Socio-Economic Assessment

UMKHANYAKUDE DISTRICT MUNICIPALITY

ENVIRONMENTAL MANAGEMENT FRAMEWORK

DRAFT

May 2012

P.O. BOX 1673 23 Jan Hofmeyer Road Tel: 031 266 3884 SUNNINGHILL Westville Fax: 031 266 5287 2157 3629 Email: [email protected]

1 TABLE OF CONTENTS 1 Legal Framework ...... 5 1.1 Constitution of the Republic of South Africa (Act 108 of 1996) ...... 5 1.1.1 Traditional leadership ...... 6 1.2 National Environmental Management (Act 107 of 1998) ...... 6 1.3 Promotion of Administrative Justice Act (Act 3 of 2000) ...... 7 1.4 Development Facilitation Act (Act 67 of 1995) ...... 8 1.5 KwaZulu-Natal Traditional Leadership and Governance Act (Act 5 of 2005) ...... 9 1.6 Ingonyama Trust Act (Act 3 of 1994) ...... 10 1.7 KwaZulu-Natal Planning and Development Act 6 of 2008 ...... 10 1.8 Restitution of Land Rights Act 22 Of 1994 ...... 11 1.9 Promotion of Access to Information Act 2 of 2000 ...... 11 1.10 KwaZulu-Natal Public Transport Act 3 of 2005 ...... 11 2 Policies, Strategies, Plans and Programmes ...... 12 2.1 The New Growth Path ...... 12 2.2 Provincial Growth and Development Strategy 2011 ...... 12 2.3 Provincial Spatial Economic Development Strategy 2007 ...... 12 2.4 District Comparative Advantages Report, 2012 ...... 13 2.5 District Economic Drivers: uThukela District Municipality, 2012...... 13 2.6 Free Basic Water Policy ...... 13 3 Analysis of Land Use ...... 14 3.1 Land Claims ...... 14 3.2 Land Cover and Land Tenure ...... 15 3.3 Traditional Leadership ...... 16 4 Socio-Economic Profile ...... 17 4.1 Population and Household Size ...... 17 4.2 Age and gender ...... 18 4.3 Dwelling ...... 18 4.4 Monthly personal income ...... 19 4.5 Poverty and vulnerability ...... 20 4.6 Education ...... 22 4.7 Crime and Security ...... 24 4.8 Health ...... 25 4.9 Access to services: Water ...... 25 4.10 Access to services: Sanitation ...... 26

2 4.11 Access to services: Energy ...... 26 4.12 Safety and Security ...... 27 5 Overview of the District Economy ...... 29 5.1 GVA and economic indicators ...... 29 5.1.1 Development Nodes and Corridors ...... 31 5.2 Spatial Economic Drivers and Comparative Advantage ...... 32 5.2.1 Location Advantages ...... 33 5.2.2 Geographical Advantages ...... 33 5.2.3 Infrastructural Advantages ...... 33 5.2.4 Heritage Advantages ...... 33 5.2.5 Sector Advantages ...... 34 5.2.6 Linkages between Sectors ...... 34 5.3 Government Contribution to the Economy ...... 35 5.3.1 Govt Spending and Fixed Investment ...... 35 5.3.2 Institutional Structures ...... 35 5.3.3 Maladministration Indicators ...... 36 6 SWOT Analysis ...... 36 6.1 Strengths ...... 36 6.2 Opportunities ...... 36 6.3 Weaknesses ...... 37 6.4 Threats ...... 37 7 Management Priorities ...... 37 8 Bibliography ...... 39

List of Tables

Table 1: List of Traditional Authorities in uThukela DM ...... 16 Table 2: Population in Uthukela DM by number and percentage (Statistics South Africa, 2011) ...... 17 Table 3: Age and Gender (Statistics South Africa, 2007) ...... 18 Table 4: Percentage Distribution of households by Type of dwelling (Statistics South Africa, 2007) .. 19 Table 5: Annual personal Income (Statistics South Africa, 2007)...... 20 Table 6: Percentage of People Living in Poverty in KwaZulu-Natal and uThukela DM in 2001, 2005 and 2012 (Global Insight, 2011) taken from uThukela IDP 2012 (Department Strategic Planning and Economic Development, 2012) ...... 20 Table 7: Vulnerability Classification (Department of Cooperative Government and Traditional Affairs, 2011) ...... 21 Table 8: Number of persons receiving social grants in uThukela DM (Statistics South Africa, 2007) .. 22 Table 9: Schools in uThukela as provided by KZN DOE ...... 23 Table 10: Level of Education Obtained reached (Statistics South Africa, 2011) ...... 23 Table 11: Crime Statistics per 10 000 persons for uThukela Police Precincts and KwaZulu-Natal for the period 2011-2012 (Institute for Security Studies, 2011) ...... 24

3 Table 12: Health Care Facilities in uThukela DM (Department Strategic Planning and Economic Development, 2012) ...... 25 Table 13 Percentage distribution of households by type of Water Source (Statistics South Africa, 2011) ...... 26 Table 14: Percentage distribution of households by type of Toilet Facilities (Statistics South Africa, 2011) ...... 26 Table 15: District usage of energy/fuel (Statistics South Africa, 2011) ...... 27 Table 16: Crime Statistics per 10 000 persons for uThukela Police Precincts and KwaZulu-Natal for the period 2011-2012 (Institute for Security Studies, 2011) ...... 28 Table 17: Audit outcomes of uThukela DM and the local municipalities for 2010-2011 ...... 35

4 1 LEGAL FRAMEWORK

1.1 Constitution of the Republic of South Africa (Act 108 of 1996)

As contained in the Constitution the rights of all South African’s are protected by Chapter 2 of the Bill of Rights. These rights form the basis of democracy in South Africa. The Bill of Rights applies to all law, and binds the Legislature, the Executive, the Judiciary and all organs of state.

Key rights in the Bill that have a bearing on social rights and issues include:

Life: Everyone has the right to life;

Human Dignity: Everyone has inherent dignity and the right to have their dignity respected and protected;

Equality: Everyone is equal before the law and has the right to equal protection and benefit from the law;

Freedom of religion, belief and opinion: Everyone has the right of freedom of conscience, religion, thought, belief and opinion;

Environment: Everyone has the right to an environment that is not harmful to their health or well being, and to have the environment protected for the benefit of present and future generations, through reasonable legislative and other measures that prevent pollution and ecological degradation, promote conservation and secure ecologically sustainable development and the use of natural resources while promoting justifiable economic and social development;

Property: No person may be deprived of property except in terms of the law of general application, and no law may permit arbitrary deprivation of property. Property may be expropriated only in terms of the law of general application for a public purpose or in the public interest. The public interest includes South Africa’s commitment to land reform and to reforms to bring about equitable access to all South Africa’s natural resources. Property is not limited to land;

Health care, food, water and social security: Everyone has the right to have access to health care services, including reproductive health care, sufficient food and water and social security, including, if they are unable to support themselves and their dependents, appropriate social assistance;

Language and culture: Everyone has the right to use the language and participate in the cultural life of their choice, but no one exercising these rights may do so in a manner inconsistent with any provision of the Bill of Rights;

Cultural, religious and linguistic communities: Persons belonging to cultural, religious or linguistic communities may not be denied the right, with other members of the that community to enjoy their culture, practice their religion and use their language, and to form, join and maintain cultural, religious and linguistic associations and other organs of civil society. These rights must be exercised in a manner that is consistent with any provision in the Bill of Rights;

5 Access to information: Everyone has the right of access to any information held by the state and any information that is held by another person and that is required for the exercise or protection of any rights; and,

Just administrative action: Everyone has the right to administrative action that is lawful, reasonable and procedurally fair. Everyone whose rights have been adversely affected by administrative action has the right to be given written reasons. This right has been given effect via the Promotion of Administrative Justice Act (PAJA).

