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1Steve Tshwete Local Municipality l Final LED Strategy 2016/2021

TABLE OF CONTENTSABBREVIATIONS ......................................................................................................................5TABLES ..................................................................................................................................6FIGURES ..................................................................................................................................6CHAPTER 1INTRODUCTION ...................................................................................................................................................................................7Purpose of Strategy .............................................................................................................................................................................8Methodology ..............................................................................................................................................................................................8Location of the Municipality – Strategy Focus ..............................................................................................................10CHAPTER 2 ...........................................................................................................................................................................................122. SITUATIONAL ANALYSIS .......................................................................................................................................122.1 What is Local Economic Development? .......................................................................................................122.2 Guiding Principles ..........................................................................................................................................................122.3 Sector Opportunities ....................................................................................................................................................13Labour Profile ........................................................................................................................................................................................142.5 Development and Income Profile .......................................................................................................................15(a) Human Development Index (HDI) .....................................................................................................................15(b) Gini-Coefficient ................................................................................................................................................................15(c) Poverty Rate ......................................................................................................................................................................16(d) Household Income ........................................................................................................................................................16(e) Health Profile .....................................................................................................................................................................16(f) HIV prevalence ................................................................................................................................................................17(g) Housing Profile.................................................................................................................................................................17(i) Basic Infrastructure .......................................................................................................................................................19CHAPTER 3 ...........................................................................................................................................................................................21POLICY FRAMEWORK .................................................................................................................................................................213.1 The Planning Process ................................................................................................................................................213.2 The Mpumalanga Economic Growth and Development Path .......................................................213.3 The Constitution ..............................................................................................................................................................223.4 The White Paper on Local Government........................................................................................................233.5 Municipal Systems Act ...............................................................................................................................................243.6 Broad Based Black Economic Empowerment ..........................................................................................243.7 Preferential Procurement Act ................................................................................................................................253.8 The National Development Plan .........................................................................................................................253.9 Mpumalanga Vision 2030 ........................................................................................................................................25

Steve Tshwete Local Municipality l Final LED Strategy 2016/20212

CHAPTER 4 ...........................................................................................................................................................................................334. SWOT ANALYSIS ..........................................................................................................................................................33CHAPTER 5 ...........................................................................................................................................................................................355.1 DEVELOPMENT OF THE LED STRATEGY .............................................................................................355.1.1 Strategic Focus ................................................................................................................................................................355.1.2 Vision.......................................................................................................................................................................................355.1.3 Mission ...................................................................................................................................................................................355.2 KEY STRATEGY OBJECTIVES .........................................................................................................................365.3 Municipal Strategic Goals ........................................................................................................................................375.4 Municipal Investment Strategy .............................................................................................................................375.6 ECONOMIC ACTIVITY NODES .........................................................................................................................415.6.1 Primary Nodes .................................................................................................................................................................415.6.2 Secondary Nodes ..........................................................................................................................................................415.6.3 Proposed Nodes .............................................................................................................................................................415.6.4 Multi Purpose Community Centres (Thusong Centres) ....................................................................415.7 LED STRATEGIES AND OBJECTIVES 2016 - 2021 .........................................................................425.8 PROPOSED CAPITAL INVESTMENT PROJECTS (FIVE YEAR PLAN 2016-2021) 46CHAPTER 6 ...........................................................................................................................................................................................50GREEN ECONOMY .........................................................................................................................................................................506.1 What is Green Economy ...........................................................................................................................................506.2 Challenges of Transition to Green Economy in STLM .......................................................................506.3 Alignment with Policies and Plans ....................................................................................................................516.5 A Summary of Key Indicators: Transitional Steps to Green Economy ...................................53CHAPTER 7 ...........................................................................................................................................................................................54TOWNSHIP ECONOMY AND INDUSTRIES REVITALIZATION STRATEGY ......................................547.1 Introduction .........................................................................................................................................................................547.1.1 Key Objective of the Township Economy and Revitalization Strategy ...................................547.1.2 The Municipal Vision on Township Economy and Revitalization Strategy ..........................557.2 SITUATIONAL ANALYSIS .......................................................................................................................................557.2.1 The Summit on Reviving the Township Economy and Industries ..............................................557.3 LEGISLATIVE FRAMWORK AND REGULATIONS .............................................................................567.4 Enterprise Development ...........................................................................................................................................567.5 Informal Economy ..........................................................................................................................................................577.6 STRATEGIC PILLARS OF SUPPORT ..........................................................................................................587.6.1 Economic Infrastructure ............................................................................................................................................587.7 Resourcing ..........................................................................................................................................................................59

Steve Tshwete Local Municipality l Final LED Strategy 2016/2021 3

7.8 Entrepreneurship Development ..........................................................................................................................597.8.1 Business Support and Competitiveness .......................................................................................................617.9 Resource Mobilization and Partnerships ......................................................................................................627.9.1 Partnerships .......................................................................................................................................................................63CHAPTER 8 ...........................................................................................................................................................................................658.2 MONITORING AND EVALUATION ...................................................................................................................678.4 CONCLUSION .................................................................................................................................................................68


ABBREVIATIONSCOGTA: Cooperative Governance and Traditional AffairsDEDT: Department of Economic Development and TourismEPWP: Expanded Public Works ProgramIDP: Integrated Development PlanHDI: Human Development Index HEDC: Highveld Entrepreneur Development CentreLED: Local Economic DevelopmentMEGDP: Mpumalanga Economic Growth and Development Path MPCC: Multipurpose Community CentreMSI: Mpumalanga Stainless InitiativeNDM: Nkangala District MunicipalityNDP: National Development PlanSALGA: South African Local Government AssociationSLP: Social Labour PlanSTLM: Steve Tshwete Local MunicipalityMDG: Millennium Development GoalsSERO: Socio – Economic Review OutlookBEE: Black Economic Empowerment BBBEE: Broad Based Black Economic Empowerment SWOT: Strength Weaknesses Opportunities ThreatCWP: Community Works ProgramSMME: Small Micro and Medium EnterprisesCIDB: Construction Industry Development BoardICLEI: International Council for Local Environmental InitiativesMEGA: Mpumalanga Economic Growth AgencyGTZ: German Technical CooperationDEDT: Department of Economic Development and TourismNYDA: National Youth Development AgencyDALA: Department of Agriculture and Land AffairsSEDA: State Enterprise Development AgencyCBD: Central Business DistrictFET: Further Education and TrainingFTE: Full Time Equivalent DMR: Department Mineral ResourcesDARDLEA: Department of Rural Development Land Reform and Environment AffairsDTI: Department of Trade IndustrySAIW: South African Institute of Welding


TABLES TABLE 1: LEADING SECTORS IN STLM .................................................................................................................13TABLE 2: DISTRIBUTION OF THE POPULATION AGED 20 YEARS AND OLDER BY .......12 HIGHEST LEVEL OF EDUCATION........................................................................................................14TABLE 3: EMPLOYMENT STATUS IN 2001 AND 2011 ..................................................................................15TABLE 4: POVERTY IN STEVE TSHWETE 2001 AND 2011 .....................................................................16TABLE 5: AVERAGE ANNUAL HOUSEHOLD INCOME IN STLM .........................................................16TABLE 6: DWELLING TYPES 1996, 2001 AND 2011 ......................................................................................17TABLE 7: STEVE TSHWETE HOUSEHOLD DYNAMICS 2001 AND 2011 .....................................18TABLE 8: MIGRATION BY PROVINCE .......................................................................................................................18TABLE 9: HOUSEHOLDS WITH ACCESS TO SERVICES 2011 ............................................................19TABLE 10: ALIGNMENT OF NATIONAL, PROVINCIAL, DISTRICT AND STLM STRATEGY ...............................................................................................................................................30Table 11: ACTUAL YEARLY PLAN ................................................................................................................................65

FIGURESFIGURE 1: LOCATION OF STEVE TSHWETE LOCAL MUNICIPALITY .................................................11


CHAPTER 1 INTRODUCTION

Steve Tshwete Local Municipality has identified a need to review its Local Economic DevelopmentStrategy of 2006 with a view of crafting a new LED Strategy. The localmunicipality has identified the LED Strategy as a key component in implementing itseconomic objectives within the Integrated Development Plan, therefore carrying one of itsmandates of coordination and facilitating sustainable development and attracting economicinvestment.In order to formulate an effective LED Strategy, the municipality formulated a few guidelines

and / or aspects when drafting the plans:o The municipality is utilizing various sources to understand the ever changing local socio-

economic environment; the current LED Strategy is outdated and does not address emerging socio-economic issues. Sources utilized to gather information for the new strategy include government institutions like Statistics South Africa, Nkangala District Municipality, the provincial Socio Economic Review Outlook and situational analysis as drafted by the Department of Finance, Economic Development and Tourism (Mpumalanga Provincial Government).

o That the 2015/16 Integrated Development Plan serves as a guiding document in formulating a new LED Strategy. The 2006 LED strategy will form the basis for review and analysis, incorporate new findings. Strategies formulated at the district level will contribute to the development of a local economic strategy. This will help aligning initiatives at municipal level with those at the district level.

o That the municipality embark on a detailed analysis of sector departmental plans with a view of documenting the identified sector opportunities.

o That the formulated LED Strategy will aid the budgeting process, measure its performances and give feedback to adjustment process in future.

o The municipality will monitor and continuously measure the impact of solicited private investment in the local economy, jobs created, revenue created and small and medium enterprises established.

o That the new LED Strategy assists the municipality in formulating relevant structures to ensure coordination of economic and investment issues.


Purpose of Strategy

The purpose of formulating an LED Strategy is to contribute to the implementation of economic plans from the overall planning of the municipality as detailed in the IDP. This strategy will collate economic information, projects identified by the broader plan (IDP), formulate a framework to investigate further sector opportunities and formulate priorities. It is an important tool in creating sustainable local economies. It is a planning process of ensuringthat the environment continues to bear the required outputs. It is used to integrate diverse sector strategies into one plenary tool.In accordance to the Municipal Systems Act 32, 2000 (Act 32 of 2000), section 26 (c) provides for:

An integrated development plan must reflect:

(c) the council’s development priorities and objectives for its elected term, including its local economic development aims and its internal transformation needs.The Local Economic Development and Planning is guided by various legislations in relations to their implications on the functioning of local municipality; below are a framework of such Actsand policies.

It therefore aims at facilitating a process of disseminating the collated economic information forstrategy implementation purposes. The overall goal of the strategy is summarised as follows:

“To formulate a new LED Strategy informed by newly identified development needs, opportunities, priorities; guide the budgeting and implementing process, unlocking investor potential and creating economic and job opportunities; measuring economic performance and impact of private investment”.

Methodology

The LED Strategy formulation process commences with an analysis of the current LED Strategyas drafted in 2006; followed by a situational analysis of the district municipality an input made by various stakeholders through the investment summit. Sector departments have been consulted to integrate their industry plans into the LED Strategy.

The strategy formulation followed the following steps:


Step One:o Formulating the strategy scope, mapping out objectives, and setting out possible

consultative periods.o Determining relevant documentation and sources of information (LED 2006, IDP 2013,

and Spatial Development Framework 2014, SERO Report, Stats SA).o Identifying role players and contributors to the strategy development.

Step Two:o Analysis of all data obtained including secondary data, sector plans, etc.o Studying environmental trends

Step Three:o Analysing economic profiles, establish relevance to scope and objectives of the LED

Strategy.

