ANNEXURE C
2012/13
ANNEXURE CLOCAL ECONOMIC DEVELOPMENT [LED]
STRATEGY
CREATING MEANINGFUL AND
SUSTAINABLE EMPLOYMENT
OPPORTUNITIES
TABLE OF CONTENTS
SECTION
CONTENTS
PAGE NUMBERS
A
Foreword By Municipal Manager: Mr. Morne Hoogbaard
4
B
Defining Local Economic Development
5
SECTION
CONTENTS
PAGE NUMBERS
PART ONE
Section One
Introduction/Background
6
Section Two
Clarification of Local Economic Development [LED] Roles and Responsibilities
10
Section Three
The Current Economic Overviews
[Global, National, Provincial, District and Local]
13
PART TWO
Section Four
The Role of the Municipality in Local Economic Development
28
Section Five
Strategic Imperatives and Programmes
45
Section Six
Identification of Local Economic Development Lead Projects
50
Section Seven
Poverty Alleviation Mechanisms
[With regard to the Community Work Programme and Expanded Public Works
Programme]
53
Section Eight
Co-operatives Development in Kannaland
58
Section Nine
The Green Economy and Implications’ for Kannaland
62
Section Ten
Monitoring and Evaluation Mechanisms
66
Section Eleven
Cross-Cutting Issues for LED in Kannaland
69
2
Section Twelve
Conclusion/Recommendations
73
Section
Thirteen
Proposed LED Projects
74
Section
Thirteen [b]
To grow SMME participation within the Tourism Sector
85
Section
Fourteen
Project Implementation Guidelines
87
APPENDIXES
CONTENTS
PAGE NUMBERS
1
Legislative and Regulatory Framework
96
2
Stakeholder Analysis
107
3
Green Industrial and Infrastructure Programmes
110
4
Possible financial/funding Support Agencies for LED Projects
112
5
Practical Management of LED Processes
114
3
A. Foreword by Municipal Manager: Morne Hoogbaard
The Communities of Kannaland is the Municipality’s most important asset. It for this
reason the Municipality decided to embark on a process to formulate a Comprehensive
and Inclusive Local Economic Development [LED] Strategy.
Because our communities live in conditions of economic hardship and social uncertainty;
this Strategy will be aimed at, providing the Municipality with mechanisms to alleviate
burdening poverty and create meaningful and sustainable employment opportunities for
the deprived communities of Kannaland.
The Municipality is also mindful of the fact that the private, public and community sectors
have a important role to play in developing the economy of Kannaland; therefore it will
encourage and engage in regular dialogue with business and community leaders,
including National and Provincial Departments, in order to build a foundation that will
address our economic and social development gaps.
This Local Economic Development [LED] Strategy presented here is a step in the process
of charting a new path for Kannaland. Our plan is to change the life chances of
underprivileged communities residing in Kannaland; life chances that currently remain
underdeveloped.
Our approach to change:
BUILDING
CAPACITIES
EMPLOYMENT
CREATION
COMMUNITY
DEVELOPMENT
POVERTY
SUSTAINABLE
ALLEVIATION
PARTNERSHIPS ’
RAISING STANDARDS
LIVING
 ECONOMIC G ROWTH
 STRONG LEADERSHIP
 CONSENSUS
 SOCIAL UNITY
 ENABLING M UNICIPALITY
4
B. Defining Local Economic Development [LED]
Local economic development [LED] is a participatory process in which local people from
all sectors work together to stimulate local commercial activity, resulting in a resilient
and sustainable economy. It is a mechanism to facilitate the creation of meaningful and
sustainable employment opportunities and improve the quality of life for everyone,
including the poor and marginalised.
Local economic development [LED] further encourages the public, private and civilsociety sectors to establish sustainable and productive partnerships and collaboratively
find local solutions to common economic challenges.
Creating a LED strategy is an integrated, process-oriented and non-prescriptive
endeavour. It should fundamentally embrace the following:
LOCAL VALUES
•Poverty Reduction
•Basic Human Needs
•Local Jobs
•Integration of Social Values
THE UTILISATION OF
ECONOMIC DRIVERS
•Value added Resource Use
•Local Skills Training
•Retention of Income
•Co-operation [National,
Provincial and District]
DEVELOPMENT
•The Role of Structural Change
•Quality of Development
[As adapted from the United Nations Human Settlements Programme (UN-HABITAT)]
LED is based on the principle that wealth in local communities is created not by government but by
private enterprise which depends on favourable local business conditions to create prosperity. Local
governments have the key role in creating favourable environments for business success
[Source: LED Tools-An Introduction for Municipalities and LED Service Providers in Bosnia Herzegovina: 2011]
5
KANNALAND MUNICIPALITY’S LOCAL ECONOMIC DEVELOPMENT
STRATEGY
PART ONE: SECTION ONE
1. INTRODUCTION
1.1.
Background
The Municipality of Kannaland has embarked on a Local Economic Development Strategy
that will speak to and ultimately reduce Poverty and enhance Job Creation and Business
opportunities in its jurisdiction.
Faced with the challenges of being a smaller rural municipality, its access to investment
and industries has been limited, yet the need to ensure standards of excellence in service
delivery and maintaining fiscal discipline, remains paramount. It also like many other
municipalities lives with the presence of huge defaults in collections of service fees as a
consequence of unemployment and dire poverty.
It is also mindful of the call by National Government for local municipalities to be the
catalyst for sustainable economic growth.
6
It is thus the aim of this document to set forth a Strategy of how the municipality would
potentially harness its own limited resources and those of the Business and broader
community, to create practical and sustainable local economic development.
The Strategy also talks to best practice models applied by the international community in
dealing with these challenges as well as aligning itself with the policies and guidelines as
set out in the National and Provincial Governmental frameworks. It also draws on the
strength of various incentive models of Donor and funding agencies in an attempt to be
able to subscribe to programs and initiatives which will almost immediately be available
for support and funding in its implementation phase.
1.2.
Methodology
Whilst it would be fair to say that the economic structure and patterns of ownership in
Kannaland broadly reflect that of South Africa at large, there are many other variables
that give Kannaland’s Local Economy a different complexity.
In order to have captured some of the specificities of the Local Economy, this strategy is
informed by an informal process of consultation with key economic stakeholders, such as
organised established business, individual black businesses, key public sector decisionmakers and other community leaders.
The rationale for having garnered the views of these stakeholders and role-players in the
Kannaland Local Economy were to ensure the relevance of the economic strategy to the
needs of local economic participants. At the same time, this process was never intended
to incorporate all views and opinions and neither to be fully comprehensive.
1.3.
Scope
7
This Strategy should not be misconstrued as the panacea for all the developmental
problems of Kannaland. It aims to bring about higher levels of economic activity in
Kannaland by placing a great emphasis on the catalytic role of the Municipality in making
this possible and in so doing hopes to make a contribution to sustainable employment
creation, poverty alleviation and broad-based black Economic empowerment in
Kannaland.
It represents the start of an economic development process and focuses on laying the
foundation for the long-term economic success of Kannaland.
A caution should be issued from the outset that Local Economic Development is not
about the planning of the geographic distribution of economic activities.
This has therefore often been confused with town planning and spatial development
which has been dealt with in Kannaland’s Integrated Development Plan.
The latter activities however do have a bearing on Local Economic Development and viceversa e.g. identifying business-zoned sites for further development of business
operations.
1.4.
Roadmap to this Local Economic Development [LED] Strategy
The following roadmap makes available a short outline of the sections which are
contained within this Local Economic Development [LED] Strategy.
PART ONE
8
Section One
Introduction, which sets the strategic direction for the Strategy by way of a background,
methodology, scope and roadmap
Section Two
Clarification of Local Economic Development
Roles and Responsibilities
Section Three
The current economic milieu, which provides an analysis of global economic conditions, the
South African and District economies
PART TWO
Section Four
Locating the Municipality within the domain of Local Economic Development, which focuses
on the strategic role of the Municipality in economic development, sets vision and mission for
the Municipality and determines the strategic economic priorities [Sector Focus] for the
Municipality
Section Five
Strategic Imperatives and Programmes, which inter alia deals with the role of the Municipal
budget, procurement, its legislative and regulatory authority and infrastructure in Local
Economic Development
Section Six
Identification of Economic Development Projects, which sets the framework and selection
criteria for identifying the appropriate Local Economic Projects
Section Seven
Poverty Alleviation Mechanisms with regard to the Community Work Progrmme and Expanded
Public Works Programme
Section Eight
Co-operatives Development-A Case for Promoting the Establishment of Co-operatives in
Kannaland
Section Nine
The Green Economy and Implications for Kannaland
Section Ten
Monitoring and Evaluation Mechanisms-Institutionalisation of LED Monitoring and Evaluation
Section Eleven
Cross-Cutting Issues for LED in Kannaland with regard to:
 Skills Development
 The Informal Sector
 SMME Development
 Youth, Women and People with Disabilities
9
Section Twelve
Conclusion
Section Thirteen
Proposed Local Economic Development Projects
Section Fourteen
Project Implementation Guidelines
SECTION TWO
Clarification of Local Economic Development [LED] Roles and Responsibilities
By its nature LED is a partnership which involves government, the private sector and civil
society. It is not a specific action or programme but occurs when a spectrum of
stakeholders harness their individual resources and ideas to strive for a better economic
status within a locality. Thus all the stakeholders have responsibilities and roles to play in
the process. As such, the roles and responsibilities of the various spheres of government
as well as civil society in local economic development are outlined below (Resource Book
for Municipal Councillors and Officials, 2001):
2.1. National Government

