CHAPTER FOUR: LED IN SOUTH AFRICA
CHAPTER 7: LOCAL ECONOMIC DEVELOPMENT STRATEGIES IN KWAMASHU
7.1 BACKGROUND TO THE URBAN RENEWAL PROGRAM AND INK ABM
The Urban Renewal Program (URP) is a presidential program introduce by the then State President Thabo Mbeki in year 2001 to address underdevelopment in the most severely impoverished rural and urban areas (―poverty nodes‖) in South Africa. The Urban Renewal is implemented by the Department of Provincial and Local Government (DPLG). Inanda Ntuzuma and KwaMashu known as INK were a identified amongst the urban poverty nodes by the URP. The INK areas have the dual status of being a presidential poverty node within the national Urban Renewal Programme (URP), as well as being one of five Area Based Management (ABM) Learning Areas within the eThekwini Municipality (DPLG and Business Trust 2007). The current practice by the eThekwini Municipality is to manage INK as one administrative unit. There is an INK office in KwaMashu which is responsible for the development of the entire are. The INK office administers both the Urban Renewal Programme (URP) and the Area Based Management (ABM) Programme (DPLG and Business Trust 2007).
The INK Office coordinates the planning, budgeting and implementation of LED projects in INK (DPLG 2007). The INK office manages development efforts by integrating development efforts by
various stakeholders so that development is not compartmentalized as was the case under the apartheid regime (Interview Program Manager INK ABM 2008). In trying to speed up development efforts INK office in 2007 established an office in KwaMashu in response to criticisms that it was not close to the people since it was located in Durban‘s CBD. It is hoped that this relocation to KwaMashu is not too late for the achievement of the programs goals. The INK receives funding from the European Union which supplies 15% of the overall budget with the rest coming from the eThekwini municipality and the national government. This funding is deemed to end in 2008 thus its future remains uncertain (Business Trust and DPLG 2007). This uncertainty is likely to impact negatively on the implementation of the program in KwaMashu meaning the fight against poverty maybe lost.
The INK ABM/URP was established to turn the tide against poverty in INK (see table below). From the table it is clear that there is high incidence of poverty in INK with over 75 % of the households falling below the household subsistence level of R 19,200 per annum meaning there is high income poverty.
Table12: Poverty Profile INK
Source: DPLG 2007
3 HSL = Household Subsistence Level and is equal to R19,200 per annum (R1,600 per month)
4 Based on households that do not use electricity as a source for lighting
5 Defined as not having piped water within a distance of 200m of dwelling (govt. policy on minimum basic human need);
6 All adults aged 20+ with no schooling at secondary level or above (Statistics SA indicator of educational deprivation)
INK (%) National
Average (%)
Difference with National Average (%)
Poverty Incidence(% of
households below HSL3) 75.2 65.0 9.9
Employment rate 27.4 33.7 6.3
Households without access
to electricity4 26.1 30.3 4.2
Households without basic
access to Water5 30.3 27.9 2.4
Access to Education 36.0 40.0 4.0
% of adults with low or no
education6 36.1 40.3 4.3
The high income poverty may be attributable to the high unemployment rate coupled with the high percentage of adults with no education. It is because of the above poverty statistics that the government together with the eThekwini municipality engaged in the INK URP/ABM so as to turn the tide against poverty in KwaMashu. However it can be argued that INK is an area which has medium developed infrastructure with 74% and 70% with access to electricity and water respectively. However significant proportions are without these services.
The INK URP/ABM has four key impact areas to address poverty namely; infrastructure investment impact area; living environments impact area; integrated governance impact area and the income enhancement impact area which is the focus of this research (see table 13). From the table it is clear that the URP/INK ABM is a means of integrating development efforts within KwaMashu. It is a means of creating complementary development efforts which reinforce each other, out of a realization that poverty is multi-faceted and needs various complementary poverty alleviation strategies.
This study focused on assessments of the income and infrastructure impact areas, mainly its impact on SME entrepreneurs and to a lesser extent the households in KwaMashu. The study assessed whether infrastructure investment impact area‘s achieved its desired outcome is of coordinating infrastructure delivery (especially via spatial planning and urban design) in the INK The assessments is mainly based on KwaMashu Township Center (KMTC) redevelopment which is an anchor project for the INK ABM. Assessment is made on how the anchor project has impacted on the business operation of entrepreneurs at KMTC which is the economic hub of INK.
The income enhancement area brings to the fore economic growth, poverty alleviation and development. The study assesses how SME‘s have grown in terms of assets, market share, employment, human capabilities and income as a result of SME support provide by the INK ABM. It is argued that promoting SME‘s is key to poverty alleviation given the high levels of income poverty within KwaMashu (World Bank 2000). Thus eThekwini municipality together with the INK URP/ABM have put in place a deliberate policy to support SME‘s which is illustrated below.
Table 13: SUMMARY OF URBAN RENEWAL PROGRAM/INK ABM PROGRAM
Source DPLG and Business Trust 2007
Purpose of INK project Objectives Outcomes Partners in INK What Guides the INK program Integrate government at
all levels (horizontal and vertical alignment).
Eradicate poverty and underdevelopment
Integrated
Governance Impact Area
National and Provincial Government Departments
Joint Government Business Plan on INK; National Legislation and Policies
Promote collaboration between INK management and National, Provincial and Municipal Line Departments
Building socially cohesive communities
Living Environments Impact Area
INK Community Based organisations (CBO‘s), NGO‘s, Non profit Organisations(NPO‘s), and residents.
5 year Development Plan; National Legislation and Policies
Bring to the fore the issue of co-operative governance
Ensuring equity, building
capacity to deliver Income Enhancement
Impact Area Line Departments at
Local Government level. Integrated Development Plan and City Priorities ;National Legislation and Policies
Create synergies and partnerships aimed at improving the lives of INK residents
Ensure integration of resources across the three spheres target at poverty pockets.
Infrastructure Investment Impact Area
European Union Kwa-Zulu Natal Provincial Growth and Development Strategy ;National Legislation and Policies
From the table 12 it is clear that there is the INK ABM is in line with national and provincial policies.
Polices stem from the national government and are implemented at provincial level up to the local government level. Likewise the INK ABM is implemented in KwaMashu and is informed by the national, provincial and Durban‘s city policies. The city of Durban has a policy with regards SME‘s so that their potential is realised.