop the project in July 2006

§ Five years of “haggling with politicians and bureaucrats” was enough for Wilderness Safari and the company is now looking for investment opportunities outside South Africa Contact Wilderness Safari

Source: Daily Dispatch Online 19 July, 2006 UUP-WRD-OR Tambo Profile-301106-IS 70 Nodal Economic Profiling Project Business Trust and dplg, 2007 Selected sector: Tourism OR Tambo Successful project – Amadiba Adventures The EU-supported Wild Coast initiative, Amadiba Adventures, is a successful community- owned initiative

AAmmaaddiibbaaAAddvveennttuurreess § § AA hhoorrssee aanndd hhikikiinngg wwiillddeerrnneessss ttrraaiill iinn tthhee ffoorrmmeerr TTrraannsskkeeii –– AAccccoommmmooddaattiioonn iinn tteenntteedd llooddggeess,, hhiirree ooff hhoorrsseess,, ttoouurr--gguuiiddiinngg aanndd ccaatteerriinngg iiss ssuupppplliieedd bbyy ssmmaalll bbuussiinneessss eenntteerrpprriisseess oowwnneedd bbyy mmeemmbbeerrss ooff tthhee llooccaall ccoommmmuunniittyy § § IInniittiiaatteedd bbyy PPoonnddooCCRROOPP((aa rreeggiioonnaall NNGGOO)) iinn ccoonnjjuunnccttiioonn wwiitthh tthhee AAmmaaddiibbaaCCooaassttaal l CCoommmmuunniittyy DDeevveellooppmmeenntt AAssssoocciiaattiioonn ((AACCCCOODDAA)) –– TThhee ttrraaiill,, uussee ooff llaanndd aanndd tthhee ffuunnddss ggeenneerraatteedd aarree aalll tthhee pprrooppeerrttyy aanndd rreessppoonnssiibbiilliittyy ooff tthhee AAmmaaddiibbaaccoommmmuunniittyy –– PPoonnddooCCRROOPPaanndd AACCCCOODDAA wwoorrkk ttooggeetthheerr wwiitthh TTrriippllee TTrruusstt,, aann NNGGOO ffooccuussiinngg oonn sskkiilllss ddeevveellooppmmeenntt § § TThhee pprroojjeecctt iiss ppaarrtt ooff tthhee WWilildd CCooaasstt SSppaattiiaall DDeevveellooppmmeenntt,, mmaaiinnllyy ffuunnddeedd bbyy EEuurrooppeeaann UUnniioonn ((EEUU)) ((RR8800 mmiillliioonn))

The three NGOs act as an interface between the EU and the OOuuttccoommee local community § § TTooddaayy ccoonnssiiddeerreedd aa bbuussiinneessss rraatthheerr tthhaann oonnllyy aa pprroo--ppoooorr pprroojjeecctt §

EU § SSiiggnniiffiiccaanntt ppoossiittiivvee iimmppaacctt oonn ppaarrttiicciippaattiinngg hhoouusseehhoollddss

ACCODA PondoCROP Triple Trust RReeaassoonn ffoorr ssuucccceessss § § NNoott llaanndd tteennuurree ddeeppeennddeenntt § § LLoottss ooff pprreessssuurree ffrroomm tthhee EEUU ttoo rreeccoonnssttrruucctt tthhee pprroojjeecctt aanndd bbrriinngg iitt mmoorree iinn lliinnee wwiitthh pprriivvaattee sseeccttoorr nnoorrmmss Community

Source: International Trade in Services and Sustainable Development: The case of tourism in SA, International Institute for Sustainable Development 2003 UUP-WRD-OR Tambo Profile-301106-IS 71 Nodal Economic Profiling Project Business Trust and dplg, 2007 OR Tambo OR Tambo 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-OR Tambo Profile-301106-IS 72 Nodal Economic Profiling Project Business Trust and dplg, 2007 Selected sector: Agriculture OR Tambo Overview of the agriculture sector

IInnppuutt PPrroodduuccttiioonn TTaarrggeett mmaarrkkeettss

WWhhaatt ddoo tthheeyy ddoo // WWhhoo ddoo tthheeyy sseerrvvee // WWhhaatt ddoo tthheeyy rreellyy oonn?? pprroodduuccee?? ttaarrggeett // sseellll ttoo??

z Coastal climate with z Very few commercial z Maize is the only 25% of all of the farmers field crop with export rainfall in South Africa – Tea plantations potential z Poor basic – Sugar estates z Small-scale farmers infrastructure totally lack access to z Most people farm in – Roads their garden the market – Water and – Field crops

irrigation © Mainly maize – Vegetables

© Mainly cabbage – Livestock

Source: Monitor interviews, Monitor analysis UUP-WRD-OR Tambo Profile-301106-IS 73 Nodal Economic Profiling Project Business Trust and dplg, 2007 Selected sector: Agriculture OR Tambo Inputs Poor infrastructure and land claims stop development of agricultural sector

OOvveerrvviieeww

zz NNaattuurraall rreessoouurrcceess ––RReecceeiivveess 2255%% ooff aallll tthhee rraaiinnffaallll iinn SSAA ––MMaannyy rriivveerrss ppootteennttiiaallllyy uusseedd ffoorr iirrrriiggaattiioonn

zz CCaappiittaall aasssseettss ––PPeeooppllee uussuuaallllyy ggeett aabboouutt 22 hhaa ffrroomm tthhee ttrraaddiittiioonnaall lleeaaddeerrss ttoo uussee ffoorr ffaarrmmiinngg ––LLaanndd ccllaaiimmss aanndd llaanndd tteennuurree iissssuueess ssttoopp ddeevveellooppmmeenntt ooff llaarrggee--ssccaallee ffaarrmmiinngg ––VVeerryy ppoooorr iinnffrraassttrruuccttuurree pprroohhiibbiittss pprroodduuccttiioonn ––WWaatteerr aanndd eelleeccttrriicciittyy iiss lliimmiitteedd ––RRooaadd aacccceessss iiss vveerryy ppoooorr

zz SSkkiillllss ––NNoo ccoommmmeerrcciiaall ffaarrmmeerrss aanndd mmoosstt ooff tthhee ssmmaallll--ssccaallee ffaarrmmeerrss hhaavvee lliimmiitteedd sskkiillllss