Co-ordinate and align support to municipalities for LED through their IDP process

Provide support to municipalities to implement their developmental mandate

Provide the overall legislative and regulatory framework for LED

Maintain strong inter-governmental relationships and institutions

Provide the necessary resources to Municipalities for the implementation of LED

Disseminate information to Provincial and local government about LED

Increase administrative efficiency (such as access to land and finances), and

Monitor the outcomes and impact of municipal-led LED activities.
10
2.2. Provincial Government

Align LED initiatives with National and local priorities

Strengthen and support the capacity of local government

Make available financial and technical resources to implement and sustain LED

Share information regularly (Provincial economic trends, land use, investment, new
developments) with municipalities, and

Monitor and evaluate the impact of LED initiatives provincially.
2.3. District Municipalities
District municipalities are better positioned to provide a coordinator and supporting role
to the local municipalities within their broad geographic area. They have the following
direct responsibilities:

Plan and co-ordinate LED strategies within the frameworks of IDP

Establish the LED structure comprising of the District and local municipalities, to
foster co-operation and co-ordinate LED policies, strategies and projects within the
District

Identify lead LED sectors that can kick-start development within Districts by
undertaking economic research and analysis

Promote joint marketing, purchasing and production activities

Promote networking of firms within the District (e.g. tourism routes) Collect and
disseminate information to assist local municipalities with LED policies

Identify resource availability [e.g. grants, land and infrastructure etc.]

Maintain a strong relationship with the province, and
11

Provide the necessary training to municipalities.
2.4.Local Municipalities

The local municipalities are the key LED implementation agencies of government.
They have a more direct impact on LED in terms of their potential influence on issues
and factors such as by-laws, tender and procurement procedures and other
regulations, access to land and the necessary infrastructure and services, promoting a
positive image of their area, making their environment more appealing and
welcoming of investors and visitors, facilitating skills development and by being
responsive to the needs of the local and potential business concerns. Local
authorities therefore need to be proactive in promoting economic development.
2.5. Civil Society
The new developmental form of local government puts emphasis on civil society
involvement in local government activities. For civil society involvement to have the
desired effect however, the representatives should have the legibility and respect of the
people or organisations they represent. Civil society should also share a common LED
vision with the local municipality within which they reside.
2.6. The Private Sector [Organised Business]

Policy Inputs with regard to:
 Macro Economic
Roles and Responsibilities of Captains of Industry:

Value Chain delineation
 Exchange Rate

Opportunity Identification
 Trade Policy

Development of Opportunities
 Labour Market Policy

Provision of Markets

Management

Technical Expertise

Capital – Operationalisation
 Transport/Infrastructure
12
 Taxation
 B-BBEE
 Mining/Energy
 Agriculture and Land Reform
 Safety and Environment
SECTION THREE
3. The Current Economic Milieu
3.1.
The Global Economic Overview
The continued volatility in the Global markets and spiralling debt levels of most European
and American countries has lead to an almost total collapse of confidence by investors
and industrialists. The new growth forecasts are predicted to largely emanate from the
“BRIC” [Brazil, Russia, India and China] Countries.
With this in mind it would necessitate our energies to be focussed on these markets to
ascertain if there is any merit in tapping into any potential business and investment
opportunities. The emerging markets together with South Africa offer the only real
potential to create growth opportunities and it therefore important that we align our
plans and strategies to take advantage of these potential markets.
Our focus and vision should be aimed at deriving advantage from our position in the
Global arena and our accessibility to the African continent. Whist Kannaland is not
situated at the forefront of this opportunity it can nevertheless direct its products and
expertise to subscribe to some of the needs of this market opportunity.
An example of this would be to develop export opportunities for its products or to
develop tourism niche markets which could draw from the initiatives being created. By
13
structuring our local economy and its opportunities in tourism and agriculture
favourably, we would be able to attract sufficient direct and indirect capital to develop
meaningful and sustainable economic clusters.
 World Economic Growth Outlook; 2011-2013
Country
2011
2012
2013
Country
2011
2012
2013
Advanced
Countries
1.6
1.2
1.9
Developing
Countries
6.2
5.4
5.9
USA
1.8
1.8
2.2
Developing Asia
7.9
7.3
7.8
Japan
-0.9
1.7
1.6
China
9.2
8.2
8.8
Euro Land
1.6
-0.5
0.8
India
7.4
7.0
7.3
Germany
3.0
0.3
1.5
Latin America
4.6
3.6
3.9
United
Kingdom
0.9
0.6
2.0
Central & East
Europe
5.1
1.1
2.4
Canada
2.3
1.7
2.0
Sub-Saharan Africa
4.9
5.5
5.3
Source: IMF World Economic Outlook Update-January 2012

