147
5.5 Objective 2: Determine how the implementation and sustainability of pro-
148 stakeholders including the municipality have put in place measures to assist SMMEs to benefit from IDZ activities. Furthermore, the participants indicated that the uMhlathuze Municipality has identified key projects through the established Industrial Development Zone (RBIDZ) to fuel those drivers which have been proposed for the identified land in the spatial development framework (SDF). The following are key projects that are being implemented by RBIDZ:
Manufacturing of plastic piping for bulk water transportation
Paint manufacturing
Machinery and equipment assembly and repackaging
Manufacturing of solar water heater geysers
Manufacturing of energy storage and micro grid systems
Cement blending and production facility
Establishment of caustic soda/ chorine chemical production plant
Manufacturing of stainless steel cookware
Manufacturing of products that use nano-precipitated calcium carbonate
Manufacturing of tomato paste
Manufacturing of agricultural supplements
Manufacturing of titanium dioxide pigment
Pulp manufacturing
Generation of 60 megawatts green electricity
Establishment of a metallurgical coke production facility
Aluminium beneficiation
Manufacturing of welding electrodes
The uMhlathuze local municipality is economically stable because of industries, and the harbour and is flourishing in comparison with other cities within the province (KwaZulu–
Natal). Moreover, participants mentioned that as much as there have been numerous industrial developments that have taken place in Richards Bay, only a few citizens have benefited and the unemployment rate remains high including the unemployment rate for graduates. There is a very real need to enhance and support the local economy of the district through different activities including agriculture as an important activity and small business development, to reduce poverty and empower people with skills.
149 The uMhlathuze local municipality is focusing more on pure economic development in respect of building sustainable entities owned by the youth whether in farming or construction, and making them sustainable. “Youth is our main focus because we believe that young people are the future of this country hence they deserve more opportunities and they are in the majority in uMhlathuze and South Africa at large, and section 217 of the Constitution provides protection for those who were discriminated against, which include women, the youth and the disabled”. In construction incubators the municipality is partnering with SEDA and CIDB this is a work in progress. The municipality in their strategic plans prioritised nine (9) key sectors listed below:
Manufacturing
Mining and mineral processing
Agriculture and Agri-processing
Tourism
Maritime
Blue economy
Revitalisation of the townships (Township economy)
Wholesale, retail, trade and services
ICT and innovation
It was further explained by the participants that in each of these key sectors, a detailed implementation plan has been developed highlighting key projects/ interventions. In addition to the industry-specific interventions, the strategic roadmap has identified priority projects/ interventions that are sector-wide as well. Some of these include the development of a one-stop shop for business development, creating a local business finance fund, and a green economy. In the KCDM most of the area is available for development with more than 55 percent of the land having high to good potential.
Participants indicated that within the KCDM there is the District Growth and Development Plan (DGDP) and agricultural production has been set as the main priority for development within the district.
However, there are various constraints in most of the proposed expansion areas, mainly relating to conflict between the expansion areas and areas of high agricultural potential, as identified by the Department of Agriculture, conflict between the expansion areas and
“Mineral Rights” as identified by the Department of Mineral Resources, and availability
150 of bulk engineering services has not yet been assessed, as areas owned by the Ingonyama Trust have been excluded as possible expansion areas. The Council is not the land owner and does not have control over the decision-making processes, a number of the proposed expansion areas are subject to long term leases in favour of, amongst others, forestry interest groups and some identified expansion areas are not geo-technically suitable for the proposed projects.
The uMhlathuze municipality has planned to grow employment in line with the National Development Plan (NDP). The key economic drivers identified to achieve this target as well as economic growth are;
Substantial public investments in infrastructure both to create jobs in construction, operations and maintenance as well as production input and indirectly by creating efficiency across the economy.
Targeting more labour-absorbing activities across the main economic sectors:
agriculture and mining value chains, manufacturing and services.
Exploring the knowledge and green economy (new economies).