Step Four:Establish an LED framework through integrating the identified opportunities into a holistic LEDstrategy plan; key objectives: o Create sustainable job opportunitieso Solicit and attract private investment into the local economy.o Develop infrastructure master plans to base future economic developmento Broaden tax and income base for the municipality.o Enable development of SMMEs and Cooperativeso Contribute to skills and human capital developmento Information sharing and database

Step Five:

Implementation of the LED Strategyo Describing the role of the LED within the municipality on implementing the strategy.o Obtain funding of the LED Strategy Plano Solicit investments o Monitoring and evaluation of the LED Strategy Plano Corporate Social Investment and Social Labour Plans


Location of the Municipality – Strategy Focus

Steve Tshwete Local Municipality is one of the six municipalities within the Nkangala District Municipality and located at the centre of the district municipality; it is also the seat of NkangalaDistrict Municipality.o It is located along the N4 / N12 corridor that connects Pretoria and Johannesburg to

Mbombela and Mozambique.o N11 corridor runs through the CBD town and links the Limpopo Province through

Middelburg – Hendrina – Ermelo to Kwa-Zulu Natal province and the Richards Bay harbour.

o Railway lines link the municipality to regional economic Maputo harbour; one railway line runs from Johannesburg through Delmas and Ogies and connects with the other line that runs from Pretoria through Bonkhorstspruit and Emalahleni. It runs parallel to the N4 / N12 and provides an alternative freight between Gauteng, Mpumalanga to Maputo.

o Midlen corridor links Middelburg and Emalahleni, the two largest economies of the Mpumalanga province.

o The municipality houses three power stations (Komati, Hendrina, Arnot), south of the N4 / N12.


3 FIGURE 1: LOCATION OF STEVE TSHWETE LOCAL MUNICIPALITY

SDF 2014


CHAPTER 2

2. SITUATIONAL ANALYSIS

2.1 What is Local Economic Development?

In accordance to the World Bank, LED can be broadly defined as an outcome of local initiatives by stakeholders identifying and using local resources, ideas and skills to stimulate economic growth and development. The outcome of this exercise is the creation of employment opportunities, alleviation of poverty, addressing the inequality whilst attracting external investment.

This planning process is located within the broader planning context, namely, regionally (Nkangala District), provincially (MEGDP) and nationally (National Development Planning, National Growth Path).

2.2 Guiding Principles

o LED aims at creating an environment conducive for private investment and job creation.o It advocates the establishment of a master infrastructure plan that enables long term

economic growth and development.o It aims at promoting the establishment and support of small and medium enterprises. o It targets previously disadvantaged individuals, thus reviving township economy.o It is a partnership between government and key stakeholders, eg organized business,

labour and civil society.o It is a five year plan that is adjusted annually in order to accommodate rapidly changing

socio-economic environment; flexible development planning process.o It integrates diverse economic activities into a comprehensive approach.o LED Strategies promotes local participation and ownership of resources.o Sustainability and development big businesses.

2.3 Sector Opportunities

The purpose of this sub-section is to provide an assessment of the economic activities within the leading economic sectors in order to determine the sectors in STLM economy that have a comparative advantage. Table 1 illustrates the leading sectors. The sources of data used are from QLFS Q4 2013 and SERO 2013 on sectoral employment in NDM and local municipalities.


TABLE 1: LEADING SECTORS IN STLM: 2013

Education and Skills Profile

The table below shows an increase in the proportion of people attending school aged between 5 and 24 years in STLM. Table 2 below shows an increase in the proportion of the population that completed Grade 12 / Matric and with higher education and a decline in the population with no schooling in STLM.

Sector Contribution to GDP Contribution toEmployment Location Quotient

Agriculture 1.9% 3.4% -0.5

Mining 45.8% 20.7% 0.11

Manufacturing 17.2% 6.5% -0.25

Electricity/Utilities 5.2% 2.5% 0.006

Construction 1.8% 6.9% 0.06

Trade 7.1% 21.4% 0.3

Transport 2.8% 3.1% 0.02

Finance 8.7% 11.3% 0.08

Community Services 9.4% 13.6% 0.11

Private Households 10.4% 0.09

SERO 2014


TABLE 2: DISTRIBUTION OF THE POPULATION AGED 20 YEARS AND OLDER BY HIGHEST

MP313: Steve

Tshwete

1996 2001 2011

Male Female Total Male Female Total Male Female TotalNo

schooling 6 235 6 889 13 124 6 771 8 510 15 281 5 024 6 094 11 117

Some primary 4 838 4 474 9 312 5 527 5 292 10 818 7 040 6 075 13 115

Complete primary 2 543 2 409 4 952 2 530 2 547 5 077 2 744 2 258 5 001

Some secondary 13 063 12 650 25 713 12 970 13 186 26 156 24 736 21 114 45 849

Std 10/ Grade 7 526 7 902 15 428 10 652 10 291 20 942 26 992 25 300 52 291

Higher 5 137 3329 8 466 3 955 3 519 7 474 11 787 9 715 21 502

Total 39 342 37 652 76 994 42 405 43 345 85 749 78 321 70 555 148 876

Statistics SA, Census 2011.

MP313: Steve

Tshwete

1996 2001 2011

Male Female Total Male Female Total Male Female TotalNo

schooling 6 235 6 889 13 124 6 771 8 510 15 281 5 024 6 094 11 117

Some primary 4 838 4 474 9 312 5 527 5 292 10 818 7 040 6 075 13 115

Complete primary 2 543 2 409 4 952 2 530 2 547 5 077 2 744 2 258 5 001

Somesecondary 13 063 12 650 25 713 12 970 13 186 26 156 24 736 21 114 45 849

Std 10/ Grade 7 526 7 902 15 428 10 652 10 291 20 942 26 992 25 300 52 291

Higher 5 137 3329 8 466 3 955 3 519 7 474 11 787 9 715 21 502

Total 39 342 37 652 76 994 42 405 43 345 85 749 78 321 70 555 148 876

Statistics SA, Census 2011.


LEVEL OF EDUCATIONLabour Profile

The pattern of overall unemployment rate in STLM has dramatically changed from 35.4% in 2001 to 19.7% in 2011 as seen from the table below. Therefore, unemployment rate is 19.7% in STLM (Census 2011). In the municipality, 107 069 people are economically active people. The composite breakdown of unemployment in STLM shows youth unemployment rate of 27.1%, unemployment rate for females 27.8% and males 14.2% (Census 2011).

TABLE 3: EMPLOYMENT STATUS 2001 AND 2011

2.5 Development and Income Profile

(a) Human Development Index (HDI)

The Human Development Index (HDI) is a composite, relative index that attempts to quantify the extent of human development of a community. It is based on measures of life expectancy, literacy and income. According to the United Nations, the HDI is considered high when it is 0.8 and higher, medium when it ranges between 0.5 to 0.8 and an index value of 0.5 and lower, will be considered as a low rating.

LABOUR INDICATORS CENSUS 2001 CENSUS 2011

EmploymentEconomically Active Population (EAP)/Labour Force 64 474 107 069

Number of employed 41 679 85 968

Unemployment

Number of unemployed 22 795 21 101

Official Unemployment rate (%) 35.4% 19.7%Unemployment amongst people with disabilities 38.0%

Youth Unemployment 41.6% 26.5%

Woman Unemployment 49.2% 27.8%

Statistics South Africa Census 2001 and 2011


STLM’s HDI level improved from 0.62 in 2001 to 0.63 in 2007 and to 0.69 in 2011 (SERO, 2013). It is ranked the second best out of eighteen (18) municipalities in the entire province in terms of HDI.

(b) Gini-Coefficient

The Gini-coefficient is one of the most commonly used measures of income inequality. The Gini-coefficient of STLM shows an improving trend since 2001 from 0.68 to 0.65 in 2007 and to 0.60 in 2011 (SERO, 2013). Despite the decline in 2011, the level still reflects a more unequal income distribution.

(c) Poverty Rate

According to SERO 2014, STLM has the lowest poverty rate in the province. The poverty rate is at 20.7% in 2011 showing a decreasing trend from 31.6% in 2001 and 28.8% in 2007. STLM, with about 59 929 people living below the poverty income in 2011, had the lowest number of people in poverty.

TABLE 4: POVERTY IN STEVE TSHWETE 2001, 2011, 2014

(d) Household Income

According to Census 2011, the average annual household income for all households in STLM increased from R 55 369 per annum in 2001 to R134 026 per annum in 2011 (table 6). This represents an absolute increase in nominal terms over the 10-year period, which was the highest among the eighteen local municipalities in the province. This is closely related to its higher education levels and employment rates.

INDICATORS 2001 2011 2014

Poverty rate 31.6% 25.9% 20.7%Number of people

in poverty 48 865 59 929 49 014

Poverty gap(R million) R54 R110

Statistics South Africa Census 2001 and 2011 and SERO 2014


TABLE 5: AVERAGE ANNUAL HOUSEHOLD INCOME IN STLM

(e) Health Profile

Health care is the prevention, treatment, and management of illness and the preservation of mental and physical well-being through the services offered by the medical, primary healthcare, and allied health professions to the population of STLM. According to SERO 2013, in 2012, a total of 18 clinics were located within the STLM. In addition STLM has 1 provincial hospital and no community health centres and a private hospital.

(f) HIV prevalence

Changes in the HIV prevalence of the female population distribution for the 15–49 age group in the municipality between 2009 and 2011 shows that in 2009 the prevalence rate was 33.8%, in 2010 24.3% and 2011 28.8% (SERO, 2013). The 2011 prevalence rate in STLM was the third highest in the province. The TB cases continued to show steady decline from 1 019 in 2010 to 844 in 2011 and to further 792 in 2012, the ninth highest in the province.

(g) Housing Profile

Housing type implies the structure of the dwelling a family occupies as their home. The main categories can be distinguished; these are formal permanent structures, traditional structures and informal non-permanent structures. Table 7 indicates the different dwelling types in the municipal area according to the Census 2011. Table 7 below shows a significant increase in the proportion of households residing in formal dwellings across the municipality, meanwhile there is decline in traditional dwellings. The informal dwellings declined from 1996 to 2001 and showed an upward trend from 2001 to 2011. The availability of suitable land and funding delays place cause a challenge on housing delivery in the municipality.

MP313:Steve Tshwete

2001 2011

55 369 134 026

Statistics SA, Census 2011


TABLE 6: DWELLING TYPES 1996, 2001 AND 2011

Table 8 shows a decline in the proportion of households that own their dwellings. On the other hand, there is an increase in the proportion of households headed by females in 2001 and a decline thereafter.

TABLE 7: STEVE TSHWETE HOUSEHOLD DYNAMICS 2001 AND 2011

(h) Statistics on Migration

The municipality has experiencing high level of migration over the last 10 years due to potential job opportunities.