Source: Department of Agriculture and Land Affairs, Monitor interviews UUP-WRD-OR Tambo Profile-301106-IS 74 Nodal Economic Profiling Project Business Trust and dplg, 2007 Selected sector: Agriculture OR Tambo Inputs (continued) No commercial livestock farmers but a large portion of the communal farmers in Eastern Cape

PPootteennttiiaall ffoorr lliivveessttoocckk LLiivveessttoocckk cceennssuuss ffiigguurreess::22000033 ¨ Most goats in ¨ CCaattttllee Pondoland – Commercial 0 (0% of EC total) where the – Commercial 0 (0% of EC total) potential is –– CCoommmmuunnaall 663322,,553300 ((3311%%))

low! ¨ ¨ SShheeeepp –– CCoommmmeerrcciiaall 00 ((00%%)) –– CCoommmmuunnaall 11,,222255,,224444 ((3366%%)) ¨ ¨ GGooaattss –– CCoommmmeerrcciiaall 00 ((00%%)) –– CCoommmmuunnaall 771155,,447788 ((3388%%)) ¨ ¨ PPiiggss –– CCoommmmeerrcciiaall 00 ((00%%)) –– CCoommmmuunnaall 6699,,557700 ((5577%%)) ¨ ¨ PPoouullttrryy –– CCoommmmeerrcciiaall 00 ((00%%)) –– CCoommmmuunnaall 114488,,003344 ((1166%%))

Source: Eastern Cape Livestock Census Figures 2003, Monitor interviews UUP-WRD-OR Tambo Profile-301106-IS 75 Nodal Economic Profiling Project Business Trust and dplg, 2007 Selected sector: Agriculture OR Tambo Inputs (continued) Large potential for forestry in OR Tambo, but limited due to infrastructure constraints

Areas of forestry potential within the Eastern Cape: 2006

Potential for an additional 50,000 ha of forestry development in OR Tambo This will create 1,500 direct jobs, and 6,000 indirect jobs

Indicates moderate potential incorporating infrastructure constraints Indicates good potential incorporating infrastructure constraints

Source: Department of Water and Forestry UUP-WRD-OR Tambo Profile-301106-IS 76 Nodal Economic Profiling Project Business Trust and dplg, 2007 Selected sector: Agriculture OR Tambo Production Predominantly subsistence farming with maize as the basic crop

OOvveerrvviieeww § § LLeessss tthhaann 55%% ooff tthhee llaanndd iiss uusseedd ffoorr iinntteennssiivvee aaggrriiccuullttuurree § § FFeeww ssiiggnniiffiiccaanntt aaggrriiccuullttuurraall pprroodduucceerrss –– TTeeaa ((MMaaggwwaaTTeeaa EEssttaattee iiss tthhee sseeccoonndd llaarrggeesstt tteeaa pprroodduucceerr iinn SSoouutthh AAffrriiccaa)) –– SSuuggaarr eessttaatteess ((pprroodduuccttiioonn ooff ssuuggaarr ccaannee aanndd ssuuggaarr bbeeeett)) § § MMoosstt ooff tthhee aaggrriiccuullttuurraall aaccttiivviittyy iiss wwiitthhiinn tthhee iinnffoorrmmaall sseeccttoorr aanndd oonn aa vveerryy ssmmaalll ssccaallee –– SSuubbssiisstteennccee ffaarrmmeerrss:: 8844 %% –– OORR TTaammbbooiiss bbyy ffaarr tthhee bbiiggggeesstt ccoommmmuunnaall lliivveessttoocckk ffaarrmmiinngg pprraaccttiiccee iinn tthhee wwhhoollee ccoouunnttrryy § § EExxiissttiinngg ffoorreessttrryy ppllaannttaattiioonnss iinn tthhee aarreeaa ––aapppprrooxxiimmaatteellyy 3300,,000000 hhaa

FFoouurr mmaaiinn pprroodduuccttss

FFiieelldd ccrrooppss VVeeggeettaabblleess LLiivveessttoocckk FFoorreessttrryy § § § § § § § MMaaiizzee 7700%% MMaaiinnllyy aalloonngg tthhee rriivveerrss OOnn ccoommmmuunnaall ggrraazziinngg § PPllaannttaattiioonnss iinn PPoonnddoollaanndd § § § § § § § BBeeaannss 1100%% CCaabbbbaaggee 8800%% CCaattttllee aanndd ggooaattss § NNeeaarr MMaattiiwwaannee § § (Pondoland) § § § (Pondoland) § PPuummppkkiinn 1100%% PPoottaattooeess aanndd ccaarrrroottss 2200%% SSooffttwwoooodd ((ppiinnee)) 9900%% § §

§ Sheep (around Mthatha) § Sheep (around Mthatha) SSoorrgghhuumm 1100%%

Source: Ntinga OR Tambo Development Agency, Monitor interviews, Department of Water and Forestry, Monitor analysis UUP-WRD-OR Tambo Profile-301106-IS 77 Nodal Economic Profiling Project Business Trust and dplg, 2007 Selected sector: Agriculture OR Tambo Production (continued)

PPrroodduuccttiioonn aanndd PpPprriicceess

FFiieelldd ccrrooppss VVeeggeettaabblleess LLiivveessttoocckk FFoorreessttrryy § § § § § § § § NN//AA NN//AA GGrroossss iinnccoommee ppeerr LLSSUU11ffoorr DDeetteerrmmiinneedd bbyy mmaarrkkeett ccoommmmeerrcciiaall ffaarrmmeerrss wwaass ddyynnaammiiccss 22 calculated at R1,207 § calculated at R1,207 § LLoonngg--tteerrmm sshhoorrttaaggee iinn SSoouutthh § § TThhee ccoommmmuunnaall ffaarrmmeerr AAffrriiccaa;;tthheerreeffoorree,,pprriicceess aarree eeqquuiivvaalleenntt iiss RR330099--RR553355 pprreeddiicctteedd ttoo iinnccrreeaassee