1.1.1 Traditional leadership

Recognition a) The institution, status and role of traditional leadership, according to customary law, are recognised, subject to the Constitution. b) A traditional authority that observes a system of customary law may function subject to any applicable legislation and customs, which includes amendments to, or repeal of, that legislation or those customs. c) The courts must apply customary law when that law is applicable, subject to the Constitution and any legislation that specifically deals with customary law. Role of traditional leaders a) National legislation may provide for a role for traditional leadership as an institution at local level on matters affecting local communities. b) To deal with matters relating to traditional leadership, the role of traditional leaders, customary law and the customs of communities observing a system of customary law 1. National or provincial legislation may provide for the establishment of houses of traditional leaders; and 2. National legislation may establish a council of

1.2 National Environmental Management (Act 107 of 1998)

The National Environmental Management Act (NEMA) and the principles contained therein have a significant influence on the need to identify and assess socio-economic impacts. The NEMA principles are based on the basic rights as set out in Chapter 2 (Bill of Rights) of the Constitution.

According to Barber (2007:16) the following NEMA principles have an important impact on social issues:

Environmental management must place people and their needs at the forefront of its concern, and serve their physical, psychological, developmental, cultural and social interests equitably;

Development must be socially, environmentally and economically sustainable;

Environmental management must be integrated, acknowledging that all elements of the environment are linked and interrelated, and it must take into account the effects of decisions on all aspects of the environment and all people in the environment by pursuing the selection of the best practicable environmental option;

6 Environmental justice must be pursued so that adverse environmental impacts shall not be distributed in such a manner as to unfairly discriminate against any person, particularly vulnerable and disadvantaged persons;

Equitable access to environmental resources, benefits and services to meet basic human needs and ensure human well-being must be pursued and special measures may be taken to ensure access thereto by categories of persons disadvantaged by unfair discrimination;

The participation of all interested and affected parties in environmental governance must be promoted, and all people must have the opportunity to develop the understanding, skills and capacity necessary for achieving equitable and effective participation, and participation by vulnerable and disadvantaged persons must be ensured;

Decisions must take into account the interests, needs and values of all interested

and affected parties, and this includes recognising all forms of knowledge, including traditional and ordinary knowledge;

Community well-being and empowerment must be promoted through environmental education, the raising of environmental awareness, the sharing of knowledge and experience and other appropriate means;

The social, economic and environmental impacts of activities, including disadvantages and benefits, must be considered, assessed and evaluated, and decisions must be appropriate in light of such consideration and assessment;

The right of workers to refuse work that is harmful to human health or the environment and to be informed of dangers must be respected and protected;

Decisions must be taken in an open and transparent manner, and access to information must be provided in accordance with the law;

The environment is held in public trust for the people. The beneficial use of environmental resources must serve the public interest and the environment must be protected as the peoples’ common heritage; and,

The vital role of women and youth in environmental management and development must be recognised and their full participation therein must be promoted.

1.3 Promotion of Administrative Justice Act (Act 3 of 2000)

As stated in the Guideline Document for involving Socio-Economic Impacts Assessment Specialists in the EIA process which was prepared in February, 2007, by Tony Barbour for the Department of Environmental Affairs and Development Planning, Western Cape Province, in terms of the Bill of Rights everyone has the right to administrative action that is lawful, reasonable and procedurally fair. This right has been given effect via the Promotion of Administrative Justice Act (PAJA).

Barbour further contends that provisions of the PAJA apply to all decisions of all organs of state exercising public power or performing a public function in terms of any legislation that

7 adversely affects the rights of any person. The Act also prescribes the procedure that must be followed by an organ of state when it takes decisions.

If an organ of state implements a decision that impacts on an individual or community without granting them an opportunity to comment, the ultimate decision will be unlawful and may be set aside. The Act also imposes a duty on organs of state to explain and justify the manner in which they have reached their decisions and, in the case of social issues, how these issues were considered in the decision-making process.

1.4 Development Facilitation Act (Act 67 of 1995)

Concerning land development various principles are set out in Section 3 of the DFA. A few of these principles are briefly highlighted below, as contained in the Guideline Document for involving Socio-Economic Impacts Assessment Specialists in the EIA process which was prepared in February, 2007, by Tony Barbour for the Department of Environmental Affairs and Development Planning, Western Cape Province (Barbour, 2007):

1. Promoting the integration of the social, economic, institutional and physical aspects of land development;

2. Promoting integrated land development in rural and urban areas in support of each other;

3. Promoting the availability of residential and employment opportunities in close proximity to or integrated with each other;

4. Optimising the use of existing resources including such resources relating to agriculture, land, minerals, bulk infrastructure, roads, transportation and social facilities;

5. Promoting a diverse combination of land uses, also at the level of individual erven or subdivisions of land

6. Discouraging the phenomenon of "urban sprawl" in urban areas and contributing to the development of more compact towns and cities;

7. Contributing to the correction of the historically distorted spatial patterns of settlement in the Republic and to the optimum use of existing infrastructure in excess of current needs;

8. Encouraging environmentally sustainable land development practices and processes;

9. Promoting land development which is within the fiscal, institutional and administrative means of the Republic;

10. Promoting the establishment of viable communities; and,

11. Promoting sustained protection of the environment.

8 1.5 KwaZulu-Natal Traditional Leadership and Governance Act (Act 5 of 2005)

The KwaZulu-Natal Provincial Government recognises traditional communities if it is subject to the system of traditional leadership in terms of that community’s customs and observes a system of customary law.

Partnership between traditional councils and municipalities

The Provincial Government must promote partnerships between municipalities and traditional councils through legislative and other measures. The partnership envisaged in subsection (1) must be based on the principle of mutual respect and recognition of the status and roles of the parties. Without derogating from the generality of subsection (1), a traditional council may submit a proposal to the municipal council to adopt a by-law, which the traditional council may consider to be necessary in respect of any matter directly affecting the area of its jurisdiction. The proposal envisaged in subsection (3), may be accompanied by a draft of the proposed by-law and must be motivated in writing The municipal council must consider the proposed by-law at its next meeting and may request comments from its municipal manager. In the event that the municipal council does not accept the proposed by-law, the municipal council must, in writing, inform the traditional council of its decision and must give reasons for its decision.

Support to traditional councils

The Provincial Government or the relevant municipal council may adopt such legislative or other measures as may be necessary to support and strengthen the capacity of traditional councils to fulfill their functions. The Provincial Government or the relevant municipal council may, within that sphere of government’s means, give traditional councils support to enable the traditional councils to perform their functions. The support envisaged in this section may include transport assistance where it is feasible taking into consideration budgetary constraints.

Functions of traditional councils

to administer the affairs of the traditional community in accordance with customs and tradition; to assist, support and guide traditional leaders in the performance of their functions; to work together with municipalities in the identification of community needs; to facilitate the involvement of the traditional community in the development or amendment of the integrated development plan of a municipality in whose areas that community resides; to recommend, after consultation with the relevant Local House and the Provincial House of Traditional Leaders, appropriate interventions to government that will contribute to development and service delivery within the area of jurisdiction of the traditional council; to participate in the development of policy and legislation at local level;

9 to participate in the development programmes of municipalities and of the provincial and national spheres of government; to promote the ideals of co-operative governance, integrated development planning, sustainable development and service delivery; to promote indigenous knowledge systems for sustainable development and disaster management; to alert any relevant municipality to any hazard or calamity that threatens the area of jurisdiction of the traditional council in question, or the well-being of people living in such area of jurisdiction, and to contribute to disaster management in general; to share information and co-operate with other traditional councils; to perform the functions conferred by customary law, customs and statutory law consistent with the Constitution. (m) to uphold the values of the traditional community; (n) to reject and proscribe such practices as the sowing of divisions based on tribalism; (o) to promote peace and stability amongst members of traditional communities; and (p) to promote social cohesion within the traditional community.