Households Average household size

Female headed households %

Formal dwellings %

% Housing owned/paying

off2001 2011 2001 2011 2001 2011 2001 2011 2001 2011

36 229 64 971 3.8 3.5 29.5 29.4 73.9 83.0 57.5 44.5

Statistics South Africa- Census 2001 and 2011

MunicipalityFormal Traditional Informal

1996 2001 2011 1996 2001 2011 1996 2001 2011MP313:Steve

Tshwete24 765 26 776 53 929 2 952 3 516 1 102 12 901 5 937 9 190

Statistics South Africa- Census 1996, 2001 and 2011


TABLE 8: MIGRATION BY PROVINCE AND AGE

TABLE 9: MIGRATION BY GENDER

Statistics South Africa- Census 2011

AGE WC E C N C F S KZN N W GP MP LPOutside South Africa

Un specified

Notapplicable Total

20 – 24 124 704 162 319 1188 282 1178 15339 2567 1464 302 513 24141

25 – 29 152 856 218 441 1591 334 1540 14716 3234 1845 281 401 25609

30 – 34 158 614 213 467 1214 306 1289 11252 2507 1400 249 491 20161

35 – 39 155 456 239 453 934 362 1624 10041 2082 1076 232 303 17957

40 – 44 190 445 199 444 706 303 1534 8980 1615 748 204 328 15696

45 – 49 172 420 189 429 660 295 1382 7772 1325 597 164 199 13604

50 – 54 160 400 179 428 604 283 1164 6329 954 544 153 341 11539

55 – 59 124 294 113 330 381 200 888 5062 691 449 137 185 8855

60 – 64 116 151 118 217 219 170 714 3502 342 272 87 33 5940

TOTAL 1351 4340 1630 3528 7497 2535 11313 82993 15317 8395 1809 2794 143502

Statistics South Africa- Census 2011


(i) Basic Infrastructure

In response to the municipal statutory obligation and the challenges faced, the municipality formulated a compressive strategic response to the management of infrastructure and community assets and the provision of services that are dependent on those.

(1) Access to Household Services

Steve Tshwete Local Municipality has made great strides in providing this basic service to its communities. The table below reflect the progress made:

TABLE 10: HOUSEHOLDS WITH ACCESS TO SERVICES 2011

(2) Water and sanitation

Access to water and sanitation remains fairly high in STLM. The Census 2011 reveals that, 98.2% and 86.8% of households had access to potable water (household connections and communal stands) and flush and chemical toilets. In 2012, the Blue Drop Certified Systems awarded STLM a blue drop score of 97.4% (ranked 1st in the province, noting that the municipality continues to manage drinking water within their area of jurisdiction with distinction. STLM was ranked second in terms of waste water services in the Green Drop Report.

BASIC SERVICES 1996 2001 2011

% of households with flush or chemical

toilets 79.7% 87.5% 84.9%

% of households with connection to piped (tap) water: on site &

off site

88.9% 95.9% 98.2%

% of households with electricity for lighting 71.2% 74.7% 90.8%

% of households with weekly municipal refuse removal

74.8% 82.6% 84.7%

Statistics South Africa- Census1996, 2001& 2011


(3) Electricity

STLM is licensed to supply the following areas with electricity: Middelburg, Hendrina, Kwaza, Doornkop, Komati, Blinkpan and Koornfontein and comprises of the following divisions: Small consumer, Distribution and Planning and bulk connection. The provision of electricity within the municipality continues to increase since 1996. According to Stats SA Census 1996, 2001 & 2011, as of 2011, about 90.8% of households have access to electricity.

(4) Refuse Removal Census 1996 shows that the municipality continues to improve expanding the access to refuse removal since 1996. About 84.7% households had access to refuse removal at least once a day. The municipal service extends to all the municipal towns but exclude the mining towns which are self-serviced, Kranspoort, Somaphepha, Mafube and rural areas. The service will probably be extended to Somaphepha and Mafube when household numbers justify such action. The Middelburg area is experiencing spatial growth both residential and business. As a result, the current departmental resources cannot meet the demand for waste collection.

(5) Roads and stormwater

In 2011, the municipality had about 826km of total road network. Out of the 828km about 637.7km were tarred and about 188.4km were gravel roads. The 188.4km includes roads within farm areas which are privately owned and the municipality is unable to provide tarred roads.

CHAPTER 3

POLICY FRAMEWORK

3.1 The Planning Process

The LED Strategy forms a key part of the IDP, which is a single inclusive planning process; LED finds its space within this planning process. It is fully integrated into the IDP as it gives guidance to sector departments where priority areas are.Section 25 (1) of the Municipal Systems Act of 32, 2000 (Act 32 of 2000) provides that:


o each municipal council must, within a prescribed period after the start of its elected term, adopt a single, inclusive and strategic plan for the development of the municipality which:-

o links, integrates and coordinates plans and takes into account proposals for the development of the municipality;

o aligns the resources and capacity of the municipality with the implementation of the plan;

o forms the policy framework and general basis on which annual budgets must be based;

o and complies with provisions of this Chapter; and

o is compatible with national and provincial development plans and planning requirements binding on the municipality in terms of legislation.

3.2 The Mpumalanga Economic Growth and Development Path

The Mpumalanga Economic Growth and Development Path (MEGDP) is central for all planning in the province. The key objective of the MEGDP is to foster economic growth that creates jobs, reduce poverty and inequality in the Province. The LED strategy is developed within the context of this provincial development framework.

In accordance to the Municipal Systems Act 32, 2000 (Act 32 of 2000), sections 26 (c) and 26 (d):

An integrated development plan must reflect:

(c) the council’s development priorities and objectives for its elected term, including its local economic development aims and its internal transformation needs.

(d) the council’s development strategies which must be aligned with any national or provincial sectoral plans and planning requirements binding on the municipality in terms legislation.

MEGDP aims at creating labour absorbing economies and has identified the following initiatives to propel economic growth:


o Infrastructure development

o Climate change and green economy

o Agriculture and agro-process and rural development

o Minerals and beneficiation

o Manufacturingo Knowledge based economies

o Tourism and business services

o Social economy

o Public sector

o The regional economy

The sector plans as identified by the province provide the basis and context of LED Strategy of the district municipality (Nkangala District) and Steve Tshwete Local Municipality.

3.3 The Constitution

The Constitution of the Republic of South Africa, 1996 (Act 108 of 1996); section 152 of the Constitution details the objectives of local government:

o To provide democratic and accountable government for local communities.

o To ensure the provision of services to communities in a sustainable manner.

o To promote social and economic development.

o To provide a safe and healthy environment


o To encourage the involvement of communities and community organizations in the matters of local government.

3.4 The White Paper on Local Government

The White Paper on Local Government spells out a set of responsibilities that local authorities have obligations to economic development:

o That municipalities need to play a role in promoting job creation and boosting local economies through investing in basic services. Municipalities perform the following key functions in relation economic development planning processes (section B 2.3 of the White Paper on Local Government):

They review existing policies and procedures to enhance employment and investment.

o Steps to promote businesses

o Reviewing procurement policies to promote business activities

o Establishment of a spatial framework which identifies land for residential, commercial and mixed development to help with speeding up rezoning.

o Establishment of a user- friendly customer care management to increase quality and efficiency of local services.

Provide special economic services

o Municipalities provide marketing and investment support services in order to attract and secure potential investors.

o Provide small business support services thus assisting small entrepreneurs.

o Offer targeted services to specific sectors (research and technology services)

o Work with the Department of Labour in offering skills training and placements services.


o Reviewing of legislation which impedes LED.

o Assist certain sectors that show growth potential in a manner deemed necessary.o Assists in the acquiring of certain set of skills and place the same in some industries.

o Support initiatives of other departments, eg, Department of Trade industry (Local Business Support Centres Program); Department of Labour (training and placement).

3.5 Municipal Systems Act

The Municipal Systems Act, 2000 (Act 32 of 2000); details the duties of the municipal council as provided by Section 28:

28 (1) Each municipal council, within a prescribed period after the start of its elected term, must adopt a process set out in writing to guide the planning, drafting, adoption and review of its integrated plan.

(2) The municipality must through appropriate mechanisms, processes and procedure established in terms of Chapter 4, consult the local community before adopting the process.

28 (3) A municipality must give notice to the local community of particulars of the process it intends to follow.The LED Strategy finds its space within the Integrated Development Plan and therefore municipal council follows the outlined process in crafting an LED Strategy.

3.6 Broad Based Black Economic Empowerment

South Africa’s first democratic government was elected in 1994, with a clear mandate to redress the inequalities of the past in every sphere: political, social and economic. Since then, government has embarked on a comprehensive programme to provide a legislative framework for the transformation of South Africa’s economy. In 2003, the Broad-Based Black Economic Empowerment (BBBEE) Strategy was published as a precursor to the BBBEE Act, No. 53 of 2003. The fundamental objective of the Act is to advance economic transformation and enhance the economic participation of black people in the South African economy.


The Act provides a legislative framework for the promotion of BEE, empowering the Minister of Trade and Industry to issue Codes of Good Practice and publish Transformation Charters, and paving the way for the establishment of the BBBEE Advisory Council.

3.7 Preferential Procurement Act

The Act aims at giving effect to section 217(3) of the Constitution by providing a framework for the implementation of the procurement policy contemplated in section 217(2) of the Constitution; and to provide for matters connected therewith.

3.8 The National Development Plan

Government has already started a process to align the long term plans of departments with the NDP and to identify areas where policy change is required to ensure consistency and coherence.It defines a desired destination and identifies the role different sectors of society need to play in reaching those goals. LED planning is crafted within this context; it is aligned to key objectives of the national development planning process. The National Development Plan: Vision 2030 focuses on the following key priority areas:

o An economy that will create more jobs

o Improving infrastructure

o Transition to low carbon economy

o Reversing the spatial effects of apartheid in urban and rural areas

o Improving the quality of education, training and innovation

o Quality health for all

o Social protection

o Building safer communities

o Reforming the public sector


3.9 Mpumalanga Vision 2030

Mpumalanga Vision 2030 formulated a development rationale for future economic growth revolving around eight key drivers:

Key Driver 1: Nodal DevelopmentKey Driver 2: Business, Commercial and Industrial DevelopmentKey Driver 3: Tourism Development Key Driver 4: Forestry DevelopmentKey Driver 5: Agricultural DevelopmentKey Driver 6: Mining and Energy Related DevelopmentKey Driver 7: Urban DevelopmentKey Driver 8: Rural Development

Below is the reflection of how the municipality has aligned its strategic objectives in line with the Mpumalanga vision 2030 key drivers

3.10.1 Nodal Development

FOCUS AREAEconomic diversification

NDM proposed intervention Mixed use nodal centres, nodal marketing, infrastructure development, foreign direct investment and agro-processingInclude retail and transport nodes in all future township.Layouts and development nodes.

STLM Initiatives and current activitiesPromote development in all three developmental nodes (Primary, Secondary, and Proposed Nodes).Align all nodal development with proposals from SDF.


3.10.2 Business, Commercial and Industrial Development

FOCUS AREAIndustrial DevelopmentBig business

NDM proposed interventionEncourage iron and steel beneficiation incubatorAttract local and foreign direct investment into the regionImprove cooperation and participation by private sector to wide initiatives (CSI)Support from industry and suppliers to EPWP Learner Contractors.

STLM Initiatives and current activitiesFacilitate access to serviced land for business development.Invest in infrastructure developmentNode D development and Local steel Hub initiative

3.10.3 Tourism Development

Tourism has the ability to grow the local economy and stimulate small enterprise and rural development as detailed in the Mpumalanga Vision 2030 priorities.