PPrrooffiittaabbiilliittyy

FFiieelldd ccrrooppss VVeeggeettaabblleess LLiivveessttoocckk FFoorreessttrryy § § § § § § NN//AA § NN//AA § FFoorr ccoommmmeerrcciiaall ffaarrmmeerrss tthhee SSmmaalll mmaarrggiinn iinn ffoorreessttrryy ooffff--ttaakkee nnoorrmm iiss 2255--3300%% ppllaannttaattiioonnss ((4400--yyeeaarr

§ investment period) § investment period) FFoorr ccoommmmuunnaall ffaarrmmeerrss iitt iiss § 55--77%% § MMaarrggiinnss iinnccrreeaassee wwiitthh vvaalluuee-- aaddddeedd pprroocceessssiinngg

Note: 1LSU=LiveStock Unit; 2The figures for commercial farmers are based on provincial data Source: Ntinga OR Tambo Development Agency, Monitor interviews UUP-WRD-OR Tambo Profile-301106-IS 78 Nodal Economic Profiling Project Business Trust and dplg, 2007 Selected sector: Agriculture OR Tambo Production (continued) Most of the agricultural production located to King Sabata Dalindyebo local municipality

Gross Geographic Product (GGP) in agriculture, OR Tambo District Municipality: 1996

Source: OR Tambo DM UUP-WRD-OR Tambo Profile-301106-IS 79 Nodal Economic Profiling Project Business Trust and dplg, 2007 Selected sector: Agriculture OR Tambo Production (continued)

Examples of current agricultural projects in OR Tambo District Municipality

Name Description Implementer

OR Tambo Department of Massive Food Programme Focus on food security (mainly vegetables) for homesteads Agriculture

OR Tambo Department of Syakole People with access to 1-49 ha are supplied with tools and fertilisers Agriculture

People with access to 50-200 ha are supplied with tools and OR Tambo Department of “Big project” fertilisers Agriculture

Infrastructure § Comprehensive Agricultural Irrigation equipment

§ OR Tambo Department of Projects Dams Support Programme (CASP) Agriculture § Poultry / piggery houses § Linkage to veterinary service Ntinga OR Tambo Crop production Support to maize producing farmers (operations and input) Development Agency Support programme for production of § Vegetables Ntinga OR Tambo

High value crops § Sorghum Development Agency § Essential oils Support programme for production of Livestock development and § Beef Ntinga OR Tambo red meat production § Sheep Development Agency § Goat

Source: Monitor interviews, Monitor analysis UUP-WRD-OR Tambo Profile-301106-IS 80 Nodal Economic Profiling Project Business Trust and dplg, 2007 Selected sector: Agriculture OR Tambo Target markets Few people have access to the market and export is limited

zz MMaarrkkeettss // ccuussttoommeerrss –– VVeerryy lliittttllee eexxppoorrtt

EExxppoorrtt ooff mmaaiizzee ttoo bbee uusseedd ffoorr bbiioo--ffuueellss iiss tthhee oonnllyy ccrroopp ppllaannnneedd –– MMaaiinn mmaarrkkeettss aarree GGaauutteenngg aanndd FFrreeee SSttaattee –– TTooddaayy aallll lliivveessttoocckk pprroodduuccttss ((pprriimmaarryy aanndd pprroocceesssseedd)) aarree iimmppoorrtteedd

11..77 mmiilllliioonn ppeeooppllee bbuuyy mmiillkk,, bbeeeeff aanndd mmuuttttoonn oouuttssiiddee tthhee nnooddee –– EExxppoorrtt ooff ppoorrkk mmeeaatt ffrroomm tthhee EEaasstteerrnn CCaappee iiss pprroohhiibbiitteedd –– PPootteennttiiaall ffoorr eexxppoorrtt ooff ggooaatt mmeeaatt ttoo tthhee MMiiddddllee EEaasstt –– MMaajjoorr mmaarrkkeettss ffoorr ffoorreessttrryy ppllaannttaattiioonnss aarreeSSaappppii’’ss ppuullpp mmiillll iinnUUmmkkoommaaaass,, aanndd tthhee ssaawwmmiillllss iinn KKookkssttaadd zz CChhaannnneell // iinntteerrffaaccee –– FFeeww ppeeooppllee hhaavvee aacccceessss ttoo tthhee mmaarrkkeett.. MMoosstt ppeeooppllee sseellll tthheeiirr pprroodduuccttss ttoo tthhee llooccaall sshhoopp zz MMaarrkkeettiinngg –– NNoo ttaarrggeetteedd mmaarrkkeettiinngg ccaammppaaiiggnn zz CCoommppeettiittoorrss // tthhrreeaatt ooff ssuubbssttiittuuttee pprroodduuccttss –– TThhee tteeaa iinndduussttrryy iiss sseevveerreellyy tthhrreeaatteenneedd bbyy llaarrggeerr pprroodduuccttiioonn ffaacciilliittiieess,, ee..gg.. iinn TTaannzzaanniiaa

TToo ssuurrvviivvee tthhee tteeaa ppllaannttaattiioonnss ttrryy ttoo ccoonnvveerrtt iinnttoo eeccoo--ttoouurriissmm ffaacciilliittiieess

Source: Ntinga OR Tambo Development Agency, Monitor interviews UUP-WRD-OR Tambo Profile-301106-IS 81 Nodal Economic Profiling Project Business Trust and dplg, 2007 Selected sector: Agriculture OR Tambo Growth of share of global exports vs share of global exports Decreasing global exports for South Africa will make it harder for farmers in OR Tambo to enter the domestic maize market

Share of global exports vs growth of share of global exports Rye (0.06%, 106.20%) Cattle and calves II I slaughtered 17% Viticulture Sugar cane Wheat (0.00%, 12% Eggs 100.00%) Soya beans Citrus fruit Barley Potatoes Cotton 7% Nuts Poultry meat Tobacco Dry peas Wool3 (0.07%, Grain sorghum 48.32%) Sunflower seed 2% Vegetables Sheep and goats Oats slaughtered Subtropical fruit (0.01%, -3% Groundnuts 21.97%) Dry beans Growth of Milk1 -8% Deciduous and other fruit Share of Gross value 2004/05 Global Pigs Exports slaughtered -13% R5,000 million IV III -18% Maize 0% 1% 2% 3%

