NATIONAL TREASURY
Economic Development Strategy
For
Greater Tzaneen Municipality
4 November 2004
PHASE 3 REPORT
Prepared for:
National Treasury
For Attention:
Mr Malcolm Simpson
Glen Steyn & Associates
Greater Tzaneen Municipality
For Attention:
Ms Morongoa Ramphele
TABLE OF CONTENTS
1.
2.
3.
4.
INTRODUCTION
1.1
Terms of Reference
1.2
The Strategic Development Management Process
1.2.1 Recognizing the Need for Change
1.2.2 Policy and Situation Assessment
1.2.3 Vision, Goals and Targets
1.2.4 Development Opportunity Identification
1.2.5 Project and Programme Conceptualization
1.2.6 Preparation of Feasibility Studies and Business Plans
1.2.7 Approval and Implementation
1.2.8 Monitoring and Evaluation
1.2.9 Stakeholder Consultation
1.2.10 Repeat the Cycle towards the Realization of the Vision
POLICY AND SITUATION ASSESSMENT
2.1
Economic Development Policies
2.1.1 Limpopo Growth and Development Strategy
2.1.2 Mopani District Municipality IDP
2.1.3 Greater Tzaneen Municipality IDP
2.2
Status Quo Assessment
2.2.1 Demographics
2.2.2 Economic Production
2.2.3 SWOT Analysis
2.2.4 Financial Assessment: Greater Tzaneen Municipality
2.2.5 Economic Infrastructure
VISION, GOALS AND TARGETS
3.1
GTM Vision 2015
3.2
Economic Development Goals
3.3
Economic Development Targets
3.3.1 Job Creation Targets
3.3.2 Economic Growth Targets
3.3.3 Illiteracy Eradication Targets
3.3.4 Institutional Efficiency Targets
3.3.5 Cross-Cutting Issues
3.3.6 Regional Integration
DEVELOPMENT OPPORTUNITIES
4.1
Agriculture
4.1.1 Subtropical Fruit and Nut Cluster Development
4.1.2 Livestock Improvement
4.2
Tourism
4.2.1 GTM Tourism Development Framework
4.2.2 Letaba River Mile
4.3
Business Development
4.3.1 New Shopping Centers
4.3.2 Local Buying and Business Service Improvement
4.3.3 Informal Sector Promotion
4.4
Business Retention
4.4.1 Sapekoe Tea Estates
4.5
Special LED
4.6
Skills Development
4.7
Economic Infrastructure
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5.
6.
7.
PROJECT CONCEPTUALISATION
5.1
Agriculture
5.1.1 Subtropical Fruit and Nut Cluster Development
5.1.2 Livestock Improvement
5.2
Tourism
5.2.1 GTM Tourism Development Framework
5.2.2 Letaba River Mile
5.3
Business Development
5.3.1 New Shopping Centers
5.3.2 Local Buying and Business Services Improvement
5.3.3 Informal Sector Promotion
5.4
Business Retention
5.4.1 Sapekoe Tea Estates
5.5
Special LED Projects
5.6
Skills Development
5.7
Economic Infrastructure
5.7.1 Development of Additional Water Sources
5.7.2 Critical Upgrading of Existing Water Supply Scheme
5.7.3 Critical Upgrading of Access roads and Storm Water Systems
5.7.4 Preventative Maintenance Programme for Electro-Technical
Development
5.7.5 River Mile
5.7.6 Solid Waste Management
5.7.7 Employment-Intensive Construction
FEASIBILITY STUDIES AND BUSINESS PLANS
6.1
Introduction
6.2
Subtropical Fruit and Nut Cluster Development Proposal
6.3
Livestock Improvement
6.4
Implementation of the Tourism Development Framework
6.5
Letaba River Mile
6.6
New Shopping Center Development
6.7
Local Buying and Business Service Improvement
6.8
Informal Sector Promotion
6.9
Retention of Sapekoe Tea Estate
6.10 Special LED Projects
6.11 Skills Development
6.12 Economic Infrastructure
6.12.1 Development of Additional Water Sources
6.12.2 Critical Upgrading of Existing Water Supply Schemes
6.12.3 Critical Upgrading of Access Roads and Storm Water Systems
6.12.4 Preventative Maintenance Programme for Electro-Technical
Development
6.12.5 River Mile
6.12.6 Solid Waste Management
6.12.7 Employment-Intensive Construction
IMPLEMENTATION
7.1
Stakeholder Consultation
7.1.1 Introduction
7.1.2 Consultation Process
7.2
Council Approval
7.3
Communicating and Marketing the Economic Development Strategy
7.4
Strategic Financial Considerations
7.4.1 Government Subsidies and Grants
7.4.2 Assessment Rates
7.4.3 Electricity
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9.
7.4.4 Water
7.4.5 Conclusion
7.5
Managing the Economic Development Strategy
7.5.1 Managing the Process
7.5.2 Managing Each Development Project Proposal
7.5.3 EDS Project Management Schedule
MONITORING AND EVALUATION
SUMMARY OF RECOMMENDATIONS
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ANNEXURES
ANNEXURE ONE
:
ANNEXURE TWO
:
ANNEXURE THREE :
PROJECT TEAMS
PROPERTY RATES BILL
MAP OF PROPOSED PROJECTS
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1.
INTRODUCTION
1.1
TERMS OF REFERENCE
The terms of reference for this assignment was to assist Greater Tzaneen
Municipality to prepare and implement an Economic Development Strategy
that is aligned to the Integrated Development Programme and presents the
priority projects that will support the economic development process.
The Bigen Africa/Glen Steyn Consortium was appointed on 1 July 2004 to
execute the terms of reference. The first report, which was presented on 19
August, was an assessment of the current situation and the second report,
dated 16 September, contained development project proposals.
This third report is the culmination of the initial appointment.
It
consolidates all the findings and recommendations into a strategy format,
but within the context of a broader strategic management process that is
yet to be completed.
This broader strategic management process is
described below.
1.2
THE STRATEGIC DEVELOPMENT MANAGEMENT PROCESS
Development is a process of change and if this process is to be accelerated,
then it has to be effectively managed. Development (change) management
implies the planning, implementation and evaluation of interventions that
have sufficient impact to change a status quo situation towards a more
desirable outcome. This process would normally have the following generic
components, which are also illustrated in the attached figure one:
1.2.1 Recognizing the Need for Change
The need for change is one of the strongest drivers of the change
management process. The extent to which this need is recognized,
determines the level of motivation and commitment to the changemanagement process. This recognition should also be shared among
a coalition that represents a sufficient majority for stakeholder
support to be mobilized and sustained.
1.2.2 Policy and Situation Assessment
The existing policy environment and the current situation assessment
describe the departure point for the change management process.
The need for change will normally be confirmed by the results of the
assessment.
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FIGURE ONE: ECONOMIC DEVELOPMENT STRATEGY MANAGEMENT PROCESS
GTM Vision 2015
The proposed vision for GTM for the ten-year period to 2015 is to understand and realize
the full Human and Natural Development Potential of Greater Tzaneen Municipality for
the benefit of its Residents and the Province.
Approve in
Principle
Note: Stakeholder Consultation is essential throughout the process.
6
1.2.3 Vision, Goals and Targets
The vision is an expression of the future situation that is desired by a
sufficient majority of stakeholders for that preferred situation to be
legitimate. The future situation could reflect a decade ahead or
longer. Goals describe the high-level interventions that are required
to realize the vision and targets provide time-lines for the
achievement of every goal.
This section describes the destination of the change management
process.
1.2.4 Development Opportunity Identification
Development opportunities are interventions that are capable of
accelerating the process of change. They are identified from the local
natural and human resource base, as well as from political, economic,
social and technological trends that are occurring in the environment.
1.2.5 Project and Programme Conceptualization
Project conceptualization forms the bridge between observations
regarding development opportunities and feasibility studies during
which these observations are rigorously tested. It should include the
formulation of the project purpose, a summary of the project history
and a list of the project stakeholders. Available project statistics and
preliminary project action plans should also be compiled.
It is normally after this stage that a mandate should be obtained to
proceed, because the costs associated with the change management
process could escalate from this point onwards.
1.2.6 Preparation of Feasibility Studies and Business Plans
The purpose of the feasibility study is to enable a decision to be taken
regarding the commitment of funds for project implementation.
Feasibility studies can be expensive, but if conducted with care, will
reduce the likelihood of unexpected problems emerging during
implementation. A typical feasibility study will include the following
components:







Market analysis
Financial and risk analysis
Technical analysis
Economic analysis
Social analysis
Institutional analysis, and
Environmental analysis.
7
The integrated results of the analyses should indicate whether the
project should proceed to implementation.
The business plan
contains all the actions required for implementation.
1.2.7 Approval and Implementation
Positive feasibility studies require
formal approval before
implementation can proceed. The business plan should indicate the
role of all stakeholders in the implementation process, the mechanism
for raising the required capital and the institutional structure to
manage the implementation process.
The development change management process normally contains
several simultaneous project interventions. This requires a separate
institutional structure to manage, because the development process
is bigger than each individual project.
1.2.8 Monitoring and Evaluation
The monitoring function is aimed at ensuring that each project
intervention makes the required contribution to annual development
targets, because this is essential for the achievement of goals and
ultimately for the realization of the vision.
1.2.9 Stakeholder Consultation
Throughout the change management process, it is essential that all
stakeholders, formal and informal, should be consulted. Without
consultation, it is unlikely that community commitment towards the
development process will be mobilized and sustained.
1.2.10Repeat the Cycle towards the Realization of the Vision
The first wave of development project interventions is unlikely to
realize the vision in full and is likely to be implemented before the
vision period expires. Repetition of the cycle again and again will
bring the community closer to its vision and will ultimately contribute
towards the reformulation of the vision itself.
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2.
POLICY AND SITUATION ASSESSMENT
2.1
ECONOMIC DEVELOPMENT POLICIES
2.1.1 Limpopo Growth and Development Strategy
The five primary objectives of the Limpopo Growth and Development
Strategy (LGDS) are to:
Improve the Quality of Life of the Provincial Population
Promote Sustainable Job Creation and Economic Growth
Raise the Institutional Efficiency of the Provincial Government
Address Unique Priorities as they arise, including Black Economic
Empowerment, HIV/AIDS-TB and poverty reduction, and
 Facilitate regional integration towards achieving the objectives of
NEPAD.