1.6 Ingonyama Trust Act (Act 3 of 1994)

The Ingonyama Trust was established by the KZN-Ingonyama Trust Act. This legislation Transferred land under jurisdiction of the former KwaZulu Government to the Ingonyama Trust.

The Ingonyama Trust was established in terms of the KwaZuluNatal Ingonyama Trust Act, (Act 3 of 1994). This Act was amended by National Act 9 of 1997. Among other things, the KwaZulu-Natal Ingonyama Trust Amendment Act provided for the establishment of the Ingonyama Trust Board. The primary objective of the Board is to function as landowner-in- law of Ingonyama Trust land, which is in extent of some 2.7 million hectares spread throughout KwaZulu-Natal.

This legislation provides for His Majesty the King to be the sole trustee but in terms of the 1997 amendments the Board came into operation on the 2 October 1998 to actually administer the affairs of the Trust. The Chairperson of the Board is His Majesty the King or his nominee. The members are appointed by the Minister, subject to consultative procedures laid down in the Act.

The core business of the Trust is to manage the land for the “material benefit and social well being of the individual members of the tribes”. However, no alienation or burdening of the land may occur without the written permission of the relevant traditional or community authority.

1.7 KwaZulu-Natal Planning and Development Act 6 of 2008

The KwaZulu-Natal Planning and Development Act of 2008 aims to:

To provide for the adoption, replacement and amendment of schemes; Provide for the subdivision and consolidation of land; Provide for the development of land outside schemes;

10 Provide for the phasing or cancellation of approves layout plans for the subdivision or development of land; Provide for the alteration, suspension and deletion of restrictions relating to land; Establish general principles for the permanent closure of municipal roads or public access; Provide for the adoption and recognition of schemes; Provide for compensation in respect of matters regulated by the Act; Establish the KwaZulu-Natal Planning and Development Appeal Tribunal; Provide for provincial planning and development norms and standards; and Provide for matters connected therewith.

1.8 Restitution of Land Rights Act 22 Of 1994

The aim of the Restitution of Land rights Act 22 of 1994 is as follows:

To provide for the restitution of rights in land in respect of which persons or communities were dispossessed under or for the purpose of furthering the objects of any racially based discriminatory law; To establish a Commission on Restitution of Land Rights and a Land Claims Court; and To provide for matters connected therewith.

1.9 Promotion of Access to Information Act 2 of 2000

The Promotion of Access to Information Act gives effect to the constitutional right of access to any information held by any public or private body that is required for the exercise or protection of any rights.

1.10 KwaZulu-Natal Public Transport Act 3 of 2005

The KwaZulu-Natal Public Tranpsort Act of 2005 aims to provide transform and restructure the public transport system. The aim, as stated in the act it to:

Develop and implement provincial public transport policy; Provide for an effective institutional framework; Facilitate the development and provision of public transport for all communities; Enhance the quality of life of historically disadvantaged communities through improved mobility and access to transport services; Provide for transparency in the development and implementation of provincial public transport policies and practices; Bring about effective regulation and enforcement of the public transport system; Substitute provincial arrangements for matters dealt with in Chapter 3 of the National Land Transport Transition Act, 2000 (Act No. 22 of 2000), within the framework of prevailing national land transport policy; and Provide for matters connected therewith.

11 2 POLICIES, STRATEGIES, PLANS AND PROGRAMMES

2.1 The New Growth Path

The New Growth Path (NGP) is a Government initiative that identifies mass joblessness, poverty and inequality as South Africa’s core challenge. It then outlines policies and institutional developments which require taking advantage of opportunities to reduce these core challenges. The main aim is to use South Africa’s limited capital and capacities to create “decent work”.

The NGP identifies five job drivers in South Africa listed below:

Infrastructure for Employment and Development Improving Job Creation in Economic Sectors Seizing the Potential of New Economies Investing in Social Capital Spatial Development

2.2 Provincial Growth and Development Strategy 2011

There are seven strategic objectives highlighted in the PGDS namely:

1. Job creation; 2. Human resource development; 3. Human and community development; 4. Strategic infrastructure; 5. Environmental sustainability; 6. Governance and policy; and 7. Spatial equity.

The document identifies unemployment, poverty and inequality as structural constraints to KwaZulu-Natal’s growth.

2.3 Provincial Spatial Economic Development Strategy 2007

The Provincial Spatial Economic Development Strategy (PSEDS) aims to understand economic growth through strategic spatial planning lead by the Department of Economic Development, KwaZulu-Natal Provincial Government. By introducing the concept of nodes and corridors, the PSEDS describes where economic development should to take place to enable the most efficient growth.

The document identified the following sectors as the drivers of growth, employment and poverty eradication in the province:

Agriculture – including agri-industry Industry, including heavy and light industry and manufacturing Tourism, including domestic and foreign tourism Service sector including financial, social, transport, retail and government

12 2.4 District Comparative Advantages Report, 2012

While PSEDS answered where economic development should occur, the District Comparative Advantage Report aims to understand what kind of development should take place.

The aims of the Report were to describe comparative economic advantages in each of the districts and identify economic opportunities and catalytic projects in each district.

Comparative advantage means that each geographic area has unique, comparative advantages in certain industries or sectors, thus enabling the area to produce at a lower opportunity cost than other areas. Thus the Report identifies each of the KwaZulu-Natal District Municipalities comparative advantages to identify what kind of economic activity should take place where.

The following categories were used to identify comparative advantages:

Location /access advantages Natural/geographical advantages Infrastructural advantages Resource advantages Human Capital advantages Institutional advantages Cultural or Heritage Advantages Sectoral comparative advantages

As a district municipality in KwaZulu-Natal, uThukela DM formed part of this report. This Socio-economic Status Quo analysis on uThukela DM will take into account the results of this report, identifying opportunities available to uThukela DM in order to create a desired state.

2.5 District Economic Drivers: uThukela District Municipality, 2012

As part of PSEDS, the Department of Economic Development profiles the District Economic Drivers for each of the KwaZulu-Natal District Municipalities. The aim was to inform PSEDS at a district level on the economic drivers and resource endowments for planning purposes.

The perspectives from private companies, the public and private sector and the natural resources perspective were studied to inform the document.

For uThukela DM, the report highlights the economic drivers as well as the environmental opportunities and constraints for a number of industries, including trade, banking and manufacturing, tourism and manufacturing to name a few. This Socio-economic Status Quo Report takes into consideration the findings of the District Economic Drivers Report.

2.6 Free Basic Water Policy

The Free Basic Water Policy was introduced in 2000 recognising the importance of having a clean and adequate water supply. The policy allows that every household to get 6 000 litres of water per month at no cost within a 200 metre distance from a household (Hall, Leatt, & Monson, 2006).

13 It is up to municipalities to ensure that the policy is implemented, as three targeting options are provided:

1. Rising Block Tariff: with access to taps and meters, the free 6 000 litres (block) is provided to water users and there after subsequent usage (or block) is billed at increasing rates for increasing consumption. 2. Targeted Credits or Subsidies: where people are considered “indigent” a subsidies amount is credited to their bill monthly. 3. Service Level Targeting: this option limits access of water to the minimum 6 000 litres per month. This is provided for either through a communal tap system which is within the 200 meter service level.

3 ANALYSIS OF LAND USE uThukela DM is situated in the KwaZulu-Natal Province of South Africa. It is one of eleven district municipalities. The name uThukela is derived from one of the major rivers in the province, the uThukela River that rises from the Drakensburg Mountains. uThukela DM is made of five local municipalities as well as a District Management Area namely:

1. Indaka Local Municipality KZN233 2. Emnambithi/Ladysmith Local Municipality KZN232 3. Umtshezi Local Municipality KZN234 4. Okhahlamba Local Municipality KZN235 5. Imbabazane Local Municipality KZN236 6. uThukela District Management Area KZDMA23

3.1 Land Claims

According to the KwaZulu-Natal Land Claims Commission, there are 5 000 land claims in uThukela District Municipality and 88 gazetted claims.