FOCUS AREALoskop Leisure Resorts (Aventura)Botshabelo Heritage siteMiddelburg DamTourism Info CentreLittle ElephantOlifants River LodgeLoskop Marathon and Train RaceOther sports and entertainment Year end events (STLM cross – over)Arts and cultural festivalBanquet hallCountry Club and golf course


STLM Initiatives and current activities High level profiling of the Loskop Aventura resort as a key component of the tourism belt on the N11 corridor Total revamp of the Botshabelo heritage site is required; extending the tourism belt on N11 that links Limpopo with the CBD.Rework the ownership and management structure of the site.Revamp the site to include cabin accommodationDisseminate information from the Middelburg information centre: cabin accommodation, hikingtrails, cheetah farming, fishing gamesDevelop a market access strategy including improving signageHigh profiling of the events Brand the Loskop Marathon to be at the same level as the Comrades Marathon level through TV and other forms of advertising, invite high profile athletes.Accelerate the process of establishing the hotel to encourage local accommodation.Create a calendar of major events (standardised the dates) eg Joyous CelebrationRevamp Kees Taljaard to bid for professional soccer matches.

3.10.4 Agricultural Development

FOCUS AREAAgriculture developmentRenewable energyResource mobilization

NDM proposed interventionCommission and implement agro-processing value chain development strategySTLM to be considered on completive advantage on agriculture even if it is in a low scale.Exploit opportunities generated by green economy efforts.Agriculture infrastructure development (dams, irrigation facilities, agro-processing, etc).

STLM Initiatives and current activitiesPromotion of sustainable land reform and security of tenure via agric –VillageSMME’s and corporative developmentAgric hub development


3.10.5 Mining and Energy Related Development

FOCUS AREAMining (Coal)Resource mobilizationCapacity development

NDM proposed interventionProvide extensive support on the mining industry in the long term, especially on value adding.Provide cost-effective infrastructure for labour absorbing activities.Skills development for mining sector and support for mining small and medium enterprises.

STLM Initiatives and current activitiesConduct economic study on the mining sector and economic impactEstablishment of steel fabrication hub Training of constructors and improving CIDB grading levels

3.10.7 Urban Development

FOCUS AREADeveloping inclusive economyMixed Use Nodal centres

NDM proposed interventionInner city economic development and inclusive rural economy.Develop strategy for procurement of land close to existing economic development zones.

STLM Initiatives and current activitiesEnsure integrated economic planning and developmentPromote STLM as an eco-tourism destination of choiceCreate a hierarchy of functional towns and settlement Township economic development


3.10.8 Rural Development

FOCUS AREADeveloping inclusive economyFacilitate business creation

NDM proposed interventionAttend to rural development initiativeFacilitate establishment of at least two shisanyama businesses in each local municipalityPromote rural development

STLM Initiatives and current activitiesDevelopment of Hendrina MallThird phase development of the Middelburg MallRevive township businessEnsure equitable access of social infrastructure and promotion of LED by way of MPCC’s and agricultural village


TAB

LE 1

1: A

LIG

NM

ENT

OF

NAT

ION

AL,

PR

OVI

NC

IAL,

DIS

TRIC

T A

ND

STL

M S

TRAT

EGY

Nat

iona

l D

evel

opm

ent P

lan

MPG

Vis

ion

2030

Nat

iona

l LED

Fram

ewor

kN

DM

LED

Str

ateg

yST

LM L

ED

An

econ

omy

that

will

cr

eate

mor

e jo

bs.

Bus

ines

s, C

omm

erci

al

and

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stria

l D

evel

opm

ent

Tour

ism

Dev

elop

men

tFo

rest

ry D

evel

opm

ent

Agr

icul

tura

l D

evel

opm

ent

Min

ing

and

Ene

rgy

Rel

ated

Dev

elop

men

t

Bui

ldin

g a

dive

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omic

bas

e.In

clus

ive

Eco

nom

ic

Dev

elop

men

t.

Out

com

e 4:

Eco

nom

ic

grow

thC

reat

ion

of d

ecen

t w

ork

and

sust

aina

ble

jobs

Out

com

e 11

: Out

put

3 Im

plem

entin

g th

e C

omm

unity

Wor

ks

Pro

gram

and

EP

WP

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ovin

g in

fras

truc

ture

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al D

evel

opm

ent

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nom

ic G

over

nanc

e an

d In

frast

ruct

ure.

Mix

ed U

se N

odal

ce

ntre

s.37

indu

stria

l site

s w

ere

sold

.

Tran

sitio

n to

low

ca

rbon

eco

nom

y

Man

agin

g po

llutio

n an

d so

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rtilit

y le

adin

g to

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inse

curit

y

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age

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ED

and

ot

her p

lans

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my

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itiat

ives

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ICLE

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ft S

trate

gy

Rec

omm

enda

tions

Gre

en b

uild

ing

polic

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TAB

LE 1

1: A

LIG

NM

ENT

OF

NAT

ION

AL,

PR

OVI

NC

IAL,

DIS

TRIC

T A

ND

STL

M S

TRAT

EGY

Nat

iona

l D

evel

opm

ent P

lan

MPG

Vis

ion

2030

Nat

iona

l LED

Fram

ewor

kN

DM

LED

Str

ateg

yST

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Rev

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atia

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s of

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rthe

id

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and

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l ar

eas.

Rur

al D

evel

opm

ent

Urb

an D

evel

opm

ent

Dev

elop

ing

incl

usiv

e ec

onom

ies.

Dev

elop

ing

incl

usiv

e ec

onom

y: in

form

al

econ

omy

supp

ort.

Inne

r City

D

evel

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ent

Tow

nshi

p E

cono

mic

D

evel

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usiv

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ural

E

cono

my

Incl

usiv

e E

cono

mic

D

evel

opm

ent.

Tow

nshi

p E

cono

mic

D

evel

opm

ent.

Rur

al E

cono

mic

D

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opm

ent.

Impr

ovin

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e qu

ality

of

edu

catio

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aini

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and

inno

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man

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onom

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nal

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with

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Pro

vide

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bus

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s de

velo

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Ann

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aree

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oN

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nal T

oolin

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itiat

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ME

and

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Qua

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her p

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DF,

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hich

enh

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mm

unity

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201

4

Soci

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ctio

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d bu

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fer

com

mun

ities

Enh

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Pro

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gy

m a

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hild

ren

play

pa

rk in

eac

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cal

mun

icip

ality

.

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ion

prog

ram

mes


TAB

LE 1

1: A

LIG

NM

ENT

OF

NAT

ION

AL,

PR

OVI

NC

IAL,

DIS

TRIC

T A

ND

STL

M S

TRAT

EGY

Nat

iona

l D

evel

opm

ent P

lan

MPG

Vis

ion

2030

Nat

iona

l LED

Fram

ewor

kN

DM

LED

Str

ateg

yST

LM L

ED

Impr

ovin

g th

e qu

ality

of

pub

lic s

ervi

ces

as

criti

cal t

o ac

hiev

ing

tran

sfor

mat

ion

Bac

k to

Bas

ic S

trate

gyB

ack

to B

asic

Stra

tegy

Bac

k to

Bas

ic S

trate

gyB

ack

to B

asic

Stra

tegy


STRENGTHS WEAKNESSESFinancial viability and stabilityo Good governance o Good income base Sound financial planning and managemento Proper credit control

Inadequate parking space in the CBD.

High level of service delivery. Limited communication of achievements.

Land availability and good infrastructure. Perpetuation of old spatial patterns (Doornkop, Rockdale).

Good corporate image with awarding of a number of awards. Loss of qualified staff (job hopping).

Cordial employer and labour unions relationship

Conflicts of land use between farming, mining, industrial and residential.

Functional local Aids Council. No stand alone LED Forum / part of the IDP-LED Representative Forum.

Sound relationship between politicians and administration. Lines of communication not always followed.

Well established Employee Assistance Programme.

Overlapping of portfolios represented in Council.

Development of rural villages. Municipal buildings not accommodative of disabled persons.

Good expenditure of government grants.

No mechanism to monitor the SLP/CIP commitments and implementation.

Sound relationship between STLM and the business community: implementation of enterprise development plan.Decentralised pay-points and electricity outlets.Good ITC infrastructure.Committed workforce.Established industries.OPPORTUNITIES THREATSAvailability of natural resources. Depleting mineral resources.Increase in export of final products. Negative impact of HIV/AIDS.Good governance and consistent clean audit. Crime.Accreditation of housing function. Lengthy procurement processes.Expansion on tax base International market fluctuation.

CHAPTER 4 4. SWOT ANALYSIS


Credit worthiness. Cost of input material and fuel pricing.Viable social networking opportunities. Fiscal fluctuation.Strategic location and Proximity to Gauteng province as a major market which is SA ma-

jor industry opportunity for industry.

Infrastructure does not accommodate the high influx of trucks.

Close to the large commercial centres and metro municipalities.

Lack of bulk infrastructure to meet growth demand.

Where Nkangala District Municipality resides. Escalating high unemployment levels among young people under the age of 35

Adequate resources – commercial land. Aging existing infrastructure.

Positive economic growth indicatorso Implementation of property rates Acto Mining development and implementa-

tion of SLPso Tourist information centre upgradeo Industrial Park adjacent to Mhluzi

(possible job creation and SMME Develop-ment).

o Integrated planning pioneered by the IDP-LED Representative Forum.

o Potential secondary activities from mining activities (linked to post-mining activi-

ties.o Potential investment in steel produc-

tion facilities.

Environmental hazards and impact:o Veld fireso Hazardous material in transito Pollution by mining activitieso No clear post-mining plan or rehabilitation. (industry responsibility)Impact of climate change.Population migration to the municipality thus pressure on service delivery.Closure of mines (mergers, downsizing) (out).Poor maintenance of roads (provincial & national).Lack of Integrated Transport Plan.No rental housing allowance for employees.

Growth point in terms of the NSDF. Lack of suitable land for cemeteries.

Performance management system is cas-caded to lower levels within the organization to harmonise PMS at all levels.

High population growth.No affordable accommodation for employees.


CHAPTER 5

5.1 DEVELOPMENT OF THE LED STRATEGY5.1.1 Strategic Focus

Based on the situational analysis, the development of the strategy revolves around the following focus areas:

o Promoting investment along the N4 development corridor with specific focus on enhancing the stainless steel cluster in Middelburg. o Focus on the sustainable extraction and beneficiation of local minerals with comprehensive mining rehabilitation programs to enable the re-used of mined land. o Facilitate the beneficiation of local agricultural produce and export finished products. o Promoting Steve Tshwete as an eco-tourism destination of choice. o Continuous maintenance and upgrade of infrastructure and engineering services in order to meet business and industry development. o Development of human capital in manner that links formal academic education to industry- based training in order to meet the skills requirements of the leading local economic sectors. o Development of a regulatory environment that promotes small and medium enterprise growth, for example, preferential procurement, Broad Based Black Economic Empowerment initiatives, etc o Development of township economy

5.1.2 Vision

To be the leading community driven municipality in the provision of sustainable services and developmental programmes.

5.1.3 Mission

We are committed to the total well- being of all our citizens through:o Rendering affordable, cost-effective, accessible, efficient and quality services;o Effective management systems, procedures, skilled and motivated workforce;o Maximising infrastructural development through the utilisation of all available resources;o Improving the quality of life by co-ordinating youth, gender and social development

programmes;


o Creating an enabling environment for economic growth and job creationo Ensuring effective community and relevant stakeholder participation and co-operation;o Ensuring skilled, motivated and committed work force; and o Compliance with the Batho-Pele Principles; o To strive to sustain the fiduciary position of the municipality towards achieving the

clean audit.

