O.R TAMBO DISTRICT MUNICIPALITY THE DISTRICT DEVELOPMENT MODEL KNOWLEDGE EXCHANGE AND PEER LEARNING SESSION FOR METRO/DISTRICT MUNICIPALITIES REFLECTIONS AND INPUTS 10 December 2020 2 Outline • Background and context • Strategic Objectives of the District Development Model • Situational Analysis • Alignment of DDM to IDP/Budget Process Plan • Progress • DDM Roadmap • Challenges & Risks 2 PURPOSE 3 • To share the concept of the District Development Model • To reflect on the progress made to date in the implementation • Share the institutional arrangement of the model Background & Context 4 • OR Tambo District Municipality (ORTDM) was identified as one of the pilot sites for the implementation of the District Development Model (DDM). • The DDM was launched by the President in Lusikisiki, Ingquza Hill Local Municipality on the 17th of September2019. • The DDM is based on establishing District Hubs that embody One Plan of government to express the short term, medium term and long-term development objectives of national, provincial and local government in the geographic boundaries of the District. • The One Plan will be strategic in nature expressing the commonly agreed diagnostics, strategies and actions which will be broken down to annual operation plans and five to ten-year implementation plans so as to enhance service delivery and development in the district’s area of jurisdiction. 5 Strategic Objectives of the DDM • The DDM is premised on institutionalizing a programmatic approach to Intergovernmental Relations, which enables: – Improving integrated planning across government through the formulation and implementation of One Plan or Joined-Up Plans for each of the 44 District and 8 Metropolitan geographic spaces or (52 IGR Impact Zones). – Streamlined and effective Local Government and/or authority’s capacity building by consolidating and strategically coordinating capacity building initiatives and programmes at district level. – Municipalities and authorities to perform their mandated functions and duties effectively and efficiently by mobilizing and making available expertise, key skilled personnel and systems that can be shared between district as well as local municipalities and authorities as needed. – Monitoring of the effectiveness of government and the spatial and developmental impact on communities in the 52 IGR Impact Zones. Situational Analysis: Overview • Provides a succinct synthesis of the status quo as regards development in the region • Key statistics in terms of demographic profiling, human development and economic performance are presented • Allows comparison of the district to the relevant provincial as well as national averages • Also provides an economic potential assessment, discussed as per all the SIC sectors in the district. • The purpose of this situation analysis is to provide an informational basis that informs planning 6 O. R Tambo District Profile • At just over 1 457 384 people, the district has the largest population of all the districts in the Eastern Cape province, and is also the most densely populated region at 120 people/km2 • Between 2001 and 2011, the district’s population grew at an average annual rate of 0.5%, which is above the provincial average of 0.4% • The economically active age groups of 15-64 years account for 55% of the total population, with the remaining 45% made up of those below 15 and above 64 (Dependency rate) 7 ECONOMY The economic state of O. R. Tambo District Municipality is put in perspective by comparing it on a spatial level with its neighbouring district municipalities, Eastern Cape Province and South Africa. The section will also allude to the economic composition and contribution of the local municipalities within O.R.Tambo District Municipality. The O. R Tambo District is predominantly rural based economy with 93% of the population dwelling in rural areas and as such the effects of any shocks in the economy are likely to be felt in the rural areas even more. The COVID-19 induced countrywide lockdown has exposed some faults and gaps within the economy. The retail sector has been affected most in the O. R Tambo District and exposed the unsustainable nature and structure of the sector. 