SERVICE DELIVERY PERFORMANCE (PERFORMANCE REPORT – PART I)
3.11 LOCAL ECONOMIC DEVELOPMENT
Employee Stats (Outstanding)
Financial Performance (Outstanding) Capital (Outstanding)
COMMENTS ON PERFORMANCE OF PHYSICAL PLANNING OVERALL:
Outstanding
The NMBM has developed strategies in which these challenges can be addressed and a special focus has been put on:
• Further diversification of the economy.
• Down-stream and cross-stream diversification within the manufacturing sector.
• Development of new growth industries.
• Diversification of markets for manufactured products and services.
• Investment in the intellectual capital, creativity and technical capabilities of the labour force through skills development.
• Innovation support through research and development.
• Public and private sector investment to accelerate the production of all economic sectors.
• An aggressive market development programme for regional production.
NMBM has also a number of Mega projects that are part of Vision 2020 which when implemented will with a doubt change the economic landscape of the region. The projects include but not limited to the following; Njoli Square Development, Madiba Bay Development, Embizweni Development, Waterfront Development, Baywest Development, ICC Development, Freedom Statue Development, Project Mthombo etc.
There are some challenges that are being addressed in some projects and once resolved, the economic potential of the region will be unlocked and the economy of the region will develop and grow significantly and thus make a huge impact in job creation and poverty alleviation.
The strategic framework as per the NMBM LED Strategy identifies an economic development vision with goals which is reflected in the figure below. The economic development vision of the Municipality is: “Nelson Mandela Bay is an innovation hub for sustainable production and consumption”.
The below figures indicate the economic value and jobs created in the local economy in the year 2014/15:
New Economic Activity by Sector
R '000
Sector Year -2 2016/2017 Year 0 2014/2015 Year 0 2014/2015
Apen Pharmecutical Company - 1,800,000,000.00 - La Mohair - 1,242,375.00 - Scan Display - 1,306,240.00 - Sage Kitchen - 318,282.00 - Small Business Incubation - 3,500,000.00 - Total - 1,806,366,897.00 -
T 3.11.2
Please Note: The investment value of R1.8billion is in terms of infrastructure and building development.
The other areas refer to new export contracts facilitated.
New Economic Employment by Sector
Jobs
Sector Year 1 2015/2016 Year 0 2014/2015 Year 0 2014/2015
No. No. No.
Aspen Pharmacutical Company - 497 497
Total 0 497 497
T 3.11.3
EPWP
In terms of the Protocol Agreement signed between the Nelson Mandela Bay Municipality and the National Department of Public Works, a target of 10 211 jobs was set to be created during the 2014/15 financial year within the government, community and social services sector.
Job creation through EPWP* projects
Details EPWP Projects Jobs created through EPWP projects
Number Number
Year -2 86
2,166 (FTEs) 8,637 (WOs)
Year -1 67
2,746 (FTEs) 11,886 (WOs) Year 0
(2014/15) 84
1,595 (FTEs) 11,822 (WOs)
* Expanded Public Works Programme T 3.11.6
KEY PERFORMANCE AREA AND KEY PERFORMANCE ELEMENT
KEY PERFORMANCE INDICATOR (Online Service Targets)
Year -1 TARGET 2013/14
Year -1 ACTUAL 2013/14
Year 0 TARGET
2014/15
Year 0 ACTUAL
2014/15
Year 1 TARGET
2015/16
KPA: Local
Economic Development
KPE: Poverty Eradication
Number of emerging businesses trained on entrepreneurship: SMMEs
N/A N/A N/A N/A N/A
Number of emerging businesses trained in entrepreneurship
500
Entrepreneurs
541 N/A N/A N/A
KEY PERFORMANCE AREA AND KEY PERFORMANCE ELEMENT
KEY PERFORMANCE INDICATOR (Online Service Targets)
Year -1 TARGET
2013/14
Year -1 ACTUAL 2013/14
Year 0 TARGET
2014/15
Year 0 ACTUAL
2014/15
Year 1 TARGET
2015/16 KPA: Local Economic
Development
KPE: Economic
Growth and
Development
Value of new investment/
expansions attracted to the Nelson Mandela Bay
R100 million by June 2014
R297 050 000 invested
R100 million by June 2015
Target Not Met (Draft Investment Incentive
Agreement between Aspen and NMBM in place)
R100 million by 2016
Number of SMMEs trained and registered in exporting
35 By June 2014 2 N / A N / A N/A
Value of new export contracts concluded for businesses within Nelson Mandela Bay
R1 500 000.00 R2 100 000.00 R1,5 million by June 2015
R2 866 896.30 R1,5 million by June 2016
PERFORMANCE
ELEMENT Service Targets) 2013/14 2013/14
2014/15 2014/15 2015/16
KPA: Local
Economic Development
KPE: Poverty Eradication
KPA: Local
Economic