3.2 Land Cover and Land Tenure

Agriculture accounts for 13 percent of land cover in the area, of which 7.9 percent is commercial agriculture and 5.1 percent is subsistence agriculture. 55.8 percent of land cover is grassland and bushland accounts for 18.3 percent, both of which contribute to stock farming. Only 3.5 percent of the district land cover is used for settlement (Matthews & Catacutan, 2012).

According to Matthews and Catacutan (2012), there are three main forms of land tenure. The Ezemvelo KZN Wildlife DMZ23 own 8 percent of the land area. Commercial farms have 53 percent of the total land area. Lastly, communal land which accounts for 40 percent of uThukela DM land is made up of land owned by the Ingonyama Trust Board or land reform areas (Matthews & Catacutan, 2012).

15 3.3 Traditional Leadership

The Constitution of South Africa recognised the role of Traditional Authorities and facilitates their involvement through the Department of Co-operative Governance and Traditional Affairs (Cogta).

Traditional Authorities play an important social and economic role in the uThukela DM area. In each local municipality there is a traditional body that communicates with the local ward committees and council forming part of the decision making body in the area.

As land owners, Traditional Authorities directly shape the economic conditions of the area. Without consultation and permission of Traditional Authorities there can be no development of uThukela DM.

According to the KZN PGDS 2011 there are 265 traditional councils in KwaZulu-Natal, 24 are in uThukela DM. The table below lists the 24 traditional councils which are found in each of the five local municipalities for uThukela DM.

Table 1: List of Traditional Authorities in uThukela DM

No Inkosi Traditional Authority Emnambithi LM 1 Inkosi N.M Shabala Shabalala TC 2 Inkosi T.R. Khumalo Abantungwa Kholwa 3 Inkosi M.A> Radebe Amahlubi 4 Inkosi B.F. Nkosi AmaSwazi Imbabazane LM 5 Inkosi S.N. Mkhize Abambo 6 Inkosi M.A. Dlamini Dlamini 7 Inkosi N.F. Ndaba Mhlungwini 8 Inkosi S.X Mazibuko Amangwe 9 Inkosi M.J. Radebe AmaHlubi 10 Inkosi T.B. Mabaso-Ntabamhlophe Mabaso Umtshezi LM 11 Inkosi F.N. Mnkwanyana Mnkwanyana 12 Inkosi N. Mchunu AmaChunu Okhahlamba LM 13 Inkosi M.E. Miya Amazizi 14 Inkosi M. Hlongwane AmaNgwane 15 Inkosi M.S. Tshabalala AmaSwazi Indaka LM 16 Inkosi S.A. Mchunu Mchunu 17 Inkosi S.S. Kunene Sigweje 18 Inkosi N.S.W. Sithole Sithole 19 Inkosi Mabaso Mabaso 20 Inkosi F.V. Mbhense Mbhense 21 Inkosi M.M. Nxumalo Nxumalo 22 Inkosi C.N. Zwane Ingwe

16 23 Inkosi B.S. Sithole Sithole 24 Inkosi S.W. Mthembu Mthembu

The Ingonyama Trust Board serves as the landowner-in-law of some 2.8 million hectares of land in KwaZulu-Natal. The Board is charged with administering this land for the material benefit and social-well being of the individual members of the communities.

Some of the functions of the Ingonyama Trust Board include:

The Trust cannot encumber, pledge, lease, alienate or otherwise dispose of land without the consent of the Traditional Authority or Community Authority concerned. Consent to issue of Permissions to Occupy for developments Issuing Prospecting Rights and Minerals Lease 3

According to the ITB website, the ITB own approximately 15 .11 percent or 171 196 hectares of uThukela DM land amounting to 1 133 120 hectares. Thus the land owned by the Traditional Authorities listed above from part of the ITB. Prospective land developments on ITB land require both ITB and relevant Traditional Authorities approval.

4 SOCIO-ECONOMIC PROFILE The socio-economic profile aims to understand the community, the population dynamics and the living conditions. Data from Community Survey 2007, Census 2001 and Quantec Research are used. More information was found in the municipal IDPs and reports.

4.1 Population and Household Size

The population statistics for 2011 are shown in the Table 2 below taken from Statistics South Africa Census 2011. Emnambithi-Ladysmith LM has the largest population of 237 437 persons followed by Okhahlamba LM with 132 068 persons.

From the data presented it is evident that the population in the District is unevenly distributed particularly around the main urban centres. According to the uThukela DM IDP total urbanisation rates in the district are growing (Department Strategic Planning and Economic Development, 2012) .

Table 2: Population in Uthukela DM by number and percentage (Statistics South Africa, 2011)

Population Municipality Number Percentage Uthukela DM 668 848 100% Emnambithi-Ladysmith LM 237 437 35% Indaka LM 103 116 15% Umtshezi LM 113 073 17% Okhahlamba LM 132 068 20% Imbabazane LM 83 153 12%

17 4.2 Age and gender

Age and Gender are important to understand the level of economic activity that is likely to occur, as well aspects of migration and female-headed households.

Table 3: Age and Gender (Statistics South Africa, 2007)

Age Male Female Total Group Number Percentage Number Percentage Number Percentage

0-14 124 496 19% 121 713 18% 246 209 37% 15-34 112 905 17% 125 539 19% 238 444 36% 35-64 64 150 10% 88 774 13% 152 924 23% 64+ 9 631 1% 21 638 3% 31 269 5% Total 311 182 47% 357 664 53% 668 846 100%

The district age and gender profile is 47% male and 53% female. The largest population group are youth between 0 – 14 years and 15 – 34 years old who account for 37 percent and 36 percent of the population respectively. Thus 73 percent of the population is under 35 years indicating a youth dependent generation. This means that the youth are expected to contribute towards the households bearing more responsibility than what is normal. Only 5 percent of the population are over 65 years of age.

Analysis of uThukela DM population indicates that there is a strong migration of males out of the area leaving households that are female headed and youth dependent. Migration of males of uThukela DM is caused by the lack of jobs in the area. Males seek work in towns surrounding the municipality and larger metropolitan areas (Department Strategic Planning and Economic Development, 2012).

4.3 Dwelling

The type of households in the area can be classified into formal or informal housing from Census 2001 data.

Formal housing is classified as (Statistics South Africa, 2001):

House or brick structure on a separate stand or yard Flat in block of flats Town/cluster/semi-detached house (simplex; duplex; triplex) House/flat/room in back yard Traditional dwelling/hut/structure made of traditional materials Room/flatlet not in back yard but on shared property Caravan or tent Private ship/boat

Informal Housing is classified as (Statistics South Africa, 2001):

Informal dwelling/shack in back yard

18 Informal dwelling/shack not in back yard

The table below highlights the percentage distribution of households by type of dwelling taken from Stats SA. 99 percent of the households in the district are formal household structures. 45 percent of households are on a separate stand while 43 percent of households are traditional dwellings. There have been no significant changes to dwelling type in the region between 2001 and 2007.

Table 4: Percentage Distribution of households by Type of dwelling (Statistics South Africa, 2007)

Type of Dwelling Census 2001 CS 2007

Formal Dwelling 145 292 99% House on separate stand 84 297 57% Traditional dwelling 47 353 32% Flat in block of flats 6 445 4% Cluster house in complex 611 0% Townhouse 526 0% Semi-detached house 418 0% Room in back yard 4 070 3% Room/ flatlet on a property 700 0% Caravan / tent 103 0% Other 769 1% Informal dwelling 1 994 1% in back yard 1 063 0.3% Not in back yard 931 0.7% Total 147 286 100%

4.4 Monthly personal income

Personal income is grouped into the following brackets:

No income R0 Low Income R1 - R3 200 Middle Income R3 201 - R 25 600 High Income R25 601+

The table below shows monthly income per person ages 15-65 for the year 2007 by gender. The proportion of non income earners is lower for females (52 percent) than for males (57 percent). In all income –earning categories the proportion of male earners are higher than females. This indicates that males in general earn more than females in uThukela DM.