Share of Global Exports

Source: Monitor work done for the Department of Agriculture and Land Affairs, 2005 UUP-WRD-OR Tambo Profile-301106-IS 82 Nodal Economic Profiling Project Business Trust and dplg, 2007 Selected sector: Agriculture OR Tambo Barriers / solutions related to Inputs Lack of infrastructure and lack of skills impede future growth

Barrier / constraint Potential solution

Poor basic infrastructure – many farmers without Major upgrade of the basic services access to proper drainage, water supplies or electricity

Mainly emerging farmers with low skills levels Municipality initiative to train people

No tradition of large-scale farming – lack of Mentoring programme with commercial farmers understanding of irrigation, fertilisers and breeding from other districts

Wrong breeding practices have led to breed of low Mentoring programme with commercial farmers quality from other districts

Low quality of produced products – people tend to Teach people agricultural processing and the value think that quantity is better than quality of high-quality products

Water and irrigation – barrier for medium and small Subsidies for irrigation systems granted to medium farmers farmers

Source: Monitor interviews UUP-WRD-OR Tambo Profile-301106-IS 83 Nodal Economic Profiling Project Business Trust and dplg, 2007 Selected sector: Agriculture OR Tambo Barriers / solutions related to target markets Lack of road and rail network is a key impediment for forestry

Barrier / constraint Potential solution

Lack of proper road and rail network impedes Extension of N2 to Port Edward, Kei Rail road forestry industry – getting produce to market network from East London to Mthatha

No understanding of market dynamics – people sell Teach people market dynamics at whatever price they are offered in the local shops Gather people in co-operatives to increase their buying/selling power

No value-add processing within the node Potential for high volume produce to be processed in the node

Lack of interest from the meat industry in meat from Let the meat industry play an active role in any communal land livestock improvement programme

Source: Monitor interviews UUP-WRD-OR Tambo Profile-301106-IS 84 Nodal Economic Profiling Project Business Trust and dplg, 2007 Selected sector: Agriculture OR Tambo Assessment of the potential of the agriculture sector Investing in the agriculture sector will create jobs and enable other sectors to develop in the node ¨ ¨ 1 ¨ Better roads and rail network Better roads and rail network ¨ p IInnccrreeaassee iinn pprroodduuccttiioonn vvoolluummeess e ¨ ¨ t

Skills development of emerging ¨ ¨

S Skills development of emerging SSkkiillllss aanndd nneettwwoorrkkss ddeevveellooppeedd ffaarrmmeerrss ¨ ¨ ¨ ¨ PPrroommoottee ccoo--ooppeerraattiivveess bbeettwweeeenn EEmmppllooyymmeenntt ccrreeaatteedd ¨ 2 ¨ ffaarrmmeerrss Enhanced competitiveness

p Enhanced competitiveness e ¨ ¨ t Agricultural value-added wwiitthh ffaarrmmeerrss oouuttssiiddee tthhee nnooddee

S Agricultural value-added ¨ pprroocceessssiinngg iinnssiiddee tthhee nnooddee ¨ RReeaall eeccoonnoommiicc ggrroowwtthh

Ancillary service industries created (service stations, accommodation, etc)

Sustainable growth in agriculture, and platform created for development of tourism

Source: Monitor analysis UUP-WRD-OR Tambo Profile-301106-IS 85 Nodal Economic Profiling Project Business Trust and dplg, 2007 Selected sector: Agriculture OR Tambo Barriers / solutions to investments

Idea Business plan Funding Implementation

People have no People have no security When projects are experience of writing a to warrant a loan from implemented for proper business plan the bank emerging farmers, they are often left alone Blockages The bad reputation of the without the necessary network / barriers region makes the banks reluctant to invest in the node

Municipality initiatives to Work shops and training Locally-based initiatives Mentorship programme provide basic programmes for investment within the with commercial farmers infrastructure node Joint ventures with larger farmers Potential Co-operatives to share solutions experiences

UUP-WRD-OR Tambo Profile-301106-IS 86 Nodal Economic Profiling Project Business Trust and dplg, 2007 OR Tambo OR Tambo 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-OR Tambo Profile-301106-IS 87 Nodal Economic Profiling Project Business Trust and dplg, 2007 Investment opportunities OR Tambo Mkambathi Nature Reserve

Concept Data and commentary

Description § Developing accommodation in Mkambathi Nature Reserve covering 7,720 ha between Port Edward and Port St Johns. According to market analysis the demand is – One 50-200 bed, 3-star hotel/resort – Two 24-48 bed, 4-star lodges – One 12-24 bed, 5-star lodge § Parallel to this, an activity package needs to be developed § Today there is not enough accommodation (in total 90 beds) in the reserve and many tourists choose better alternatives elsewhere on the coast

Economic rationale § The major attractions for tourists in EC are beach and nature reserves. By combining these two and at the same time offering upmarket accommodation, many visitors could be attracted to a region with currently untapped potential § If the facilities are successfully developed it is believed that the number of visitors would be between 25,000 and 35,000 per year

Employment § The proposed scenario would create at least 175 permanent jobs for the establishments and an additional 17 for the park management § Approximately 420 local jobs would be created over the construction period

Enabling conditions § Need for a new access road with an estimated cost of R80 million § The tourism support infrastructure needs to be improved to the value of R8.4 million

Other § The required investment for the tourism products is R77,340,000 § The net present value at 5% discount rate over 30 years is R34 million for a fully outsourced commercialised option § For a community-developed, operations-outsourced option, the net present value (NPV) using the same discount rate and time frame would be just over R31 million Contact Intact Consulting Documentation Feasibility study done by Intact Consulting, Cape Town in July 2006 Source: Intact Consulting UUP-WRD-OR Tambo Profile-301106-IS 88 Nodal Economic Profiling Project Business Trust and dplg, 2007 Investment opportunities OR Tambo The Freedom Route