1/9/2021 8 ECONOMY The problems faced by the retail and trade Sector and especially the ones in the O. R Tambo region also offer opportunity for business. The advent of COVID-19 has exposed the need to strengthen the retail sector, change approaches, re- establish other supply chain and logistical avenues. COVID-19 has exposed the unsustainable supply and distribution of food related goods to most spazas, informal traders, and even food parcels procurement and distribution. The few available distribution is owned by large corporations and non South Africans locking out the local businesses. There is a need to change that structural dynamics and introduce local businesses to claim a stake into the retail, food and distribution sector. The informal trade sector (Hawkers, Spazzas & waste harvestors) was also the hardest hit by the pandemic as such realising a critical need for strategic economic recovery and turnaround of the entire economy 1/9/2021 9 O. R Tambo District Profile • 41% of the district population is unemployed. • 15% employed in highly skilled positions, 36% in skilled positions and the remainder in unskilled positions Indicator ORTDM EC SA Population with Matric or higher 12% 18% 28% Not economically active 36% 32% 26% Labour force participation 33% 47% 60% Unemployment rate 41% 33% 27% 10 O. R Tambo District Profile • Distribution of household earnings R 204801 or more 0.1% R 102401 - R 204800 0.1% R 51201 - R 102400 0% R 25601 - R 51200 2% R 12801 - R 25600 3% R 6401 - R 12800 5% R 3201 - R 6400 8% R 1601 - R 3200 21% R 801 - R 1600 24% R 401 - R 800 14% R 1 - R 400 7% No income 16% 11 0% 5% 10% 15% 20% 25% 30% INDEX OF BUYING POWER - O.R.TAMBO, EASTERN CAPE AND NATIONAL O.R.Tambo Eastern Cape National Total Population 1,495,999 7,222,764 58,125,712 Population - share of national total 2.6% 12.4% 100.0% Income 34,311 291,870 3,420,872 Income - share of national total 1.0% 8.5% 100.0% Retail 12,413,520 89,503,454 1,056,444,000 Retail - share of national total 1.2% 8.5% 100.0% Index 0.01 0.09 1.00 O.R.Tambo District Municipality has a 2.6% share of the national population, 1.0% share of the total national income and a 1.2% share in the total national retail, this all equates to an IBP index value of 0.012 relative to South Africa as a whole. Eastern Cape has an IBP of 0.089. , were South Africa has and IBP index value of 1 relative to South Africa as a whole. The considerable low index of buying power of the O.R.Tambo District Municipality suggests that the district municipality has access to only a small percentage of the goods and services available in all of the Eastern Cape Province. Its residents are most likely spending some of their income in neighbouring areas. 1/9/2021 12 Number and percentage of people in poverty O.R.Tambo, 2008-2018 1,250,000 86% 84% 1,200,000 82% 1,150,000 80% 1,100,000 78% 76% 1,050,000 74% 1,000,000 72% 950,000 70% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Number of people in poverty Percentage of people in poverty Source: IHS Markit Regional eXplorer version 1803 In 2018, there were 1.21 million people living in poverty, using the upper poverty line definition, across O.R.Tambo District Municipality - this is 5.97% higher than the 1.14 million in 2008. The percentage of people living in poverty has decreased from 84.37% in 2008 to 80.95% in 2018, which indicates a decrease of 3.42 percentage points. 1/9/2021 13 Percentage of people living in poverty O.R.Tambo District Municipality, 2018 100.0% 90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Ingquza Hill Port St Johns Nyandeni Mhlontlo King Sabata Dalindyebo Source: IHS Markit Regional eXplorer version 1803 In terms of the percentage of people living in poverty for each of the regions within the O.R.Tambo District Municipality, Port St Johns Local Municipality has the highest percentage of people living in poverty, using the upper poverty line definition, with a total of 87.0%. The lowest percentage of people living in poverty can be observed in the King Sabata Dalindyebo Local Municipality with a total of 72.3% living in poverty, using the upper poverty line definition. 1/9/2021 14 Gini coefficient O.R.Tambo, Eastern Cape and National Total, 2008-2018 0.66 0.64 0.62 0.60 0.58 0.56 0.54 0.52 0.50 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 O.R.Tambo Eastern Cape National Total Source: IHS Markit Regional eXplorer version 1803 In 2018, the Gini coefficient in O.R.Tambo District Municipality was at 0.557, which reflects a marginal decrease in the number over the ten-year period from 2008 to 2018. The Eastern Cape Province and South Africa, both had a more unequal spread of income amongst their residents (at 0.623 and 0.629 respectively) when compared to O.R.Tambo District Municipality. 1/9/2021 15 Gini coefficient O.R.Tambo District Municipality, 2018 0.6 0.6 0.6 0.5 0.5 0.5 0.5 0.5 Ingquza Hill Port St Johns Nyandeni Mhlontlo King Sabata Dalindyebo Source: IHS Markit Regional eXplorer version 1803 In terms of the Gini coefficient for each of the regions within the O.R.Tambo District Municipality, King Sabata Dalindyebo Local Municipality has the highest Gini coefficient, with an index value of 0.589.