Three strategies are proposed to achieve the economic growth and
job creation objective. These three are the promotion of competitive
cluster value chains, a science and technology strategy for improved
competitiveness and new product development, as well as additional
job creation by way of the expanded public works programme.
The proposed objectives of the Tzaneen Economic Development
Strategy should be informed by the objectives of the LGDS. Cluster
development proposals that are of particular interest to Greater
Tzaneen Municipality are fruit production (horticulture) and tourism
(Upper Letaba, special interest groups and family recreation).
From the analysis of current fruit and nut production in the Greater
Tzaneen area in the first report, it became evident that the potential
for competitive cluster development already exists. Climate and soil
conditions, as well as local farming expertise in the Greater Tzaneen
area, present opportunities for highly productive and competitive
cluster formation in fruit and nut production, with a value chain that
extends across sectors. Similarly, biodiversity, topography and a
wonderful climate conspire to create the platform for world-class
tourism clusters to be established.
The other four objectives cut across the sustainable job creation and
economic development and should therefore be kept in focus as well.
2.1.2 Mopani District Municipality IDP
The IDP for Mopani District Municipality reflects economic
development as one of five strategic programmes to accelerate
development.
The specific issues contained in the economic
development programme include tourism, agriculture and forestry.
With regard to tourism development, Greater Tzaneen Municipality is
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considered to be the special focus area for new opportunities,
although agriculture is also identified as an area of opportunity.
The three economic constraints that are mentioned for GTM are:
 Lack of a marketing slogan and brand for tourism promotion
 Land reform and traditional systems of tenure, and
 Previous failures in promoting small-scale farming.
The cluster value chain approach is supported as a mechanism to
promote accelerated economic growth and job creation.
2.1.3 Greater Tzaneen Municipality IDP
The proposed vision statement for GTM that is contained in the IDP is
"To be the fastest growing economy in Limpopo that ensures a quality
of life for our community".
The formulation and implementation of an economic growth strategy
is one of five strategic thrusts contained in the IDP and aimed at
realizing the vision statement reflected above. The strategy phase of
the IDP has the following objectives with regard to local economic
development (LED):
 To facilitate economic development within GTM communities
including sustainable community projects for women, men, youth
and the disabled by 2007.
 To lobby resources for SMME development and promotion of 20
emerging and 10 existing SMMEs by 2007.
 To develop and promote tourism without compromising indigenous
and cultural values within the GTM area.
 To develop an effective Monitoring and Evaluation system for Local
Economic Projects that has been implemented.
A wide range of strategies is proposed to achieve these objectives,
including the compilation of an economic development study as a
basis to refine the LED strategy formulation process. Among others,
it is this purpose that the current economic development study seeks
to fulfill.
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2.2
STATUS QUO ASSESSMENT
2.2.1 Demographics
Accurate population figures remain a controversial issue. Although
the 2001 population census is the official source of statistics on
demography, there are many stakeholders, including Greater Tzaneen
Municipality who do not accept the census results. The table below
reflects the official figure.
Table 2.2.1: Census result for Mopani District Municipality
NP331:
NP332:
NP333:
NP334:
Total
Municipality
Greater Giyani
Greater Letaba
Greater Tzaneen
Ba-Phalaborwa
Male
105118
98119
171111
64164
438511
Female
132315
122007
204474
66932
525728
Total
237433
220126
375584
131096
964239
Source: Statistics SA; Census 2001
According to the census, Greater Tzaneen is by far the largest
municipality in the Mopani District, with almost 40% of the
population. Females are in a considerable majority (almost 55%),
reflecting the impact of the migrant labour system.
A population estimate that was made for the Department of Water
Affairs for the municipality for 2001 on the basis of house counts
came to 395121. (Refer to the Mopani Water Services Development
Plan of 2002). It is therefore concluded that the census 2001 figure
could be an undercount.
Greater Tzaneen Municipality conducted a Status Quo Survey in 2003.
It reflects a total number of 93 815 families, from which it projects
the population at 489,974. This is a significant deviation from the
census projections, (see table 3.1.3 below) and the survey
methodology is not provided to substantiate the estimate.
The real figure is likely to lie between the census and the survey
population estimates. This controversy needs to be resolved with
Statistics SA and will require an explanation of the methodology that
was used for the GTM survey. Census figures will have to be used
until the controversy is resolved.
Almost 47% of the population is still at school or younger (18 years
and below), whereas the proportion of aged persons is less than 5%.
Small reductions in the proportion of population at school and equal
increases in the population of working age and older are indicative of
a shift in age distribution that is likely to reduce population growth
rates in future.
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Population growth rates are expected to decline from the current
1.4% per year (2004), to 1.06% in 2008, mainly as a result of the
HIV/AIDS epidemic, where after it will stabilize and gradually increase
again. It should be noted that these are natural population growth
projections only and do not provide for in or out-migration.
The fact that almost 26% of adults in Mopani and 25% in Greater
Tzaneen have no schooling is a limiting factor on the local skills pool
and ultimately on economic development. This is reinforced by the
fact that only four percent of adults in both areas have attained
educational qualifications beyond secondary school.
The census of 1996 indicated that 28% of GTM population had no
schooling, which means that the situation is improving. The rate of
improvement may have to be accelerated so as to raise the
trainability of the workforce.
Almost 29% of households indicated that they have no formal source
of income. The R9600 level and lower is below the minimum living
level and almost 70% of households fall into this category.
Conventional economic growth initiatives are unlikely to reach this
entire group and will have to be augmented with special programmes
that are aimed at poverty alleviation.
The Integrated Development Plan and the Integrated Spatial
Framework for GTM indicates that HIV prevalence among persons
who underwent voluntary testing during 2002 was as high as 45. All
the employers that were interviewed for the Tzaneen Economic
Development strategy have indicated that HIV/AIDS is a major threat
to business productivity and to household income.
2.2.2 Economic Production
A comprehensive analysis of Gross Geographic Product per sector is
not available for Tzaneen Municipality and could not be done within
the budget that was available for the compilation of this draft
Economic Development Strategy.
However, it is evident from the status quo assessment that
agriculture, and sub-tropical fruit production in particular, is the main
driver of the local economy. A summary of agricultural production
per commodity is provided below. Other important sectors are trade
and tourism. There is substantial potential for expansion in all three
of these sectors. Government services and manufacturing are of
intermediate importance. The impact of government services on the
local economy is mostly through the purchasing power of public
servants and through pension payments. Manufacturing activities are
largely confined to timber and fruit processing and to packaging.
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Mining is not a significant economic activity in Greater Tzaneen
Municipality.
Table 2.2.2: Local Value of Agricultural Production (2004)
Commodity
Citrus
Avocado
Macadamia
Banana
Timber
Mango
Other
Total
Pack House Sales
R’m
500
100
60
50
40
30
120
900
Employment
11 000
1 070
600
810
1 600
850
1 000
16 930
The revenue figure above includes packaging of approximately R100
million. The net sales figure for agriculture is therefore estimated as
R800 million. The GGP co-efficient for the agriculture sector in
Limpopo is 0.498, which implies that the contribution from the
agriculture sector to gross geographic product in Greater Tzaneen
Municipality could be R400 million. According to Census 2001, thirty
percent of the Municipal labour force is employed in agriculture,
hunting, forestry or fishing.
(Note that hunting is excluded from
the table above).
It is estimated that the gross value of sales from manufacturing in
Greater Tzaneen Municipality is approximately R750 million at 2004
prices. The GGP co-efficient for the manufacturing sector in Limpopo
is 0.244, implying that the contribution to gross geographic product
from this sector could be R183 million. According to Census 2001,
11.7% of the municipal labour force or 7650 people were employed in
the manufacturing sector in that year.
The Tourism Development Framework estimated turnover in the local
tourism industry to be R75 million (adjusted to 2004 prices). This
translates to R60 million in GGP at a conversion rate of 0.773.
Annual expenditure by the Department of Education in the Mopani
District area (Region 5) will be approximately R780 million in 2004.
Population distribution (40% of Mopani District residents live in GTM)
can be used as a proxy to estimate the GTM share of this expenditure
at R312 million. This translates to a contribution of R240 million to
GGP (at a conversion rate of 0.773). Education alone could represent
40% of total government activity, implying that government probably
contributes R600 million in the local economy.
On the assumption that government represents 20% of economic
activity in GTM, the size of the municipal economy at 2004 prices is in
the order of R3 billion, with agriculture representing 13.3% of that.
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A more rigorous analysis of GGP per sector is required for GTM as a
benchmark to track progress with regard to the implementation of the
Economic Development Strategy.
2.2.3 SWOT Analysis
The following SWOT analysis is derived from the responses of persons
who participated in interviews for the preparation of the Greater
Tzaneen Economic Development Strategy and from the municipal
IDP.
Strengths
 Greater Tzaneen has the strongest economy in Mopani District,
with established agricultural, tourism and commercial activities, as
well as supporting infrastructure. Purchasing power is drawn from
areas beyond the municipal boundaries.
 Substantial provision has been made for industrial development in
terms of the zoning of land with adequate infrastructure.
 Municipal capacity is relatively strong.
 There is a will to realize the full economic potential of the local
area and to accelerate job creation.
Weaknesses
 Economic Development is a new department within the
municipality and it has capacity limitations, particularly with
regard to development project management.
 There has been no economic development strategy in the past and
the economic development planning database is weak.
 The local skills pool is inadequate for the new jobs that can be
created.
 The original layout of the town in terms of the size of the Central
Business District and its spatial relationship to the northern
industrial park, as well as its relationship to the Letaba River,
reflect little consideration for long-term economic growth.
 Land-uses at some of the entrances to Tzaneen town are diffuse.
 There is a leakage of purchasing power for specialist goods and
local business people are accused of having a poor service culture.
 Road access between the major nodal points in the municipality is
inadequate.
 The manner in which land restitution was implemented in some
cases has resulted in a decrease in production.
 Lack of co-ordination among the different spheres of government
causes development budgets often to remain unspent or less than
optimally utilized.
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Opportunities
 Fruit and nut production can be significantly expanded and if this
is done within a cluster value-chain context, then the
development impact, sustainability and competitiveness will be
raised. It presents opportunities or SMME promotion and to
broaden the local mainstream economy.
 Yields from the communal cattle herd can be raised by introducing
scientific animal husbandry practices.
 The Great Letaba River presents opportunities for additional water
storage.
 The Tourism Development Framework identified fourteen major
development opportunities to attract more visitors into the area.
The Letaba River section
that runs through the CBD represents
a fifteenth major project opportunity.
 Shopping centers can be established in each of the major
development or population concentration points.
 Business practices can be improved to stop the leakage of
purchasing power.
 Jobs can be created through road construction for economic
development purposes.
 Access to district, provincial, national and donor support
programmes represents an opportunity to obtain capital funding
for development projects.
Threats
 Inconsiderate application of property rates on agricultural land
could stop orchard expansion.
 Shortage of water for irrigation purposes could undermine the fruit
and nut cluster development.
 Impact of HIV/AIDS on the local workforce is reducing the limited
local skills pool even further.
 Rising unemployment is reducing the ability to pay for services
and is increasing the number of households who depend on social
assistance.
 Decay of the Nkowankowa Industrial Park through theft and
vandalism is threatening the spatial development objective of
making Nkowankowa the
primary industrial node of Tzaneen
Municipality.
 Backlogs in municipal service delivery could increase, which will
further inhibit the capacity of local government to strategically
manage the development process.
The policy assessment and the status quo and SWOT analyses,
provide the platform for objective setting and for development project
identification, which are discussed in the following chapters. The
assessment of municipal finances, which is discussed below,
illustrates
the capacity of GTM to participate in strategic
development interventions.
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2.2.4 Financial Assessment: Greater Tzaneen Municipality
BALANCE SHEET AT 30 JUNE 2003
2003
2002
CAPITAL EMPLOYED
Funds and Reserves
Retained Surplus/(Deficit)
Trust Funds
Long Term Liabilities
Deposits
70 291 360
69 501 232
(5 195 274)
1 107 822
3 424 675
3 155 387
44 830 192
25 196 501
5 943 547
6 028 930
119 294 500 104 989 872
EMPLOYMENT OF CAPITAL
Fixed Assets
Investments
Long Term Debtors
Current Assets
Current Liabilities
75 583 841
58 398 988
14 920 877
4 510 375
9 433 128
9 622 973
62 689 583
70 508 533
(43 332 929) (38 050 997)
19 294 500 104 989 872
Long term borrowings increased by an amount of R 19 633 691
during the financial year to finance capital expenditure and
infrastructure. The total loans outstanding as at 30 June 2003
amounted to R 44 830 192.
The Debt-to-Income ratio at 20 % is manageable and the capital
charges debited to the operating budget of R 11 440 891(5.6%) is
well within the affordability levels of the municipality.
The debt burden is modest and even with additional borrowings it is
expected to remain manageable.
In the short term (12 months or less) the municipality has a strong
capacity for the timely payment of creditors and loans.
The long-term rating indicates adequate capacity of the municipality
to repay interest and redemption on external loans, but adverse
economic conditions or changing circumstances are likely to lead to a
weakened capacity to pay interest and capital.
Investments amounted to R 23 715 996 as at 30 June 2003 and cash
on hand and bank totaled R 10 528 484.
Sundry debtors were reduced by an amount of R9 225 218 during the
financial year and reflected a balance of R 37 381 130 as at 30 June
2003. This indicates that the provision for working capital in the
operating budget is adequate.
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A credit control and debt collection policy has been approved by the
council but has not yet been promulgated. This should be done as a
matter of urgency and should help in reducing the outstanding
consumer debtor accounts owing to the municipality.
A tariff policy has been compiled but has not yet been approved by
the council. This should also be done as soon as possible and also
promulgated in order that consumers of municipal services fully
understand how the various municipal tariffs are compiled and
charged.
Revenue and expenditure for the year ended 30 June 2003
Income
Source
Grants and
Subsidies
Assessment
Rates
Sale of
Electricity
Sale of
Water
Other
Amount
Percentage
25 215 109 11.72
36 228 708 16.84
105 301 851 48.96
8 941 308 4.14
39 383 170 18.34
215 070 146 100.00
Expenditure
Salaries and
Allowances
Bulk
Purchases:
Electricity
Bulk
Purchases:
Water
General
Expenses
Repairs and
Maintenance
Capital
Charges
Amount
Percentage
59 390 618 29.04
6 289 7549 30.76
666 542 0.32
58 762 905 28.73
11 310 238 5.55
11 440 891 5.60
204 468 743 100.00
The municipality ended the financial year with a surplus of R 10 601
403 but appropriations of R 16 904 501 resulted in a net deficit of
R 6 303 098 for the year.
Grants and subsidies received from central and provincial government
amounted to R 25 215 109 comprising 11.72 % of the total income.
The electricity service realized a surplus of R 25 798 026 for the
financial year and was utilized to subsidize deficits on other services.
Should the electricity functions of the municipality be transferred to a
Regional Electricity Distributor the surplus of R25 798 026 would be
lost to the municipality. Without this source of revenue the
municipality would find it impossible to balance it’s budget and would
have to find other sources of income.
The function of water delivery has been transferred to the Mopani
District Municipality although the municipality continues to provide
water on an agency basis on behalf of the District Municipality. The
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current profit of R 12 158 451 on the service is being replaced by a
management fee charged to the district municipality.
In conclusion, the municipality has adequate capacity to borrow and
repay external loans required for capital expenditure on future
infrastructure although it is imperative that consumer debtors and
sundry creditors be considerably reduced.
2.2.5 Economic Infrastructure
Many of the projects in the current IDP are aimed at improving and/or
extending the quality of municipal services.
Improved service
provision facilitates LED and therefore this aspect deserves
considerable attention.
The municipal area is characterized by steep slopes along its western
and southern boundaries (roughly 22% of the entire municipal area),
which gradually dissipate into undulating hills in the central areas, to
virtually flat ground in the eastern parts of the area of jurisdiction.
Rainfall places the following restrictions on future planning and
development:
 In general, urban development may not take place below the
1:100 year flood line. There are however attractive developments
such as sports fields, bird parks, hiking trails that can be
developed below this flood line.
 The flooding of dirt roads results in certain areas being
inaccessible at times and results in high maintenance costs,
 The rate of completion of infrastructural development and building
projects are slowed down at times which causes additional costs.
The wind direction in the GTM area is mainly north-easterly and
south-westerly. The wind direction should be taken into account
during the placement of noxious industrial uses, sewerage purification
plants and solid waste dumping grounds. Air pollution can also occur
in the lower-lying areas during cold and wind free periods.
A variety of soil types are found in the area. Special care should be
taken when a development takes place in areas with high clay
content, low baring capacity, etc. The general soil types in the area
are:
 Soils developed from weathering of greenstones tend to be rich
and loamy.
 Residual soils of the basement gneisses can be described as light
colored to clayey sands.
 Soils derived from the quartzite tend to be sandy as opposed to
the shale which will produce clayey soils.
18
By far the largest concentration of rural settlements occurs in the
southern quadrant of the municipal area where 69 % of the
population resides on 67 % of the residential stands. Densities vary
from 21 persons per ha to 106 persons per ha with an average of 45
persons/ha.
The fragmented and dispersed out nature of the urban component of
the municipality has caused inefficient duplication of networks and
hinders the creation of a core urban complex which is essential for a
healthy
spatial
pattern.
The
rapid
increase
of
informal
settlement/squatting (especially around Nkowankowa and Lenyenye)
bears the threat of neutralizing development alternatives currently
available to Council by the reduction of land availability and the
problems associated with relocation of communities once they have
established.
The current tendency to under-utilize land by establishing limited
businesses on large farm portions and providing extensive residential
plots, has resulted in considerable sprawl, which impacts on the
availability of land, being a scarce resource, for future development
initiatives.
The following
development:
infrastructure
conditions
could
restrict
economic
Lack of maintenance
Inadequate cost recovery
Unauthorized or informal connections
The water supply schemes are not interlinked to allow transfer of
water from areas of surplus to areas of shortages.
 Variety of technology used in sanitation with many households
without access to safe sanitation.