Concept Data and commentary

Description § An internationally recognised tourist route in the Eastern Cape stretching from the Wild Coast to the southern Drakensberg with a historical focus on the freedom struggle

Economic § The area currently has a negative image (bad roads, rationale part of former Transkei) § Establishment of the route will be used as a marketing tool to highlight the various attractions in the area

Employment § The successful establishment of the route will result in an upliftment in the tourism sector as a whole, which will result in a large-scale employment opportunity

Enabling § Upgrading of key roads across the area conditions § Large hotel development in Mthatha § Buy-in from ECTB, ECDC, DEAT and municipalities § Approval for branding of corridor

Other § Major investment required in rebuilding roads (between R60-R200 million) § Route is designed to compete with Garden Route, Wine Route and Midlands Meander Contact Rob Farrington, Dr Bool Smuts

Documentation Feasibility studies and interviews

Source: Monitor interviews, Monitor analysis UUP-WRD-OR Tambo Profile-301106-IS 89 Nodal Economic Profiling Project Business Trust and dplg, 2007 Investment opportunities OR Tambo Commercial dairy enterprise

Concept Data and commentary

Description § Three areas around Port St John’s (Selwane, Mantusini and Mbabalane) could use water from the nearby Umngazi River to irrigate land and create a good environment for cattle. The produced milk would be sold to a proposed processing plant in the vicinity of the project § Milk production and processing are suppose to work on a co- operative basis where the plant has the right of first refusal of the milk and at the same time provides the farmers with access to a competitive market

Economic § By being the main supplier of high quality milk to the rationale processing plant it is envisaged that a better milk price can be fetched

Employment § For the milk production 15 permanent labourers are needed § A high degree of management skills is necessary to effectively implement irrigation, fodder and fertilisers

Enabling § Approval from Dept of Water Affairs and Forestry (DWAF) is conditions needed before water from Umngazi River can be used for irrigation. This is a critical point since the whole region should be under irrigation § Today the farmers in the region have Permission To Occupy (PTO) the land. Potential land claim issues need to be investigated further

Other § The capital requirement is R13,080,000 (processing plant not included) § The NPV of the net flow at a 13% discount rate, over a 10- year period, amounts to R1,046,564 Contact details Lieb Venter, Managing Director FarmVision, Tel: (042) 296-0818 Documentation Feasibility study from FarmVision available Source: FarmVision; Picture from www.optive.uk UUP-WRD-OR Tambo Profile-301106-IS 90 Nodal Economic Profiling Project Business Trust and dplg, 2007 Investment opportunities OR Tambo OR Tambo maize production

Concept Data and commentary

Description § Although the region has high potential (soil, climate) for crop production almost 70% of the croplands are left unused

§ The major reason is that people cannot afford the costs of the operations involved

§ The project aims to scale-up the maize production in the region

Economic § N/A rationale

Employment § N/A

Enabling § Training is needed in order to give the farmers the conditions right level of skills (chemicals, fertilisers, seed)

Other § Required funding is R18,376,015 which covers production, plant and equipment Contact Maize Team, Department of Agriculture, OR Tambo DM Documentation Business Plan

Source: Maize Team, Department of Agriculture, OR Tambo DM; Picture from www.gov.sz UUP-WRD-OR Tambo Profile-301106-IS 91 Nodal Economic Profiling Project Business Trust and dplg, 2007 Investment opportunities OR Tambo Mqanduli milling plant

Concept Data and commentary

Description § Establishing a plant wherein maize can be transformed into samp, maize meal or feed (cattle, chicken or pig) as a by-product

§ The purpose is to help the many subsistence farmers in the region transform into commercial farmers and also to use the raw material in the region and add value to it

Economic § N/A rationale NB: This is just an illustration and not NB: This is just an illustration and not § the milling plant in Mqanduli Employment Thirty low or semi-skilled jobs

the milling plant in Mqanduli § Six jobs requiring managing skills

Enabling § N/A conditions

Other § An investment of R1.2 million is required over a period of three years before the plant will be self- sustaining

§ The factory building and the milling equipment already exist Contact details LED Manager, KSD Municipality, Tel: (047) 501-4006 Documentation Business Plan

Source: KSD Municipality UUP-WRD-OR Tambo Profile-301106-IS 92 Nodal Economic Profiling Project Business Trust and dplg, 2007 Investment opportunities OR Tambo Xolobeni Mineral Sands

Concept Data and commentary

Description § Mining the heavy mineral sand deposits of an estimated 346 million tonnes at 5.0% mineral content, located in Pondoland on the Wild Coast. The lease area extends for 22 km along the coast from Mzamba River in the north to the Mtentu River in the south covering about 3,300 ha

Economic § Dry mining followed by mineral separation to produce rationale the raw material for a smelter and iron plant producing slag and pig iron

Employment § The project would generate between 200 and 300 direct employment opportunities. The induced employment multiplier is believed to be 4.2 giving 840 to 1,260 additional employment opportunities

Enabling § Issues to be resolved include water requirements, road conditions traffic to and from Xolobeni, and security of power supplies § The affected land is owned by the state and held in trust for the local people. Re-settlements and resource loss to the local communities have to be compensated for

Other § Pre-feasibility work shows a 22-year life of mine for a US$220 million capital investment. In 2003 SRK Consulting completed a Desktop Mining Study confirming an indicative pre-tax NPV of US$129 million

Contact Mineral Commodities Ltd Documentation Early review document

Source: Xolobeni Mineral Sands Project – presented by the Wilderness Foundation; Picture from www.mineralcommodites.com.au UUP-WRD-OR Tambo Profile-301106-IS 93 Nodal Economic Profiling Project Business Trust and dplg, 2007 Investment opportunities OR Tambo Example of investment process The Investment Atlas would facilitate the process where a project is outlined and taken to the Board of Directors Decision process and involved stakeholders

e t

OOlldd MMuuttuuaall//DDBBSSAA IInnvveessttmmeenntt FFuunndd a t s i l s i §

§ Entrepreneur Hluma e RR550000 mmiillliioonn ffuunndd c Concept c a f o

– Mainly for projects > R30 million

– Mainly for projects > R30 million r o p t

e § s §

The joint-venture initiative is called Hluma Development h The joint-venture initiative is called Hluma Development a l t

