2 SECTION B: UPDATED SITUATIONAL ANALYSIS
2.10 Unemployment
Stats SA has not released any new or updated employment statistics and therefore figures used in the analysis of employment for ELM are those that were released in 2011. Assessing employment remains a very complex task to undertake, due to the fact that there are a number of varying methodologies of measuring unemployment. The variations in methods often result in unemployment rates being very different for the same area depending on who has conducted the measurement and which methods were employed in order to do so.
The table below depicts that 9% of Elundini’s population is unemployed. Whilst this percentage may seem quite low it is also important to remember that 4% are classified as discouraged work seekers and are therefore technically also not gainfully employed. There is also 47 040 (34%) of the population which is not economically active. Many of those included in the (Not economically Active) population are of working age and therefore could be working. Regardless of the categories that have been used to describe those that are not employed, what is clearly evident is the fact that only 11% of those assessed in Elundini are considered gainfully employed, which is a low employment rate.
Table 12: Employment Status
Source: Census 2011 and CS 2016 2.11 Local Economic Development
The LED Strategy which was adopted in 2012 and implementable until the end of 2017 and is now under review. The purpose of local economic development (LED) is to build up the economic capacity of a local area in order to improve its economic future and the quality of life for all. It is a process by which public, business, and non-governmental sector partners work collectively to create better conditions for economic growth and employment generation. The success of a community today depends upon its ability to adapt to the dynamic local, national, and international market economy.
The key policies that primarily guide the ELM’s economic development are:
National Framework for Local Economic Development;
National Framework for Sustainable development in South Africa;
Industrial Policy Action Plan;
Integrated Sustainable Rural Development Strategy;
National business Act;
Spatial Planning and Land Use Management Act of 2013;
Towards an Integrated Urban Development Framework;
National Cooperative Development Act of 2011;
National Housing Policy and Subsidy Programs;
Elundini Local Economic Development Strategy;
Elundini Spatial Planning Framework
INDICATOR NUMBER OF PEOPLE PERCENTAGE
Employed 14207 11%
Unemployed 11 323 9%
Discouraged work seekers 5305 4%
Not economically active 47040 34%
Not applicable 60 265 44%
The National Framework for LED in South Africa has been developed as a guide that seeks to advance an understanding of LED and has put forward a strategic implementation approach that municipalities, provinces, national government, State-owned enterprises and communities may concentrate on in order to improve local economic development.
As per the Elundini Local Economic Development Strategy, the objectives of the municipality are:
To create an enabling environment which is conducive to attract investment in the region;
To create new employment opportunities, thereby reducing high unemployment levels and poverty therefore improving livelihoods;
To develop the human resource potential in the region and promote skills development;
To strengthen linkages between urban and rural areas in the municipality;
To provide a framework in which a culture of entrepreneurship can be created to reduce dependency on government;
To ensure that existing LED projects are strengthened and/or consolidated;
To identify new economic potential and how this can be unlocked;
To diversify the economic base and strengthen existing industry;
To maximize the use of local contractors, business and expertise in the implementation of programs and projects;
To identify how resources can be harnessed to promote economic growth and development To encourage linkages between neighbouring municipalities.
The ELM’s Local Economic Development program focusses on the following areas:
2.11.1 Formal and Informal Trade Development
ELM recognizes the key role that informal trading plays in poverty alleviation, income generation and entrepreneurial development and, in particular, the positive impact that informal trading has on historically disadvantaged individuals and communities. The Municipality will continue playing its central role in supporting the employment and economic initiatives of micro-enterprises, and prioritized the informal economy in its local economic development strategies.
In the next five years the municipality will be developing guidelines to adopt a more developmental approach towards the informal economy and review the by law which related to street trading/ informal trading. The Formal & Informal Business Regulations Compliance which focuses on ensuring that businesses have the necessary permits and licenses to conduct their operations within the legal framework will remain as a focus in trade management.
The municipality is also contributing in the sector by ensuring that the three towns have the main street trading zones in place and also provides infrastructure to the traders.