Euro Land = 17 Euro Counties
 Factors that is relevant to Kannaland’s Local Economic Development Strategy
1
Attention should also be given to and links should be established with potential clients
and investors in the BRIC’s and Emerging Markets
2
Kannaland Municipality should promote itself as an attractive investment location
internationally
3
Opportunities could also arise for growing agricultural exports to the developed
countries of the World
14
3.2.
National Economic Overview
While much of the world staggered in the wake of the
global financial meltdown, South Africa has managed
to stay on its feet – largely due to its prudent fiscal and
monetary policies.
Ranked by the World Bank as an “upper middle-income country”, South Africa is the
largest economy in Africa – and it remains rich with promise. It was admitted to the BRIC
group of countries of Brazil, Russia, India and China (known as BRICS) in 2011
The economy has a marked duality, with a sophisticated financial and industrial economy
having grown alongside an underdeveloped informal economy. It is this “second
economy” which presents both potential and a developmental challenge.
South Africa’s success in reforming its economic policies is probably best reflected by its
GDP figures, which reflected an unprecedented 62 quarters of uninterrupted economic
growth between 1993 and 2007, when GDP rose by 5.1%. With South Africa’s increased
integration into the global market, there was no escaping the impact of the 2008-09
global economic crises, and GDP contracted to 3.1%.
While the economy continues to grow - driven largely by domestic consumption –
growth is at a slower rate than previously forecast. It is projected to grow at:
15
 2.7% in 2013;
 3.5% in 2014; and
 3.8% in 2015.
According to figures from the National Treasury, total government spending will reach
R1.1- trillion in 2013. This represents a doubling in expenditure since 2002/3 in real terms.
Under its inflation-targeting policy, implemented by the South African Reserve Bank
(SARB), prices have been fairly steady. In January 2013, the annual consumer inflation
rate was 5.4%, dipping from December 2012's 5.7%. Stable and low inflation protects living
standards, especially of working families and low-income households.
South Africa has a diverse economy, with key sectors roughly contributing to the GDP as
follows:
Sector Percentages based on 2012 GDP data from Statistics SA
25,00%
20,00%
21.2%
15,00%
16.2%
10,00%
9%
5,00%
0,00%
16.7%
12.3%
2.2%
2.6%
10%
3.9%
 TSC-Transport, Storage and Communication
 WRM-Wholesale, Retail and Motor Trade
 FRB-Finance, Real Estate and Business Services
16
The South Africa’s outlook is affected both by national concerns, such as unrest in and
pressure on the agricultural and mining industry, as well as international sluggishness,
with Europe as one of South Africa’s chief export destinations. However, trade and
industrial policies encourage local firms to explore new areas of growth based on
improved competitiveness. China, India and Brazil offer significant opportunities.
Infrastructure, mining, finance and retail developments across Africa are helping to fuel a
growth trajectory in which South Africa can participate.
Unemployment, at a rate of +25%, remains the most challenging of South Africa’s
hurdles: it is at the top of government priorities and at the heart of its economic policies.
The New Growth Plan, launched in November 2010, builds on plans to restructure the
economy to ensure more inclusive and sustainable growth – and sets a target of creating
five million new jobs by 2020.
The road map to do this is provided by the Industrial Policy Action Plan, which proposes
multi sectoral interventions across agriculture, mining, manufacturing, tourism and other
high-level services to create substantial employment.
South Africa’s dream of growing an inclusive economy by drawing on the energies of its
people is given voice through the National Development Plan 2030, launched in August
2012.
Through investment incentives and industrial financing interventions, the government
actively seeks to encourage commercial activity and attract foreign capital. South Africa
17
earned around R42-billion in foreign direct investment in 2011, which was more than four
times the amount in 2010.
Principal international trading partners of South Africa [besides other African countries]
include: China, the United States, Germany, Japan, and the United Kingdom.
3.3.
Western Cape Provincial Economic Overview
Western Cape Provincial Economy contributes roughly 14.5% to South Africa’s Gross
Domestic Product [GDP], growing at an average of 4.2% a year. More sophisticated
sectors such as finance, real estate and ICT, retail and tourism have shown substantial
growth, and are the primary contributors to the regional economy.
After Gauteng and KwaZulu-Natal, the Western Cape’s manufacturing sector is the third
largest contributor to the National Manufacturing Sector. The clothing and textile
industry remains the most significant industrial source of employment in the province.

