Framework and Strategy for the
Regeneration of the Matatiele Municipal
Area
For the Matatiele Economic
Regeneration Project
Submitted t0:
The Matatiele Municipality in Partnership with the Department of
Economic Development and Tourism
March 2003
McIntosh Xaba & Associates
A partnership of institutional and development
research and facilitation specialists
P O Box 61221
Bishopsgate
4008
T (031) 5634335
F (031) 5634334
Email: [email protected]
Web: http://www.mxa.co.za
Contents page
1
Section One: Methodology ________________________________________________________ 1
1.1
2
Scenario Planning ___________________________________________________________ 1
Section Two: Rules of the Game ____________________________________________________ 3
2.1
Key Framework Rules And Guidelines For Matatiele ________________________________ 3
2.1.1
Pre-requisites _____________________________________________________________ 3
2.1.2
Approach ________________________________________________________________ 4
2.1.3
Outcomes ________________________________________________________________ 5
3
4
5
Section Three: Key Uncertainties and Scenarios within the Matatiele Environment _________ 6
3.1
Key Uncertainties ____________________________________________________________ 6
3.2
Scenarios __________________________________________________________________ 7
Scenario 1: Inactivity __________________________________________________________ 7
Scenario 2: Uncoordinated Action and Reaction____________________________________ 7
Scenario 3: The Giant Turns____________________________________________________ 8
Section Four: Options and Strategies_______________________________________________ 10
4.1
Guiding vision _____________________________________________________________ 10
4.2
Strategies _________________________________________________________________ 11
Strategy One: Build on Strengths and Available Resources __________________________ 12
Strategy Two: Build a Strong Poverty and Food Security Program ___________________ 12
Strategy Three: Build New Sectors and Diversify the Economy_______________________ 12
Strategy Four: Communication and Institution Building across Internal and External
Stakeholders ________________________________________________________________ 13
Section Five: Programs and Projects _______________________________________________ 14
Programs and Projects within Strategy One: Build on Strengths and Available Resources 14
Programs and Projects within Strategy Two: Build a Strong Poverty and Food Security
Program ____________________________________________________________________ 14
Programs and Projects within Strategy Three: Build New Sectors and Diversify the
Economy____________________________________________________________________ 15
Programs and Projects within Strategy Four: Communication and Institution Building
across Internal and External Stakeholders________________________________________ 15
6
Section Six: Project list __________________________________________________________ 17
1 Section One: Methodology
1.1 Scenario Planning
The team undertook a scenario planning exercise during the technical workshop.
The methodology makes use of the matrix as indicated below.
CONTROL
3. Options
4. Decisions
Strategies
U
N
C
E
R
T
A
I
N
T
Y
Programs
Projects
2. (a) Key
1. Rules of the
Uncertainties
Game
R56 Road
(b) Scenarios
- Inactivity
- Unco-ordinated
action and reaction
- The Giant Turns
LED Policy
LED Best Practice
LED Guidelines
C
E
R
T
A
I
N
T
Y
Legislation
Funding
ABSENCE OF CONTROL
Matatiele Framework Strategy
1
The methodology begins in quadrant one (Rules of the Game), working through
the Key Uncertainties, Options and Decisions. The end result is a focused set of
options (including programs and projects) built on what is possible. The section
below indicates the outcomes for each of the quadrants.
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2
2 Section Two: Rules of the Game
The research for the status quo report and the results from the technical
workshop have enabled the team to compile a set of key framework rules and
guidelines, and key uncertainties. The technical workshop and the IDP have
enabled the team to develop a vision and strategy, and set of possible programs
and projects. The process has been cognizant of the work that was completed as
part of the IDP process and key inputs have been used from that process.
2.1 Key Framework
Matatiele
Rules
And
Guidelines
For
The key framework rules and guidelines provide the markers that will assist in
the formulation and implementation of an LED program.
2.1.1 Pre-requisites
Most of the pre-requisites listed below relate to the vehicle or organization that
will drive the led program. Most of these appear obvious, but experience from
other initiatives indicates that these are life and death factors when undertaking
LED programs. The institutional and administrative centers must be clear.
The LED vehicle / organization must be sustainable.
Must be driven by local actors and maximize use of local resources.
It should be clear who should be raising resources for LED.
Requires administrative alignment (particularly cross-border in this case).
Participation of Government, Organized Business and Civil Society within the
LED process.
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The focus must be on developing economic strengths and overcoming
weaknesses (for example Matatiele has a high level of dependency on
wholesale and retail, and the potential to develop tourism market share).
It must expand existing markets and develop new markets.
Communication and access to information.
Access to finance.
Must make maximum use of existing resources.
There should be rules concerning local content and the use of local
contractors.
The program must be strengthened through the development of partnerships
(Public-Private-Partnerships, Municipal-Community-Partnerships etc).