5.2 KEY STRATEGY OBJECTIVES

Through consultation with partners (government stakeholders, organized labour, industry associations and business chambers), develop long term master plans that promote external investors.Maximise the job creation potential of key sectors, through a partnership of local, provincial and national role-players.

Retention of current investment and solicit future investment and growth through incentive packages (flexible tariff and rate structure, serviced land, stable supply of water and electricity, etc)

Diversify and broadening key local sectors (steel manufacturing) through downstream beneficiation programs.

To grow the local economy by 4% by 2019.

Strengthening government- supported entities, increasing their capacity with a view of stimulating opportunities for small and medium enterprises in the manufacturing industry, particularly steel manufacturing:

o The steel incubator, Mpumalanga Stainless Initiative to include post incubation programs; steel fabrication and production plant that will be used by graduating incubates. o The tooling initiative, Mpumalanga Tooling Initiative, to be assisted to expand its tooling initiative, artisan development skills and establishment of the tooling room. o Develop the capacity of Mpumalanga Stainless Steel Cluster to assist entrepreneurs to access markets, conduct research, and develop entrepreneur and management skills.


o Make more land available for small and medium enterprises at the HEDC centre, show ground, and other available areas.

Creating secondary industries out of the mining sector, eg recycling, cement manufacturing through mining bi-products or waste, processing of coal waste into secondary products (pellets, briquettes), identifying opportunities for quarrying, etc

Develop a coordination program (culminating into a structure) to facilitate the development of industry specific opportunities in conjunction with industry associations and business bodies.

Continuous alignment of LED strategy to economic trends through the establishment of a panel of economic advisors to the Council.

Coordinate all developmental issues as initiated by various government sector departments in the local municipality.

Continuous improvement and updating of the investor guide incorporating new developments and economic opportunities.

5.3 Municipal Strategic Goals

Four (4) strategic goals have been identified to drive the vision and mission of the Municipality: o Creating a municipality which is, through its financial and human capital together with all other resources, totally focused on the wellbeing of all its citizens; o Economic growth, job creation and poverty alleviation; o All residents enjoy the best possible level of municipal services; o Creating a space within which a caring society is economically, spatially, environmentally and socially integrated and developed.

5.4 Municipal Investment Strategy

The municipality offers a stable environment for investment and economic development:

o Access to municipal owned land at affordable rates; both serviced and underserviced land o Stable and uninterrupted water and electricity supply.


o Good road and rail transport infrastructure linked to major cities (Pretoria – Johannesburg through N4 / 12 also linking the municipality with Mbombela; Groblersdal - Hendrina – Ermelo – Richards Bay on N11). o The municipality offers tax holidays on assessment rate or discount during certain period or during construction and establishment according to Council policy, depending on: - Size of the erf to be occupied. - Number of direct jobs to be created. - Corporate Social Investment policy of the institution. - Potential income for the municipality in terms of trade services (water, electricity, sewage and refuse removal) - Potential secondary business - BBBEE grading

The municipality has the following investment opportunities:

o Manufacturing presents investment opportunities in downstream beneficiation of raw material, as proposed through establishing a steel and metal fabrication hub and the tooling initiatives as a sub sector of the steel manufacturing industry. o Expanding the local hospitality industry to establish a hotel and link that to the activities of a banquet hall and the business activities. o Land available for mining purposes; as per proposals submitted to Department of Mineral Resources by mining companies for prospecting rights. o Through land reform policies, Rural Development and Land Reforms are making land available for agricultural purposes, especially for emerging farmers. o Increasing the provision of local private healthcare capacity. o Establishment of a production facilities to manufacture steel material o Establishment of solar energy solutions for areas that are not electrified yet and cater for the escalating demand for energy.


5.5

SEC

TOR

SPE

CIF

IC D

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OPM

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L C

ON

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AIN

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ND

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D

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APS

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PRO

POSE

D

INTE

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NTI

ON

Man

ufac

turin

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xpor

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aw m

ater

ial

Impo

rts o

f fini

shed

goo

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flood

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loca

l mar

kets

Exp

ensi

ve in

tern

atio

nal

prod

ucts

dum

ped

on o

ur

mar

kets

Out

flow

of c

apita

l to

othe

r co

untri

es

Est

ablis

h a

bene

ficia

tion

hub

for s

teel

and

met

als

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ing

Com

petin

g w

ith a

gric

ultu

re

for l

and

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labi

lity

Und

erpe

rform

ing

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etre

nchm

ents

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loss

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pact

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oved

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mTr

aini

ng a

nd c

apac

ity

build

ing


5.6 ECONOMIC ACTIVITY NODES

The following are some the identified hierarchy of economic nodes/areas within the STLM in line with the proposals of the Spatial Development framework 2014/15.

5.6.1 Primary Nodes

Middelburg Central Business District is the primary activity node of the municipality; the largest commercial centre of the municipality. Concentrated on Cowen Ntuli, OR Tambo, SADC and Walter Sisulu Streets, it is a strong area for retail and commercial development, service industries, community facilities; government buildings and municipal offices are located here.

Hendrina Central Business District forms part of the primary economic activity node within the municipality. Also it comprises a combination of retail, wholesale trade, financial services, municipal and government services.

5.6.2 Secondary Nodes

The following are the existing secondary nodal points: o Midwater business complex o The Middelburg Mall, located south towards the N4 o OK node, east of Fountain Street o Kanonkop node within the residential area, Kanonkop o Rockdale node o Nazareth node o Mhluzi node o Mhluzi Mall, extension 2/4 towards the south of Mhluzi

5.6.3 Proposed Nodes

o Kanonkop node is the proposed future node and will be located at the intersection between Walter Sisulu and Protea Street. o Node D south of Mhluzi towards the bricks manufacturing industries; earmarked for light industries

5.6.4 Multi- Purpose Community Centres (Thusong Centres) Further nodal points identified for the purpose of enhancing and access to social services: o Mhluzi Extension 7 o Doornkop o Rockdale


5.7

LED

STR

ATEG

IES

AN

D O

BJE

CTI

VES

2016

- 20

21

Stra

tegi

c O

bjec

tive:

To

ensu

re a

bet

ter l

ife fo

r the

soc

iety

by

coor

dina

ting

sust

aina

ble

soci

al a

nd e

cono

mic

de

velo

pmen

tal p

rogr

amm

es.

Perf

orm

ance

Obj

ectiv

esSt

rate

gies

Poss

ible

Pro

ject

/ Act

iviti

es

To c

reat

e a

cond

uciv

e en

viro

nmen

t for

bu

sine

ss in

vest

men

t and

gro

wth

for j

ob

crea

tion

Dev

elop

ing

the

LED

stra

tegy

and

fu

rther

iden

tify

sect

or o

ppor

tuni

ties

to

impr

ove

the

stra

tegy

.

Dev

elop

an

LED

stra

tegy

with

spe

cific

pr

ojec

ts/ p

rogr

ams,

reso

urce

s re

quire

d, ti

me

fram

es a

nd in

stitu

tions

re

spon

sibl

e fo

r im

plem

enta

tion.

Adv

ocat

e fo

r eco

nom

ic in

tegr

atio

nE

nsur

ing

that

all

LED

pro

posa

ls in

the

SD

F ar

e im

plem

ente

d

Tow

nshi

p ec

onom

y (N

ode

D)

Pro

mot

ing

STL

M a

s an

eco

-tour

ism

de

stin

atio

n of

cho

ice.

Faci

litat

e an

eco

nom

y th

at w

ill c

reat

e m

ore

jobs

Pro

mot

ing

inve

stm

ent a

long

the

N4

deve

lopm

ent c

orrid

or w

ith s

peci

fic

focu

s on

enh

anci

ng th

e st

ainl

ess

stee

l cl

uste

r in

Mid

delb

urg.

Im

prov

e m

onito

ring

of p

rivat

e se

ctor

in

itiat

ives

.

Pro

mot

ing

STL

M a

s an

inve

stm

ent

dest

inat

ion.

Con

tinuo

us u

pdat

e of

the

inve

stor

gu

ide.

Upd

ate

the

audi

o vi

sual

mat

eria

l an

d av

ail i

t to

inve

stor

s.

Est

ablis

h a

pane

l of

econ

omic

ad

viso

rs fo

r Cou

ncil

by D

ecem

ber

2015

.

Mon

itor t

he im

plem

enta

tion

of a

ll S

LP

from

min

es a

nd C

orpo

rate

Soc

ial.

Inve

stm

ent b

y pr

ivat

e co

mpa

nies

.

Rev

italiz

e di

stre

ssed

min

ing

tow

n.


Stra

tegi

c O

bjec

tive:

To

ensu

re a

bet

ter l

ife fo

r the

soc

iety

by

coor

dina

ting

sust

aina

ble

soci

al a

nd e

cono

mic

de

velo

pmen

tal p

rogr

amm

es.

Perf

orm

ance

Obj

ectiv

esSt

rate

gies

Poss

ible

Pro

ject

/ Act

iviti

es

Faci

litat

e tra

nsiti

on to

gre

en e

cono

my

Dev

elop

gre

en e

cono

my

polic

y

Impr

ovin

g th

e qu

ality

of e

duca

tion,

tra

inin

g an

d in

nova

tion

on th

e gr

een

econ

omy

Stre

ngth

en s

uppo

rt fo

r rec

yclin

g in

itiat

ives

(coa

l was

te, i

ndus

trial

wat

er)

Inst

allin

g de

vice

s th

at u

tiliz

e so

lar

ener

gyM

onito

r the

reha

bilit

atio

n pr

oces

s of

th

e m

ined

land

Faci

litat

e th

e de

velo

pmen

t of e

mer

ging

in

dust

ries

that

pro

mot

e la

rge

scal

e em

ploy

men

t and

cre

ate

jobs

Rev

italiz

e an

d in

tegr

ate

tow

nshi

p in

dust

ries

Fa

cilit

atin

g th

e de

velo

pmen

t of

emer

ging

farm

ers.

Faci

litat

e th

e be

nefic

iatio

n of

loca

l ag

ricul

tura

l pro

duce

and

exp

ort

finis

hed

prod

ucts

.

Pro

mot

e H

ydro

poni

c fa

rmin

gD

evel

op li

ght i

ndus

try h

ub: N

ode

D

(SM

ME

Hub

)Fa

cilit

ate

the

impl

emen

tatio

n of

C

omm

unity

Wor

ks P

rogr

am a

nd E

PW

PS

treng

then

rela

tions

hip

with

exi

stin

g go

vern

men

t sup

porte

d in

itiat

ive

(MS

I, H

ED

C, M

TI)

Rev

ersi

ng th

e sp

atia

l effe

cts

of

apar

thei

d in

urb

an a

nd ru

ral a

reas

.

Impr

ovin

g in

frast

ruct

ure

deve

lopm

ent

Con

tinuo

us m

aint

enan

ce a

nd u

pgra

de

of in

frast

ruct

ure

in o

rder

to m

eet

busi

ness

and

indu

stry

dev

elop

men

t.