Leveraging social capital in the social economy and the public service.
Fostering rural development and regional integration (Spatial Development).
Furthermore, participants indicated that it is similarly imperative that education and wellbeing matters be discussed in order to provide a pool of abilities for both future self- employment and the necessary skills required to enhance local economic activities.
Participants again further alluded to RBIDZ by indicating that the RBIDZ report shows that some of the above-mentioned projects are already committed (signed) and ready to start while others have been approved in terms of feasibility and implementation.
Additionally, strategic prioritized projects of the Richards Bay port are critical for economic growth and transformation of the local economy. Many of these projects have been prioritized in Operation Phakisa, which is a national priority to unpack the potential of the sea economy for South Africa. Some of the key projects relating to Richards Bay include:
Ship and rig repairs
Establishing a liquid natural gas cluster
Enhanced container handling capacity
Improving the cruise terminal facility and
151
Development of the waterfront.
One of the participants alluded to the Spatial Development Framework (SDF) by stating that the long-term vision of the uMhlathuze local municipality is:
“The Port City of uMhlathuze offering improved quality of life for all its citizens through sustainable development.”
In support of the above municipality-wide (IDP) vision, the uMhlathuze local municipal Spatial Development Framework Vision is:
“Progressive and sustained socio-economic transformation poised for equal distribution of opportunities to all citizens.”
In line with basic service delivery, infrastructure provision and Local Economic Development key performance areas, the following was noted:
Promote socio-economic balance and improve quality of life for all citizens through sustainable development;
Provide guidance for spatial distribution of desirable land development and promote densification;
Promote spatial justice and an efficient land use management system.
Participants further mentioned that the uMhlathuze local municipality is the heart of industrial development and investment, and it must therefore position itself as a strategic driver and supporter of economic development initiatives for the benefit of local enterprises, job seekers, aspirant entrepreneurs and the local economy.To ensure that economic development within the city is achieved, the LED strategic plan is in line with the Richards Bay Industrial Development Zone master plan, the Port Expansion Plan etc.
on how these strategic investments could promote balance and shared growth, and innovative governance systems in order to drive the economy of the City to greater heights.
The uMfolozi local municipality is different from the uMhlathuze local municipality in that it is mostly surrounded by rural communities and there are no industries like in Richards Bay. Participants indicated that uMfolozi’s economy is generally vulnerable.
Excessive dependence on the manufacturing sector poses a major risk to the municipal economy. Participants indicated that one of the reasons for the vulnerability of the
152 economy relates to the underdeveloped food security sub-sector within the broader agricultural sector, which still relies on climate conditions. What this means is that skills are concentrated in the mainstay sector - manufacturing - and under the current economic trajectory unemployment and poverty reduction relies heavily on the expansion of the manufacturing sector. Furthermore, participants indicated that the vision of the municipality is to:
“Improve the quality of life of all people of the uMfolozi municipality by creating an economically viable and sustainable development.” And the proposed LED vision is “to
achieve a high standard of living, a highly skilled population and a highly diversified green economy”. The proposed LED mission is “to promote employment and job creation through facilitating the design and implementation of high labour impact and
environmentally conserving economic initiatives”.
Affordability, socio-economic development, efficient resources utilisation, area marketing and public participation are critical factors in the municipal vision.
5.5.1 Responses from community members and cooperatives on Objective number 2
Participants stated that small businesses must be encouraged by different stakeholders, for instance, by providing guidance, technical support, information and resources to help individuals to set up their own businesses in the form of sole traders, partnerships and cooperatives. Participants further mentioned that it is also crucial to provide financial support for new businesses and it serves as the key to enable businesses including cooperatives to start up their own businesses. Micro-enterprise financing is a specialist area; however, the uMhlathuze municipality does not give businesses grants to start their businesses and participants stated this in a focus group discussion.