2.1.2 Approach
The approach to LED outlined below is strongly supported by the development
framework within South Africa. The factors listed below were supported by the
technical workshop.
A participatory approach to LED must be followed from planning to
implementation.
Must target the vulnerable groups i.e. women, disabled & youth.
Demographic profile suggests that priority should be aimed at focused and
appropriate African youth skills development.
Governments’ role is to create an environment which is conducive to
economic development. (Matatiele municipality currently has a much more
hands on approach).
The Municipality is expected to lead by example, but not necessarily
undertake all the actions that are required.
The organizations that form the LED cluster must mirror organizations at
national, provincial level; in order to link into programs and access funding,
including other municipalities.
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4
Must be linked to the IDP as guiding document.
High levels of poverty in the municipality and the hinterland suggest a propoor strategy.
Initiatives should use labor- based methodologies where possible.
2.1.3 Outcomes
The outcomes of the led program must be more than the income generated and
the employment created. It should assist in restructuring the economy and create
momentum for further action.
Skills development and transfer should be encouraged.
Economic leakages should be minimized.
Economic linkages within the economy need to be strengthened.
Must lead to increased circulation of resources within Matatiele.
Should set a base for economic restructuring (which is ongoing).
LED must be sustainable both financially and environmentally.
Must lead to stakeholder integration and alignment for long term benefits.
Must lead to job creation and economic growth.
Should contribute to poverty alleviation and equality.
Successes must be known to the community and outside stakeholders.
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3 Section Three: Key Uncertainties and
Scenarios within the Matatiele
Environment
3.1 Key Uncertainties
The situational analysis and the technical workshop identified a number of
uncertainties that could impact on the economic future of Matatiele. The extent
to which these can be controlled will differ per issue.
Economic relationship and linkages between Matatiele and Sisonke, KwazuluNatal & Lesotho:
A. Positive with regard to economy and spending power.
B. Negative with regard to social services capacity.
C. Negative in that traders come in from outside, sell their goods and
leave.
Future demarcation of the Municipalities and Provinces could change
administrative structures.
Changes in the economic environment in the neighboring hinterland will have
an impact on the wholesale and retail sector.
Changes In Major Transport Routes are a reality – the uncertainty is how the
region react to it i.e.
A. The N2 can be negative
B. The R56 can be positive.
Stock theft (crime).
Access to Finance.
Access to markets – particularly a declining market in historical catchment
areas.
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The extent to which a focused inward investment strategy would draw
manufacturing and service sector investment
The vehicle / organization to drive LED over the long term.
Participation of Government, Organized Business and Civil Society within the
LED process.
Will the participants in the LED projects maintain their commitment and
enthusiasm?
3.2 Scenarios
The scenarios presented below are a composite of discussions and comments
made in individual interviews and discussions. The purpose is to bring together a
sense of what the respondents were hoping for as a future.
Scenario 1: Inactivity
The shift of commerce and services to the Eastern Cape and the shift of the
economic and transport corridor is not met by a focused response from the
municipalities or the sub-region. The municipality, organised commerce and
civil society do not work together to strengthen the economy. This is an unlikely
scenario given the commitment to the current project.
Scenario 2: Uncoordinated Action and Reaction
There is activity and some projects are started, but there is no co-ordinated
response to the new developments in the sub-district. Projects and initiatives are
unconnected, largely based on what other municipalities and actors are doing.
There is a danger of this happening.
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7
Scenario 3: The Giant Turns
The municipality and the sub-district undertake a considered and deliberate
strategy to turn the economy around. There is a strongly co-ordinated initiative to
establish an East Griqualand Integrated Development, Tourism and Investment
initiative which includes:
The establishment of a public- private-community partnership between
current farmers, investors, the Department of Land Affairs, the Department of
Agriculture, parastatals (Land Bank, IDC), to establish deciduous fruit
production in the sub-district with the necessary training, marketing and
processing arrangements in place.
The Community Tourism Organisations across the region build a strong and
diverse tourism product development and marketing capacity, taking full
advantage of the changing road routes and the areas location by building
route linkages with other tourism regions (Wild Coast, South Coast,
Ukhahlamba) as well as the urban/rural linkages (Mount Currie Gateway and
rural adventure, cultural and eco-tourism products).
An urban renewal initiative is undertaken in both Matatiele to consolidate the
towns’ service and commercial role, including a review of the commuter
services and retail function to improve the shopping experience.
Resources are mobilised by the initiative to attract investment, undertake
training and provide technical advice and business networks for agriprocessing enterprises in Matatiele focusing on fruit and other high value
commodities.
The upgrading of the Kokstad airport, the establishment of the JL Dube Trade
Port and the uncongested N3 allows for improved movement of goods and
tourism to and from the sub-district.