Dev

elop

men

t of H

endr

ina

Mal

l

Dev

elop

ligh

t ind

ustry

hub

: Nod

e D


Stra

tegi

c O

bjec

tive:

To

ensu

re a

bet

ter l

ife fo

r the

soc

iety

by

coor

dina

ting

sust

aina

ble

soci

al a

nd e

cono

mic

de

velo

pmen

tal p

rogr

amm

es.

Perf

orm

ance

Obj

ectiv

esSt

rate

gies

Poss

ible

Pro

ject

/ Act

iviti

es

Dev

elop

ing

a st

rong

SM

ME

sec

tor

Incr

ease

d pa

rtici

patio

n of

SM

ME

s in

th

e st

eel m

anuf

actu

ring

sect

or

Mak

e la

nd a

vaila

ble

for S

MM

E d

evel

-op

men

t

Incr

ease

sup

port

to g

over

nmen

t ini

ti-at

ed d

evel

opm

ent

Red

uce

impo

rts o

f fini

shed

pro

duct

s

Trai

ning

con

tract

ors

on o

ur d

atab

ase

Ass

ist i

n th

e id

entifi

catio

n of

bus

ines

s fa

cilit

ies

for S

MM

E’s

dev

elop

men

tP

artn

er s

ecto

r dep

artm

ents

and

de

velo

pmen

t age

ncie

s to

impr

ove

the

capa

city

of S

MM

Es

Ben

efici

atio

n of

loca

lly p

rodu

ced

raw

m

ater

ial

Est

ablis

hing

a s

teel

fabr

icat

ion

hub.

Trai

ning

of c

ontra

ctor

s an

d im

prov

e C

IDB

leve

ls

Dev

elop

men

t of h

uman

cap

ital i

n m

anne

r tha

t lin

ks fo

rmal

aca

dem

ic

educ

atio

n to

indu

stry

- bas

ed tr

aini

ng

-Est

ablis

h th

e to

ol a

nd d

ie m

akin

g se

ctor

-Dev

elop

an

acad

emy

with

sat

ellit

e ce

ntre

s in

sch

ools

in th

e N

kang

ala

dist

rict

Rev

italiz

e an

d in

tegr

ate

tow

nshi

p in

dust

ries

Fa

cilit

atin

g th

e de

velo

pmen

t of

emer

ging

farm

ers.

Faci

litat

e th

e be

nefic

iatio

n of

loca

l ag

ricul

tura

l pro

duce

and

exp

ort

finis

hed

prod

ucts

.

Coo

rdin

ate

wor

ksho

ps/ s

emin

ar

in c

olla

bora

tion

with

gov

ernm

ent

depa

rtmen

ts /

agen

cies

and

priv

ate

sect

or (c

aree

r gui

danc

e, in

tern

ship

s).

Stre

ngth

en th

e ca

paci

ty o

f the

tool

ing

and

skill

s ce

ntre

B

HP

dona

ted

the

N4

build

ing

to

hous

e th

e m

athe

mat

ics

and

scie

nce

acad

emy.

Util

izat

ion

of th

e S

kills

Dev

elop

men

t C

entre

by

Opt

imum

Min

e pr

ocur

emen

t.


Stra

tegi

c O

bjec

tive:

To

ensu

re a

bet

ter l

ife fo

r the

soc

iety

by

coor

dina

ting

sust

aina

ble

soci

al a

nd e

cono

mic

de

velo

pmen

tal p

rogr

amm

es.

Perf

orm

ance

Obj

ectiv

esSt

rate

gies

Poss

ible

Pro

ject

/ Act

iviti

es

Cre

atin

g an

ena

blin

g en

viro

nmen

t for

de

velo

pmen

t

The

exis

ting

cond

uciv

e cl

imat

e fo

r eco

-no

mic

dev

elop

men

t will

be

mai

ntai

ned

and

impr

oved

whe

re p

ossi

ble

and

we

will

mar

ket t

he R

evie

w o

f pro

cure

men

t po

licie

s to

ena

ble

equi

tabl

e ac

cess

Est

ablis

h th

e LE

D fo

rum

Yout

h, d

isab

led

and

wom

en

pres

enta

tion

in th

e Lo

cal E

cono

mic

D

evel

opm

ent F

orum

will

be

ensu

red.

Par

tner

ship

with

eTh

ekw

ini M

etro

M

unic

ipal

ity a

nd L

eeds

City

Cou

ncil

in U

K w

as e

stab

lishe

d fo

r the

em

pow

erm

ent o

f SM

ME

’s th

roug

h pu

blic

and

priv

ate.

S

treng

then

ing

of th

e S

TLM

arts

, sp

orts

, cul

ture

and

her

itage

foru

m w

ill

be re

pres

ente

d in

the

LED

foru

m.

Dev

elop

men

t of a

regu

lato

ry

envi

ronm

ent t

hat p

rom

otes

sm

all

and

med

ium

ent

erpr

ise

grow

th, f

or

exam

ple,

pre

fere

ntia

l pro

cure

men

t, B

road

Bas

ed B

lack

Eco

nom

ic

Em

pow

erm

ent

Dev

elop

a d

atab

ase

of a

ll bu

sine

sses

in

clud

ing

wom

en, y

outh

and

per

sons

w

ith d

isab

ility

ow

ned

busi

ness

es

Faci

litat

e in

dust

rial d

evel

opm

ent

Faci

litat

e in

vest

men

t in

our v

ario

us

noda

l poi

nts

Iden

tify

LED

pro

ject

s/ p

rogr

ams

that

re

quire

fund

ing.

Map

uto

Dev

elop

men

t Cor

ridor

R

eviv

ing

of to

wns

hip

busi

ness

(car

w

ash

& s

hisa

nyam

a m

odel

)


5.8

PRO

POSE

D C

API

TAL

INVE

STM

ENT

PRO

JEC

TS (F

IVE

YEA

R P

LAN

201

6-20

21)

Obj

ectiv

e / k

ey

Prin

cipl

eTa

rget

/ In

dica

tors

Act

ivity

Res

pons

ible

Tim

efra

me

Fund

ing/

Bud

get

Prin

cipl

e 1

Cre

ate

a H

iera

r-ch

y of

func

tiona

l To

wns

and

set

tle-

men

t

Rev

iew

of s

patia

l de

velo

pmen

t fra

mew

ork

Spa

tial P

lann

ing

2015

/16

Pub

lic a

nd p

rivat

e fu

nds

Prin

cipl

e 2

Ens

ure

equi

tabl

e ac

cess

to s

ocia

l in

frast

ruct

ure

and

the

prom

otio

n of

lo

cal e

cono

mic

de

velo

pmen

t by

way

of M

PC

Cs

and

agric

ultu

ral

villa

ge

Est

ablis

hmen

t of

MP

CC

s, S

MM

E

Indu

stria

l Hub

, A

gri-H

ub, i

mpr

ove

agric

ultu

ral

infra

stru

ctur

e,

esta

blis

hmen

t of

a S

teel

and

Met

al

Fabr

icat

ion

Hub

Spa

tial P

lann

ing

Bui

ldin

g M

anag

emen

tLo

cal E

cono

mic

D

evel

opm

ent

DE

DT,

ND

M

2016

– 2

021

Pub

lic a

nd p

rivat

e fu

nds

Prin

cipl

e 3

Dev

elop

men

t an

d m

aint

aini

ng

stra

tegi

c in

tern

al

and

exte

rnal

lin

kage

s

Est

ablis

hmen

t of

an L

ED

For

umLo

cal E

cono

mic

D

evel

opm

ent

2016

/17

Pub

lic a

nd p

rivat

e fu

nds

Prin

cipl

e 4

Nat

ural

reso

urce

de

velo

pmen

t and

pr

otec

tion

area

Issu

ing

of

licen

sing

and

m

ine

perm

its, l

and

avai

labi

lity

for

min

ing

purp

oses

, ag

ricul

ture

Spa

tial p

lann

ing

Min

eral

Res

ourc

es20

16 –

202

1P

ublic

and

priv

ate

fund

s

Prin

cipl

e 5

Pro

mot

ion

of

sust

aina

ble

land

refo

rm a

nd

secu

rity

of te

nure

vi

a A

gri V

illag

e an

d A

BP

s

Impr

ove

the

capa

city

of

agric

ultu

ral

parti

cipa

nts,

eg

emer

ging

farm

ers,

co

oper

ativ

es.

Acc

eler

ate

land

re

form

pol

icie

s

DA

RD

LEA

2016

– 2

021

DA

RD

LEA


5.8

PRO

POSE

D C

API

TAL

INVE

STM

ENT

PRO

JEC

TS (F

IVE

YEA

R P

LAN

201

6-20

21)

Obj

ectiv

e / k

ey

Prin

cipl

eTa

rget

/ In

dica

tors

Act

ivity

Res

pons

ible

Tim

efra

me

Fund

ing/

Bud

get

Prin

cipl

e 6

Ben

efits

from

loca

l in

dust

ries

(min

ing,

m

anuf

actu

ring,

ag

ricul

ture

, util

i-tie

s, e

tc)

Pre

fere

ntia

l P

rocu

rem

ent,

Soc

ial L

abou

r P

lans

Min

eral

R

esou

rces

, LE

D20

16 –

202

1P

ublic

and

priv

ate

fund

s

Prin

cipl

e 7

CB

D Im

prov

emen

tR

evie

w o

f spa

tial

deve

lopm

ent

fram

ewor

kS

patia

l Pla

nnin

g20

16 –

202

1P

ublic

and

priv

ate

fund

s

Prin

cipl

e 8

Pro

pose

d w

eldi

ng

train

ing

faci

lity:

S

AIW

Land

allo

catio

n,

link

to o

ther

in

itiat

ives

in s

teel

(s

teel

incu

batio

n,

tool

ing

initi

ativ

es

stee

l fab

ricat

ion

hub)

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tial P

lann

ing

Loca

l Eco

nom

ic

Dev

elop

men

t20

16 –

202

1R

110

000

000

DTI

SA

IW

Prin

cipl

e 9

Pro

pose

d S

teel

an

d M

etal

Fa

bric

atio

n H

ub:

DE

DE

T

Feas

ibili

ty s

tudy

an

d de

velo

ping

a

busi

ness

pla

n fo

r th

e es

tabl

ishm

ent

of a

ste

el a

nd

met

al fa

bric

atio

n hu

b

DE

DT

ND

MS

TLM

2016

- 2

021

R1

000

000

ND

M

Prin

cipl

e 10

Rec

apita

lizat

ion

of M

achi

nery

: M

pum

alan

ga

Sta

inle

ss In

itiat

ive

Rec

apita

lize

mac

hine

ry a

nd

equi

pmen

t of t

he

stee

l inc

ubat

or

DE

DT

Mpu

mal

anga

S

tain

less

Initi

ativ

e20

16 -

202

1M

SI D

ED

T A

tlant

is

Min

ing

Prin

cipl

e 11

Allo

cate

mor

e la

nd

for S

MM

Es

Acc

ess

to m

ore

land

at t

he s

how

gr

ound

for S

MM

Es

Tow

n P

lann

ing

LED

2016

- 2

021


5.8

PRO

POSE

D C

API

TAL

INVE

STM

ENT

PRO

JEC

TS (F

IVE

YEA

R P

LAN

201

6-20

21)

Obj

ectiv

e / k

ey

Prin

cipl

eTa

rget

/ In

dica

tors

Act

ivity

Res

pons

ible

Tim

efra

me

Fund

ing/

Bud

get

Prin

cipl

e 12

New

sho

ppin

g co

mpl

ex (M

hluz

i an

d M

idde

lbur

g)

proj

ects

on

Trad

e

Exp

ansi

on o

f the

M

idde

lbur

g m

all

Ret

ail S

ecto

r20

16 -2

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ate

inve

stm

ents

Prin

cipl

e 13

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stic

al h

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uris

mU

pgra

de o

f to

uris

m c

entre

Nat

iona

l D

epar

tmen

t of

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ism

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5 00

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Prin

cipl

e 14

Map

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CHAPTER 6 GREEN ECONOMY

6.1 What is Green Economy

United Nations Environment Programme (UNEP) defines a green economy as one that results in improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities. It has low carbon emissions, resource efficient and socially inclusive.A municipality with ‘a green economy’ will therefore be characterised by: • Reduced dependence on fossil fuels. • Introduction of cleaner fuels and renewable energy. • Increase in energy and transport efficiency. • Efficiently managed resources in the pursuit of economically and environmentally sound development. • Prevent the loss of biodiversity and ecosystem services

6.2 Challenges of Transition to Green Economy in STLM

The local economy is dominated by the manufacturing and mining industries as well as a presence of several power stations. All of these manufacturing and power plants are coal-fired, which has significant implications on the carbon footprint of the municipality. The neighbouring municipality has twice the number of mining companies and power stations and therefore contribute further to the degradation of the local environment. In addition to the main urban centre of Middelburg, several small towns have been created to serve specific mines and power stations, like Arnot, Rietkuil, Pullenshoop, Rietspruit, etc. The economies of these towns solely depends on these industries for employment and the business spin offs. This therefore provides a major challenge to develop and implement strategies on transition to low- carbon emission industries.