Number of emerging businesses supported through either training or financial or technical support in entrepreneurship development
N / A N / A N / A N / A 500
entrepreneurs
Number of entrepreneurial cooperatives formed
10 Cooperatives 0 N / A N / A N / A
Number of emerging businesses trained in entrepreneurship: Auto SMMEs
N / A N / A N / A N / A N / A
Number of emerging businesses trained on entrepreneurship: Informal Traders
100 informal traders
350 N / A N / A N / A
Number of emerging businesses trained on entrepreneurship: Tourism SMMEs
100 74 N / A N / A N / A
Number of SMMEs provided with startup equipment:
General
5 SMMEs 8 5 General 6 N / A
Number of SMMEs provided with start-up equipment:
Auto SMMEs
3 Auto SMMEs 8 3 Auto 7 N / A
Number of SMMEs provided with start-up equipment:
8 Informal Traders
8 6 Informal
Traders
12 N / A
AREA AND KEY PERFORMANCE ELEMENT
INDICATOR (Online Service Targets)
Year -1 TARGET 2013/14
Year -1 ACTUAL
2013/14 TARGET 2014/15
ACTUAL 2014/15
TARGET 2015/16 Development
KPE: Poverty Eradication
Informal Traders
Number of SMMEs provided with start-up equipment:
Cooperatives
8 Cooperatives 19 5 Cooperatives 9 N / A
Number of SMMEs in business incubator programme
N/A N/A N/A N/A N/A
Number of SMMEs
supported in terms of the NMBM-SEDA Information Communication and Technology (ICT) incubation programme
20 per quarter 27 per quarter 20 70 N / A
Number of SMMEs
supported in terms of the NMBM-SEDA Construction Independent Development Board (CIDB) incubation programme
20 per quarter 33 SMME's Supported
20 107 N / A
Number of emerging farmers supported with either infrastructure, equipment or raw materials
15 22 15 34 20
PERFORMANCE
ELEMENT Service Targets) 2013/14 2013/14
2014/15 2014/15 2015/16
Number of food gardens
supported with
infrastructure, equipment and raw materials
15 59 15 54 N / A
KEY PERFORMANCE AREA AND KEY PERFORMANCE ELEMENT
KEY PERFORMANCE INDICATOR (Online Service Targets)
Year -1 TARGET
2013/14
Year -1 ACTUAL
2013/14
Year 0 TARGET
2014/15
Year 0 ACTUAL
2014/15
Year 1 TARGET
2015/16 KPA: Local Economic
Development
KPE: Broad-based Economic
Empowerment (BEE)
% tenders awarded in adherence to the broad- based empowerment targets, both in terms of number and value: (a) Previously disadvantaged
50% 49.30% N / A N / A N / A
% tenders awarded in adherence to the broad- based empowerment targets, both in terms of number and value: (b) Women and youth
10% 16.23% N / A N / A N / A
% tenders awarded in adherence to the broad- based empowerment targets, both in terms of number and value: (c) People with disabilities
2% 0.37% N / A N / A N / A
KEY PERFORMANCE AREA AND KEY PERFORMANCE ELEMENT
KEY PERFORMANCE INDICATOR (Online Service Targets)
Year -1 TARGET 2013/14
Year -1 ACTUAL 2013/14
Year 0 TARGET
2014/15
Year 0 ACTUAL
2014/15
Year 1 TARGET
2015/16 KPA: Local Economic
Development
KPE: Job creation and Expanded Public Work Programme (EPWP)
Number of learners on Infrastructure Learnership Programme
N/A N/A N/A N/A N/A
Number of Full Time Equivalent (FTE) jobs created
3022 2206 1756 1595 3596
Number of Work Opportunities (WO) created
8406 6913 10211 11822 11586
Financial Performance Year 0: Local Economic Development Services
R'000
Details
Year -1
2013/2014 Year 0 2014/2015
Actual Original Budget
Adjustment Budget
Actual Variance to Budget Total Operational Revenue
269,295,085.00
133,882,650.00
128,640,270.00
143,084,741.00 6%
Expenditure:
Employees
21,816,329.71
25,695,150.00
25,456,800.00
27,761,575.00 7%
Repairs and Maintenance
2,305,678.76
2,183,980.00
2,131,530.00
2,061,043.00 -6%
Other
20,166,121.62
131,673,760.00
130,099,380.00
116,558,688.00 -13%
Total Operational Expenditure
44,288,130.09
159,552,890.00
157,687,710.00
146,381,306.00 -9%
Net Operational Expenditure
(225,006,954.91)
25,670,240.00
29,047,440.00
3,296,565.00 -679%
Net expenditure to be consistent with summary T 5.1.2 in Chapter 5. Variances are calculated by dividing the difference
between the Actual and Original Budget by the Actual. T 3.11.9
Job Level
Year -1 2013/2014 Year 0 2014/2015
Employees Posts Employees Vacancies (fulltime
equivalents)
Vacancies (as a % of total posts)
No. No. No. No. %
0 – 3 10 12 12 2 17%
4 – 6 17 17 17 0 0%
7 – 9 16 7 7 9 129%
10 – 12 5 5 5 0 0%
13 – 15 6 4 4 2 50%
16 – 18 4 4 4 0 0%
19 – 20 2 2 2 0 0%
Total 60 51 51 13 25%
T 3.11.8
Capital Expenditure Year 0: Economic Development Services
R' 000
Capital Projects
Year 0 - 2014/2014 Budget Adjustment
Budget
Actual Expenditure
Variance from original
budget
Total Project Value
Total All
14,079,420
14,079,420
10,994,888 -28%
Fountain Road Redevelopment 9,079,420
9,079,420
7,169,548 -27% 9,079,420