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The net result is the diversification of the economy, economic growth,
employment creation and a reduction in poverty levels.
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4 Section Four: Options and Strategies
4.1 Guiding vision
The guiding document for any development within the Municipal area must be
the IDP. The vision developed by the people of Matatiele during the IDP process
for LED is outlined below.
The Local Economic Development Vision for the
Matatiele Municipality
Local Economic Development
to maintain the present role of Matatiele as the dominant
commercial centre in the sub-region.
to diversify the local economy to counteract the effects of the
decline in the retail and wholesale trade.
to achieve:
the transfer of practical skills to residents to enable them to
become entrepreneurs; and
to jump start the local economy by taking advantage of
opportunities.
Source: IDP
As discussed above, the institutional vehicle for carrying the LED program is of
crucial importance.
The IDP vision for institutional development support
indicates the following.
Matatiele Framework Strategy
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The Institutional Development Vision for the
Matatiele Municipality
Institutional
to improve communication channels both within the municipality,
and between the municipality and other key role players.
to improve the skills and expertise within the municipal staff to
ensure efficient and effective administration and service delivery.
retain the financial viability of the municipality.
to initiate an entrepreneurial approach to local government
through strategic partnerships.
Source: IDP
The IDP indicates that LED will be achieved through “focused investment by all
spheres of government and through the establishment of partnerships”.
The IDP provided the basis for discussion during the technical workshops. The
technical workshop participants made some additional comments to those
included in the vision as outlined above.
4.2 Strategies
Four strategic areas have been drawn up from the workshops and the IDP. The
Municipality and the residents of Matatiele have been identified these are the key
areas where intervention is required. The four are not exclusive, nor is there a
Matatiele Framework Strategy
11
need to decide between them. Rather, the Municipality and the residents have
identified that all four are areas where intervention is required.
Strategy One: Build on Strengths and Available Resources
Business retention: must protect the sectors that are developed in Matatiele.
The role of the municipality as a key resource in the town should be
structured in terms of procurement.
This strategy will focus on securing
services from within the town and supporting SMMEs.
Make maximum use of available budgets. This relates to the Municipal and
Provincial budgets, but also the fact that alignment with Municipalities in the
Eastern Cape will assist in maximizing available resources.
Make full use of the municipal commonage (this could run across strategies
one, two and three).
Strategy Two: Build a Strong Poverty and Food Security Program
There is a potential for the development of poverty alleviation and food
security
projects
within
agriculture
(possibly
using
the
municipal
commonage).
Maximize employment and reduce labor market inefficiencies by focusing on
high labor, low technology options for all developments.
Look at traditional food crops for food security and some market availability.
Provide facilities for hawkers.
Strategy Three: Build New Sectors and Diversify the Economy
Agriculture: investigate high value crops and intensive systems.
Tourism: capitalize on emerging advantages.
Mining: revisit opportunities through the Department of Mineral and Energy.
Matatiele Framework Strategy
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Glass making: investigate value added opportunities.
The strategic thrust must link opportunity with need.
Strategy Four: Communication and Institution Building across
Internal and External Stakeholders
There is a need to build a common purpose and vision across stakeholders.
The strategy must overcome poor involvement from the business sector.
There is a need to build confidence and hope.
There needs to be ongoing monitoring and evaluation of all factors (the
economy, what the successes have been etc) and to communicate the gains.
This is a cross cutting strategy.
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5 Section Five: Programs and Projects
There are options for undertaking projects within each of the strategies outlined
above. Potential projects have been identified from three main sources. The IDP
has a five year project roll out, the workshops raised additional ideas and
opportunities, and there are sub-regional initiatives (such as the cross-border
project) that have identified potential projects.
Programs and Projects within Strategy One: Build on Strengths and
Available Resources
Develop a database or information centre that links procurement, small
business and skills availability (such as a Business Linkage Centre).
Structure municipal procurement to develop small business opportunities.
Market the nodal advantages of Matatiele to the customers from the
hinterland.
Investigation into market share, in terms of what products can be added
(including through import substitution).
Develop transport facilities to improve the commuter experience (road and
rank projects).
Programs and Projects within Strategy Two: Build a Strong Poverty
and Food Security Program
Use labour based technologies in all infrastructure projects.
Develop a database of unemployment people, with information concerning
skills and aptitude.
Ensure that training and capacity building is focused and employment
related.
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Compile an audit of Municipal infrastructure and resources available to the
poor.
This can be made available at nominal cost.
This may include
infrastructure or land.
Programs and Projects within Strategy Three: Build New Sectors and
Diversify the Economy
Develop intensive Agriculture.
There is the potential to develop a
hydroponics system and tunnels.
Investigate high value crops.
Cherries, peaches, apples have potential,
although development costs are high.
Investigate agri-processing to improve value added element within the
District.
Support tourism development.