6.3 Alignment with Policies and Plans

The current municipal strategies as detailed in 2016 / 2017 IDP, 2006 LED (under review) are crafted within the context of the national policies (NDP), provincial (Mpumalanga Economic Growth and Development Strategy) and the district’s IDP.The current review of the 2006 LED is a transition to a low carbon emission with the municipality implementing a green policy in its building. The review strategy is identifying environmentally friendly developmental programs:


• Recognition of the importance of conserving the natural environment and water resources;

• Tourism development, particularly in the mountainous north-west; • Promotion of agricultural activities, including protecting the available agricultural

land-base, supporting commercial farming and agro-processing. • Encouraging private investment, including the view of industrial and Big business

development as a key growth lever; • SMME support and development; • Job creation through CWP and EPWP, especially with regard to environmentally

beneficial projects; • The need for developing the local human resource base; • The need for an effective and efficient public transport systems that serves both rich

and poor; • Align the legal framework to create a favourable regulatory environment to enable

a transition to low carbon emission economy, eg flexible property rates (Municipal Property Rates Act).

6.4 Recommended Strategies for Transition to Green EconomyThe following are the recommended steps and action plans for the implementation of green economic development strategies:

• Safeguard the economic potential of the natural resource base in order to reduce the dependency of the local economy on manufacturing and mining. It is key for the municipality to find a balance when planning land allocation between agriculture and mining. Furthermore, post-mining activities should entail rehabilitating mined areas back to its original state for agricultural use.

• Mine Water Rehabilitation is becoming critical as it provides for the re-use of mine water for industrial purposes. The municipality is a water scarce municipality and this is further aggravated by the acid mine drainage. Some of our exported agricultural products will be affected by this if we use poor water quality. The water reclamation plant establishment jointly with Shanduka aims at rehabilitating the mine contaminated water for re-use by industries. This improves water security and helps reduce the negative impact of mining activities.

• Construction of wetlands is a once off investment that reduces acidity and heavy metal concentrations. Working for Water Program of the Department of Water Affairs aims at preserving wetlands for the purpose of rehabilitating acid water. This is done through the EPWP as managed by Public Works.


• Creating secondary industries out of the mine dumps and rehabilitated mine areas, for example, converting coal waste into briquettes and pellets, cement manufacturing, recycling, etc.

• Improve railway infrastructure and public transportation systems to reduce reliance on road transportation

• Explore alternative energy sources in order to reduce dependency on the use of electricity, coal and biomass by working in partnership with the private sector to implement waste to energy projects (landfill sites, waste water treatment plants).

• Introduce incentives for companies/ industries employing cleaner production systems (wrt waste generation, water usage, energy use, harvesting of rain water).

• Incorporate aspects of the green economy in new developments. (e.g all building plans to be installed with solar power system before approval).


6.5 A Summary of Key Indicators: Transitional Steps to Green Economy

Recommendation/outcomes Proposed Actions Economic Transition

Outcome Indicators

Use the full potential of natural resources

Increase agricultural activities to diversify local economy

Reduced reliance on mining and manufacturing sectors

for economic growth

Identify skills gap and promote relevant skills and

education

Working with training institutions to train candidates

on green economy (waste management)

Developed green economy course at school levels

(including FETs)Labour force skilled in green

economic initiatives

Improve freight and transport systems

Improved rail infrastructure to increase use of off-road

transport modeLobby Transnet to allow private siding on their rail

infrastructure

Reduced emission from trucks and heavy duty vehi-

clesAlternative mode of transport

other than road

Improve regulatory measures

Lobby DMR to implement post mining pledges

(rehabilitation of mined areas)

Enable the re-use of mined land (agriculture, commercial,

tourism attractions)

Establishment of SMMEs

Lobby developmental agencies and sector

departments to assist in establishing of SMME in the

green economy sector

SMMEs to identify opportunities in waste management, water reclamation, cement

manufacturing, briquettes making


CHAPTER 7 TOWNSHIP ECONOMY AND INDUSTRIES REVITALIZATION STRATEGY

7.1 Introduction

According to the National Development Plan, 11 million new jobs will be created by 2030 and about ninety percent of these will come from small and medium enterprises. Bulks of these small and medium enterprises are located in the townships with very limited access to development programs, infrastructure and financial resources.

The location of the SMMEs systematically excludes them from the mainstream economy and therefore missing out on being linked to core businesses of the main industries like mining, manufacturing, agriculture and retail industries. Furthermore, this excludes them from the value chain of major business operations in the established industrial areas; no manufacturing facilities are located in the townships. Township business then becomes a consumer of the services and not the producer of goods.

7.1.1 Key Objective of the Township Economy and Revitalization Strategy

The overall objective of the strategy to revitalize township economy is to align small and medium enterprise development (as part of the broader LED Strategy) with the overall goal of the National Development Plan, namely to create 11 million new jobs by 2030. This then suggests an inclusive approach for economic development. Government is paying a special attention to the realization of this objective. Through the ministry of Small Business Development, there are concerted effort to focus development to small and medium enterprises and cooperatives. Part of the ministry’s strategy includes a program on township development.

The strategy aims at laying the foundation on developing businesses in the historically excluded areas. It seeks to understand market failure, difficulties in accessing capital, information, market and government support programs, poor relationship with major industrial and corporate entities, not enough researched information on new market trends, underdeveloped infrastructure in township and peri-urban areas.


7.1.2 The Municipal Vision on Township Economy and Revitalization Strategy

The municipality is developing an inclusive and integrated approach to its development programs. The approach is based on the principles of accessibility, full participation and redistribution of resources to achieve the balancing factor. The approach seeks to isolate entrepreneurship and harness it to achieve the overall goal of converting townships into productive vibrant economic havens that produce employment opportunities.

7.2 Situational Analysis

7.2.1 The Summit on Reviving the Township Economy and Industries

Township business has not realized its potential of producing goods and services that can be linked to mainstream industries; they are not linked to the value chain of these industries. They are therefore excluded from the distribution of resources in the form of financial support or procurement opportunities. They therefore rely on supplying the non-core functions to the established businesses, for example, the provision of gardening and cleaning services, supply of materials and office consumables and catering services. These limited and unsustainable opportunities are highly populated by service providers and that limits the scope of development for the emerging businesses.

The revitalization of the township economy strategy sets to unpack the challenges confronting businesses base in townships and rural areas. The summit on reviving township economy and industries (held in Mhluzi February 2016) revealed issues confronting township based businesses:

- The retail sector has been infiltrated and dominated by foreign nationals who come with a stronger procurement strategy further alienating the struggling township retailers. Many of these retail businesses are not compliant to regulatory requirements and thus enjoy an unfair business advantage.

- Limited training and business skills further hampers the development and actual growth of the small and medium enterprises. There is a lack of both technical and business skills to manage and grow the business.

- There is a lack of formal structures that will assist emerging businesses to be organized and create networks that will benefit them. Established businesses have


chambers of commerce serving as lobbying and advocacy institutions on their behalf. This enables big businesses to address industry issues as a collective and get more attention especially from government.

- Township businesses are confined to street corners and backyards with a lack of proper facilities to work. This compromises the quality of output, price and productivity. In this way such businesses cannot access major markets that require stringent standards to be met. For example backyard panel beaters cannot access opportunities offered by insurance companies because their facilities do not meet the required quality standards. This problem is exacerbated by the lack of access to land and the cost of accessing serviced land.

7.3 Legislative Framework and Regulations

Government has over the years developed new policies, regulatory regime that aim at uplifting emerging businesses to be on par with the broader business community. Government has refined the mechanism to support small and medium enterprises.

This has however yielded minimal impact as emerging businesses were still systematically excluded from the mainstream of development. There is a need for a different approach to developing businesses in the township. New regulatory and development framework was then developed to govern the support for small and medium enterprises.

7.4 Enterprise Development

Government has, through acts of parliament, established enterprise development agencies that are supporting small and medium enterprises, the institutional arrangements:

- State Enterprise Development Agency (SEDA), established in December 2004 through the National Small Business Amendment Act, 29 of 2004. It carries a mandate to implement government’s small business strategy and has over the years, designed a common and standard national delivery network for small enterprise development. It offers non financial support to enterprises within its scope of mandate and works with agencies to offer a full boutique of services. SEDA has a branch in Emalahleni Local Municipality and can be accessed by local businesses in Steve Tshwete Local Municipality. Its service is extended by a network of service providers they have in their database, further extending the services that businesses can benefit from.


- National Youth Development Agency (NYDA), was established through the merger of youth development organizations in order to consolidate the agenda on youth development.

- Mpumalanga Economic Growth Agency saw its establishment through the consolidation of the institutions, Mpumalanga Agricultural Development Agency, Its key mandate is to facilitate trade and investment in the province and including the development of small and medium enterprises.

- ndustrial Development Corporation fulfils the mandate of promoting economic growth as detailed in the act of Parliament (Industrial Development Act, 22 of 1940. It has investments in major local operations across all industries. It has played a key role in the local manufacturing industries with investments in the steel industries (Columbus Stainless in Middelburg and Evraz Highveld Steel and Vanadium in Emalahleni). It has a footprint countrywide and in Mpumalanga it has a regional office in Mbombela and satellite offices in Secunda and Emalahleni.

- National Empowerment Fund was established to finance black people that want to go into business. It is based in Mpumalanga and works throughout the province.

- State Enterprise Financial Agencies was established in April 2012 consolidating a number of state owned institutions.

- Anglo Zimele Hub is a subsidiary of Anglo American Corporation and provides a boutique of business support programs inclusive of business loans. It has offices in Middelburg CBD and is accessible by local businesses.