A serious lack of well-constructed and maintained roads hampers
access to settlements in rural areas. In many instances there are no
formal storm water drainage systems.
A lack of structured maintenance of electrical distribution networks
pose dangers to the public and to equipment.
19
3.
VISION, GOALS AND TARGETS
3.1
GTM VISION 2015
The proposed economic development vision for GTM for the ten-year
period to 2015 is to understand and realize the full Human and Natural
Development Potential of Greater Tzaneen Municipality for the benefit of its
Residents and the Province.
3.2
ECONOMIC DEVELOPMENT GOALS
In keeping with the Limpopo Growth and Development Strategy, the
following economic goals are proposed towards the achievement of the
vision:
3.2.1 Reduce unemployment by half, from the current 44% to 22% by
2015.
3.2.2 Accelerate economic growth from the current (estimated) 4% per
year to 10% by 2015
3.2.3 Eradicate illiteracy by 2015
3.2.4 Raise the institutional efficiency of local government
3.2.5 Incorporate Black Economic Empowerment, SMME development,
poverty reduction, gender, youth and the disabled, as well as
HIV/AIDS-TB awareness into all economic development interventions
3.2.6 Contribute towards regional economic integration in the context of
Southern Africa and NEPAD.
3.3
ECONOMIC DEVELOPMENT TARGETS
In order to achieve the goals that are proposed above, the following
economic targets should be used to direct the utilization of human and
financial resources in the municipality and to mobilize commitment from the
community:
20
3.3.1 Job Creation Targets
Table 3.3.1: Job Creation Targets for GTM
Year
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Labour Force
117,260
118,550
119,850
121,170
122,500
123,850
125,210
126,590
127,980
129,390
130,810
132,250
Unemployme
nt Rate
44
42
40
38
36
34
32
30
28
26
24
22
New Jobs to
be Created
1250
2371
2397
2423
2450
2477
2504
2532
2560
2588
2616
2645
In order to reach these targets, a total of 29,000 sustainable jobs
need to be created in Greater Tzaneen Municipality in the next 12
years.
3.3.2 Economic Growth Targets
Table 3.3.2: Economic Growth Targets for GTM
Year
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Real Economic
Growth %
4
4.5
5
5.5
6
6.5
7
7.5
8
8.5
9
10
Inflation
Unadjusted Econ
Growth %*
9
9.5
10
10.5
11
11.5
12
12.5
13
13.5
14
15
*Assume a constant inflation rate of 5%
A set of proxy indicators will have to be created to measure municipal
GGP on a regular basis so that these targets can be kept in focus.
21
3.3.3 Illiteracy Eradication Targets
Illiteracy eradication is an important economic development goal
because it has a direct impact on the local skills pool, which on its
part, has a direct impact on the capacity for economic growth. From
table 3.1.1 in Report One (Development Assessment Report), it is
estimated that 50230 adults in GTM are illiterate. This implies that
5000 persons should graduate from ABET programmes in GTM
each year if the target of zero illiteracy is to be achieved by
2015.
3.3.4 Institutional Efficiency Targets
The guiding principle of public service transformation and reform is
‘service to the people’. Batho Pele is an indispensable part of this,
because it deals with the practical difference that people see in their
everyday lives. The White Paper required national and provincial
departments to publish service standards by the end of 1998 and to
monitor the results thereof.
It is acknowledged that service
standards cannot be raised overnight, as a result of resource
constraints. A key part of Batho Pele is therefore a relentless search
for increased efficiency and the reduction of wastage in the public
service.
In line with the requirements of this White Paper and in line with the
LGDS, GTM should develop indicators and targets before June 2005 to
manage improvements in terms of the following institutional
efficiency criteria:






Skills development and retention
Batho Pele and service standards
Annual customer satisfaction surveys
Reducing the duplication of local government functions
Reducing the unit cost of services, and
Reviewing the impact of local government functions.
3.3.5 Cross-Cutting Issues
By June 2005, annual targets should be set for the mainstreaming of
the following cross-cutting issues into every development intervention
in GTM for the following ten years:





Black Economic Empowerment
SMME Promotion
Poverty Reduction
Provision for Women, Youth and the Disabled, and
HIV/AIDS-TB awareness.
22
3.3.6 Regional Integration
By June 2005, the development interventions that are approved for
GTM should reflect their capacity for regional integration in the
context of Mopani District, Limpopo Province, SADC and NEPAD.
23
4.
DEVELOPMENT OPPORTUNITIES
On the basis of the policy and situation assessment, as well as the vision, goals
and targets, the following development opportunities were identified:
4.1
AGRICULTURE
4.1.1 Subtropical Fruit and Nut Cluster Development
On the basis of competitive advantage that is already evident and in
keeping with the LGDS, further development of the subtropical fruit
and nut cluster value-chain can make a substantial contribution to the
economic vision, goals and targets of Greater Tzaneen Municipality.
4.1.2 Livestock Improvement
The commercial value of cattle that is grazed on communal land can
be substantially improved, thereby contributing towards the
achievement of SMME promotion and poverty reduction targets.
4.2
TOURISM
4.2.1 GTM Tourism Development Framework
The Tourism Development Framework that was compiled for Greater
Tzaneen Municipality in December 2002, contained fourteen anchor
project proposals, as well as suggestions for the development of
themed routes and meanders.
The implementation of these
proposals could make a major contribution to all the goals and targets
that are stated above.
4.2.2 Letaba River Mile
In addition to the projects that are proposed in the Tourism
Development Framework, the stretch of the Letaba River below the
Tzaneen Dam that flows through the Tzaneen central business
district, represents an attractive opportunity for tourism development.
4.3
BUSINESS DEVELOPMENT
4.3.1 New Shopping Centers
Large concentrations of population settlement and purchasing power
present opportunities for shopping centre development at Maake,
Nkowankowa and Nkambako/Mamitwa.
4.3.2 Local Buying and Business Service Improvement
Current purchasing power leakages and the rising profile of Tzaneen
as a commercial center, make it essential that business service levels
24
should be improved.
4.3.3 Informal Sector Promotion
GTM already has a substantial informal sector, but its current
contribution towards the goals and targets listed above is relatively
low. This can be improved through programmes that include support
for informal sector business people and co-ordinated spatial location
of informal sector activities.
4.4
BUSINESS RETENTION
4.4.1 Sapekoe Tea Estates
The anticipated closure of the Sapekoe Tea Estates and its head office
in Tzaneen, will impact negatively on the GTM Economic
Development Strategy in general and on the local tourism industry in
particular.
There is an opportunity to retain this business in
conjunction with Limpopo Department of Agriculture and the national
Department of Trade and Industry.
4.5
SPECIAL LED
Although all the economic development interventions are designed to
contribute towards local economic development, there are a number of
development opportunities that do not fit directly within any of the
project proposals that are listed above.
The first is the resuscitation of Batlabine Bricks, which is a former
Development Corporation project. Reference is also made in the IDP
document to a hydroponics project, to Jopi, Masiphane, Sedan and Mulati.
The number of community-initiated LED projects could increase considerably
once the system of Community Development Facilitators is established.
A management information system, a database and basic project business
plans will be essential to co-ordinate the service providers and funding
agencies and for appropriate assistance to be provided by the Municipality.
4.6
SKILLS DEVELOPMENT
The current skills pool in GTM is inadequate to sustain the proposed
Economic Development Strategy. Programmes within the National Skills
Development Strategy are under-utilized in Limpopo, which presents an
opportunity to accelerate skills development interventions in the municipal
area.
4.7
ECONOMIC INFRASTRUCTURE
The road between Tzaneen and Lenyenye will have to be upgraded to
improve the movement of people and freight through the municipal area.
25
Additional bulk water storage capacity could also be essential in support of
the proposed subtropical fruit and nut cluster development. In this regard
the raising of Tzaneen Dam wall and the construction of a new dam at
Mamitwa, have already been investigated.
These infrastructure projects will contribute significantly towards the
achievement of the economic goals and targets stated above.
The provision of economic infrastructure can also create LED and SMME
opportunities as indicated below:
 Water supply to high income areas can generate revenue from payment
for water services.
 Water supply to low income areas will in general form part of the
provision of free basic services. The LED component will be limited to
short term job creation during construction.
 Water supply to areas where cost recovery is viable may create job
opportunities for SMMEs over and above the short term employment
during construction.
 Maintenance and refurbishment of water services networks may also
create opportunities for longer term employment.
 The collection, transport, sorting and recycling of solid waste offer
substantial LED potential.
 The labour-intensive construction of roads and streets has good potential
for short term job creation.
 The maintenance of storm water systems has most probably the best
potential for long tern job creation and business development.
 Capacity development programmes for consultants and contractors will
stimulate LED in the construction sector.
26
5.
PROJECT CONCEPTUALISATION
Project teams were established within GTM to agree on the purpose of each
proposed economic development intervention, to trace the history of each proposal
and to identify the stakeholders who will need to participate in the project
development process. Available project statistics and preliminary action plans
were also compiled.
This information will provide the basis for principle approval from Council for
project planning to proceed and lays the foundation for the design of project
scoping and feasibility studies.
5.1
AGRICULTURE
5.1.1 Subtropical Fruit and Nut Cluster Development
The purpose is to develop the value chain of existing subtropical fruit
and nut production activities
in
GTM
into
an
internationally
competitive food production cluster as a basis for increased job
creation, accelerated economic growth
and
empowerment
of
previously disadvantaged persons.
Subtropical
fruit
and
nut
production
have
proven
their
competitiveness in the GTM area during the past forty years and
there has been consistent growth during this period.
There is
significant potential for further expansion. Citrus is the main crop at
present, followed by avocados, macadamia nuts and mangoes. There
is range of smaller commodities, such as litchis and peaches. The
total value of production at the pack house is estimated to be R900
million at 2004 prices and total employment (full-time equivalent) is
almost 17,000.
A diagram that illustrates the current value chain is attached as
Figure Two and Figure Three illustrates a development scenario for
the cluster in 2015.
It is anticipated that 13,000 new job
opportunities can be created within this cluster alone by the target
date of 2015.
The primary stakeholders at the production heart of the cluster are
the producer organizations for the main commodities, including
emerging farmers and former agricultural development projects. The
cluster development concept was presented to these producer
organizations, to a group of citrus farmers and to a local management
agency that assists farmers on former development projects. These
stakeholders have all expressed their commitment to the process.
Important stakeholders on the upstream side include owners of
nurseries and producers of plant material. Stakeholders on the
downstream side include packaging materials, marketing agents and
processors. Side stream stakeholders include government at all
27
levels, logistics, infrastructure, development agencies, financial
institutions, as well as research and development organizations.
The next step after Council approval is obtained in principle, is to
arrange a meeting of stakeholders at which an Interim Cluster
Working Group and a Cluster Project Manager will be nominated. The
tasks of these bodies should also be described.
The DTI Micro-economic Reform Strategy (Agro-processing Sector
Programme) will be approached for financial assistance towards the
operational costs of the cluster development process.
5.1.2 Livestock Improvement
The purpose of this proposed project is to assist livestock owners on
communal land to increase the commercial value of their cattle.
In the second report it is pointed out that the cattle herd size on
communal land is approximately 20,000. The number of calves can
be increased from the current 2400 per year to 5000 per year by
improving the herd composition (increasing the percentage of cows)
and by feed supplementation.
The proportion of cows can be increased to 60% of the herd
composition from the current estimated 43%. Broiler litter is already
available in the municipal area and can be used as an effective feed
supplement. Sickle bush pellets can also be made and used.
The Limpopo Department of Agriculture, with donor assistance from
the Finnish Government, has already established a cattle
improvement scheme in the GTM area on the farm Bonn. This microcredit scheme can be adjusted and extended to the entire municipal
area and would be appropriate for the entire Mopani District.
Stakeholders include the cattle owners, the Limpopo Department of
Agriculture in Mopani District, the Finnish Government Donor
Assistance Programme in Limpopo and the GTM Municipality. A
project team has been established from among these stakeholders
and the first meeting has drafted an action plan regarding project
design, communication with cattle owners, appointment of mentors,
farmer support and relationships between emergent and commercial
livestock owners.
A formal request for financial support will be submitted to the Finnish
Government Aid Programme for Limpopo via the Sub-District Office of
the Provincial Department of Agriculture once Council approval is
obtained.
28
FIGURE TWO: TZANEEN FRUIT CLUSTER VALUE CHAIN: CURRENT SCENARIO
Severe Skill Shortage – Inadequate Skills Development Programmes
Plant Bio Technology
Nurseries
Citrus
Tzaneen Logo is fruit basket
Other
Fertilizer
Avocado
Macadamia
Insectarium
*Value ?
*Jobs ?
Fresh Exports
P
A
C
K
A
G
I
N
G
Fresh Local
Market
Nut Processing
Hot Processing
Cold Processing
Pesticides
*Value ?
*Jobs ?
*Estimated
Production
Value R0.9 bn
*Estimated
Jobs – 17 000
Juice
Dried Fruit
Atjars
Pastes
Fruit Processing
*R50m?
*Value ?
*Jobs ?
LOGISTICS
Notes:
1.
Estimated Value of Primary Production: R1 bn – Significant potential for expansion
2.
Estimated jobs ceated created: 15 000
3.
Logistics through refrigerated trucks
TZANEEN FRUIT CLUSTER VALUE CHAIN: DEVELOPMENT SCENARIO 2015
4.
Limited public-private interaction
Significant
Infrastructure
Risks problems)
– Water, Roads and Telecommunications
5.
Limited science
and technology
applications (quality
Zero Cluster Marketing – Provincial Marketing is Generic
Plant Material Export
29
FIGURE THREE: TZANEEN FRUIT CLUSTER VALUE CHAIN: DEVELOPMENT SCENARIO 2015
Dedicated Cluster Skills Development Programmes: Mopani FET College; PAETA; Schools & Universities
SADC Limpopo RSA
Plant Material Export
Expand Plant
Bio-Tech for all
fruit clusters in
Limpopo, SA and
SADC
Nurseries
Limpopo
Warehouse
Phospates
Phalaborwa
Other
RSA
Fertilizer
Citrus
Other
Avocado
Macadamia
Insectarium
Fresh Exports
P
A
C
K
A
G
I
N
G
Fresh Local
Market
Fruit Processing
Nut Processing
Pesticides
Organics
*Value ?
*Jobs ?
*Value ?
*Jobs ?
*Value R3 bn
*Jobs – 30 000
*R50m?
Compost
Juice
Dried Fruit
Atjars
Pastes
Cosmetics
Essential
Oils
Hot Processing
Cold Processing
Sweets
Biscuits
Municipal Investment Promotion Focused on Fruit Cluster
Fruit Cluster reflected in Municipal Strategies, Symbols, Landscaping
Science & technology applications along the value chain, ie plant bio, primary production and manufacturing
Integrated Logistics Management: Road & Rail
Completed Cluster Infrastructure Requirements, ie Tzaneen dam wall raised; Nwamitwa dam; Broadband
30
5.2
TOURISM
5.2.1 GTM Tourism Development Framework
The purpose of this proposal is to fast-track the
implementation of the proposals that were made in the GTM
Tourism Development Framework (TDF) in November 2002.
The GTM Tourism Development Framework recommends 14
anchor projects to promote the dormant tourism potential of
the municipal area. These are briefly summarized in the
table below.
Table 5.2.1: Anchor Tourism Project Proposals
Anchor Project Proposal
1. Promote Haenertsburg Village
2.
Create
Ebenezer
Dam
Destination
3. Create Magoebaskloof Dam
Destination
4. Commonwealth plantation
5. Debegeni Waterfall
6. Woodbush Forest Drive
Comments
Crafts, trails and townlands
Waterfront, boating, picnics &
trails
Picnics, walks, boat hire & fishing
Forest walk & interpretation
Picnics and walks
Upgrade road and create picnic
areas
7. Dap Naude Dam Destination
Upgrade picnic area
8.
Create
Tzaneen
Dam Waterfront, recreation & access
Destination
9. Tzaneen Town
Tourism
resource
centre
&
museum
10. Nkowankowa and Lenyenye
Traditional lifestyles
11. Noko and Thabina Nature Adventure
&
culture-based
Reserve
experiences
12. Create Tours Dam Destination Recreation, hiking & mountain
biking
13. Relela and Runnymede
Village tourism
14. Arts, Crafts and Traditional Include accommodation & story
Herbs
telling
Source: GTM Tourism Development Framework, Vol 4; Nov
2002
The Tourism Development Framework also proposes a
number of themed routes for special interest groups such as
bird enthusiasts, fishermen, and garden and tree lovers.
Some of these routes could be incorporated into meanders.
31
Recommendations for project
proposals that deal with the:
implementation
include
 Rationalisation of existing private sector tourism
representative structures,
 Establishment of a partnership between public and private
sector organizations,
 Creation of a Tourism Development Action Consortium to
implement the project proposals, and
 A short term action plan regarding the implementation of
the fourteen anchor projects. The action plan includes
activities that range from facilitation to concept plans and
feasibility studies, depending on the position of each
proposal in the project planning cycle.
The Tourism Development Framework has been formally
approved, but due to internal capacity limitations with regard
to tourism-related LED, GTM has been unable to implement
the recommendations.
All the anchor project proposals, as well as the proposed
routes and meanders, will contribute towards the
development of the Upper Letaba Tourism Destination. This
is one of the tourism clusters that is contained in the Limpopo
Growth and Development Strategy and which has been
proposed for donor support by the Irish Government.
Approval from the Irish Government is anticipated in April
2005. It is anticipated that this programme will contribute
significantly towards the costs of implementation and towards
institutional capacity building. Capacity building will be aimed
tourism project management within the municipality and at
community tourism institutions.
5.2.2 Letaba River Mile
The envisaged purpose of this proposed intervention is to
develop the stretch of the Letaba River that passes through
Tzaneen town into a major tourist attraction. It should cater
for the leisure needs of local residents, but should also be
attractive for tourists from other provinces and countries.
A secondary purpose is to establish a platform for business,
office park and property development on the eastern side of
the Letaba River, thereby alleviating some of the space
limitations that are currently being experienced in the CBD.
This is being supported by the GTM Spatial Development
Framework.
32
The attractive natural features of the River have resulted in
several development investigations in the past, but no
implementation yet. Among these investigations are the
1988 CBD Extension Plan and the 1997 CBD Spatial
Development Policy.
The banks of the River are largely neglected at present and
shopping malls have their backs to the River. The proposed
project area within the river bend comprises approximately
170 hectares, of which 47 hectares is owned by the
Municipality.
More than half of the area is zoned for
agriculture, but public and private open space also features
strongly.
An internal project team was established to
facilitate the project conceptualization process and the output
from this team is reflected below.
Some of the positive forces/strengths/opportunities that
could drive the project proposal include:
Properties available to market for development
Existing high concentration of traffic and pedestrians
River and its form
Need for business development
Low density development(Sapekoe offices)
Existing approved Extension 51
Highly accessible from Provincial Road
Existing lodge(Fairview)
Improvements of properties not of high value - becoming
dilapidated
 Construction of Agatha Road
 Bulk infrastructure services are adequate
 Good bio-diversity.