There is a need for strong institutional
support, including from the municipality, if SMME development is to be
encouraged.
Develop sporting facilities.
Investigate mining further.
Investigations for platinum have been
undertaken. Also opportunities in slate and shale. This may require cross
border relationships be built.
Some farms in the Cedarville have rights for sand winning which is of very
high quality for making glass.
There are opportunities for down-stream
activities.
Programs and Projects within Strategy Four: Communication and
Institution Building across Internal and External Stakeholders
Develop an ongoing (‘living’) knowledge and information base for the area.
Develop strong linkages with partner organizations through structures.
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Support partner organizations to ensure that strong representation comes
from key sectors (this includes community structures such as Community
Tourism Organizations).
Develop strong linkages with cross-border institutions.
Participate in broader structures, such as those at District level.
This is
pertinent to sectors which require broad geographical support, such as the
road network, tourism (railway project) etc.
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6 Section Six: Project list
Strategy One: Build on Strengths and Available Resources
Source
Project
Source
Project
Build current business opportunities.
IDP
Develop SMME=s in Matatiele.
IDP &
W/shop
Expansion of manufacturing sector
(possibly new project or expansion of
existing Micro Manufacturing Centre).
IDP &
Wshop
Develop Community Market in
Matatiele.
IDP &
W/shop
Market Matatiele as a centre within the
hinterland.
IDP &
W/shop
Investigate import replacement
strategy.
IDP &
W/shop
Investigate current product lines to
increase market share.
W/shop
Develop Craft – Cultural village.
(Possibly at the ‘Balloon’ site)
W/shop
Business Linkage Centre.
IDP
Upgrade hawkers stalls in
Matatiele/Cedarville.
IDP
Develop Agric Centre Β Cedarville.
IDP &
W/shop
Link with Eastern Cape to maximise
impact of respective municipal and
provincial budgets.
W/shop
Investigate the re-commissioning of the
mill at New Amalfi.
Development of Urban Renewal program.
IDP
Develop Shelters for Informal Traders.
IDP
Improve shelter facilities at Matatiele
Bus Rank.
Support agricultural sector to grow.
IDP &
w/shop
LED Development Project by extending
Agri-Project in Matatiele.
Use current budgets to develop economy.
W/shop
Use Municipal procurement policy to
favour small business.
IDP
Develop a program to encourage
Municipal Service Partnerships.
Develop existing assets.
W/shop
Participate in the rail expansion
initiative.
IDP
Development of Mountain Lake Nature
Reserve.
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Strategy Two: Build a Strong Poverty and Food Security Program
Source
Project
Source
Project
IDP
Creation of viable job opportunities for
Service Providers.
W/shop
Develop skills to identify and manage
labour based opportunities and systems.
IDP &
W/shop
Develop a database of unemployment
people and their skills.
IDP
Skills Development Centre (link skills
development to opportunities).
IDP
Promote Home/Community Gardening
Projects.
W/shop
Investigate Municipal assets for
opportunities for poverty alleviation
strategies.
Strategy Three: Build New Sectors and Diversify the Economy
Source
Project
Source
Project
Tourism Development.
W/shop
Institutional development of tourism
sector.
IDP
Develop a Tourism Strategy for Matatiele.
IDP
Tourism Information Centre.
IDP
Development of Chalets in
Matatiele/Cedarville.
W/shop
Participate in rail tourism initiative.
W/shop
Agro-tourism route along the R56.
IDP
Development of Matatiele Heritage Site:
Year 1-3.
Sport Development
IDP
Develop/Market Sporting Events in
Matatiele.
IDP
Establishment of an indoor Multi-purpose
Sports Complex.
IDP
Develop Multi purpose sports fields Β
Cedarville.
IDP
Develop Sports Academy in Matatiele.
New Business Development.
IDP
One Stop Business Development Centre.
W/shop
Feasibility into mining and sand winning.
IDP
Develop Investment/Incentives Strategy
for potential investors.
W/shop
Investigate glass making.
IDP
Develop Industrial site to accommodate
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SMME=s.
Develop new agricultural markets.
W/shop
Intensive agriculture (hydroponics and
tunnels).
IDP
Develop land as Small Holdings.
W/shop
Opportunities for agri-processing.
IDP
Ongeluksnek Agricultural Development
Centre.
W/shop
Develop a pilot for high value crops,
including apples and cherries, forestation.
Paprika has also been mentioned.
Strategy Four: Communication and Institution Building across Internal and
External Stakeholders
IDP &
W/shop
Develop a knowledge base concerning
the economy.
IDP &
W/shops
Set-up structures to manage the
relationships with partner
organisations.
IDP &
W/shop
Municipality develop a communication
strategy.
IDP &
W/shop
Establish strong contact with crossborder institutions.
IDP &
W/shop
Ensure participation at District and
higher levels.
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