LLooccaall IInnvveessttmmeenntt AAggeennccyy t f A o

t t § § r TThhee WWiilldd CCooaasstt ((iinncclluuddiinngg MMtthhaatthhaa)) iiss tthhee ffiirrsstt aarreeaa ttoo bbee n Board of a rolled out e

rolled out p Directors (Old

Early Review m Hluma t

– Three other regions are up for discussion s Mutual /

– Three other regions are up for discussion i s Document

h

e DBSA) NNoorrtthheerrnn CCaappee t v

North West n North West I

Limpopo Limpopo If Yes § § NNeeeedd ffoorr iinnvveessttmmeennttss ssiinnccee tthhee mmaajjoorr bbaannkkss aarree rreelluuccttaanntt ttoo iinnvveesstt oonn tthhee WWiilldd CCooaasstt Board of –– LLaanndd tteennuurree Directors (Old Mandate Entrepreneur –– SSaaffeettyy iissssuueess Statement Mutual / –– LLooww sskkiilllss lleevveell wwiitthhiinn tthhee mmuunniicciippaalliittyy DBSA) § § FFooccuuss aarreeaass aarree MMtthhaatthhaa,, PPoorrtt SStt JJoohhnnss aanndd CCooffffeeee BBaayy –– CCuurrrreenntt pprroojjeeccttss mmaaiinnllyy wwiitthhiinn tthhee rreettaaiill sseeccttoorr –– TToouurriissmm iiddeennttiiffiieedd aass aannootthheerr hhiigghh ppootteennttiiaall sseeccttoorr Feasibility Consultants Structure of § (outsourced § Study / TThhee ssttrruuccttuurree ooff tthhee ddeeaall iiss eeiitthheerr eeqquuiittyy oorr llooaann Deal Business Case function) Note: DBSA = Development Bank of Southern Africa Source: Monitor interviews UUP-WRD-OR Tambo Profile-301106-IS 94 Nodal Economic Profiling Project Business Trust and dplg, 2007 OR Tambo OR Tambo 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-OR Tambo Profile-301106-IS 95 Nodal Economic Profiling Project Business Trust and dplg, 2007 Summary OR Tambo Understanding the OR Tambo poverty node

Key observations from OR Tambo Key characteristics of node

§ Part of the former Transkei – negative perceptions

Densely populated ¨ Overview Negative perception Overview Lack of significant commercial investment ¨

No commercial Lack of basic infrastructure (roads, water and electricity) investment ¨ Ninety per cent rural Poor economy ¨ Rural EEccoonnoommyy,, GDP per capita is 33% of the Eastern Cape average ¨ oovveerrvviieeww Seventy-two per cent of households lack electricity Lacks infrastructure

Eighty-four per cent of households lack piped water ¨ Potential for tourism ¨ Underdeveloped sector constrained by lack of infrastructure No tourism strategy ¨ Many areas of natural beauty and many unique leisure Land tenure EEccoonnoommyy,, activities (untouched coastline, mountains, wildlife) ¨ Potential for crop tourism tourism Land tenure is a barrier and livestock No collective marketing strategy farming ¨ Lack of infrastructure adds cost and limits productivity Mainly subsistence (roads, water) farming

Economy, Economy, ¨ Both crops and livestock farming in the node Skills gap

agriculture agriculture Mainly subsistence farming

Lack of skill

UUP-WRD-OR Tambo Profile-301106-IS 96 Nodal Economic Profiling Project Business Trust and dplg, 2007 Summary OR Tambo 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?

Skills gap with municipality

Create a market Sector-related expertise is for selling produce required

– Forestry Crops Address skills gap with

– Tourism Livestock subsistence farmers

Capability to deal with potential Provide farmers Training in production private sector investments with techniques transparency on Selling and marketing skills market prices Not a focus Key focus area area UUP-WRD-OR Tambo Profile-301106-IS 97 Nodal Economic Profiling Project Business Trust and dplg, 2007 Summary OR Tambo 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 Estimate of cost structure of average For Import Skills Other firm in node export substitution

Where to focus?

Collective marketing strategy Value-added processing in incorporating all the attractions the node for agricultural and activities in this and products neighbouring areas is needed

Increases growth and Creates awareness of the employment in the node Encourage private sector available tourist attractions in

investment Stimulates large private the node Transparency on land sector investment in the Changes negative perceptions node tenure process about the node

Establish a PPP model Demand for ancillary Increases volume of tourists to services created the node (garages, accommodation, etc)

UUP-WRD-OR Tambo Profile-301106-IS 98 Nodal Economic Profiling Project Business Trust and dplg, 2007 Summary OR Tambo Assessment of current activities

Key observations from OR Tambo

WWhhaatt iiss bbeeiinngg ddoonnee??

Development of Mthatha as commercial centre

Different agricultural projects – Maize – Vegetables – Essential oils – Livestock

High level tourism strategy

Development of a forestry cluster

Strategic choice?

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

Some work is being done on the agricultural sector

No real focus

More skills development has to happen in the node, especially within the municipalities

UUP-WRD-OR Tambo Profile-301106-IS 99 Nodal Economic Profiling Project Business Trust and dplg, 2007 Summary OR Tambo What needs to be done now?