Negative forces, weaknesses and threats that may constrain
the project proposal include the following:
 CBD off-centre and invades the residential area at low
density. Policy not restricting or encouraging business to
move across river
 Private ownership of properties
 Value of land is high
 Linkage between CBD and area opposite river insufficient
 Future role of Tzaneen in Region and Province (Sapekoe,
Claims, Municipal Powers & Functions)
 Lack of Development Plan
 Tzaneng Mall has its back to the river
 Condition of the Taxi & bus terminal next to river
 Establishment of commercial and industrial land uses
33
along river
 Water quality reduced by discharge of effluent and
polluted storm water
 Illegal dumping on river banks by hawkers and land
owners, and
 Unauthorized truck stopover.
The proposed action plan is firstly to obtain Council approval
in principle for the project planning process to proceed.
Thereafter a concept zoning and development proposal
should be prepared for the project area, indicating some of
the tourist activities that could be established along the river.
A budget of R50,000 should be adequate for the zoning and
concept development plan, which should then form the basis
of a full feasibility study and business plan.
The latter
should spell out the roles and responsibilities of all the
relevant stakeholders in the implementation process.
Informal sector activities should also be incorporated into the
concept development and business plans. The proposed
project area is indicated on the attached map.
The
Department of Environmental Affairs and Tourism, as well as
the Irish Government Donor Assistance Programme in
Limpopo, will be approached for financial support with the
project development process.
5.3
BUSINESS DEVELOPMENT
5.3.1 New Shopping Centers
The Maake Shopping Plaza is already in implementation by a
private sector developer in conjunction with a local
empowerment company. This is likely to be a 10,000 square
meter complex.
GTM should negotiate with LIMDEV to upgrade and expand
the existing Bendzulani Shopping Complex in Nkowankowa.
GTM should also enter into discussions with Trade and
Investment Limpopo to include the Nkambako/Mamitwa
population settlement cluster in their survey of potential
places for new shopping centre development in Limpopo.
This settlement cluster has a population of 98,000 people
who live in 34 villages. A suitable location should be found at
a major road intersection where population density is the
highest. Ward 25 is probably the right place to begin such a
search.
34
5.3.2 Local Buying and Business Service Improvement
The purpose of this proposed intervention is to mobilize the
support
of
organized
business
structures
for
the
implementation of the GTM Economic Development Strategy
in general and for local buying promotion and business
service improvement in particular. Organized business in this
instance includes the NAFCOC, the SACOB and the AHI
structures. It also includes
organized
agriculture
and
tourism.
A presentation on the draft GTM Economic Development
Strategy was made to all members of the Tzaneen Business
Forum on Friday 17 September. This was followed-up with a
presentation to the joint managements committees of all the
organized business structures on 14 October, during which
full support was expressed for the process.
The action plan agreed upon was that a local buying and
business service improvement campaign should be launched.
The Business Forum will find successful case studies on local
buying and business service improvement that were
implemented elsewhere and will recommend ways of
communicating
this
information
with
the
business
community. A measuring instrument will also have to be
created as an indicator of progress with best-practice
benchmarks as targets. This proposed campaign will become
a permanent agenda item for all organized business
structures and will the purpose of regular joint meetings of all
local organized structure meetings.
It was also requested that a permanent delegate from
Greater Tzaneen Municipality should attend the joint
meetings of organized business; that the
services
of a
project manager or consultant will be required to launch the
campaign and that assistance should be given to improving
the institutional capacity of informal business organizational
structures.
The Department of Trade and Industry and the Development
Bank of Southern Africa could be approached to fund the
costs of this proposal.
5.3.3 Informal Sector Promotion
The purpose is to formulate and implement an Informal
Sector
Promotion
Policy
that
would
assist
these
businesspersons to engage meaningfully in the mainstream
35
economy of GTM in the context of the Economic Development
Strategy.
A project team was established comprising all the
departments within GTM who deal with the informal sector
and with support from DBSA.
The project team found that
by its very nature the informal sector was short on definitions
and statistics. The following issues were agreed upon as the
basis for the proposed informal sector policy formulation:
 The current informal sector working document in GTM was
a useful starting point, but it needs to be updated and
expanded because the focus is essentially on by-laws and
regulations
 Issues that will have to be included in the proposed
informal sector promotion policy are business support
services, appropriate zoning of informal activity areas and
institutional capacity building within the Municipality to
manage the policy
 DBSA will conduct a literature study on best case
municipal informal sector policies in South Africa and other
appropriate countries in the rest of the world as a
benchmark for the compilation of the GTM policy
 Effective informal sector promotion will require closer cooperation between the various units and departments in
the Municipality than has hitherto been the case. This
includes LED, spatial planning, public health, licensing,
public transport and security. It was agreed that the LED
Section should take the lead in facilitating co-operation
among departments with regard to the revision and
implementation of Informal Sector Policy for GTM.
Once Council approval has been obtained in principle, and
once the results of the literature study have been received,
the Interdepartmental Project Team on the Informal Sector
that has been established for GTM should revise the existing
policy. DBSA and/or the Department of Trade and Industry
could be approached to assist with expenses that may be
incurred. The European Union LED Programme in Limpopo is
also a potential source of funding support.
The Department of Labour has indicated that their Social
Fund could accommodate requests for business training for
informal sector business-people.
36
5.4
BUSINESS RETENTION
5.4.1 Sapekoe Tea Estates
After an article was published in the local newspaper
regarding the anticipated closure of Sapekoe Tea Estates, a
meeting was arranged on 29 September to discuss the cause
of the crisis at Sapekoe.
The delegation from Greater
Tzaneen was lead by Councilor Masedi and the Acting
Municipal Manager.
Management at Sapekoe made it clear that they are unable
to produce tea at the delivered import price from Malawi that
is paid by South African packers. Operations were therefore
stopped in the middle of September and 640 employees at
the two estates in Greater Tzaneen Municipality were sent
home.
Two tea estates in the Thulamela Municipality
(Vhembe District) and two estates in Kwa Zulu Natal are also
affected.
Management at Sapekoe indicated that a presentation was
made to the Department of Trade and Industry (DTI) and to
the Industrial Development Corporation, at which the
Department of Agriculture was represented. The purpose of
the presentation was to seek solutions to the Sapekoe crises.
The Department of Trade and Industry (DTI) has indicated
that a solution could possibly be found in a combination of
branding the high-quality Tzaneen tea at a slightly higher
price and converting part of the tea estate to macadamia nuts
(with alternative short-term crops to sustain cash flow).
From the economic strategy point of view there are at least
three reasons why a concerted effort at business retention
has to be made. The first reason is mostly psychological. A
substantial business closure such as Sapekoe will have a
devastating effect on the affected employees and will make it
difficult to mobilize commitment towards the economic
development strategy. It will also weigh heavily on the
minds of potential investors.
Secondly, the multiplier effect of operational spending will
impact negatively on the local trade sector, considering that
the Sapekoe head office is in Tzaneen. Thirdly, the visual
impact of the tea estates on one of the main access roads to
Tzaneen is of considerable value to the local tourism industry.
The Limpopo MEC for Agriculture is in the process of
37
facilitating a rapid business solution in conjunction with
shareholders of Sapekoe, the outcome of which should be
clear before the end of 2004.
5.5
SPECIAL LED PROJECTS
The purpose is to create a special emphasis on local economic
development with regard to all the development interventions that
are proposed in this strategy document. This refers not only to the
primary activities that are proposed, but also to potential activities
that are upstream and downstream in the value chains of the main
proposals. Several LED projects that are currently contained in the
IDP, fit into one or another of these value chains. Joppie, for
example, is a cattle-farming project that fits perfectly into the
Livestock Improvement proposal. Other potential LED projects that
could fit into the Livestock Improvement proposal include fencemaking for grazing camps, sickle de-bushing and the mixing and
transportation of broiler litter into animal feed.
Apart from these main proposals, it is also essential that provision
should be made for LED projects that are not necessarily related to
the proposals, provided that they are sustainable. In order to
demonstrate sustainability, business plans will have to be prepared
in which LED project proposals are described according to a basic
standard format. This format should include descriptions of the:







Project purpose
Environment relative to the proposed location
Intended beneficiaries and their benefits
Anticipated costs and revenues, including the source of funding
Prospective markets and logistical requirements,
Technology requirements and
Institutional arrangements, roles and responsibilities.
The proposed action plan is to create a formal mechanism for LED
project identification and an information system to manage LED
projects from the identification stage to implementation. The
mechanism for LED project identification should include the recent
appointment of Community Development Facilitators, the Economic
Development Strategy Project Teams, as well as unique
opportunities that may arise. A typical example of the latter is the
increasing need for brick manufacturing as a result of the growing
local construction industry.
This provides an opportunity to
resuscitate the erstwhile Batlabine Brick Works.
The management information system for LED projects should
include arrangements for the preparation and implementation of
project business plans.
38
The European Union LED Programme in Limpopo is a potential
source of funding support for this proposed intervention.
5.6
SKILLS DEVELOPMENT
The intention of this intervention is to improve the employability of
the economically active persons within the GTM area so that these
persons will qualify for the new jobs that are expected to be
created through the project proposals that are contained in the
Economic Development Strategy.
The proposed course of action is to tap into underutilized resources
that have been dedicated to the National Skills Development
Strategy and to focus these resources on the economic project
proposals that were identified specifically for Greater Tzaneen
Municipality. This course of action should cover both the up-skilling
of currently employed persons and appropriate training for
unemployed persons.
By way of background information, the National Skills Development
Strategy determines that 80% of skills levy that is collected from
employers is allocated to Sector Education and Training Authorities
(SETAs), of which there are 25 in the country. The remaining 20%
of the levy is retained by the Department of Labour.
Employers are entitled to claim 15% of their skills development levy
after the compilation of a Workplace Skills Plan and 45% for the
implementation of that plan. Ten percent is held by SETAs in a
discretionary fund and the remaining 10% is for SETA
administration. All the above is for the up- skilling of employed
people. However, the flow of funds back to employers is not as
effective as it was intended to be.
Levies have been
accumulating at the SETAs.
SETAs that are particularly relevant to GTM are Tourism and
Hospitality (THETA), Primary Agriculture (PAETA), Local Government
and Water (LGWSETA) and the Wholesale and Retail Education and
Training Authority (WRSETA).
A Skills Development Project Team has been established comprising
the relevant municipal officials with representatives from the
Tzaneen Labour Centre and the Limpopo Office of the Department
of Labour. This team will obtain project application forms from the
SETAs that are mentioned above as a starting point to facilitate the
flow of levies back to employers.
Applications for taxi-driver
training will also be included under the auspices of the Transport
Education and Training Authority.
39
With regard to unemployed persons, the appropriate programmes
are Learnerships, the Social Funding Window and Adult Basic
Education and Training. Training project application forms in terms
of the Social Funding Programme will be obtained from the Labour
Centre and applications will be prepared for the Hydroponics LED
project and for business skills training for persons in the informal
sector.
The Project Team will make contact with Employment and Skills
Development Agencies in the GTM area in order to increase the
number of learnerships that are created and placed.
Finally the Project Team has to find ways to substantially increase
the number of ABET graduates every year in conjunction with the
Department of Education, donor agencies, Non-governmental and
Community-based organizations, as well as employers. It was
indicated in section 3.3.3 above that 5000 persons have to
graduate from ABET programmes every year if illiteracy is to be
eradicated by 2015.
Literacy is a prerequisite for skills
development.
5.7
ECONOMIC INFRASTRUCTURE
Infrastructure may restrict or stimulate LED. Several infrastructure
projects, associated with local economic development, have been
identified. Most of these projects will require detailed feasibility
studies prior to proper cost estimates being prepared. At this stage,
only indicative budgets are given.
5.7.1 Development of Additional Water Sources
It is crucial that the water sources in the area be increased
substantially in order to realize the implementation of the
identified value-chains.
The potential growth in the economy in and around Tzaneen is
dependant on adequate water supply. A study executed in
1998 confirmed the construction of a new dam at Nwamitwa
as a viable option. According to Mr Beyers Havenga, (Chief
Engineer: Water Resources Planning for Department of Water
Affairs), the cost/benefit study for this dam confirmed its
viability. There is however no plan to construct this dam in
the near future. Mr Anton Kilian, acting Director Technical
Services at the Greater Tzaneen Local Municipality, indicated
that the risk of silting has been identified. He also indicated
that the proposed dam site will necessitate the relocation of
certain communities.
40
Investigations and a feasibility study confirmed the economic
benefits of raising the Tzaneen Dam wall. Mr Kilian stated
that one option that was considered was to install flood gates
on the crest of the existing wall. This will assist with flood
control but will not necessary increase the sustainable yield of
the dam.
To ensure a sufficient bulk raw water supply in the Thabina
area, it is proposed that the Pitse Dam be constructed.
Typical cost
Nwamitwa
Dam
R 900 million
Possible
funding
source
 DWAF
Water
Resource
LED considerations




Raising
of 
Tzaneen Dam
R 30 million
DWAF
Water
Resource



Pitsi Dam
R 57 million

DWAF
Water
Resource



500 000 Person days of
employment during
construction
Additional jobs during
rerouting of roads.
Additional jobs during
relocation of communities.
Sustainable benefits due to
improved economic activity.
45 000 Person days of
employment during
construction
Additional jobs during
rerouting of roads.
Sustainable benefits due to
improved economic activity.
65 000 Person days of
employment during
construction
Additional jobs during
rerouting of roads.
Sustainable benefits due to
improved economic activity.
5.7.2 Critical Upgrading of Existing Water Supply Schemes
Water in the Greater Tzaneen area is supplied from 9 regional
schemes and several other groundwater schemes.
It is
estimated that approximately R20 million is required to
refurbish the existing infrastructure.
According to the Water Sector Plan, the existing water sources
in the rural areas can supply a total of 35 Ml/day. Based on a
basic supply to all of 25 l/c/day, the total water demand is 10
Ml/day for these areas. A more conservative estimate is
41
based on 70% of the consumers using the basic supply of 25
l/c/day while the balance of 30% consume 120 l/c/day. The
latter assumption results in a total demand of 20 Ml/day. It is
therefore clear that 15 Ml/day may be made available for
other LED projects. For instance, an additional 1000 ha of
macadamias may be irrigated with 15 Ml/day.
Various sources hinted on the inefficiency of the current
irrigation systems. Optimization of such infrastructure may
also result in increased volumes of water being available for
irrigation.
Mopani District Municipality, in its capacity as Water Services
Authority for the area, is currently deciding on Water Services
Provider arrangements. It is likely that the GTLM will be
considered as Water Services Provider for the Tzaneen area or
even beyond.
Typical
cost
R50
million per
year
Possible funding
source
 Municipal
Infrastructure
Grant
 DWAF Transfer
Grant
R 2.5
million per
month

Water Services
Provider
function
LED considerations




Improved sustainability of
water services.
Improved moral of workers.
70 000 person days of
employment during project
implementation
Opportunities for meter
readers, billing clerks, debt
collectors, water venders
ect.
5.7.3 Critical Upgrading of Access Roads and Storm Water
Systems
The most traveled major arterial within the Greater Tzaneen
area is the section of the P17/3 between Nkowankowa and
Rita. The entire section from Tzaneen to Burgersdorp/Gabaza
needs to be upgraded.
The municipality has already
purchased the land required for the upgrading.
The
municipality previously appointed consultants for the
engineering design. This design needs to be revised based on
the latest traffic counts and accident records.
Special
attention is required for the accommodation of pedestrian
traffic.
It is estimated that 50% of internal streets in villages are not
accessible. Most of these streets have no formal storm water
system.
Link roads between central business areas,
42
community centers, municipal service centers, schools,
hospitals and tourism areas need rehabilitation.
Special
attention is required on the development of rural bus/taxi
routes.
Roads and streets are very expensive to repair and construct.
A lack of proper operating storm water systems reduces the
lifespan of roads and streets. It therefore makes economic
sense to ensure that the storm water systems are properly
designed, implemented and well-maintained.
Large portions of the road and street network has either nonfunctional storm water systems or no system at all. It is
proposed that an employment-intensive storm water
maintenance programme be implemented. The cost of such
programme will depend on the size of the teams and the
extent of the area they are covering. The cost indicated
should be regarded as the allowance for phase 1 only.
Typical cost
Tzaneen –
Nkowankowa
Road
R 50 million
provisional
allowance
General
upgrading of
roads
R 15 million
provisional
allowance
Rehabilitation
of
stormwater
systems
R 5 million
Possible funding
source
 Road Agency
Limpopo
 Municipal
Infrastructure
Grant