Rehabilitation of the Market Building Infrastructure
5,000,000
5,000,000
3,825,340 -31% 5,000,000
Total project value represents the estimated cost of the project on approval by council (including
past and future expenditure as appropriate. T 3.11.10
COMMENT ON LOCAL ECONOMIC DEVELOPMENT PERFORMANCE OVERALL:
The Nelson Mandela Bay is the pillar of the Eastern Cape provincial economy. A number of initiatives to help grow the regional economy have been implemented.
These include significant investments made in the region through the Nelson Mandela Bay Municipality and the Coega Development Corporation. The total value of investments attracted by CDC is R1. 308,750,000 which created a total of 38 684 jobs (direct and indirect jobs). The NMBM through its direct investment promotion initiatives has attracted investments to the value of 2.716bn which created 1 815 jobs (direct and indirect).
The South African Government adopted a National Infrastructure Plan in 2012. The plan aim to transform the economic landscape while simultaneously creating significant numbers of new jobs, and strengthen the delivery of basic services. The plan also supports the integration of African economies. The Nelson Mandela Bay region stand to benefit out of this plan through (Strategic Intergrated Projects) SIP 3 which aims at the following;
• strengthening of economic development in Port Elizabeth through a manganese rail capacity from Northern Cape.
• A manganese sinter (Northern Cape) and smelter (Eastern Cape).
• Possible Mthombo refinery (Coega) and transshipment hub at Ngqura and port and rail upgrades to improve industrial capacity and performance of the automotive sector.
Whilst the NMBM is undoubtedly an important node of activity within the economy of the Eastern Cape, it is characterised by several challenges in terms of economic development, these include:
• High unemployment and dependency ratios (Unemployment rate 36,3% vs 28,8% national average)
• Due to the economic downturn, the region has experienced slow growth
• Declining competitiveness; the cost of utilities such as water and electricity has risen up and this has a negative impact on the competitiveness of the region as an investment destination.
• Declining confidence; due to some governance related issues there is a declining confidence into the region particularily by business and investors.
• Economically underperforming against other Metros; the economy is below national average growth (3% vs 3,5%)
• The NMB’s infrastructure is ageing and there is inadequate investment in the maintenance and upgrading of infrastructure; this puts more pressure on economic infrastructural demands and poses a negative impact on investment attraction and business retention.
• The region is faced with massive future investment needs with high resource shortfalls.
• Dependancy on the Auto Sector
The NMBM has developed strategies in which these challenges can be addressed and a special focus has been put on;
• Further diversification of the economy.
• Down-stream and cross-stream diversification within the manufacturing sector.
• Development of new growth industries.
• Diversification of markets for manufactured products and services.
• Investment in the intellectual capital, creativity and technical capabilities of the labour force through skills development.
• Innovation support through research and development.
• Public and private sector investment to accelerate the production of all economic sectors.
• An aggressive market development programme for regional production.
NMBM also has a number of Mega projects that are part of Vision 2020 which when implemented will with a doubt change the economic landscape of the region. The projects include but not limited to the following; Njoli Square Development, Madiba Bay Development, Embizweni Development, Waterfront Development, Baywest Development, ICC Development, Freedom Statue Development, Project Mthombo etc.
There are some challenges that are being addressed in some projects and once resolved, the economic potential of the region will be unlocked and the economy of the region will develop and grow significantly and thus make a huge impact in job creation and poverty alleviation.
The strategic framework as per the NMBM LED Strategy identifies an economic development vision with goals which is reflected in the figure below. The economic development vision of the Municipality is: “Nelson Mandela Bay is an innovation hub for sustainable production and consumption
COMPONENT D: COMMUNITY AND SOCIAL SERVICES
3.12 HERITAGE, LIBRARIES, ARCHIVES, MUSEUMS, GALLERIES, COMMUNITY