The data shows that 60 percent of persons between the specified age group earn no income. 25 percent of the persons are low income earners in the region. This means that 85 percent of the population live on less than R 38 400 per annum, an indicator of poverty and vulnerability in the area.

19 Table 5: Annual personal Income (Statistics South Africa, 2007)

Income Male Female Total Group Number Percentage Number Percentage Number Percentage

No income 100 700 57% 138 272 62% 238 973 60% Low Income 51 023 29% 61 845 28% 112 868 28% Middle 10 077 6% 7 922 4% 17 999 4% Income High 544 0% 542 0% 1 086 0% Income No 13 068 7% 12 776 6% 25 844 6% Response Institutions 2 558 1% 1 591 1% 4 149 1% Total 177 970 100% 222 948 100% 400 919 100%

Furthermore, when analysing the education levels (section 4.6) and income levels of the population, it is evident that both are low. 47 percent of the population in uThukela DM have either received no schooling or received primary schooling. This means 47 percent of the population are unemployable in semi or high skilled jobs. Looking at income statistics where 60 percent of the population earn no income and 28 percent of the population are low income earners, there is a strong likelihood that these figures are correlated.

4.5 Poverty and vulnerability

The uThukela DM IDP reports that 65.7 percent of the district municipality’s population were living below the minimum standards in 2010. This is compared to 49.6% in KwaZulu-Natal for the same year.

The table below was taken from the uThukela DM IDP, uses Global Insights data to provide information on the percentage of persons living in poverty in uThukela DM.

Table 6: Percentage of People Living in Poverty in KwaZulu-Natal and uThukela DM in 2001, 2005 and 2012 (Global Insight, 2011) taken from uThukela IDP 2012 (Department Strategic Planning and Economic Development, 2012)

Local Municipality 2001 2005 2010

KwaZulu-Natal Province 57.1% 55.2% 49.6% uThukela DM 71.7% 70.7% 65.7% Emnambithi-Ladysmith LM 54.9% 58.2% 56.4% Imbabazane LM 86.0% 81.6% 73.6% Indaka LM 64.6% 66.3% 62.3% Okhahlamba LM 86.1% 84.2% 78.1% Umtshezi LM 76.9% 72.3% 65.3%

20 From the table provided, it is evident the population figures for KZN and uThukela DM have declined during the 2001-2010 period, although uThukela DM maintains a higher rate of poverty.

When comparing the local municipalities, Okhahlamba LM has the highest poverty rate of 78.1 percent in 2010 followed by Imbabazane LM with a poverty rate of 73.6 percent. None of the municipalities have a poverty rate that is lower than KZN. Emnambithi-Ladysmith LM has the lowest level of poverty in the area at 56.4 percent.

The Department of Co-operative Governance has developed a Municipal Spatial Classification System for local municipalities based on the indicators of functionality, socio- economic profile and backlog status. The system is “intended to support a range of governance. Policy and institutional reforms what will be supporting the Turn-Around Strategy over the longer term (Department of Cooperative Governance and Traditional Affairs, 2009).

The State of Local Government in South Africa Overview Report by COGTA (2009) defines the four municipal classifications as:

Class 1: Most vulnerable. These municipalities a located in previous, disestablished Bantustans. Class 2: Second most vulnerable. These municipalities tend to be found in commercial farming areas will small service towns; previously located in disestablished apartheid homelands; semi desert areas; or areas with low population densities. Class 3: Second highest performing. These municipalities are located in commercial farming areas will small service towns; smaller mining towns; or semi desert areas. Class 4: Highest performing. These municipalities tend to contain highly urbanised communities; large urban centres; mining towns; or semi desert areas.

The five local municipalities in the uMkhanyakude District can be classified as follows in Table 7:

Table 7: Vulnerability Classification (Department of Cooperative Government and Traditional Affairs, 2011)

Local Municipality Classification

Emnambithi-Ladysmith LM Second highest performing Imbabazane LM Most vulnerable Indaka LM Most vulnerable Okhahlamba LM Most vulnerable Umtshezi LM Second highest performing

Emnambithi –Ladysmith LM and Umtshezi LM have been classified as second highest performing local municipalities. These two municipalities perform well despite the fact that 56.4 percent of persons are living in poverty in Emnambithi-Ladysmith LM and 62.3 percent in Umtshezi LM as shown in Table 6.

21 On the other hand, Indaka LM, Okhahlamba LM and Imbabazane LM have been classified as “most vulnerable” municipalities. The “most vulnerable” local municipalities are thus characterised by a weak economy, with high unemployment rates, a vast backlog in the provision of basic services, high poverty rates and high grant dependency rates all of which will be explained below.

The table below indicates the number of persons in uThukela DM that are receiving social grants. When looking at the proportion of males to females that are receiving grants, it is clear that there are significantly higher ration of females beneficiaries than males.

Table 8: Number of persons receiving social grants in uThukela DM (Statistics South Africa, 2007)

Male Female Social Grants Total Number Percentage Number Percentage Not applicable 222 432 46% 257 456 54% 479 888 Old age pension 8 465 22% 29 609 78% 38 074 Disability grant 10 213 49% 10 514 51% 20 727 Child support grant 77 725 48% 83 941 52% 161 666 Care dependency grant 1 207 42% 1 674 58% 2 881 Foster care grant 195 32% 407 68% 602 Grant in aid 1 445 36% 2 546 64% 3 991 Social relief 234 30% 557 70% 791 Multiple social grants 317 40% 467 60% 784 Institutions 3 262 59% 2 242 41% 5 505

64 percent of aid grants and 70 percent of social relief grants are provided to females rather than to males. Child support, care dependency and foster care grants are also provided more to females than males.

Using the population statistics in Table 2, it has been calculated that 22.6 percent of people in uThukela DM receive the child support grant. 5 percent of the population receive the old age pension which according to the population data accounts for almost all persons over the age of 65.

All three tables indicate that the living conditions in the study area can be described as extremely poor and there is much need for development and economic stimulation in the area.

4.6 Education

Functional illiteracy is defined as a person who has received education on how to read and write but they are not fully capable of doing so. Thus while having the ability to read, the difficulty is experienced in trying to comprehending the material. Usually persons who have a low level of education such as primary education are classified as functionally illiterate.

22 Low education in the area will affect the level of income received in the community as it is a indicator of skill levels. Low education also affects the ability of local residents to actively participate in development programmes (Business Trust, 2007).

According the KZN Department of Education there are a total of 462 school in uThukela DM. The table below provides some detail as to the type of schools in district.

Table 9: Schools in uThukela as provided by KZN DOE

School Level Public Independent Total

Primary 275 5 280 Secondary 119 1 120 Combination 51 7 58 Special needs schools 3 1 4 Total 448 14 462

There are 448 public school and 14 independent schools in uThukela DM. 61 percent or 280 schools in the area are primary schools. This is compared to 58 or 26 percent of secondary schools. There may be a shortage of secondary schools in the area.

Table 10: Level of Education Obtained reached (Statistics South Africa, 2011)

Level of Education Male Female Total Obtained Number % Number % Number %

No schooling 20 218 3% 34 286 5% 54 504 8% Some primary 91 247 14% 97 210 15% 188 457 28% Completed primary 15 654 2% 17 997 3% 33 651 5% Some secondary 79 931 12% 93 939 14% 173 870 26% Grade 12/Std 10 45 972 7% 54 524 8% 100 496 15% Higher 9 005 1% 12 379 2% 21 384 3% Unspecified 360 0% 431 0% 791 0% Not applicable 48 796 7% 46 898 7% 95 694 14% Total 311 183 47% 357 664 53% 668 847 100%

The table above provides information on the level of education reached in 2011 for the entire uThukela DM population. 8 percent of persons have not received any schooling of which 3 percent are male and 5 percent are females. This indicated that there is a gender bias in deciding on which child should be sent to school.