Economic performance and outlook for the Western Cape [%] growth in GDP-R
Description
2009
2010e
2011f
2012f
2013f
2014f
Agriculture,
forestry and
fishing
-5.5
0.7
3.1
2
2.7
3.3
18
Mining and
quarrying
0.5
-8.8
4.4
1
0.9
1.1
Manufacturing
-8.9
3.9
3.5
3.5
3.5
3.6
Electricity,
water and gas
0.5
3.2
1.3
3.3
3.2
3.3
Construction
6.1
1.6
2.1
5
6.2
6.5
Wholesale,
retail, catering
and
accommodation
-2.8
2.6
4.2
3.7
4.1
4
Transport,
storage and
communication
0.7
3
5.3
5.4
5.8
5.8
Finance,
insurance, real
estate and
business service
0.5
1.9
4.5
5
4.8
5.1
Community,
social and
personal
services
-0.5
0.6
3.2
2.8
3
3
General
Government
3.9
2.4
2.2
2.3
2.4
2
Total
-1.4
2.4
3.9
4.1
4.2
4.3
Source: Quantec /BER, July 2011 [e = estimate; f = forecast]
The largest sector in the province, driving the region’s growth over the past decade, i.e.
finance, insurance, real estate & business services, grew by 3.6 per cent in 2010, following
marginal positive growth of 0.2 per cent in the recessionary year, 2009. Due to its size
[accounting for close to a third of the provincial GDPR], this sector made the largest
contribution to real economic growth during calendar 2010. The only broad sector that
continued to contract in calendar 2010 was agriculture, forestry and fishing. This sector
19
accounts for 4 per cent of the provincial GDPR and contracted by 1.8 per cent in 2010 (on
top of a 1.3 per cent contraction in 2009). Whilst, the direct contribution of the sector to
the regional economy is relatively small, this however, changes when the backward and
forward inter-industry linkages are considered. The contraction in the sector does not
bode well for employment in the province as farm worker layoffs have been a feature in
the sector over the 2000s.
Source: Western Cape Municipal Economic Review and Outlook 2012
The Western Cape economy continues to grow faster than the national economy. The regional
manufacturing sector registered a welcome recovery in 2010/11.
However, the Province’s services industries remain the leading contributors to growth.
The key Western Cape agricultural sector is estimated to have recovered in 2011 from
contractions experienced in 2009/10
Source: Western Cape Municipal Economic Review and Outlook 2012
3.3.1. Provincial Strategic Objectives
The figure below illustrates the five building blocks for job creation and economic growth
as identified by the Western Cape Provincial Department of Economic Development and
Tourism:
JOB CREATION AND ECONOMIC GROWTH
Economic
Strategy and
Policies
Enabling
Business
Environment
Demand-led
Private Sector
Driven Support
Infrastructureled growth
Decreased Skills
Gap
20
3.4.
Eden District Economic Overview
The Eden District’s economy is the second largest of
the District economies in the Western Cape Province
outside that of the Cape Metro. Eden District is responsible for 7.3% of the Western Cape
GDPR. The value of the GDPR generated during calendar 2010 amounted to R25.5 billion;
the sub-regional breakdowns of the GDPR see Figure below.
George is the largest municipality, accounting for close to a third of Eden District’s GDPR,
followed by Mossel Bay [25%] and Knysna and Oudtshoorn [12%]; the Bitou municipality
contributes [7.6%], Hessequa [5.5%] and Kannaland [3.6]
GDPR [% SHARE 2010]
35%
30%
25%
George
Mossel Bay
20%
Knysna
15%
Oudtshoorn
10%
Bitou
5%
Hessequa
Kannaland
0%
DMA
21
3.4.1. The Fastest and Slowest Growing Sectors in Eden District
Construction [11.5% per annum]; Finance, Insurance, Real Estate & Business services
[7.0%]; Transport, Storage & Communication [5.5%] and Community, Social and Personal
services [5.2%] grew the fastest; and the slowest growing sectors were Mining [-3.7% per
annum]; Agriculture, Forestry & Fishing [0.6%]; and Electricity & Water [0.7%].
Eden District’s reasonably small export basket is fairly well diversified [agriculture, forestry and fishing;
food & beverages; clothing, textiles & leather goods; furniture & other industries, as well as other smaller
but significant categories such as petro-chemicals, metals & machinery and automotive].
Source: Western Cape Municipal Economic Review and Outlook, 2012
The flexible outperformance of the Eden District’s effervescent services industries is
anticipated to persist, with a thriving tourism industry playing a catalytic role and
counteracting the heave which originated in the wake of the global financial crisis.
The flexible outperformance of the Eden District’s effervescent services industries is
anticipated to persist, with a thriving tourism industry playing a catalytic role and
counteracting the heave which originated in the wake of the global financial crisis. The
figure below will illustrate the well diversified nature of the Eden District’s economy, the
finance, and insurance, real estate & business services sector [23%] , manufacturing [18 %]
and retail, wholesale, catering & accommodation sector [18%] are the largest in the
Eden District Economy: Sectoral Composition
25
20
15
10
22
5
0
Column1
Agri
Mining
Mnfg
E/W
Constr
Trade
T/C
F/BS
CSP/s
Govt/s
5,9
0,2
18,2
1,8
8,4
17,8
8
22,6
5,5
11,6
region and account for close to 60% of the region’s GDPR.
Source: Western Cape Municipal Economic Review and Outlook, 2012
3.5.
Economic Profile of Kannaland Municipality
Kannaland consists of Ladysmith, Calitzorp, Zoar and a few small settlements. It is
situated to the west of Oudtshoorn, in the Little Karoo. The R62 route traverses the
entire length of the municipal area, and links the municipality with Barrydale and
Oudtshoorn.
This road plays an important role in Kannaland’s economic development and growth,
especially in the tourism and agricultural industries. Van Wyksdorp remains a very
isolated village, and is not connected to the R62; it is linked by gravel road to the R62.
Employment in Kannaland is concentrated primarily in agriculture. Calitzdorp is the fruitbowl of the Little Karoo, and produces fine port wine, because of the hot, dry climate.
Other farming activities are small stock [sheep and goats], ostriches, lucerne and cheese.
Community and Government services and manufacturing also provide employment
opportunities.
Kannaland Municipality's local economy grew at an average annual rate of 1, 3% between
1995 and 2004, which is lower than that of Eden District Municipality at 3,3%. However,
23
between 2000 and 2004, the economy grew at an increasing annual rate of 1, 6% reaching
a growth rate of 3,1% in 2003 and 2004.
Kannaland Municipality played a marginal role in the Eden District’s economy between
1996 and 2004. In 2004, Kannaland contributed 3, 0% or a mere R0, 256 billion of R8, 7
billion of the economy. The largest contributors to Kannaland`s GDPR in 2004 were:
Agriculture
1
Finance and
Business Services
Manufacturing
2
4
General
Government
Services
3
Agriculture remain the backbone of Kannaland`s economy, accounting for about almost
29% of economic activity.
Fruit and dairy farming are the biggest contributors to the area’s agricultural output, with
mixed farming (ostriches, small livestock and game) prevalent.
Unlike other areas where the sector experienced a serious decline, its share of
contribution to total output increased marginally from 1995 to 2004. Economic
Contributions [%] per sector is stipulated in the figure below:
24
26,80%
20,40%
18,40%
6,20%
4,70%
Constr
E/W
3,00%
0%
Agri
Mining
Mnfg
11,00%
9,40%
WS/RT/TR
T/C
F/BS
CS
Source: Kannaland IDP 2012/2017
3.5.1. Assumptions
Because of the availability and reliability of statistical information about Kannaland, the
following assumptions are made:

There are 29 270 people residing in Kannaland

69% of households live in urban areas

The majority of the population is unskilled

Economically active population constitute 86.15%

90% of the population earn less than R 12, 800-00 per annum

The dependency ratio is 2 people for each employed person


Seasonal work skews the employment patterns in Kannaland
Kannaland has a very high unemployment and poverty rate [no reliable %; as
Census 2011 results for regions are not available]

Co-operatives Development can be seen as one of the mechanisms to create
employment and alleviate poverty in the area

SMME’s in Kannaland is to a large extent under-developed
25
3.5.2. Employment and Unemployment in Kannaland
Employed
Unemployed
Not Economically Active
Year
6 312
1015
7296
2001
7 833
886
5667
2007
Source: Kannaland IDP, 2012
3.5.3. Unemployment figures according to Kannaland’s 2012 IDP
Unemployment figures for 2001/2007/2010
[Male and Female]
1400
1285
1200
1000
933
857
800
600
400
200
0
2001
2007
2010
3.5.4. Futher Demographic detail
Kannaland’s is approximately 4 758 km in extent and is situated about 340 km North-East
of Cape Town along the famous route, route 62. Kannaland is further linked by tarred
roads to all other major towns in the Eden District such as Oudthoorn [100 km], George
[170 km], Mossel Bay [185 km] and Port Elizebeth (in Eastern Cape Province) [420 km].
The administrative centre of Kannaland Municipality is situated in Ladismith [340 km
North-East of Cape Town], with satellite offices in the towns of Calitzdorp, Van Wyksdorp
and Zoar.
26
Distances between Ladismith and the other towns in Kannaland are the following:
Van Wyksdorp
40 km
Zoar
25 km
Calitzdorp
43 km
Hoeko
15 km
The climate in Kannaland is known to be hot and dry during the summer season. Annual
rainfall is averaged at 270 mm; occurring throughout the year. Typical midday
temperatures’ range from 16.6 degrees in July to 29.6 degrees in January; the mercury
does not drop to 3.2 degrees during winter nights.
3.5.5. Education Levels in Kannaland

11.9% of residents aged 20 and over have received no schooling,

31.4% have had some primary school,

11.7% have completed only primary school,

27.4% have had some high school education,

12.1% have finished only high school,

5.5% have an education higher than the high school level, and

Overall, 17.6% of residents have completed high school
27
PART TWO: SECTION FOUR
4. The role of the Municipality in Local Economic Development?
The role of the Municipality in the local economy has been accentuated by Government
who sees its role as pivotal given the current global and local market conditions.
“Where market failures are identified government will intervene through
transparent, regulatory and other carefully defined and time delineated
mechanisms...”
It is therefore incumbent upon the Municipality to seek to play a pro-active role in
economic development through various forms of constructive inventions in the local
economy.
Kannaland Municipality however recognises the importance of the private sector in
economic growth and development and in the creation of meaningful and sustainable
employment opportunities. Its strategic economic intent is therefore to enable the
private sector to play its role in economic development and through mild incentives and
partnerships seek to lower the risks for the private sector to take up economic
opportunities in the area and invest in the local economy of Kannaland.
28
According the White paper on Local Government, 1998, section b 1.1:
“Local Government is not directly responsible for creating employment. Rather it is
the responsible for taking active steps to ensure that the overall economic and social
conditions of the locality are conducive to the creation of” meaningful and
sustainable employment opportunities.
Kannaland Municipality is therefore remains commitment to uphold the Constitutional
values and recognises the role of these values in promoting economic growth and
development.
Public discontent with economic progress is often the result of a lack communication
with economic stakeholders. It is therefore cardinal that Kannaland Municipality
communicate its activities pertaining to Local Economic Development to its
constituencies on regular basis.
4.1.
Vision 2017
Through various constructive inventions launch within a five year time frame five
commercially viable projects with a capitalisation requirement of R 5 million and with
meaningful community participation and Broad-Based Black Economic Empowerment
involvement, in participation with the private sector and other role-players in the key
sectors of Kannaland’s regional economy.
4.2.
Mission
To utilise the resources of Kannaland Municipality as the catalyst for Local Economic
Development and to establish working partnerships with the Private Sector, Provincial and
29
National Government institutions and agencies and to bring these partnerships to service of
the local economy of Kannaland.
4.3.
Strategic Objectives
The strategic objectives listed below can only be achieved in partnership with the
economic and social actors in Kannaland’s Local Economy:

Meaningful and sustainable employment creation

Training and Development of Local People [Skills Development]

Establishing Productive and Sustainable Partnerships with Government and
the Private Sector

4.4.
Small, Medium and Micro Enterprise Development
Strategic Targets
In order to concretely realise advances with respect to these strategic priorities,
Kannaland Municipality boldly embraces the statement of intent made for each strategic
objective below:
4.4.1. Meaningful and Sustainable Employment Creation
Meaningful and Sustainable Employment creation is the pre-eminent priority for
Kannaland Municipality. This will be the foremost consideration in any economic initiative
of the Municipality. It should be underscored, however that there are limitations to the
ability to spearhead meaningful and sustainable employment. The Municipality therefore
recognises the key role of the private sector in the creation of meaningful and
30
sustainable employment opportunities and economic growth in the area and will
establish active working partnerships with the business community of the area.
In the taking the first steps, Kannaland Municipality will make every effort to ensure that
its own activities leads to meaningful and Sustainable Employment Creation.
4.4.2. The training and development of local people
It can reasonably be assumed that most established businesses in Kannaland source their
skills from outside the area. At the same time, the vast majority of skilled and semi-skilled
inhabitants of Kannaland commute to surrounding areas for work or have completely
relocated elsewhere where employment opportunities are better. This situation added
significantly to the problem of the skills base in Kannaland.
Kannaland Municipality recognises that in order to have an impact on skills development,
it will have to do this at sectoral level.
It will work closely with the relevant Sector Education and Training Authorities [SETA’s]
and other role-players to roll out skills development programmes in the key sectors of
the area
4.4.3. Establishing Productive and Sustainable Partnerships with Government and the
Private Sector
Local Economic Development is not exclusively the domain of Local Government; indeed
this Local Economic Development Strategy is based on a Partnership ethos.
31
Kannaland Municipality intends to establish partnerships straddling the entire economic
spectrum of businesses. In so doing it will have regular interactions with organised
formations of businesses, other relevant economic actors and business leaders where
organised formations are non –existent.
4.4.4. Small, Medium and Micro Enterprises [SMME] Development
One way of getting employment in this National, Provincial and Local climate of dire
unemployment is to create conditions conducive to establishment and development of
Small, Medium and Micro Enterprises [SMME’s].
Encouraging entrepreneurs to start up small businesses is one of the most important
mechanisms to counter-unemployment, experts say, especially as labour market policies
like subsidised wages, training programmes and apprenticeships have a limited effect on
the increasing number of people out of work.
It is widely accepted that:

SMME’s can serve as the foremost employment creating sector in the country

SMME development can lead to higher levels of competition and can act as
vehicle to break the high levels of concentration in the Economy

SMME’s can serve as a useful catalyst for redistribution to address the highly
unequal income distribution patterns
SMME development is a vital component of Local Economic Development
32

In recognition of this near economic axiom, Kannaland Municipality will endeavour to
incorporate an SMME Development component into all its Local Economic Development
initiatives. Over and above this it will develop its contacts database to assist and as to
allow Small, Medium and Micro Enterprises [SMME’s] in Kannaland to access those that
can provide finance and those that make business services available to this market
segment.
4.5.
Sector focus
4.5.1. Focus on Agriculture
The need to build out the Agro Industries in the Kannaland area cannot be overly
emphasised. This is principally illustrated that one has the presence of two cheese
manufacturing plants situated in an area like Ladysmith.
By its very nature one is pointed in the direction that the potential must exist for more
Agro industries to establish themselves in the region. These current plants are operating
profitably and have both expressed the desire to increase their current potential
footprint.
The need to exploit supporting industries has not even begun and this must be viewed as
a potential to build out the existing industry to its full potential. Related and supporting
industries need to be identified and established.
There is also the opportunity to create small scale farming initiatives and it is evident
from the current practices, that there is a high concentration on Game farming in the
33
area. The ancillary industries such as tour guides and rangers etc. should be more fully
explored.
It also becomes apparent that from the consultative processes undertaken, that the
challenges in this industries also need to be spoken to.
The fact that there is adequate rainfall in the area but a huge shortage of water,
identifies the need for a review of the basic infrastructure requirements and
functionality.
4.5.2. SMME- Private Sector Joint Ventures and Outsourcing
Having spoken to the larger corporate in the Kannaland area, it was obvious that there
were various ways in which these industries could support the local communities in
mutually beneficial projects.
One of these initiatives involved the manufacturing of cheese by community cooperatives for example.
In this instance the established business had access to skills, packaging and markets. It
could outsource the manufacturing of various product lines to the community and
implement training and quality programs that would enable the community co ops to
engage in the manufacturing and marketing of these products.
Funding for training would need to be sourced, but this industry because of its private
sector partners, could become hugely beneficial to the community in terms of job
creating and sustainable development.
34
Joint initiatives can be further developed into a Tourism opportunity with for example a
cheese festival or creating export markets for the local co op cheese through the support
and assistance of the larger corporate.
One would need to perhaps drive this initiate through the local business chamber where
the focus would be on ascertaining how the private sector and the SMME’s could
collaborate for mutual benefit and to also interrogate outsourcing opportunities from
the private sector.
These opportunities would have to be well managed in sustainable entities with
oversight and support being provided from the private /NGO sector.
Significant outsourcing opportunities also exist within the municipal compact. Various
smaller works and services could be given to smaller SMME’s in a managed capacity.
Examples of these could be the beautifying of the area, maintaining curb sides and
verges, painting of street markings etc.
4.5.3. Tourism as an Economic Driver for Kannaland
The Objectives of tourism is to maximise the potential income streams and social
benefits flowing into the economy whilst also minimising the negative impacts on the
natural, historical, social and cultural landscape.
It would appear that from our initial discussions with the municipality and various private
sector organisations, that Tourism should be one of the chief economic drivers in the
Kannaland area.
35
The Tourism sector not only lent itself to huge job creation prospects but would also be a
catalyst to bridging the divide in a racially segmented community and thereby contribute
to building up the social fabric of the greater Kannaland area.
There is a positive disposition from the established private sector to join forces with an
emerging SMME’s who would be mostly from the PDI communities to jointly exploit the
myriad of Tourism opportunities.
It is apparent that the formal sector possessed the necessary Capital and Skills and the
emerging PDI market had access to the Opportunities but lacked the former resources.
These could well be combined to create effective joint ventures which would be
sustainable and profitable to all parties.
Each of the 4 major towns in Kannaland appeared to have unique features around which
the tourism sector could be further exploited and also used to develop other support
industries which lead to exponential growth of several business ventures and job
creation. Some of these specific value offerings are:
Calitzdorp
Port and wine estates as well as spring water from SPA Gamka Mountain
reserve (Cape Mountain Zebra)
Zoar and
Amalienstein
Historic mission stations offering donkey cart and hiking trails through
vineyards and orchards, including indigenous cultural festivals
Seweweekspoort Mountain biking, hiking, fynbos and protea flowers [also the National
Flower]
Vanwyksdorp
Fynbos processing, donkey cart rides to Anglo- Boer/ SA War grave sites
36
The profile of the area must be improved to ensure that Kannaland is not seen as just a
region through which the traveller should pass in order to get to their final destination.
The transformation of the entire area will ensure that tourist spend longer periods in the
Municipal area.
There are also various initiatives which have been launched and which could be further
supported such as the VLI project in Ladysmith and the Dream Project in Calitzdorp
4.5.3.1.