7.5 Informal Economy

Informal businesses are assisting families to survive and earn additional income for households. There are no formal tools to administer support for this sector and yet it has significant contribution to the economy. Bi-laws do not accommodate the informal businesses as they do not meet many of the health and quality standards required by government and end users of their services.

There are areas that restrict informal trading as they might pose some form of health risks like food stalls and selling perishables, or obstruction of traffic mainly through self-made stalls at traffic intersections; these areas are however viewed by the informal traders as viable. There are therefore competing objectives between government and the informal traders.


It is recommended that government establish a developmental approach to the informal sector so as to assist them to grow and ultimately comply with bi-laws.

The following are some of the areas utilized by the informal businesses:

- Irag Taxi rank - Extension 8 clinic - Extension 8 bridge (fruit and vegetable and car wash) - Tokologo and extension 6 four-ways - Sasol garage extension 2 - Mhluzi Mall - Four-ways stop extension 2 (light industries) - Kwaza entrance - Doornkop main entrance (entrance 1) - Extension 24 and Rockdale entrances

7.6 Strategic Pillars of Support

7.6.1 Economic Infrastructure

4.1.1 Land The municipality has zoned areas for commercial and business purposes in responding to the growing demand for affordable in the townships. The following areas have been zoned for trading purposes:

- Extension 5 in Mhluzi - Node D in extension 23 designed to accommodate small and medium enterprises

operating in informal facilities - Business areas zoned in Newtown - Initiatives along the Mandela road including the Mhluzi mall and the vacant land next

to it. - Land made available for the development of the Kwaza Hendrina mall


7.6.2 Industrial Parks for Small and Medium Enterprises

A high level survey was conducted by the municipality on activities carried out by businesses in the townships. It was established through this study that businesses were conducting illegal activities in their backyards and at street corners. It was further recorded that many of these businesses activities were posing danger to society and some were also hazardous in nature. For example welding, panel beating and spray painting were conducted in backyards. These are dangerous and pose health risks to residents.A land was therefore zoned for purposes of housing these emerging businesses that are working from home and cannot afford to buy land for trading. The land, namely Node D, will be utilized to erect workshops designed in accordance to the enterprises doing light industrial activities.In this way the municipality is facilitating access to infrastructure thus alleviating the burden of erecting structures by township businesses. The infrastructure development enables further development of the township business through other developmental programs, for example, the an incubation program as managed by State Enterprise and Development Agency and the Department of Trade can be implemented in the industrial park. This will further assist in expanding the current steel incubation program of Mpumalanga Stainless Initiative.

7.7 Resourcing

Various forms of financial support are available in the market place. These are provided by both government through government development agencies and the private sector, working mainly through the banks and other funding institutions. The current funding models do not address the challenges faced by township based businesses, like the lack of adequate collateral, lending guarantees, lack of industry knowledge, management skills, etc. These are critical requirements by funding institutions when considering business plans of businesses especially start ups.

7.8 Entrepreneurship Development

Studies conducted by global institutions like the World Bank and World Economic Forum concludes that South Africa has the lowest levels of entrepreneurship among its peers. This section demonstrates the development that can be achieved through structured development programs. The cases below illustrate how interventions can assist achieve good results when efforts are made in developing small and medium enterprises.


BUSINESS CASE STUDY 1: MPUMALANGA STAINLESS INITIATIVE (MSI)

This initiative was established as a result of government and business partnering to curb escalating unemployment rate in Mhluzi (Middelburg) in the late eighties. Due to the unrest with communities protesting against high rent and rates and unemployment, Columbus Stainless through its corporate social responsibility investment program pledged to assist the community to establish job creation initiatives.

The conglomerate made facilities available to start job creation projects and even supplied material to further assist the project. The Job Creation Centre in Chromeville was made available for this purpose. The first project was making of pots from steel and metal, the birth of COMPOTS (“Comrades making Pots”). This initiative was later adopted by the Department of Economic Development and Planning and included other private businesses like ABSA.

It was renamed Mpumalanga Stainless Initiative and aims at developing entrepreneurs in the fabrication of steel and metal with a view of creating finished products. Entrepreneurs are given access to production facilities and development programs, both technical and business skills programs.

They are further assisted to access raw materials at affordable prices, access to markets and exhibition shows. The entrepreneurs exit the program after three years.

The program was later moved to the industries at HEDC, a land made available by the municipality to house emerging entrepreneurs at infancy stages.

This program (steel incubation) has produced medium sized businesses that are sustainable and are offering services to both the government and the private sector. They now require bigger production facilities in order to expand their product offering, The premises provided by HEDC were sufficient at the time of inception of the enterprises but now the facilities are no longer adequate for further expansion of these medium sized enterprises. It is thus recommended that the Department of Economic Development and Tourism and municipality consider identifying some of the medium sized entities that are sustainable and develop proper facilities for them.


BUSINESS CASE STUDY 2: HIGHVELD ENTREPRENEUR DEVELOPMENT CENTRE (HEDC)

Highveld Entrepreneur Development Centre was established as a result of a partnership between business and the government particularly Steve Tshwete Local Municipality. Previously Middelburg Forum provided a platform all stakeholders to address socio – economic issues ranging from job creation, education, housing, safety and security, etc.

HEDC was then established to facilitate entrepreneur development and support. A fund was established to serve as a guarantee when businesses applied for loans at financial institutions. HEDC assists emerging businesses with free training and business advisory services. Township businesses are benefiting from these services and the training centre is in the township.

A land was also made available for HEDC to establish workshop and house small and medium enterprises at the old show ground. Many businesses have been established through this approach and are now strong medium sized entities. The facility is now houses established businesses like the manufacturers of agro-processing equipment’s, electrical enclosure boxes, kitchen and wardrobe material, cleaning chemicals and many others.

7.8.1 Business Support and Competitiveness

Some emerging businesses have demonstrated abilities of producing quality goods and services especially in the steel and metal fabrication sector, producing steel gates, security doors and burglar windows. These have however faced another challenge in their business ventures, where do they find markets to sell their produced goods and services. This might also include the access to raw material which is still a domain of big business and cartels. Some initiatives have been noted by the private sectors that seek to expose emerging businesses to procurement opportunities. For example, there are supplier development initiatives established by businesses like mining houses. Aglo-zimele supply development has been operational over the last 5 years. This initiative has bear good output of about local suppliers.The Adelaide Tambo multipurpose centre houses the Supplier Development Program of South 32 (formerly BHP Billiton). Small and medium enterprises are assisted to improve their capacity in order to access procurement opportunities in the mining sector. In this way these emerging businesses are in a position to access wider markets.


7.8.2 Networking and partnerships

Associations and network platforms are an integral part of developing small and medium enterprises. Industry associations help them grow through benchmarking, information sharing, resource sharing, and utilizing common production facilities as and when they require them, especially those in manufacturing. Medium sized businesses in developed countries in Europe like Italy will have a database of skilled workers that can be utilized by emerging businesses on ad hoc basis and / or as when they require them. Some associations specialize in this area of business by making skilled labour available at a particular rate.

7.8.3 Market Access

International business symposium and the relationship already built with international role players through MEGA has yield positive results.

7.9 Resource Mobilization and Partnerships

Communities have over the years mobilized resources and organized themselves into semi-formal groupings make membership contributions or fees. This has however not been explored at businesses levels. Partly to this problem is a lack of support from government in form of additional resources when such initiatives have been taken by community members. Furthermore, there are restrictions imposed by the Financial Service Board when informal groups do financial transactions exceeding certain limits as will be prescribe by the banking sector. There is a fair amount of financial programs and incentive schemes available for access by cooperatives and emerging businesses; however there is still a high level of noncompliance and thus limiting the accessibility to such funds.

7.9.1 Partnerships

It is clearly demonstrated that the development of emerging businesses especially in the townships, will highly coordinated efforts from all stakeholders. It is important that all the key stakeholders be identified and a schedule of responsibilities be drawn in order to align the programs of government, sector departments, development agencies as well as the private sector.


7. Implementation PlanPillars and proposed programmes for development

Pillar Projects and Initiatives

Resources / Requirements Partnerships

Development Infrastructure

Industrial / business stands ext 5, 6 , 23

and New Town

Industrial Park / NODE D

Mandela Corridor

Mhluzi Mall expansion

Recreational Park in Hendrina

Workshops for renting at HEDC centre and show

ground

Construction of a boarding school at

Somaphepha

Business stands for sale at Newtown,

extension 5/6

Anglo is partly funding the

development of Node D

Opportunities along Mandela RD

More land available for retail trade

Contracting opportunities

Vacant municipal land at the showground

Opportunities for contractors

STLM and private sector

All mining houses operating within

STLM

Private sectors

Mhluzi Mall investors

STLM

HEDC / MSI

Department of Basic Education

Enterprise Development and

SMME Support Programs

Training and Support programs

Enterprise Development – ABSASteel incubator – MSI

Training of SMME Business incubation

Business plans

HEDCMSI

ABSAMTI

SEDANYDA

Funding and Resources

Business loansGrants

IncentivesSocial labour plans

Corporate social responsibility

Black Industrialist Program

Business plansApplications

NYDAMEGANEFIDC

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Supplier Development

Market Access

Preferential procurement

Capacity building

Database registration e-Procurement portal

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ABSA (e-portal) Middelburg Chamber

(Columbus)Accenture

(Shanduka)Anglo Zimele (Anglo)

Chem City (Sasol)


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8.2 MONITORING AND EVALUATION

In order for the municipality to effectively plan and implement this LEDStrategy, the following should be developed: o Approval of the LED Strategy and terms of reference for the establishment of the LED

Forum. o Appointment of LED Advisors. o Establishment of the LED Forum. o The priority projects and development facilitation focus areas, prioritised through

stakeholder consultation and through the use of a project prioritisation matrix required for the 5-year period of the strategy.

o Implementation plan of the strategy along with actions plans, timeframes, financial and other resource requirements, for example a spatial plan framework aligned to the LED process.

o An effective monitoring and evaluation system in order to assist the LED unit in tracking the progress with regards to economic development.

o Align the LED Strategy to internal policies, budget processes and risk strategies. o Establish an LED Forum to monitor the implementation of the LED Strategy, aligning

it to economic trends and development. o Improve the capacity of the LED unit to effectively implement the strategy. o Establishment of a partnership model with other key stakeholders (both private and

sector institutions). o The monitoring and evaluation should be should regularly in order assess the impact

of the township revitalization strategy. The interventions should include among other things, the following indicators:

- The number of emerging businesses assisted and sustained, - The newly created jobs and their sustainability and the overall impact to society.

8.3 Framework of Roles

Economic Cluster Department

Macroeconomic policy development, legislative and regulatory frameworks and support

COGTA & SALGA Strategy development, national coordination and support, monitoring and evaluation

Province Govt Strategy development, national and provincial coordination and support, monitoring and evaluation


MPG

District GovtNkangala District and local coordination and implementation support

Local Govt STLM Coordination and strategy implementation

Private Sector Financial, information, training, technical support and partnerships

8.4 CONCLUSION

The LED Strategy is developed to create an economic framework within which broader sectoral opportunities will be identified, prioritized and implemented.It aims at translating the IDP into economic principles and strategies for further implementation. It has to be continuously aligned with ever changing economic trends. It finds its context within the framework as created and provided for by other spheres of government.

table of contentsstlm.gov.za/documents/led/led strategy 2016-2021... · steve tshwete local...

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