LED considerations



Road Agency
Limpopo
Municipal
Infrastructure
Grant


Equitable share
Municipal own
funds





5.7.4 Preventative Maintenance
Technical Department
Improved access.
Improved moral of
workers.
40 000 Person days of
employment during
project implementation
Improved access.
Improved moral of
workers.
30 000 person days of
employment during
project implementation
Sustainable job
opportunities for 100
people.
Opportunities for
SMME’s
Opportunities for
privatization of
municipal services.
Opportunities for PPP’s
Programme
for
Electro-
The municipality has a large electricity distribution area, but
the generally poor state of the network in rural areas poses a
43
serious threat to efficient distribution.
required:
The following is
 Upgrading of the distribution system.
 Refurbishment of existing distribution system.
 Preventative maintenance programme.
A Maintenance Management Support Programme may be
required to establish management systems and preventative
maintenance programmes.
Typical
cost
R 5 million
per year
Possible funding
source
 Equitable share
 Municipal own
funds
LED considerations



Scope for SMME
development.
Empowerment of
existing municipal staff.
Improved service
delivery leading to
improved cost recovery.
5.7.5 River Mile
The main infrastructure constraint limiting the development of
the River Mile is access across the river. It is proposed that
low level bridges be constructed. A flood warning system
should be installed to alert people to the danger of oncoming
floods.
It is not possible to quantify the need at this early stage and
the figures below should be regarded as phase one only.
Typical
cost
R 10
million
Possible funding
source
 Municipal
Infrastructure
Grant
 DBSA loan
LED considerations



Increased retail
opportunities.
Increased property
values.
Increased property
taxes.
5.7.6 Solid Waste Management
The current landfill site has sufficient capacity up to 2010.
New sites have already been identified and the process of
licensing has been initiated.
Some municipalities derived major benefits from a solid waste
44
sorting and recycling approach. This created sustainable jobs,
generated income from the sale of sorted waste and reduced
the burden on the environment.
Typical
cost
R 5 million
Possible funding
source
 Municipal
Infrastructure
Grant
 DBSA loans
LED considerations




Sustainable jobs for up to
50 people.
Opportunities for SMMEs.
Opportunities for
privatized collection and
transport.
Opportunities for PPP’s.
5.7.7 Employment-Intensive Construction
A total of R15 billion (a third of the total allocation over the
next five years for municipal and provincial infrastructure
grants) will be implemented in accordance with the Expanded
Public Works Programmes (EPWP) principles. This approach
will assist in creating a million job opportunities countrywide.
The budgets and LED considerations have already been
indicated under the various infrastructure projects.
45
6.
FEASIBILITY STUDIES AND BUSINESS PLANS
6.1
INTRODUCTION
Feasibility studies enable a decision to be taken regarding the
commitment of funds for project implementation. They can be
expensive, but if conducted with care, will reduce the likelihood of
unexpected problems emerging during implementation. Feasibility
studies for project proposals in terms of the GTM Economic
Development Strategy should be standardized and should include
the following components (which have also been adopted by the
Limpopo Growth and Development Strategy):







Market analysis
Financial and risk analysis
Technical analysis
Economic analysis
Social analysis
Institutional analysis, and
Environmental analysis.
The integrated results of the analyses should indicate whether the
project should proceed to implementation. Business plans that
follow from the feasibility studies, should contain all the actions
required for implementation.
Although the feasibility study and business planning component of
the GTM Economic Development Strategy will only formally
commence after Council approval of all the proposals have been
obtained in principle, there are already a number of initiatives in the
feasibility study phase. This is indicated per proposal below.
6.2
SUBTROPICAL FRUIT AND NUT CLUSTER
PROPOSAL
DEVELOPMENT
A formal cluster working group will be established once principle
Council approval has been obtained. One of the first tasks of this
working group will be to identify new project opportunities within
the value chain (upstream, downstream and sidestream) of the
cluster.
Project opportunities that are already in the feasibility study phase
with Trade and Investment Limpopo include compost manufacturing
(upstream) and fruit and vegetable processing (downstream). The
CSIR has also completed a prefeasibility study on the extraction of
essential oils (downstream).
Prefeasibility studies on the raising of the Tzaneen Dam wall and on
46
the construction of Mamitwa Dam were completed by DWAF in
1996. These should be updated in the context of the proposed
cluster development requirements.
A considerable amount of work has also been done on improved
logistics for increased competitiveness, particularly in the citrus
industry, which should form part of this feasibility study phase.
A target should be set for the first wave of projects within this fruit
and nut cluster proposal to be through the feasibility study and
business planning stage by June 2005 and for implementation to
commence immediately thereafter. It should also be the objective
to have new project proposals moving through the feasibility study
stage on a continuous basis towards the achievement of vision 2015
for this cluster.
6.3
LIVESTOCK IMPROVEMENT
A business plan has been compiled for the Bonn Micro-credit
Livestock Improvement Programme. However, this business plan
may need to be reviewed in the context of a Municipal Livestock
Improvement Strategy, as recommended in this Economic
Development Strategy for GTM. Such a strategy, together with
project business plans for places like Bonn, Joppie and other
communities where large cattle herds are kept, should be completed
by June 2005. Additional feasibility studies and business plans
should be compiled simultaneously for LED projects that can be
associated with livestock improvement, such as fence-making,
sickle de-bushing and cattle feed supplements from locally available
broiler litter and fruit peels.
6.4
IMPLEMENTATION
FRAMEWORK
OF
THE
TOURISM
DEVELOPMENT
The Tourism Development Framework spells out exactly for which
parts of fourteen proposed anchor projects feasibility studies are
required.
Some of this work has subsequently been done, such as the
feasibility study for the Tzaneen Dam Nature Reserve, which was
done as part of the Programme for the commercialization of Nature
Reserves in Limpopo.
6.5
LETABA RIVER MILE
The conceptual design should ideally be completed by February
2005 in order that the feasibility study can be done by June 2005.
47
6.6
NEW SHOPPING CENTER DEVELOPMENT
A feasibility study and business plan for the Maake Shopping Plaza
has been compiled by the private sector developer (McCormick
Properties). Similar studies will have to be done for Bendzulani (in
conjunction with Limdev) and for a site in the Nkambako/Mamitwa
area that is yet to be identified as part of the shopping pattern
study that is currently being conducted by Trade and Investment
Limpopo.
6.7
LOCAL BUYING AND BUSINESS SERVICE IMPROVEMENT
Representatives from organized business structures in GTM have
offered to obtain case studies on local buying and business service
improvement campaigns through their national governing bodies.
These case studies have to be interpreted in the context of local
conditions in GTM so as to ensure that the correct conclusions are
drawn and that appropriate lessons are drawn.
6.8
INFORMAL SECTOR PROMOTION
This proposal is still in the policy formulation stage. Once the policy
has been completed and adopted, it is likely that feasibility studies
and business plans may be required for selected informal sector
markets and facilities.
6.9
RETENTION OF SAPEKOE TEA ESTATE
The proposed meeting with the MEC for Agriculture in Limpopo will
indicate the nature of the feasibility study that will be required and
which will probably have to be compiled in conjunction with the
Department of Trade and Industry and national tea packers.
6.10 SPECIAL LED PROJECTS
A feasibility study for the resuscitation of Batlabine Brick Works
could commence immediately in conjunction with Limdev.
6.11 SKILLS DEVELOPMENT
This proposed intervention is more of a facilitative nature and no
feasibility studies or business plans are anticipated until July 2005.
A Tourism Academy is likely to become an option, but a feasibility
study for this option could be pursued in the context of the Letaba
River Mile proposal.
48
6.12 ECONOMIC INFRASTRUCTURE
6.12.1Development of Additional Water Sources
 Feasibility studies for Nwamitwa dam, Tzaneen dam and
Pitsi dam should be updated based on the results of the
EDS project teams, with specific reference to the proposed
Fruit and Nut Cluster Working Group.
 Depending on the outcome of the feasibility studies,
principle decisions must be taken by DWAF on the
implementation programmes for each one of these
additional water sources.
 Engineering designs and project business plans are
required for each project.
 DWAF should indicate the financing model for each
project.
 Implementation of approved projects should start as soon
as possible.
6.12.2 Critical Upgrading of Existing Water Supply Schemes
 The GTM should update their Water Sector Plan to
accommodate the LED information.
 The GTM should ensure that the content of their Water
Sector Plan is incorporated in the Water Services
Development Plan of Mopani District Municipality.
 The GTM should co-operate with Mopani District
Municipality on the implementation, operation and
maintenance of water services projects in their area.
6.12.3 Critical Upgrading of Access Roads and Storm Water
Systems
 The GTM should clarify responsibilities for the
refurbishment and upgrading of specific roads between
themselves, the Mopani District Municipality, the Road
Agency Limpopo and the National Road Agency.
 Each party should prepare feasibility studies for the roads
under their jurisdiction.
 Engineering designs and project business plans are
required for each project.
 Responsible parties indicate the financing model for each
project.
 Implementation of approved projects should start as soon
as possible.
49
6.12.4 Preventative Maintenance Programme for ElectroTechnical Department
 The GTM should appoint a specialist to assist them with
the development of a preventative maintenance
programme.
 A cost/benefit analysis should be prepared to establish the
levels of spares to be carried as well as the levels of
staffing required.
 The GTLM should budget for preventative maintenance.
 An implementation strategy must be prepared.
6.12.5 River Mile
 The River Mile Project Team should prepare a concept plan
and feasibility study once Council approval has been
obtained.
 Depending on the layout, the need for upgraded and new
infrastructure must be identified.
 Infrastructure requirements should be grouped into
integrated projects.
 Engineering designs and project business plans are
required for each project.
 Responsible parties should indicate the financing model for
each project
 Implementation of approved projects should start as soon
as possible
6.12.6 Solid Waste Management
 Implementation of approved projects should start as soon
as possible
 The GTM should clarify responsibilities for the licensing,
establishment, operation & maintenance of solid waste
disposal sites between themselves and the Mopani District
Municipality.
 Each party should prepare feasibility studies for the
disposal sites under their jurisdiction, with specific
modeling of the recycling potential.
 Engineering designs and project business plans are
required for each project.
 Responsible parties should indicate the financing model for
each project.
 Implementation of approved projects should start as
possible.
50
6.12.7 Employment-Intensive Construction
 The GTM should prepare a panel of consultants registered
for NQF 5 and NQF 7 levels of Labour Intensive
Construction.
 The GTM should identify projects from their IDP that are
suitable for labour-intensive construction.
 Engineering designs and project business plans are
required for each project.
 Responsible parties indicate the financing model for each
project.
 Implementation of approved projects should start as soon
as possible.
51
7.
IMPLEMENTATION
7.1
STAKEHOLDER CONSULTATION
7.1.1 Introduction
This section focuses on the stakeholder consultation process,
of which the primary aim was to present the Phase1 and 2
reports on the Economic Development Strategy, thereby
creating awareness, and to obtain inputs from stakeholders.
7.1.2 Consultation Process
(a)
Greater Tzaneen Municipality
In order to gain as complete a picture as possible
about the rationale behind the initiative, face-to-face
interviews were conducted with the officials of the
Greater Tzaneen Municipality in the Strategy and
Development Section.
The following were the inputs:
(i)
(ii)
(iii)
(iv)
(v)
The strategy should focus on the overall
economic transformation of the Greater Tzaneen
municipal area.
Clear
initiatives
to
address
the
underdevelopment of primarily Black areas, and
Black-owned business should buttress the
strategy.
Various Acts of Government should underpin
proposals contained in the strategy, for
example, Black Economic Empowerment Act,
Skills Development Act, Employment Equity Act,
etc.
Government initiatives must be incorporated in
the plan and there should be clear illustration of
how such initiatives should inform the Greater
Tzaneen Municipality’s route to economic