Key observations from OR Tambo

SSoolluuttiioonnss ttoo ccoonnssttrraaiinnttss // iinnvveessttmmeenntt ooppppoorrttuunniittiieess

¨ Improve basic road, water and electricity infrastructure

¨ Make the land claim / land tenure process more transparent

¨ Create a public-private sector model to incentivise private sector investment in the tourism and forestry sector

¨ Develop marketing strategy for the node

¨ Address skills gap for subsistence farmers

¨ Address skills gap within municipalities

Requires involvement of key stakeholders

¨ OR Tambo Municipality

¨ All local municipalities

¨ dplg

¨ Department of Trade and Industry (DTI)

¨ Department of Environmental Affairs & Tourism (DEAT)

UUP-WRD-OR Tambo Profile-301106-IS 100 Nodal Economic Profiling Project Business Trust and dplg, 2007 OR Tambo OR Tambo poverty node

z Research process

z Overview

z Economy

– 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-OR Tambo Profile-301106-IS 101 Nodal Economic Profiling Project Business Trust and dplg, 2007 Appendix OR Tambo Itineraries of field trips

TTrraavveell sscchheedduullee // llooccaattiioonnss MMaaiinn aaccttiivviittiieess CCoommmmeennttss

 Kick off with the local champion  Early flight from Johannesburg to  Meeting with the municipality  Lots of dead time because of delayed MMoonnddaayy,, 2244 JJuullyy 22000066 Mthatha manager for strategic development meetings  Meeting with ECDC in Mthatha  Meeting with Ntinga OR Tambo  Working day in Coffee Bay with TTuueessddaayy,, 2255 JJuullyy  development agency in Mthatha Drive from Mthatha to Coffee Bay  follow-ups, data gathering and phone Meeting with owner of Coffee Bay calls 22000066 Hotel

 Meeting with the municipality manager for SMMEs  Received maps and other electronic WWeeddnneessddaayy,, 2266 JJuullyy  Coffee Bay – Mthatha – Coffee Bay  CEO of Old Mutual/DBSA investment information from the municipality‘s IT 2006 fund department

2006  LED manager in KSD

 Meeting with the Department of 

TThhuurrssddaayy,, 2277 JJuullyy  Agriculture Two confirmed meetings cancelled at Coffee Bay – Mthatha  Meeting at the Nelson Mandela the last minute 22000066 museum

 Meeting with Department of

 Economic Affairs, Environment and

In Mthatha 

 Tourism (DEAET) One confirmed meeting cancelled Drive from Mthatha to the Wild  FFrriiddaayy,, 2288 JJuullyy 22000066 Meeting with Simpiwe Somdyala - without further notice Coast and accommodation for the KDBS Consulting weekend  Meeting with DEAT

UUP-WRD-OR Tambo Profile-301106-IS 102 Nodal Economic Profiling Project Business Trust and dplg, 2007 Appendix OR Tambo Itineraries of field trips (continued)

TTrraavveell sscchheedduullee // llooccaattiioonnss MMaaiinn aaccttiivviittiieess CCoommmmeennttss

 Meeting with Graham Harrison   Drive from the Wild Coast back to Follow-up meeting with the local champion  Many good meetings and lots of Mthatha  MMoonnddaayy,, 3311 JJuullyy 22000066 OR Tambo LED manager information received   Mthatha – Port St John’s Ntinga development agency  Meeting with Dept of Agriculture

 Six hours of driving  

TTuueessddaayy,, 11 AAuugguusstt Port St Johns – Bizana – Port St Meeting with the LED manager and  John’s the LED working group in Bizana Smaller towns like Flagstaff, Lusikisiki 22000066 and Bizana visited

 Meeting with the LED manager in

 Port St John’s WWeeddnneessddaayy,, In Port St John’s

22 AAuugguusstt 22000066  Wild Coast Development Forum

 Port St John’s – Mthatha TThhuurrssddaayy,, 33 AAuugguusstt  Meeting with Majola Tea Estate close  Flight from Mthatha back to to Port St John’s 22000066 Johannesburg

UUP-WRD-OR Tambo Profile-301106-IS 103 Nodal Economic Profiling Project Business Trust and dplg, 2007 Appendix OR Tambo Key stakeholders, actors, information carriers

PPrriivvaattee sseeccttoorr // GGoovveerrnnmmeenntt PPuubblliicc sseeccttoorr LLooccaall ppeeooppllee NNGGOOss OOtthheerr bbuussiinneessss LED Manager Ntinga OR Tambo Owner of the Ken Small Wilderness KSD Local Development Ocean View Hotel (landowner European Union Foundation Municipality Agency in Coffee Bay Umdumbi)

Old Mutual / Department of Eastern Cape Vuyiswa DBSA Investment ACCODA Agriculture Tourism Board Dlabutshe Fund

Eastern Cape SMME Manager Development Wilderness Safari PondoCROP of OR Tambo DM Corporation

Simpiwe DEAT Nelson Mandela Somdyala /KDBS Triple Trust Museum OR Tambo Consulting

DEAET Majola Tea Estate OR Tambo

Department for Magwa Tea Strategic Estate Development

LED Manager OR The Pondoland Tambo DM Sugar Company

LED Manager The Wild Coast Bizana Local Sun hotel Municipality

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

UUP-WRD-OR Tambo Profile-301106-IS 104 Nodal Economic Profiling Project Business Trust and dplg, 2007 Appendix OR Tambo Key stakeholders, actors, information carriers (continued)

PPrriivvaattee sseeccttoorr // GGoovveerrnnmmeenntt PPuubblliicc sseeccttoorr LLooccaall ppeeooppllee NNGGOOss OOtthheerr bbuussiinneessss LED Manager Port St Johns Local Municipality

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

UUP-WRD-OR Tambo Profile-301106-IS 105 Nodal Economic Profiling Project Business Trust and dplg, 2007 Appendix OR Tambo Key documentation

AAuutthhoorr // TTiittllee MMaaiinn iissssuueess ccoovveerreedd YYeeaarr oorrgg.. OR Tambo OR Tambo IDP Report 2006/2007 Planning report for the district municipality District 2006 Municipality

KSD Local King Sabata Dalindyebo IDP Report 2005/2006 Planning report for the local municipality 2005 Municipality

OR Tambo Ntinga OR Tambo Development Agency – Review of economic activity in OR Tambo District 2005 2004/2005 Annual Performance Report Municipality

KSD Mqanduli Milling Plant Revised business plan 2006 Municipality

Wilderness Xolobeni Mining Sands Background and basic feasibility study 2005 Foundation

Major tourism project in the Xolobeni area – Major Tourism initiative in Pondoland Grant Thornton 2005 Comparison with the mining project

Eastern Cape KEI Rail Development Corridor: Economic Overview of Kei Rail project and its major Department of 2005 Initiative stakeholders Transport

Eastern Cape Economic Profile of OR Tambo District Overview of the municipality and its economic Socio-Economic Consultative 2002 Municipality sectors Council (ECSECC)

tick if on file

UUP-WRD-OR Tambo Profile-301106-IS 106 Nodal Economic Profiling Project Business Trust and dplg, 2007 Appendix OR Tambo Key documentation (continued)

AAuutthhoorr // TTiittllee MMaaiinn iissssuueess ccoovveerreedd YYeeaarr oorrgg..