2.11.2 SMME and Cooperative Development
The National Business Act defines the small business as a separate and distinct business entity including cooperatives and the non-governmental organization’s managed by one or more owners. As per the act they are categorized into four such as the micro enterprises, very small enterprises, small enterprise and medium enterprises. Presently the SMME sector is not sustainable, it operates on a survival basis rather than growing the enterprises to create sustainable employment opportunities. ELM has begun a process of creating a necessary infrastructure to support SMMEs to operate on a platform that will grow their businesses to enter the formal sector of business. Furthermore the ELM will work on providing programs to equip SMMEs with critical skills to become more competitive and sustainable.
This will concentrate on:
Programs for separate segments as per the act;
Policy development and review;
Nonfinancial entrepreneurial support initiatives with a particular focus on entrepreneurial training;
Research on specific sectors and the role of SMMEs in building partnerships Business network development and support;
Capacity building initiatives;
Public private partnerships for sector development
The municipality has committed itself to sustainable and meaningful socio-economic transformation of the construction sector, it has put in place a construction procurement strategy to implement in the next five years which is aiming at growing the local construction grades. A local association has also been established which serves as a voice of the sector to the municipality. The local contractor development programs developed by the municipality is being implemented and it has been also embraced by other government institutions who are working with the municipality to support the local contractors. The municipality will do the sector analysis report to reflect on the impact that is made by government as a whole in the growth of the sector
ELM has a dedicated Cooperative Development Centre (CDC) that plays a role in promoting cooperatives through various support initiatives so that a wider spectrum of the community is able to participate in economic opportunities made available to cooperatives. The CDC also plays a role in identifying the needs for skilling local cooperatives and individuals. Secondary cooperatives are being setup to support primary cooperatives operating within the same sector.
The intension is to develop the CDC into a self-sustainable institution which is able to support its local enterprises. The Municipality is concentrating on its governance as one of the elements of its sustainability and will ensure that it has a functional board in place, Centre Manager and Chairperson of the audit committee. The intension is to ensure accountability to the envisaged government funding that will be implemented through the CDC from different government institutions
2.11.3 Property Development
Property development aims to increase value of the Elundini Municipality land portfolio and generate long term recurring income for Elundini, by facilitating development of Council owned land by third party private sector developers, through private partnerships. Discussion are underway between ELM and the Department of Public Works to develop land owned by the state within Elundini. Development facilitation includes project packaging, project preparation, development contracting & actual development.
The municipality will:
Brand strategic municipal and state owned land;
Acquire tittle deeds for all municipal owned land that has been identifies for strategic development to expedite property development transactions;
Revenue maximisation;
Leveraging of private sector investment
The municipality has enhanced this function with the appointment of a skilled Project Officer in property development. The intention of the municipality going forward is also to empower municipal personnel within the LED section to effectively manage and develop municipal-owned properties.
The municipality is facilitating, through its supply chain process, commercial developments in Mouth Fletcher and Maclear. It is also focusing on housing development programs through the department of housing, JoGeda whilst some are directly facilitated by the municipality
2.11.4 Industrial Development
Rural industrialization means focus on promoting the rural based industries by involving local people, resources and expertise or exploring the new business opportunity related with available resources in that particular rural area or cluster in a professional way. Primary beneficiary must be local farmer, artisan and labour in small or medium enterprise establishment in the rural areas and also support the local eco-system and economy. The basic purpose of rural industrialization is to create alternate model for overall development
of rural society to avoid over dependency on farming by utilizing available opportunities to establish small and medium industries.
ELM will concentrate on a three-way approach which will help in exploring the rural industrialization, and they are:
i. Agriculture diversification by exploring the opportunities by farming a completely new range of grains, fruits or vegetables;
ii. Establish agro-food processing initiatives; and
iii. Non-farm product business establishment by promoting suitable rural enterprises
2.12 Types of Rural Industry available in Elundini (Competitive and the Comparative Advantages)