It was stipulated by the participants that local municipalities must be involved in the arrangement by meeting with small businesses to assess the types of support they need and the proper method of collaboration, or working as a team. Municipalities’ primary role is to identify the needs of the community and provide support, and encourage institutions and the private sector as major stakeholders to also intervene.Therefore, it may be possible to establish small grant or loan programmes to encourage, for example,
153 investment in modern technology. Care should be taken with these to ensure fairness, equity and transparency.
Participants further mentioned that a continuous provision of technical advice on business management can sustain the business. Normally people who are starting their businesses are young people with no experience of managing the business therefore, if they establish a new business, the business owner should be able to understand finance, business planning, marketing, aspects of the law including employment, taxation, safety at work, environmental legislation and general business procedures. The provision of access to informal training and support in these areas meets a basic need and can be provided through “one-stop shops” and the uMhlathuze municipality is in the process of establishing “one-stop shops”. As in most areas of technical assistance, municipalities work with service providers to provide support to small business people, and one-stop shops will also include different companies that will provide support to businesses.
Furthermore, participants also stipulated that it is important for local municipalities to establish and implement formal and informal business networks. Dynamic participation in business networks is important for developing customer bases, obtaining intellect for growing small businesses, and developing collective relationships with businesses in the same segment.These networks can enable small businesses to learn from each other and that can grow and sustain their businesses. Participants also mentioned that emerging businesses need to be involved in a mentoring programme. They suggested that new and small business owners must be linked with established businesses to grow and benefit all businesses involved. These need not be formal networks. In addition, informal networks of mentors and new businesses can create further benefits by developing supplier linkages and establishing a critical mass for specialist training.
Much of local economic growth is generated by small and medium-sized businesses that are already established in the community. Encouraging local business growth involves providing advice, support and resources to enable these existing local businesses to grow. The range of initiatives to support local businesses is vast. Participants also stated that it is important for municipalities to visit and conduct surveys on the performance of small businesses. This can assist in identifying challenges that they encounter, determine the cause of underperformance and create opportunities for expanding the business.
154 5.5.2 Strengths, Weaknesses, Opportunities and Threats Analysis (SWOT) of the uMfolozi local municipality
As much as the uMfolozi local municipality has a vulnerable economy, there are also strengths and opportunities within this municipality. Participants indicated the Strengths as follows:
Location of the municipality at close proximity to an export point (Richards Bay.)
Reliable connectivity network, the N2, which easily links uMfolozi to Richards Bay and Durban.
Crèches and schools are well distributed throughout the municipal area.
Weaknesses
Lack of sufficient institutional capacity to implement LED
Settlements are scattered across the municipality, making it highly challenging to deliver basic services.
Lack of enough sports facilities especially in the north-western part of the municipality, notwithstanding the young population.
Health facilities and community halls are not sufficiently distributed and therefore some areas lack these facilities.
Poor water quality in the western side of the municipality
Manufacturing industries in uMhlathuze place a high demand on water systems around the area.
The coastline is largely inaccessible from the N2.
Only 15 percent of the land is owned privately (and just along the N2 corridor) and over 60 percent (along the coastline) is owned by the Ingonyama trust
Only 5.39 percent of the municipal land area has been settled following land claims.
Opportunities
The municipality has a coastline which could be exploited.
Relatively young population which could be easily skilled
The uMfolozi and uMhlathuze rivers and lakes provide an opportunity for irrigation.
155
Ground water is of good quality and therefore boreholes can be considered.
High potential agricultural land to the east of the N2
Good air quality which provides an opportunity for formal residential area expansion
Potential for industrial development and expansion on the south-western border of the municipality.
Threats
The economy over-relies on manufacturing.
Environmental degradation practises such as overgrazing
Low levels of awareness on protection of wetland areas
High level of unemployment
High population density over 200 people per square kilometre especially in the western semi-formal settlements. These can easily be translated to sprawls.
A number of settlements are situated along the coastline which is an environmentally protected area.
5.6 Objective 3: Ascertain the LED development strategies in the