However the proportion of males and females who attend school from grade 0 to higher education remain virtually equal.

In total, 32 percent of the population obtained some level of schooling between Grades 0-7. 26 percent of the population have obtained some secondary schooling while 15 percent have reached grade 12. Only 3 percent of the population have some form of higher

23 education. Education levels are low in the study area, reflecting a high level of illiteracy among the population and high levels of functional illiteracy.

4.7 Crime and Security

Safety and Security plays a large role in the development of an area. If people do not feel safe in an area, the probability that they will establish businesses in the area would decline. Thus it is important that for development, crime rates are lower.

According to the Crime and Research Statistics by the South African Police Services, the highest number of crimes committed in KwaZulu-Natal for 2012 were contact crimes. This is followed by incidence of property related crimes.

The table 13, taken from the Institute for Security Studies shows the crime rate per 10 000 persons for various crimes in uThukela DM Police Precincts and KwaZulu-Natal Province. This was done for the period April 2011 to March 2012. Three categories were chosen based on the occurrence; contact crimes, contact-related crimes and property related crimes. The selected crimes are mostly contact crimes.

The data is converted into the number of crimes committed per 10 000 persons by the Institute for Security Studies. This is done to allow for comparisons and further analysis and understanding on security issues.

Table 11: Crime Statistics per 10 000 persons for uThukela Police Precincts and KwaZulu-Natal for the period 2011-2012 (Institute for Security Studies, 2011)

Contact - Property-Related Contact Crimes related Crimes Police Crimes Precinct Total Malicious Assault Common Burglary Stock Murder Sexual Damage to - GBH Assault Residential Theft Crimes property KwaZulu - 31.6 113.6 273.7 295.6 114 380.1 71.6 Natal Amangwe 3.36 10.92 13.65 9.24 3.78 22.47 26.35 Bergville 2.57 11.08 20.22 17.5 9.79 14.29 32.91 Besters 1.78 6.6 21.32 16.75 9.65 10.91 31.47 Colenso 10.27 17.61 54.3 60.17 13.35 45.49 88.05 Ekhuveni 4.2 10.42 34.61 19.15 9.58 18.82 21 Elandslaagte 0.66 7.61 18.52 17.53 13.56 13.89 39.35 Ematsheni 1.1 6.03 16.71 9.04 3.01 10.41 30.96 Escourt 4.17 10.75 32.48 29.85 17.34 44.33 27.22 Ezakheni 3.32 9.97 25.01 21.69 8.21 18.56 21.49 Ladysmith 3.92 14.56 54.01 70.57 27.11 48.29 21.18 Ntabamhlope 1.85 5.39 22.73 3.37 3.54 16.33 10.1 Upper Tugela 1.99 6.65 13.95 5.41 3.42 11.67 38.99 Van Reenen - 9.06 42.26 24.15 27.17 15.09 42.26 Weenan 1.08 10.45 24.52 10.45 5.77 8.29 23.43 Wembezi 2.37 11.27 17.79 12.45 4.15 13.93 11.56

24 Winterton 1.65 7.72 28.68 14.89 9.93 49.64 38.61 Total 44.29 156.09 440.76 342.21 169.36 362.41 504.93

For uThukela DM, stock theft was the most common crime in the period with 504.93 incidences. This is followed by incidence of common assault with the intent to do grievous bodily harm (GBH) with 440.76 incidences per 10 000 persons.

Residential burglary occurred 362.41 times per 10 000 persons while there were 169.41 incidences of malicious damage to property. Murder was the lowest committed crime with 44.29 incidences for the uThukela DM.

The precinct with the highest number of the selected crimes committed was Colenso, which is surprising considering that the population density for Ezakheni, Escourt and Ladysmith are higher. This is followed by Ladysmith and then Van Reenen.

What is not surprising though is that in Escourt and Ladysmith, which have dense urban populations, there is a large occurrence of other serious crimes not shown in this document. These include drug related crimes, driving under the influence of alcohol and shoplifting.

4.8 Health

Assessing the health standards of the municipality and the clinics is important to understanding the social and living standards of the community. The number of hospitals is an indicator of health as well as accessibility and level of municipal service. Below is a list of facilities as stated in the IDP:

Table 12: Health Care Facilities in uThukela DM (Department Strategic Planning and Economic Development, 2012)

Health Care Facilities Number of facilities

Mobile Clinics 14 Satellites 1 Clinics 35 MOUs 2 District Hospitals 2 Regional Hospitals 1

The HIV prevalence rate in uThukela DM has decreased from 46.4 percent in 2009 to 36.7 percent in 2010, which is lower than the provincial rate of 39.5 percent.

4.9 Access to services: Water

Inadequate access to water contributes to disease and sickness thus increasing the population’s vulnerability to disease and reducing productivity.

25 Table 12 shown below provides the type of water access in uThukela DM for 2011.

Table 13 Percentage distribution of households by type of Water Source (Statistics South Africa, 2011)

Water Source Number Percentage

Inside dwelling/institution 42 221 29% Inside yard 31 659 21% Community stand distance from institution/dwelling: Less than 200m 26 656 18% Between 200m and 500m 10 537 7% Between 500m and (1km) 3 875 3% Greater than 1km 2 553 2% No access to piped water 29 785 20% Total 147 286 99.9

4.10 Access to services: Sanitation

The table below highlights the type of toilet facilities for 2011 in uThukela DM.

Table 14: Percentage distribution of households by type of Toilet Facilities (Statistics South Africa, 2011)

Toilet Facilities Number Percentage

Flush toilet (connected to 47 001 32% sewerage system) Flush toilet (with septic tank) 2 933 2% Chemical toilet 7 291 5% Pit toilet with ventilation (VIP) 33 514 23% Pit toilet without ventilation 39 002 26% Bucket toilet 1 551 1% Other 3 597 2% Total 147 287 100%

Flush toilets account for 34 percent of sanitation facilities while VIP toilets make up 23 percent. This means that over 50 percent of sanitation facilities comply with the Free Basic Sanitation Policy. However there is still a large number of facilities that are below the national standard.

4.11 Access to services: Energy

The use of reliable electricity is important for economic growth. Thus the municipality should aim to provide electricity for development.

26 The table below shows the 2011 distribution of households by type of energy usage for cooking, lighting and heating for uThukela DM.

Table 15: District usage of energy/fuel (Statistics South Africa, 2011)

Cooking Heating Lighting Type of Energy /Fuel Use Number Percentage Number Percentage Number Percentage

Electricity 83 511 57% 60 361 41% 109 693 74% Gas 4 528 3% 2 990 2% 499 0% Paraffin 13 856 9% 11 792 8% 1 311 1% Wood 41 664 28% 53 712 36% 0 0% Coal 1 223 1% 2 047 1% 0 0% Animal dung 1 603 1% 2 426 2% 0 0% Solar 255 0% 274 0% 517 0% Candles 0 0% 0 0% 34 471 23% Other 189 0% 125 0% 0 0% None 459 0% 13 558 9% 797 1% Total 147 288 100% 147 285 100% 147 288 100%

For cooking purposes 57 percent of households use electricity, 28 percent of households use wood and 9 percent use paraffin. Thus electricity is more commonly used.

For heating purposes 41 percent of households have access to electricity.36 percent of households use wood for heating.

74 percent of households have access to electricity for lighting purposes while 23 percent of households make use of candles.

Acess to electricity is important for the development and

4.12 Safety and Security

27 The data is converted into the number of crimes committed per 10 000 persons by the Institute for Security Studies. This is done to allow for comparisons and further analysis and understanding on security issues.