Core Components
The marketing of the area: Although marketing and branding of Kannaland is
discussed elsewhere in the document, the marketing of Kannaland’s unique selling
points [USP], should receive high priority.

The creation of other tourism products throughout Kannaland will support the
improvement of the tourism profile.
The core of tourism development in the area lies in the creation and strengthening of
tourism products.
4.5.3.2.
The Importance of an improved Tourism profile
As Kannaland is presently utilising its tourism potential to its full extent, the
improvement of the profile will serve the function of “opening up” the area for the
development of tourist activities and therefore to a larger portion of potential tourists.
It can be foreseen that these areas will in future experience an increase in the number of
visitors. This will however only happen if the quality of sufficient services is developed in
order to ensure tourist convenience and satisfaction.

The Impact will be as follows:
37
Spatial
The specialisation of certain nodes in tourism activities will result in the
Impact
concentration of economic activities. The provision of overnight facilities and
other supporting services will also ensure traveller convenience
Social
Unemployment can be addressed by training vulnerable community
Impact
members to respond to tourism needs. The attraction of tourist buying
power will strengthen the economic and social base of these communities
Economic The various segments of this LED strategy will not only result in the
Impact
broadening of the economic base of Kannaland, but also create economies
of scale in which a number of linkages can be created

Key Role Players
Kannaland
Municipality
Potential Investors
[Local and
Internationsl]

Eden District
Municipality
Relevant NGO's and
the Private Sector
Western Cape Provincial
Department of
Economic Development
and Tourism
Regional and Local
Tourism Associations
The Community
[Beneficiaries]
Institutional Aspects and Possible Funding
The improvement of the Tourism Profile is an undertaking that must have political
commitment and buy-in from all stakeholders. A specific champion is needed to perform
the different steps to facilitate the coordination of activities. The Municipality should
38
further facilitate the matchmaking of development opportunities with identified
investors in order to implement the activities required to improve the Tourism Profile of
Kannaland.
 Project facilitation Activities
1
Solicit Community Support
2
Establish PPP’s amongst role-players
3
Compile data base on available tourism packages, facilities, services and operators
4
Involve relevant organisations in order to compile a strategy for business and
educational tourism
4.5.3.3.
Key support programmes and initiatives that can be adopted
Wine Tourism
Wine tourism being one of the fastest growing areas in the tourism sector could be one
of the chief targets in the Kannaland area with its world acclaimed PORT and related
wine products [Port Festival / Wine Routes]
Rural Tourism
Funding could be access for the development of rural areas which was identified by
government as a priority area under the national policy for Rural Tourism.
Poverty Relief Funding
The Department of Tourism has set aside funding for the development of SMME’s and
job creation. They have also supported poverty alleviation via the EPWP
Hospitality Youth Initiative
39
The government launched the HYI initiative which is aimed at creating jobs for youth in
the hospitality industry.
Industry Transformation
In line with the Tourism BEE Charter and Scorecard
Tourism Enterprise Partnership (TEP)
TEP is a small business development agency promoting job creation, transformation and
small business sustainability in the tourism sector
4.6.
Social/Community Services Sector
This sector includes the general activities of National, Provincial and Local Government
such as health and social work, education, infrastructure provision, community
organisations, recreational, cultural and sporting activities and other community, social
and personal services.
4.6.1. Community Services in Kannaland
The Community services sector, which includes the Government sector, contributes
some 20. 4% to local production while accounting for a significant number of formal
employment opportunities in Kannaland. This sector is mostly concentrated around
Ladismith, due to the government facilities located there.
The above figure indicates the importance of this sector in employing local people. It is
believed that this sector will continue to play a major role in the local economy, as these
services will continually be in demand. Future, investment in this sector is, however
dependant on National and Provincial Government investment in Kannaland.
4.6.2. Health Care and Local Economic Development
40
Increasing the number of employment opportunities in local heath care facilities
contributes to overall poverty reduction/alleviation in an area. This is why, it will be
beneficial to Local Economic Development [LED]; if local health care facilities can be
expanded and upgraded. LED is about attracting, retaining and recruiting businesses to
the area. In rural South Africa, healthcare facilities are always significant and often one of
the largest businesses and employers.
The number of local job opportunities is increased directly through the expansion of local
health care facilities through the employment of clinic personnel and related
professions’. Expanding jobs in health care facilities will also have multiplier effects on
employment in other local companies.
Some of the increased funding from provincial government is spent on local workers’
salaries and supplies from local producers. Local suppliers and employees in turn spend
some of their additional funds on local goods and services still creating more jobs.
Although Kannaland Municipality is not directly responsible for the provision of primary
health care facilities, the Municipality can play an important role in the negotiation for
more health care funding and additional facilities. The following are important
considerations in this regard:

The Municipality and the local health care facilities must develop a common
development vision

Economic development officials must be present on health care forums

Health care officials must be present at LED Forum meetings
41

Provide clinics or other health care facilities with information on relevant
businesses. These businesses may include for e.g. the provision of food and
laundry services

Health care facilities must express their need for goods and services to local
businesses first, before purchasing it from outside the boundary’ of the
Municipality. This can be facilitated by including health care officials responsible
for procurement on local business forums