development, for example, the Extended Public
Works Programme, the World Cup 2010,
Integrated Development Plan, Public-Private
Partnerships,
various
private
sector
organizations, government departments and
parastatal-specific initiatives already under way
in the municipal area.
The economic development strategy must
address, in clear terms socio-economic issues
52
like unemployment, HIV and AIDS.
The role of the Non Government Organisations,
foreign development agencies and foreign
missions should be conceptualized to be in line
with the envisaged economic development
strategy.
(vii) Hawkers and informal traders should be upskilled and capacitated to participate in the
mainstream of the economy.
A clear
programme to achieve this objective should be
incorporated in the strategy as a project.
(viii) A funding framework or possible funding models
that can be explored to implement the strategy
should be presented.
Areas like hawkers
capacitation,
taxi
transport
efficiency,
community institutional support and SMME
development need to be addressed.
(ix)
The strategy should consider instilling a culture
of community development through, for example
Corporate
Social
Investment,
Community
Development Awards in the programme and
various possible models need to be considered.
(vi)
(b)
Traditional Leaders
The presentation of the two reports was done in the
following manner:
 A visit to the Muhlavha Tribal Authority as they
were not going to be available on the day scheduled
for the meeting with traditional leaders in the area
 A group meeting with three traditional authorities
The following were the inputs:
(i)
(ii)
The consultation with them is done within a
short space of time and thus current inputs may
lack the rigour required for such an important
activity. Prior to implementation of the strategy,
more time should be allowed for more inputs.
Strategy seems to be unaware of the potential
the various tribal areas have.
The strategy
should include projects currently running or
about to run in communities, for example, the
Batlhabine Brickyard, the land claims that have
been put in for various lands and how the
communities who would benefit from the claims
would be assisted to continue and improve the
53
productivity of the land.
Environmental impact assessments need to be
done to alleviate environmental hazards that
may be brought by the proposed initiatives like
the location of factories in Nkowankowa.
(iv)
Issues like crime, disease and the availability of
grazing land, need to be addressed in the
proposed beef farming activities. A comparative
analysis of the beef farming initiative with other
possible projects like sisal production and
manufacturing needs to be done. On the bases
of such analysis the people can be motivated to
make informed choices.
(v)
Traditional leaders want to see how the
development of proposed projects like the nuts
and mangoes are going to benefit their people
beyond just providing labour to even being
equity owners whilst being employed there.
(vi)
There is a need for the mango farmers in the
communal areas to be supported. This strategy
should assist.
(vii) The development of the envisaged River Mile
proposal must clearly capture the cultural wealth
of the municipal area.
(viii) Provision of water on a continuous bases and job
creation in the rural communities must be
addressed to promote local tourism.
(ix)
Traditional authorities need to be capacitated to
play an economic development facilitation role.
An institutional capacity building programme
that
is
determined
through
consultative
processes, should to be discussed in the
document to show the envisaged role of
traditional authorities, and ensure their capacity
to play that role.
(x)
The proposed marketing theme should reflect a
common destiny for the people of the municipal
area. The consultative process should include
the entire community and not alienate the
illiterate
and
those
without
access
to
newspapers.
(xi)
There is need for the strategy to show how rural
people can access business opportunities in the
town and developed areas, and a support
programme should be proposed by the strategy
to capacitate these people.
(iii)
54
(c)
Village Tourism
Face to face discussions with a village tourism
initiative, Noko Cultural Village, drew the following
comments:
(i)
(ii)
(iii)
(iv)
(d)
The strategy should attempt to capture
challenges faced by tourism initiatives in the
rural Black areas and provide guidance in how
those bottlenecks are to be addressed.
For
example, communities in rural black areas do
not have jobs and therefore little dispensable
income to spend on the tourist initiatives. There
are
no
mechanisms
to
bring
external
expenditure into the areas through outside
tourists.
Tourism initiatives are not well funded and
mentored. There is need for comprehensive
support networks to be established to capacitate
village tourism initiatives.
Income streams of village tourism initiatives
should be diversified.
The strategy should
present various options to ensure sustainability.
The proposed marketing theme should to be
linked to marketing strategy, which should
ensure that all people benefit. It should be the
result of a consultative process.
LIMDEV
Face to face discussions were held. The following were
the inputs:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
The industrial site is quite and underutilized.
Happy that the strategy explores possible use of
industrial sites.
There is need for strategy to provide incentives
for industrial development.
Skills development to be prioritized with the
view to support SMME development.
Funding should be made available for business
start-ups. The strategy should provide guidance
Involvement
of
other
business
support
stakeholders should be mobilized to support the
economic development strategy, for example,
Land Bank.
Funding packages appropriate for the challenges
facing the successful implementation of the
55
strategy should be proposed and explored.
Strategy should be informed by what is
available.
For example, in agriculture there is
need to audit number of farms and activities,
both established and emerging, identify peculiar
problems and develop programmes to address
those problems as part of the economic
development strategy.
(viii) Creativity is needed to integrate economic
sectors in the value chain, for example creation
of initiatives like wine tours and routes in the
Cape.
(ix)
A
training
institute
for
processing,
manufacturing,
conferencing,
research,
technology development and trade should be
linked to the marketing strategy where various
countries are mobilized to partner the economic
development programme roll out.
(x)
Infrastructure development should be presented
to tie up with the development of the historically
neglected areas.
(vii)
(e)
LIMAC
Face to face discussions were held. The following were
the inputs:
(i)
(ii)
(iii)
(iv)
(v)
The strategy should take advantage of services
and products provided by agencies such as
LIMAC,
for
example,
registration
of
manufacturing
business,
human
resources
development
programmes,
productivity
enhancement programmes, development of
marketing tools and strategies, facilitating
access to finance and Ntsika’s services.
The strategy should be more articulate on the
establishment of new initiatives and building
capacities of emerging businesses as it does with
the established business.
There is need to start entrepreneurship
development at school level.
Municipality should fast-track implementation of
learnerships to close the skills gap in young
people.
There are projects that are currently supported
by LIMAC and which have been presented to the
municipality. These need to be incorporated into
the strategy.
56
(f)
Taxi Association
Face to face discussion with representatives produced
to the following inputs:
(i)
(ii)
(iii)
(iv)
(v)
(g)
The industry is moving towards people-centered
service delivery. There is need to support this
move through, for example, proposals for
involvement in the tourism industry, capacity
building in customer service and team building
Development of infrastructure that is meant to
support the industry should involve the industry.
Current development at SANLAM Taxi rank
excluded the industry and the structure is not
what they are proud of as it cannot protect
commuters from the rain and sun. The location
of the stalls is not what the industry is happy
about, so is the material used for the
construction.
There is need for training to be coupled with all
initiatives to ensure the requisite capacity to
respond
and
deliver
within
the
new
arrangements.
Hawkers are linked to taxi industry and they
complement each other.
There is need to
ensure the development proposed does not lead
to relocation and making way for new investors.
Current businesses along the proposed river mile
to be part of the beneficiaries of the
development. The strategy should be vocal on
how this is to be achieved.
There is need to upgrade the Nwamitwa Taxi
Rank, Tarring of Bridgeway-Litsitele Road via
Muhlava Head Kraal, and Upgrade of R81 road
from Dan to Burgersdorp.
NAFU and NAFCOC
(i)
(ii)
(iii)
The structures are currently disorganized as
current procurement measures favour secretive
and individualistic deals, which limit the capacity
of local service providers to implement joint
initiatives. There is need for structured chamber
development programmes and institutional
capacity building
Water provision for agriculture needs to be
improved.
There is need for structured programme to
57
create
partnerships
between
established
enterprises and emerging enterprises.
The
strategy needs to articulate this.
(iv)
Black Economic Empowerment is to be
addressed, as this is law.
(v)
Affirmative procurement needs to be articulated
in
the
strategy
to
indicate
how
the
transformation of the economy is to be achieved
in the municipal area.
(vi)
The strategy must show what are the intentions
and targets for economic transformation in the
municipality.
(vii) Acquisition of land for economic development
needs to be articulated to show how black
people would access that land.
(viii) Black people in the tourism industry should not
be limited to their local areas only, or to
entertaining tasks only. The strategy should
show which are lucrative activities and provide
an analysis of current activities and revenue
generated in the industries, and programmes be
proposed with possible funding models to ensure
successful entry, sustenance and growth of black
enterprises in those lucrative business activities.
(h)
Letaba After Care Centre for People with Disabilities
Discussions have led to the following inputs:
(i)
(ii)
7.2
There is need to clearly articulate how the
people with disabilities will be empowered
through the implementation of this strategy.
A programme has been developed and it needs
to be incorporated in the strategy.
COUNCIL APPROVAL
A Council decision in principle regarding all the proposals that are
contained in this draft Economic Development Strategy is a
prerequisite for official status to be attached to the strategy.
Thereafter, formal approval should also be obtained from the
Mopani District Council.
Every project should be presented to Council again after feasibility
studies and business plans have been completed. It is at this stage
that Council decisions can be taken about the detail of every
project.
58
7.3
COMMUNICATING
AND
DEVELOPMENT STRATEGY
MARKETING
THE
ECONOMIC
Once the Economic Development Strategy is approved by Council in
principle, it is essential that the content be communicated to all
stakeholders in the GTM community and that their commitment is
mobilized towards achievement of the vision, goals and targets.
This will require internal communication within the municipality,
communication with formal structures such as government, labour
and business at different levels, as well as communication with
community structures, which could include informal organizations.
The Economic Development Strategy will therefore require its own
dedicated communication and marketing strategy, which should be
reflected in the Communication Strategy of GTM. The municipal
logo is an important symbol in this regard. It should reflect all the
distinguishing features of GTM in a manner that promotes the
willingness of all stakeholders to identify with the municipality and
its development process. Some of the symbols that should be
included in the logo is the resourcefulness of people, the agricultural
(subtropical fruit production) and tourism potential that is inherent
in the Letaba River, as well as the attraction of the mountains.
Public participation in finalizing the symbols that should be
contained in the logo could become a useful vehicle to communicate
the Economic Development Strategy and mobilize commitment
towards it. Once the symbols are agreed upon, these symbols
should be reflected at the entrances to the municipality, in
landscaping and architecture, in official stationary and in marketing
campaigns with investors.
It is also important that the external communication of the
Economic Development Strategy should reflect the essence of the
brand that has recently been created for Limpopo Province.
The Project Team that has been established for the communication
and marketing of the Economic Development Strategy will meet
with GCIS, with the Marketing Division in the Office of the Premier,
with Trade and Investment Limpopo and with the Limpopo Tourism
and Parks Board, to formalize the Development Communication and
Marketing Strategy.
7.4
STRATEGIC FINANCIAL CONSIDERATIONS
The trend of the increase or decrease of the tax base was analyzed
for the period 1 July 1998 to 30 June 2003. All calculations are
based on audited financial statements received from the
municipality. The following sectors were evaluated as per attached
59
schedule:




Government subsidies and grants
Assessment rates
Electricity
Water
7.4.1. Government Subsidies and Grants
The income received in respect of Government subsidies and
grants calculated as a percentage of the total income
received during the following financial years was as follows:
Year
1999
2000
2001
2002
2003
Percentage
0.81
3.30
4.67
9.41
11.72
Should the abovementioned trend continue the municipality
would be able to balance its annual operating budget. If
government decided to reduce the annual grants to the
municipality, the municipality will experience problems in
balancing future operating budgets. The municipality will then
have to find additional sources of revenue in order to
compensate for the loss of income.
7.4.2. Assessment Rates
The income in respect of assessment rates reflected the
following trend for the last five financial years as a
percentage of the total income received:
Year
1999
2000
2001
2002
2003
Percentage
9.06
9.14
8.75
17.14
16.85
The above percentages reflect that the income received for
assessment rates is constant for the last two years and that
the tax base of the municipality is healthy. In terms of
legislation a valuation roll must be compiled at least every
four years and properties will be valued at market value. The
60
increase in the percentage from about 9 percent to 17
percent is the result of the implementation of the new
valuation roll in 2002.
7.43. Electricity
The surplus on the electricity service as a percentage of
income to expenditure, for the past five years was as follows:
Year
1999
2000
2001
2002
2003
Percentage
18.89
13.31
3.64
8.89
23.57
The surplus on this service contributes a significant deal to
the income of the municipality. Should this service be taken
away from the municipality by the National Energy Regulator
the consequences for the municipality will be catastrophic in
that the municipality will not be able to balance its budget
and additional sources of revenue will have to be obtained
elsewhere.
7.4.4. Water
The surplus on the water service as a percentage of income
to expenditure, for the past five years was as follows:
Year
1999
2000
2001
2002
2003
Percentage
22.98
13.26
26.30
52.10
58.60
The municipality should continue to act as service provider for
the District Municipality so that the surpluses on this service
can be used to offset deficits on other services.
7.4.5. Conclusion
The municipality has to continue to provide the services
mentioned above, and the percentages of surpluses must
stay consequent in order to balance future operating budgets
and be in a position to take up long-term loans. Grants and
subsidies from local and provincial government cannot be
61
reduced; this will result in shortages on the operating budget,
which can only be financed from alternative sources. The
transferring of the electricity service
to the “National
Electricity Regulator” will also result in shortages on future
operating budgets. This will also jeopardize the municipality’s
chances of taking up long term loans for any extension and
growth.
Additional analysis regarding the impact of property rates in
rural parts of GTM is attached as Annexure Two.
7.5
MANAGING THE ECONOMIC DEVELOPMENT STRATEGY
7.5.1 Managing the Process
It has been demonstrated by way of the project planning
cycle in chapter one above, that economic development is a
process and not an event. It is therefore essential that
institutional arrangements be made to provide for continuity
with regard to the planning and implementation of
development project interventions. Such continuity should be
consistent with the time horizon that is envisaged in the
vision statement and goals that are contained in the
Economic Development Strategy.
The planning phase of the Economic Development Strategy
has generated some momentum towards accelerated job
creation and economic growth in Greater Tzaneen
Municipality. In order to sustain and even increase this
momentum, it is recommended that a Project Management
Unit (PMU) should be established in the Strategy and
Development Department.
The function of this PMU should be to manage the completion
of the feasibility studies and business plans as indicated in
chapter six, to link every development project proposal with
an appropriate funding agency and to co-ordinate the project
teams that work on every development proposal.
Once project implementation gets underway, the monitoring
and evaluation function that is discussed in the next chapter
should also be accommodated in the Project Management
Unit.
In order to prevent an interruption in the Economic
Development Strategy Process, a consultant could be
appointment in the short-term (four to six months) until a
permanent appointment can be made or until an existing staff
62
member can be trained for the position.
The proposed organization structure for the management of
the EDS process is reflected in Figure Four below.
7.5.2 Managing Each Development Project Proposal
The project teams that have been created for all the
development proposals will need to be formalized after
Council approval of the Economic Development Strategy is
obtained in principle. All the relevant departments within
GTM, including the Treasury, should remain represented on
the teams. It is also important that the project manager
should have experience and established networks with
organizations that are relevant to the particular project
proposal. The project managers are likely to have dual
reporting lines. They will have a responsibility towards their
departmental heads, but will also be responsible to report
project progress to the proposed Project Management Unit for
the Economic Development Strategy. Each project should
have a budget (see recommendations in chapter five) and a
work schedule.
Stakeholders have been identified per project proposal in
chapter five (project conceptualization). These stakeholders
should be represented on the project teams.
Figure Five below provides a diagram of the proposed
development project teams and the organizations that should
serve on each team. Names of the project team members
are reflected in Annexure One. The Project Team for the
communication and marketing of the Economic Development
Strategy is central to the success of the strategy, because it
is hereby that all stakeholders are continuously informed of
progress on all the project interventions.
7.5.3 EDS Project Management Schedule
Figure Six below contains the proposed management
schedule for the Economic Development Strategy of GTM. It
indicates that the situation assessment, vision and target
setting, development opportunity identification and project
conceptualization stages of the EDS process have been
completed. After Project Steering Committee and Council
comments have been obtained, which is anticipated in
November 2004, feasibility studies and business plans can
commence. This could be completed by June 2005, where
after implementation can commence.
The first cycle of
63
projects could be completed by December 2005. The entire
process should continue until vision 2015 is realized.
64
FIGURE FOUR: PROPOSED ORGANIZATION STRUCTURE TO MANAGE THE ECONOMIC DEVELOPMENT STRATEGY
Mopani District Council
Municipal Mayor
Ward
Councilors
Ward
Councilors
Municipal Manager
Mopani District
Strategy & Planning
Department
HOS: LED/IDP
HOS Land Management
Manager: Strategy &
Development
(Temporary) EDS
Project Management
Unit
Area Admin Officer x 3
Project Teams for Each of the Eleven Proposed Development Interventions
65
FIGURE FIVE: PROPOSED ORGANIZATION STRUCTURE TO MANAGE THE DEVELOPMENT PROJECTS
Manager: Strategy &
Development
Project Manager and
Trainees
Fruit & Nut Cluster
Project Manager
Livestock
Improvement Project
Manager
TDF Project
Manager
River Mile Project
Manager
Project Manager:
Shopping Centers
Cluster Work Group
See Rpt 2
PM: Local Buying
& BSI
GTM
Dept. Agric/Donor
GTM
Mentors
Livestock Owners
PM: Informal Sector
DCI Limpopo
GTTA
GTM
DFED
Consultants
Developers
GTM
PM: Economic
Infrastructure
Projects
PM: Sapekoe
Limdev
Land Owners
TIL
PM: Skills
Development
Special LED
Existing Structure in the Dept.
GTM
Organized GTM
Business Structures
DBSA
informal
GTM
Business
Structures EU LED
DTI
MDM
Consultants
Sapekoe
GTM
SETAS
D of Labour
Dept of Agric
Sector Departments
PM: EDS Communication
& Marketing
GTM
GCIS
TIL
TLPB
NOTE: The Communications and Marketing Project Team could report directly to the Municipal Manager
66
Insert the A3 Project Management Schedule
67
8.
MONITORING AND EVALUATION
Adherence to municipal procedures and the application of financial regulations
are important, but the main focus of the monitoring and evaluation process is
project performance and the tracking of results against the intended objectives.
Although the monitoring and evaluation function should be centralized within
the Development and Strategy Directorate of GTM, the process should be
decentralized because field staff and Community Development Facilitators are
likely to be familiar with project conditions and details.
The ideal monitoring and evaluation system will contain a brief (one-page)
reporting format that is designed by the Strategy and Development Directorate
to cover the most pertinent aspects of project progress and performance.
Community Development Facilitators or field staff should complete this per
project on a regular (monthly or quarterly) basis.
Project and head office managers will interpret this information and take
corrective action where necessary, with feedback being given to field staff. If
feedback is not given, field staff might lose their motivation to collect the
information. Corrective action could either be done within the context of the
original design if that was sufficiently robust, or it could require changes to the
project design where it is found wanting. Thirdly, internal policies, procedures
or practices might need to be changed in order to enhance development project
performance.
At the head office level, the performance of all project interventions should be
consolidated on a regular (quarterly) basis to ensure that the targets and goals
of the entire Economic Development Strategy are achieved.
This formal monitoring and evaluation process should be supplemented with an
informal process where managers from GTM visit projects and make their own
observations about project performance.
In the final instance, the monitoring and evaluation process is also a major
source of new project identification. A large proportion of the subsequent
waves of new development project interventions towards the achievement of
Vision 2020 are likely to originate from this process.
Considering that the first wave of project development interventions is likely to
move into the implementation stage from July 2005 onwards, the monitoring
and evaluation function should ideally be established by September 2005. An
incubator for the monitoring and evaluation function could be established for
LED projects immediately, because it is an essential component of the project
management process. This incubator can then be up-scaled once the major
projects move into implementation.
68
9.
SUMMARY OF RECOMMENDATIONS
Economic development is a process and the strategy to accelerate this process
comprises several stages within the context of a project cycle.
The situation assessment, vision and goal setting, identification of development
opportunities and the project conceptualization stages of the process have been
completed.
Eleven proposed project interventions have been described and are
illustrated on the map that is contained in Annexure Three. A communication and
marketing strategy is also required to relate the proposals to the community and to
facilitate participation.
These proposals were presented to community stakeholders and valuable comments
were obtained.
The next step after the assessment of the proposals by the Project Steering Committee
on 4 November, is the presentation of the proposals to Council for a decision in
principle.
There after a Project Management Unit needs to be established for the Economic
Development Strategy. It is recommended that this unit should be located within the
Strategy and Development Department of Greater Tzaneen Municipality. The main
responsibility of the PMU is to manage all the approved project proposals through the
remaining stages of the development strategy management process, from feasibility
studies to implementation and finally to monitoring and evaluation.
The PMU should
also be responsible to repeat the project cycle towards the achievement of vision 2015.
The monitoring function is a critical indicator of the extent to which the annual targets
towards the economic development vision are being achieved.
In addition, the PMU must take responsibility for the institutional efficiency targets, for
regional integration and for the other cross-cutting policy issues that are contained in
chapter three on vision, goals and targets.
The first task of the PMU will be to formalize project teams for each proposal and to link
each proposal with the funding agencies that are recommended in the strategy. It is
crucial that the momentum, which was created during the planning phase of the
Economic Development Strategy, should be sustained. Interim project teams were
already created for the project conceptualization stage and these persons could form
the core of permanent project teams.
Comments that were obtained from the stakeholder consultation process should be
incorporated into the work of the PMU and in the work of each project team. The PMU
will use the proposed Communication and Marketing Strategy to further consult with
stakeholders in a general sense as the strategy unfolds, but the project teams should
consult with their specific stakeholders in more detail.
It is envisaged that the feasibility study stage for the first cycle of project proposals
should be completed by June 2005 and that these projects should be in implementation
by December of that year.
The next cycle of project proposals should commence in January 2006 and this process
should continue until the vision of understanding and realizing the full Human and
Natural Development Potential of Greater Tzaneen Municipality is achieved for the
benefit of its Residents and the Province.
69
ANNEXURE ONE: PROJECT TEAMS
The following GTM departments and other organizations have been serving on interim
project teams during the conceptualisation stage of the Economic Development
Strategy. These teams and their members should be formalised once principle Council
approval of the EDS has been obtained. Councillors from the LED portfolio should be
nominated to all teams. Other members can be added as the feasibility study and
implementation stages of the strategy unfold.
The main function of the teams and their project managers is to facilitate each project
proposal through the feasibility study and business planning stage into
implementation. After implementation, the teams can continue with new projects that
emanate from their original projects, or cease to exist, whatever is in the best interest
of the Economic Development Strategy.
1.
FRUIT AND NUT CLUSTER
Representatives of commodity producers, including emerging farmers
PMU for the EDS in GTM
Civil Engineering Department in GTM
Limpopo Department of Agriculture
Limpopo Department of Finance and Economic Development
Providers of logistical services
Other producers in the value chain
Relevant development agencies, including Science and Technology
2.
LIVESTOCK IMPROVEMENT
GTM Strategy and Development Department
Limpopo Department of Agriculture: Berlin Sub-regional Office
Representatives of Livestock Owners
Finnish Government ODA Programme in Limpopo
Mentors to be selected
3.
GTM TOURISM DEVELOPMENT FRAMEWORK
Specialist Project Manager
GTM Strategy and Development Department
Limpopo Department of Finance and Economic Development (Tourism Division)
Greater Tzaneen Tourism Association
Development Co-operation Ireland Programme in Limpopo
4.
LETABA RIVER MILE
All departments in GTM
Land Owners
Department of Environmental Affairs and Tourism
Various Consultants
70
5.
SHOPPING CENTER DEVELOPMENT
GTM Strategy and Development Department
Limdev
Trade and Investment Limpopo
Property Developers
6.
LOCAL BUYING AND BUSINESS SERVICE IMPROVEMENT
PMU for the EDS in GTM
All organized business structures in GTM (including agriculture and tourism)
7.
INFORMAL SECTOR PROMOTION
Specialist Project Manager
All departments in GTM
All informal business structures in GTM
DBSA
European Union LED Programme in Limpopo
8.
SAPEKOE BUSINESS RETENTION
GTM Strategy and Development Department
Limpopo Department of Agriculture
Sapekoe
Department of Trade and Industry
9.
ECONOMIC INFRASTRUCTURE
GTM Civil Engineering and Electrical Departments
GTM Strategy and Development Department
All relevant sector departments (National and Limpopo)
Mopani District Municipality
Consultants
10.
SPECIAL LED PROJECTS
GTM Strategy and Development Department
European Union LED Programme in Limpopo
LED Specialists as and when required
11.
SKILLS DEVELOPMENT
GTM Strategy and Development Department
GTM Training Division
Department of Labour in Limpopo
Relevant SETAs
71
12.
EDS COMMUNICATION AND MARKETING STRATEGY
Office of the Municipal Manager
GTM Strategy and Development Department
Government Communication and Information Service
Office of the Premier
Trade and Investment Limpopo
Limpopo Tourism and Parks Board
72
ANNEXURE TWO: PROPERTY RATES BILL
The total ratable land value amounts to R 247 623 200 with an income of R 14 708
818 and the total value of improvements amounts to R 1, 5 billion with an income of
R 7 918 074 (see Property Rates Schedule 2004-2005 attached hereto).
The total rateable value for agriculture properties amounts to R 944 253 266 with an
estimated income of R 2 100 000 for the 2004 / 2005 financial year, which is 8.49%
of the total property rates income. It is expected, in terms of current legislation, that
the total income on agricultural properties will not exceed 10% of the total property
rates income.
The calculation of the agricultural tariff is based on a sliding scale determined by the
Ordinance 17 of 1939. To neutralize the impact of the new Property Rates Bill the
municipality grants an additional rebate of 30% on the sliding scale with further
rebates of 75% for the first year, 50% for the second year and 25 % for the third
year, after which the rebates no longer exist. The municipality uses the same tariff for
both land value and improvement value to determine the income from agricultural
properties. Both the land value and improvements qualify for the above-mentioned
rebates.
The impact on the total property rates income with the phasing out of the additional
rebate on the agricultural tariff is negligible and will have little impact on the total
property rates income.
As a result of the farming community having to pay property rates for the first time
there will now be a obligation on the municipality to provide certain services, for
example roads and storm water etc, to the community which will have a impact on
future budgets. This might force the municipality to increase tariffs or reduce rebates
in future.
Should the Ordinance 17 of 1939 be rescinded in future years whereby the sliding
scale applicable to agricultural properties is done away with it will have an enormous
impact on the property rates income of the municipality. Most of the farming activities
in the municipal area are seasonable and huge increases in tariffs will have a negative
impact on the farming community.
73