Table 16: Crime Statistics per 10 000 persons for uThukela Police Precincts and KwaZulu-Natal for the period 2011-2012 (Institute for Security Studies, 2011)

28 5 OVERVIEW OF THE DISTRICT ECONOMY The economy of uThukela District Municipality is highly geographically dispersed. The majority of economic activity occurs in the main urban centres, such as Ladysmith and Escourt (Department Strategic Planning and Economic Development, 2012).

The main economic activity is classified as manufacturing in Ladysmith and wealthy commercial farms in Okhahlamba Local Municipality. According to the uThukela DM Spatial Economic Overview, the key economic development nodes in the District are Greater Ladysmith (main node); Escourt; Bergville; and Winterton. These are all urban centres in the District Municipality, thus there is an urban bias in terms of economic activity (Isikhungusethu (Pty) Ltd, 2012).

There has been limited structural change in the economy over two decades in uThukela DM. Majority of manufacturing companies are over 60 years old. New companies entering the area focus more on electronics (Isikhungusethu (Pty) Ltd, 2012).

Given the large spatial disparities in uThukela DM’s economies, some of the local municipalities are struggling to generate any revenue or to perform effectively. In Indaka Local Municipality for example, there are no towns, no major markets or any large economic activity. Thus all income is generated and spent outside of the municipal boundary in the larger urban centres. The result is that there is limited flow of monies in the municipality and no multiplier effect within Indaka LM. The municipality is unable to generate any revenue, resulting in underperformance and severe financial constraints.

5.1 GVA and economic indicators

Gross Value Added (GVA) is defined as the total value of all the goods produced in a specific area during a specific period.

According to Quantec Research data, uThukela DM contributes 5 percent to the KwaZulu- Natal Gross Value Added in 2011. GVA per capita allows for the determining the overall welfare of the population. While it is not a comprehensive measure and provides no indication of the distribution of welfare, it is still important an important indicator.

In order to generate GVA per capita, the population statistics for KwaZulu-Natal and uThukela DM has to be forecasted to 2012. The following equation has been used to determine population growth rates between 2001 and 2012:

n Pn= CP (1+ I)

Where:

P – Estimated Population Figure for the specified time CP – Population at start I – Growth rate as decimal degree of percentage n – Years over which growth is determined .

It was found that the population growth rate for uThukela DM between 2001 and 2007 was 1.42, hence this rate was applied for the period 2007 to 2012.

Quantec Research defines the major sectors into Primary Sector, which is extractive, Secondary Sector. made up of manufacturing and the Tertiary Sector, which comprises of

29 services. The Figure 1 below shows the GVA per sector for 2011. This data is taken from Quantec Research and the variables are explained below.

Primary Sector:

Agriculture, forestry and fishing; and Mining and Quarrying

Secondary Sector:

Manufacturing. This includes food, beverages and tobacco; textiles, clothing and leather goods; wood, paper, publishing and printing; petroleum products, chemicals, rubber and plastic; other non-metal mineral products; metals, metal products, machinery and equipment; electrical machinery and apparatus; radio, TV, instruments, watches and clocks; transport equipment; and furniture and other manufacturing. Electricity, gas and water; and Construction

Tertiary Sector:

Wholesale and retail trade, catering and accommodation. This sector represents the tourism sector through catering and accommodation and the sale of goods through trade. Transport, storage and communication; Finance, insurance, real estate and business services; Community, social and personal services; and General Government

GVA per Industry Agriculture, forestry and fishing General 7% government Mining and 13% quarrying Community, social 1% and personal services 6% Manufacturing Finance, insurance, 21% real estate and business services 15% Electricity, gas and water 3%

ConstructionWholesale and Transport, storage retail trade,3% catering and communication and 14% accommodation 17% Figure 1: GVA per sector for uThukela DM in 2011 (Quantec Research (Pty) Ltd, 2012)

The following sectors contribute most to uThukela GVA:

Manufacturing is the biggest contributor to GVA at 21 percent (Quantec Research (Pty) Ltd, 2012). The manufacturing sector involves the following: clothing; textiles; tyres; tools; and agricultural processing (Isikhungusethu (Pty) Ltd, 2012). Trade and hospitality (Wholesale and retail trade, catering and accommodation) also accounts for 17 percent of GVA (Quantec Research (Pty) Ltd, 2012). In terms of trade, this could be as a result of large manufacturing firms in the region. Catering and accommodation, or tourism activity in the region can be explained by the Ukhahlamba-Drakensburg World Heritage Site and other eco-tourism activity. Business Services make up 15 percent of GVA. Business services include finance, insurance and real estate and may be driven by the manufacturing sector. Other contributing sectors are transport, storage and communications contributing 14 percent to GVA as well as General Government which contributes 13 percent.

Combined, General Government and Community Services, contribute 19 percent to GVA which indicates a reliance on the government sector of the provision of services, teachers, police etc.

5.1.1 Development Nodes and Corridors

The Provincial Spatial Economic Development Strategy of 2007 introduced the concept of corridor and nodal development as the primary approach to spatial economic development in the province. These nodes can be shown spatially in the figure below.

Nodes are centres of economic activity, usually urban centres, defined by their importance to either the national, provincial, or local economy. In the context of uThukela DM, Ladysmith and Escourt have been identified as tertiary nodes defined as “a centre which should provide

31 service to the sub-regional economy”. Winterton, Bergville and Weenen are quaternary nodes, defined as “a centre which should provide service to the localised economy” (KZN Department of Local Government and Traditional Affairs, 2007).

PSEDS are classifies nodes and corridors by categories of potential which are:

1. Production of high value, differentiated goods not strongly dependent on labour costs, focused on local & global niche markets – i.e. manufacturing 2. Production of labour intensive, mass produced goods more dependent on labour costs, affordable transport linkages – i.e. agriculture and mining 3. Innovation and experimentation – research and development 4. Retail and private sector services – large employer of skilled & semi skilled workers in advanced economies 5. Tourism – dependant on tourism attractions 6. Public service and administration

Corridors are either transport or logistic routes which link centres or nodes together. Transport networks play a crucial role in local, regional and national economies. The pace of development of a country in part relies on the development of its transport network. An efficient transport system reduces transport costs, allows poorer and rural communities such as those in uThukela DM to increase its market size and also improves access to services.

uThukela DM is fortunate to have the national route N3 run across the municipality connecting the district to Johannesburg and Durban (KZN Department of Local Government and Traditional Affairs, 2007). A second national route, the N11 that crosses the northern part of the DM. These are marked as existing corridors by PSEDS. What is important about the N3 is the there are a number of isolated or clustered economic activities along the route that provide income, employment other economic benefits (Imbabazane Local Municipality, 2011).

The Ukhahlamba corridor is categorised as a level 5 secondary corridor. A level 5 corridor means that there is potential in tourism. Secondary corridors are defined as “a corridor serving areas of high poverty levels with good economic development potential within one or two sectors” (KZN Department of Local Government and Traditional Affairs, 2007).

Another corridor in the District is the Weenen – Nkandla – Eshowe. This corridor is a level 2 4 5 and 6 corridor indicating potential in labour intensive mass production; retail and private sector services; toruism; and public services and administration.

5.2 Spatial Economic Drivers and Comparative Advantage

According to the Provincial Spatial Economic Development Strategy (PSEDS) profile on uThukela District Municipality, the most prominent current economic activity in the region includes established sectors and un-established emerging sectors which are also making an impact on the economy. These are:

Established sectors

Manufacturing in clothing, textiles, tyres, tool, and processing of agricultural products;

32 Agriculture; Tourism where large scale tourism activities are established; and Trade from wholesalers and retailers.

Newer sectors

Services, more specifically medical, social and information technology services; and Trade, with new increasing facilities in wholesale, retail and tourism and hospitality.

This document however will take on the approach by the District Comparative Advantages Report by the KwaZulu-Natal Department of Economic Development and Tourism. A distinction should be made between drivers and comparative advantage.

The District Comparative Advantages Report looks at a number of categories to determine advantages each geographical area. These are summarised below for the uThukela DM (Department of Economic Developement and Tourism, 2010).