4.7.
Encourage health care facilities to employ local people
Institutional Architecture
The success of this Strategy will to a large extent depend on the partnerships Kannaland
Municipality will be able to establish with meaningful role-players in economic
development. The existing institutional structure/s is too fragmented and devoid of any
serious financial muscle to carry the responsibility of the Local Economic Development
Strategy.
This institutional structure/s in its present form nevertheless has a vital role to play in
terms of ensuring the support of business organisations and leaders, and civil society at
large for this LED Strategy.
Moreover, the projects that need to be realised out of the LED Vision 2017 will only take
off if an adequate high-level team is established based on the requirements of these
projects. The idea is to get early buy-in and support of financiers and investors; in the
projects the Municipality aim to develop as part of LED Vision 2017.
This therefore serves as the primary factor in having decided on the composition of the
proposed Kannaland Local Economic Development Forum.
42
Amongst other things the forum will seek to encourage dialogue on economic policies of
Government between, Private sector, Non-governmental organisations and academia.
This will be in addition to discussing LED Implementation issues affecting the
municipality.
Moreover, the forum will contribute to the process of finding appropriate solutions,
through conveying recommendations to decision makers in both the executive and
legislative authorities and to the business associations. Other factors include
representivity and technical expertise. It is further proposed that the Forum be
composed in the following manner:
Organogram:
A. Membership:
Kannaland LED Forum
Secretariat
1.
Councillor responsible for Economic Development
2.
Municipal and LED Manager
3.
Relevant Private Sector Representatives [x3]
4.
Government Sector Departments [x3]
5.
Official/s from Development Finance Institutions
6.
LED Consultant
B. Working Groups:
1.
Agricultural
Sector
Working
Group
Tourism
Sector
Working
Group
SMME Sector
Working
Group
development of that sector [utilising management
and technical expertise]
2.
NEW SECTOR DEVELOPMENT
WORKING GROUP
Specialist from the particular sector; task with the
The working group can be members from the LED
Forum or external specialist with a interest in
inclusive economic development
The membership to Kannaland Local Economic Development [LED] Forum shall not
exceed fifteen members for the sake of expeditious decision-making. The LED Forum will
have a tenure decided by members; but not exceeding three year.
43
The mandate of the Kannaland LED Forum will be to bring to fruition Vision 2017 and to
ensure the implementation of said LED Strategy
Municipal department responsible for Local Economic Development will serve as interim
secretariat for the Forum and be responsible for day-to-day implementation of the LED
Programme. The Forum will further be aided by Consultants responsible for drafting said
Strategy.
4.7.1. Improving the Economic Management Capacity of the Municipality
The success of any economic development strategy depends to a large extent on the
economic management capacity of the institution responsible for driving that strategy.
The current capacity available in Kannaland Municipality is woefully inadequate to deliver
single-handedly on the objectives and targets of this Strategy. To build this capacity in
the short-term is also not feasibility. It is recommended that the Municipality retain the
services of the Consultants responsible for drafting this Strategy for at least six-months
with the option to extend to augment the capacity of the Municipal Administration to
implement
44
SECTION FIVE
5. Strategic Imperatives and Programmes
Municipal Budget,
Rates and Levies
Municipal
Procurement
Regulatory
Authority
Infrastructure
Municipal Land and
Property
Public Private
Partnerships
Accessing
Government
Incentives
Promotional and
Branding Initiatives
5.1.
Municipal Budget, Rates and Levies
The Municipal Budget should specifically allocate funding for Local Economic
Development [LED]. The Municipality should be seen to be the driver of LED by leading
the process with the most effective and efficient utilisation of its own resources applying
its in areas of greatest need and greatest potential for economic development.
45
Kannaland Municipality should undertake to maintain cost-effective and competitive rates and
levy dispensation so as to make the cost of doing business in Kannaland, affordable for existing
business and attractive for potential investors.
5.2.
Municipal Procurement
Municipal Procurement should be recognised as a direct enabler of Local Economic
Development.
Procurement targets could be set according to the following guidelines:
Local
Business
JV's with
Local
B-BBEE
Employment
companies
PROCUREMENT
TARGETS
JV's with
Local
B-BBEE
Business
The Municipality should however be obliged to ensure the overall cost-effectiveness of
its procurement activities.
46
5.3.
Infrastructure
Municipal and other infrastructure is the backbone of the local economy of Kannaland.
The provision of infrastructure does not only enable businesses to operate and influence
the cost of production, but could also serve to stimulate economic activity. The
Municipality should encourage labour intensive methods of construction during the
delivery of infrastructure, as to promote local employment and ensure B-BBEE
participation in the award of infrastructural contracts.
Specific targets are to be set as to make certain that strategic objectives are met in the
spending of the capital budget of Kannaland Municipality. The Municipality is
empowered to do this; as stipulated in the White Paper on Local Government of 1998.
In promoting an enabling environment for Local Economic Development the
Municipality should embark on a process of setting procurement targets for each
Department in the Municipal Administration and a general policy guiding exceptions
to these targets upon the adoption of said LED Strategy
5.4.
Municipal Land and Property
47
Land and Property can be used as an incentive for investment in the Kannaland area, it
can also be utilised to encourage optimal land use. Moreover it creates a number of
opportunities for land reform.
In instances where the municipality is an arrangement with private sector companies or
individuals leasing key municipal land or property, it is often found that these assets are
not being used optimally. In order to prevent the sub-optimal use of land and property,
Kannaland Municipality can prepare a special by-law to encourage the economically
optimal use of municipal land and property [where this is not currently the case].
The strict principles of Broad-Based Black Economic Empowerment [B-BBEE] and
community participation should then also be applied for future leasing arrangements’.
5.5.
Public-Private Partnerships
Public-Private Partnerships [PPP’s] can be a useful mechanism to deliver services in
sustainable manner according to business principles at a local level. It can also be a tool
for unlocking participation by the local private sector and B-BBEE groups in service
delivery. However, the Municipality must guard against relinquishing strategic areas of
service delivery to the private sector for the sake of practicality.
Some municipal property lends itself to public-private partnership arrangements. This
could also be considered for certain areas of service delivery. In pursuing public-private
partnerships the Municipality need to guard against the following; apart from being
generally guided by the Department of Co-operative Governance and Traditional Affairs
“Municipal Services Partnership Policy” or any amendments made there to.
48
Unneccessary
Job Losses
5.6.
Inexplicable drop in
Unreasonable rise in
the
the
quality of services
cost of services
Accessing Government Incentives
There is plethora of economic incentives available to companies across the economic
spectrum from a host of institutions. Kannaland Municipality will establish working
relationships with these institutions in order to ensure direct contact for potential
beneficiaries of these incentives in the Kannaland area.
Most of these incentives will further be packaged in a user-friendly format in an
information brochure and will be freely available. The Municipality will furthermore
arrange workshops where institutions offering the incentives will be invited to inform the
business community of Kannaland of the modalities of the respective incentives.
5.7.
Promotional and Branding Initiatives
49
Kannaland Municipality is practically unknown in the universe of brands. Branding
initiatives of non-existing brands are normally costly and run over prolonged periods.
Kannaland would be better served by giving impetus to existing brands of the area in the
form of already known towns and products originating from there. Kannaland as a brand
will develop naturally on this basis of this.
This does not preclude the Municipality from promoting itself and the region which it
governs. A critical need exists to develop promotional material pertaining to the
attractions of Kannaland and investment opportunities. This could take the form of
promotional brochures and internet website.
SECTION SIX
6.1.
Identification of LED Lead Projects
In rolling out Vision 2017, Kannaland Municipality will measure its economic success by
achieving its target of five projects within a period of 3 to 5 years. Achieving this target
will require a chronological process that will enable the Municipality to project manage
the establishment of these projects. Three of the projects will be sectorally based in the
primary and fastest growing sectors of the local economy and the remaining two could
be additional to any sector or in non-priority sectors.
It would also be also be more expedient to consider projects where the Municipality can
use own financial, procurement, land or other resources as leverage to make the project
50
successful. In order to ensure that the projects are meaningful and sustainable, only
projects that require an investment of +R 3 million will be considered. The chronology for
the pre-implementation phase of projects will be as follows:
Project
Audit
An audit of already identified projects will be undertaken and these will be matched to the set
below
Project
Those projects that match the criteria and have the potential to be expediently and
Bank/Database
expeditiously implemented in a feasible manner will be ranked in order of bankability in a
project database
Scoping
The first 5 projects of that database will be scoped in terms of feasibility where this has not
Projects
been done. Professional business plans will be developed for the feasibility projects.
Packaging
A local and international scan will thereafter be done of companies in the sectors or products
Projects for
lines of those projects with a view of approaching them as possible investors or strategic equity
Investors
partners. Finance will also be sought from other development agencies
 Generally the criteria for selecting projects will be flexibly applied as follows:
Employment
The ability of projects to create meaningful and sustainable employment will
Intensity
supersede all other criteria. A flexible ratio for employment will be targeted
between 15-30 jobs for R 2.5 million invested in project. This target will serve to
ensure that the capital intensity of projects are kept in check
51
Community
The target for community ownership will to a large extent be determined by what
Ownership
Kannaland Municipality contributes to a project in terms of equity through a trust
and
or other appropriate vehicle. Equity participation will generally not exceed 15% of
Participation
the total equity shares of a project. The rationale behind this 15% cap is that
community ownership of projects should not be allowed to detract from the core
responsibility of a project to be profitable in a self-sustainable manner. In other
words, Community Ownership should not be confused with Community Control.
Projects will be managed by competent entrepreneurs and managers. Community
Participation refers to direct employment opportunities created by a project in the
area where its operation is domiciled.
Broad-Based
B-BBEE equity ownership in projects has to be meaningful and sustainable. The
Black
Municipality could partially contribute to B-BBEE involvement in a project by
Economic
assisting B-BBEE companies or groups with own-contribution requirement needed
Empowerment by financiers in order to secure their participation. The target for B-BBEE equity
[B-BBEE]
ownership in a project will be between 30%-80%. The reason for this high target
range for B-BBEE is simply because the ownership patterns in the Kannaland local
economy need to be redressed fundamentally and this has to be demonstrated
clearly in these limited projects. The hope is that it will serve as a catalyst for BBBEE to spread throughout the Kannaland local economy.
Export
Potential
If a project has discernible export potential it will be considered an added
advantage in its assessment
6.2. Municipal Incentives for LED Lead Projects
52
The Municipality will prioritise LED Lead Projects above all others based on their general
economic impact on the local economy, giving particular pre-eminence to the
employment intensity of projects. The Municipality will be advised by the proposed LED
Board on the extent of the incentives required for individual projects. These incentives
could include the following:
Contribution of land to assist
The granting of land on long
The provision of basic
with the capitalisation
term leases at nominal rates
infrastructure
of projects
Seed capital to start a projects
Finance for feasibility studies
SECTION SEVEN
53
7.1. Poverty Alleviation Mechanisms
Unemployment and Poverty are a National challenge and Kannaland Municipality is not
immune to this. It to this reason that the Municipality aims to ensure that poverty
alleviation will be impacted upon by most of its strategic objectives and closely linked
with meaningful and sustainable employment creation.
Apart from the traditional Local Economic Development approaches/programmes
discussed in this Strategy, the following two National Programmes have been identified,
as short term mechanisms that can in addition support the Municipality in its efforts to
alleviate poverty within its boundaries:
7.2.