Simpiwe Cluster-based Local Economic Development Cluster based economies – theory and concepts 2003 Somdyala

OR Tambo Assessment of the local economy and the LED LED Implementation strategy District 2002 initiatives Municipality OR Tambo Vulindela Study Report Study of SMMEs in OR Tambo District N/A Municipality

OR Tambo Regeneration Strategy Cluster based economic strategy for OR Tambo KDBS / Dube N/A

Vision 2030 Economic Development Strategy for OR Tambo KBDS N/A

The South African Forestry and Forest Products Forestry South Overview of the forestry sector in South Africa 2002 Industry 2002 Africa

Simpiwe The Eastern Cape Forestry sector potential Overview of the forestry sector in Eastern Cape N/A Somdyala

OR Tambo Current spatial patterns and development Spatial Development Framework District N/A strategies Municipality

tick if on file

UUP-WRD-OR Tambo Profile-301106-IS 107 Nodal Economic Profiling Project Business Trust and dplg, 2007 Appendix OR Tambo Key documentation (continued)

AAuutthhoorr // TTiittllee MMaaiinn iissssuueess ccoovveerreedd YYeeaarr oorrgg.. Intact Mkambathi Nature Reserve Tourism feasibility study Consulting, 2006 Cape Town

Singisi Forest Singisi Forest Products Overview of projects in the Langeni area N/A Products Ltd

Eastern Cape Park Board Strategy 2004/2005 ECTB 2004

SDF and state of the district economy Overview of the district’s economy KBDS N/A

Wild Coast conservation and sustainable CSIR Resource use and land tenure in the Wild Coast 2005 development project Environmentek

Overview of the DEAT’s project in the Eastern Eastern Cape Project list DEAT 2006 Cape

Project List Overview of current projects in South Africa DEAT 2006

OR Tambo Financial section of the Spatial Development Capital Investment Framework District 2006 Framework Municipality

tick if on file

UUP-WRD-OR Tambo Profile-301106-IS 108 Nodal Economic Profiling Project Business Trust and dplg, 2007 Appendix OR Tambo Key documentation (continued)

AAuutthhoorr // TTiittllee MMaaiinn iissssuueess ccoovveerreedd YYeeaarr oorrgg..

Ntinga OR Proposed Tourism Sector Development Plan Strategy to develop the tourism sector Tambo Dev. 2006 Agency

Ntinga OR Proposal for Livestock Marketing Marketing strategy for communal farmers Tambo Dev. 2003 Agency

Business Plan for Livestock Improvement Ntinga OR Improved output from livestock Tambo Dev. 2003 Programme Agency

Organised Framework aimed at sustaining agricultural Five-year Agricultural Development Plan Agriculture, N/A growth and economic development Eastern region Port St John’s Port St John’s Local Municipality IDP Report Planning report for the local municipality Local 2006 2006/2007 Municipality Port St John’s Current spatial patterns and development Port St John’s Spatial Development Framework Local 2006 strategies Municipality Port St John’s Port St John’s LED plan Current plan for local economic development Local 2005 Municipality Mlungiseleli Review of the state of Agri-business in Port St Rural Status Quo Report 2006 John’s Development Consulting

tick if on file

UUP-WRD-OR Tambo Profile-301106-IS 109 Nodal Economic Profiling Project Business Trust and dplg, 2007 Appendix OR Tambo Key documentation (continued)

AAuutthhoorr // TTiittllee MMaaiinn iissssuueess ccoovveerreedd YYeeaarr oorrgg..

Port St John’s Dairy Project Feasibility study FarmVision 2005

tick if on file

UUP-WRD-OR Tambo Profile-301106-IS 110 Nodal Economic Profiling Project Business Trust and dplg, 2007 Appendix OR Tambo Photo collage #1 – Constraints to economic growth

A rural area with huge infrastructural backlogs Poor road conditions A rural area with huge infrastructural backlogs Poor road conditions

High crime rate and bad reputation Land claim and land tenure issues High crime rate and bad reputation Land claim and land tenure issues

The absolute The absolute majority live in rural majority live in rural areas areas

UUP-WRD-OR Tambo Profile-301106-IS 111 Nodal Economic Profiling Project Business Trust and dplg, 2007 Appendix OR Tambo Photo collage #2 – Opportunities for investments

The Wild Coast and its beautiful beaches Development of the forestry sector The Wild Coast and its beautiful beaches Development of the forestry sector

Attractions around Nelson Mandela’s birthplace Scenic mountains with hiking trails Attractions around Nelson Mandela’s birthplace Scenic mountains with hiking trails

The absolute The absolute majority live in rural majority live in rural areas areas

UUP-WRD-OR Tambo Profile-301106-IS 112 Nodal Economic Profiling Project Business Trust and dplg, 2007 Appendix OR Tambo Photo collage #3 – People of the node

Children travelling to school Vibrant street life in Flagstaff Children travelling to school Vibrant street life in Flagstaff

Tourists enjoying the unspoilt nature Large distances and expensive taxis force people to Tourists enjoying the unspoilt nature walk several hours every day

The absolute The absolute majority live in rural majority live in rural areas areas

UUP-WRD-OR Tambo Profile-301106-IS 113 Nodal Economic Profiling Project Business Trust and dplg, 2007 Appendix OR Tambo Photo collage #4 – Businesses of the node

B&Bs and holiday resorts A thriving retail sector B&Bs and holiday resorts A thriving retail sector

Petrol stations serving the traffic on the N2 The informal sector is huge. Here a hairdresser Petrol stations serving the traffic on the N2 The informal sector is huge. Here a hairdresser

The absolute The absolute majority live in rural majority live in rural areas areas

UUP-WRD-OR Tambo Profile-301106-IS 114