5.2.1 Location Advantages

The N3 Primary Corridor identified in PSEDS runs through the middle of uThukela linking the district to Johannesburg and Durban allowing for tourism and logistic-related advantages (Department of Economic Developement and Tourism, 2010).

5.2.2 Geographical Advantages

Part of the Ukhahlamba-Drakensburg World Heritage Site falls within the district borders. The Headwaters of the Tugela River fills the district dams. The river is used for agriculture, tourism and recreation. Thus there are tourism related advantages (Department of Economic Developement and Tourism, 2010).

5.2.3 Infrastructural Advantages

The N3 highway provides the district with fast connectivity to Johannesburg and Durban. There are two major dams in the district, the Spioenkop Dam and the Woodstock Dam that has a hydro-electric power plant which is an advantage of the district (Department of Economic Developement and Tourism, 2010).

5.2.4 Heritage Advantages

The district had Anglo-Boer War and Drakensburg heritage sites are numerous in the district, such as rock-art painting in the Drakensburg (Department of Economic Developement and Tourism, 2010).

33 5.2.5 Sector Advantages uThukela DM has a comparative advantage in agriculture; clothing and textiles manufacturing; electrical machinery; electricity, gas and steam production; and transport. These were identified in the District Comparative Advantages Report using the location quotient which determines the contribution to the local economy (Department of Economic Developement and Tourism, 2010). uThukela is the third largest producer of textiles, concentrated in the Ladysmith and Ezakeni (east of Ladysmith) regions. The clothing and textiles industry is also the most labour intensive sector. Production in this sector would include canvas, towels, sheets and clothing (Department of Economic Developement and Tourism, 2010).

A second comparative advantage sector was identified with in the manufacturing sector. Electronics have been a growing sector in the district and has been identified as a sector with more potential. Manufacturing of electronics mostly occur in the Ezakheni region (Department of Economic Developement and Tourism, 2010).

Agriculture and hunting is a comparative advantage of uThukela DM due to the extensive crop production in the western areas (Department of Economic Developement and Tourism, 2010).

In the Escourt region, agro-processing including wood processing occurs. Food processing is also a major player in this region. Thus for the Escourt region, agro-processing and food- processing would be the comparative advantage (Department of Economic Developement and Tourism, 2010)

5.2.6 Linkages between Sectors

Not only is the manufacturing sector contribution to GVA high, overall employment in the sector is also highly significant. Manufacturing is one of the top three contributing sectors to the South African Economy.

In a report conducted by the Pan-African Investment and Research Services titled “Assessing the Manufacturing Sector and its Multiplier Effects on the South African Economy”, it was found that spending R1 on the manufacturing sector would yield R1.13 in overall output, second to the agricultural sector at R1.79 overall output. Both sectors are critical to the uThukela economy (Pan-African Investment & Research Services: Research Division, 2011).

The importance of the manufacturing was further demonstrated through the multiplier effect on other industries. It was found that an annual 3.4 percent expansion in the manufacturing sector would impact in order, wholesale and retail trade; transport and communication and the financial sectors the most (Pan-African Investment & Research Services: Research Division, 2011).

Thus while the district has a comparative advantage in the manufacturing of textiles, clothes and electronics, the entire sector is viewed as the district driver, significantly impacting other sectors of the economy. Thus the importance of the manufacturing sector cannot be overstated.

34 Manufacturing and government have a forward and backward relationship.

5.3 Government Contribution to the Economy

5.3.1 Govt Spending and Fixed Investment

The government sector of uThukela DM contributes 13 percent to GVA in the form of government activities such as capital expenditure and employment. Thus government it is one of the largest contributors to the local economy (Quantec Research (Pty) Ltd, 2012).

Government further contributes to GVA through Community, social and personal services which accounts for 6 percent of GVA. This is because Community, Social and Personal Services is make up of educational, health services provision and other services (Quantec Research (Pty) Ltd, 2012).

Spending from government can have short term and long term effects. Short term effects such as the provision of subsidies and grants support a segment of the economy allowing for immediate consumption and stimulus in the economy. Capital expenditure on the other hand creates infrastructure that will support the long term growth to the economy. Thus input from the government in crucial for the stimulus and growth to the local economy.

5.3.2 Institutional Structures uThukela DM has been identified by COGTA as a municipality that is facing serious challenges that are affecting performance. These challenges include but are not limited to:

Political instability; Poor financial management; Serious service delivery challenges; Serious challenges in the political and administrative interface; Lack of effective leadership; and Skills shortages (Department of Cooperative Government and Traditional Affairs, 2011).

The table below presents the audit finding for all municipalities in uThukela DM for the 2010- 2012 period. Four LMs received unqualified reports, only Umtshezi received an unqualified report with no findings. uThukela District however received a qualified report and Indaka LM received a disclaimer. While there has been improvement from a local municipality level, the audit report for uThukela DM stated there is room for much improvement.

Table 17: Audit outcomes of uThukela DM and the local municipalities for 2010-2011

Local Municipality Audit Option

uThukela DM Qualified Financially unqualified with Emnambithi-Ladysmith LM findings Financially unqualified with Imbabazane LM findings Indaka LM Disclaimer

35 Local Municipality Audit Option

Financially unqualified with Okhahlamba LM findings Financially unqualified with no Umtshezi LM findings

5.3.3 Maladministration Indicators

Employment in government positions is challenge for uThukela DM and its local municipalities. In Indaka Local Municipality alone there are eight municipal officials who are currently suspended. These include the Municipal Manager, the Chief Finance Officer, HR officer and IDP PMS Officer (Indaka Local Municipality, 2012).

In order for a municipality to function properly, it must have a strong structure. To perform efficiently officials cannot be suspended, officials employed must have the required skills to be in managerial positions, there needs to be no political interference in appointments and officials need to be trustworthy.

6 SWOT ANALYSIS

6.1 Strengths

World Heritage Site – attract host of international and national tourism opportunities.

Good soils for agriculture.

N2 and N11 pass through the heart of the District directly linking uThukela DM to Johannesburg and Durban.

Rate of urbanisation is high.

The presence of traditional authorities facilitates community support of developmental activity

N3 and N11 connecting uThukela DM to Johannesburg and Durban

Comparative advantage of the district in textiles & clothing as electronics

Vast amounts of land available for development

Recognition of potential level 2,4, 5 and 6 corridors in PSEDS

6.2 Opportunities

The tourism potential in the district is high.

Ukahlamba-Drakensburg World Heritage Site for tourism

Large pool of youth which can contribute to the development of uThukela DM

Creation and improvement of better transport linkages

36 Ability for the district to grow its textile and clothing sector

6.3 Weaknesses

Education levels are low

Migration out of uThukela is centred around economic and employment opportunities.

Uneven economic development in municipality – very geographically based

Need for more economic activity to stimulate growth

73 percent of population are below the age of 35, thus the economic is highly youth dependent.

65.7 percent of the district population are poor (Department Strategic Planning and Economic Development, 2012)

Some local municipalities have no urban centres or main economic nodes, hence all expenditure occurs outside these LMs.

Low revenue collection

Poor service delivery across the municipality

6.4 Threats

Population growth and life expectancy rates in the DM is low

Large over 60 percent of persons living in poverty

Low levels of education and low skill level inhibit opportunities for locals to access jobs

Lack of infrastructure and urban centres result in incomes being generated and spent outside of uThukela DM

High number of youth results in a youth dependent generation, which may result in poorer school attendance

Political interference affecting services delivery, infrastructure development and general municipal performance

Lack of effective leadership at local government

Dependence on income grants

Lack of financial resources and financial security

7 MANAGEMENT PRIORITIES Improve quality of leadership and effective governance at local municipal level

Implement effective strategies for inter and intra governmental relationships

37 Remove political influence which affects performance

The implementation of revenue collecting projects

Need for MOAs to be signed with the Ingonyama Trust Board to develop the land

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