The Community Work Programme [CWP] and;

Expanded Public Works Programme [EPWP]
A brief description of the Community Work Programme [CWP]
The Community Works Programme [CWP] was initiated to address the high
unemployment rate in South Africa and contributes to key strategic objectives of
government in addressing poverty and unemployment.
It is based on the recognition that policies to address unemployment and the creation of
meaningful and sustainable employment will take time to reach people living in
marginalised and impoverished areas with a small number of opportunities at their
disposal. The CWP does not replace government’s social grants programme but
supplements this.
54
What makes the CWP different is that it is also a community programme. The work must
be ‘useful work’. It must improve the area and the quality of life for the people living
there.
This includes fixing community assets like schools, road and parks, and setting up food
gardens. It also includes training people. People living in the area help to decide on the
kind of work that is needed, and what is most urgent; this could include for example:
Looking after orphans
and
vulnerable children
Helping sick and elderly
Assisting teachers at
people
schools
Working with the local
police to improve safety
and reduce crime
Looking after children
while their parents are at
work
Caring for the
environment and
rehabilitating land and
waterways
Features of the Community Works Programme [CWP]

The Community Work Programme provides access to a minimum level of regular work - i.e. 2 days a
week = 100 days a year

It is an area-based programme, intended to be ongoing; this allows it to target the poorest areas:
where market-based jobs are unlikely to come any time soon

The CWP uses community participation to identify ‘useful work’ and priorities

Work’ is decided in Ward Committees or local development area ; it is multi-sectoral and contributes to
public/community goods and services

Start-up scale: 1,000 participants per site with CWP sites having a 65% labour intensity
7.2.1. Stimulating Kannaland’s Local Economy through the Community Work
Programme
The significance of the programme for alleviating poverty goes beyond the people
working at sites. The programme provides work to a minimum of 1 000 people [with a
55
start up intake of 300] at a site; the money earned can have a wider multiplier effect.
Money going into the community circulates around the local economy which can support
a variety of microenterprises from building and transport to hairdressing, shoe repairs
and equipment repair.
Local markets can also prosper with informal traders setting up markets to sell goods
and services on CWP pay days for example in Koppies in the Free State Province, CWP
participants report that small informal businesses; that were previously closed have
opened again.
7.3.
A brief description of the Expanded Public Works Programme [EPWP] as Poverty
Alleviation as mechanism
The Expanded Public Works Program [EPWP] is a National Government strategy aimed at
addressing unemployment and poverty in South Africa. As local government, Kannaland
Municipality is now expected to develop an EPWP policy/framework in alignment with its
Integrated Development Plan.
EPWP projects and programmes must be identified within each of the Municipality’s
departments, which can be implemented using labour-intensive or community based
service delivery methods, with predetermined key deliverables over a given timeframe in
the Infrastructure, Environmental, and Social & Economic Sectors & in terms of the
following legal framework:
The
Intergovernmental
Relations Framework
The Codes of Good
Practice for Special
Pubilc Works
Programmes
56
The Municipality should also take note that the Expanded Public Works Programme
[EPWP] is about the reorientation of line function budgets [capital and operations &
maintenance] so that expenditure results in increased employment opportunities and
training, particularly for the unemployed and unskilled labour residing in the area.
The primary of objectives of the EPWP is to create an enabling environment to:

Create employment opportunities for the unemployed within local communities

Develop skills within communities through EPWP training programmes

Develop SMMEs to execute EPWP work by facilitating the transfer of technical,
managerial and financial skills through relevant SETA & DoL courses
The following EPWP sectors can assist the Municipality in its poverty alleviation efforts
EPWP Infrastructure
Sector
Increasing the labour intensive construction of public infrastructure projects :
EPWP Environmental
Sector
Creating employment opportunities in public environmental, agriculture and





arts programs:




EPWP Social Sector
Low volume roads
Sidewalks
Storm-water management
Trenching
Materials supply
Alien plant removal
Working for wetlands
Domestic waste collection
Agri-business initiatives
Creating employment opportunities through the public sector social programs
of Early Childhood Development and Home Based Care
EPWP Economic Sector
The development of informal businesses utilising Municipal expenditure on
goods and services such as




Catering
Security
Uniforms
Cleaning
57
7.4.
The EPWP Incentive Grant
The EPWP Incentive Grant is a performance based incentive paid to provincial and
municipal bodies implementing their Infrastructure and Environment and Culture
programmes using EPWP principles and in accordance with EPWP Guidelines; as a
reimbursement of the cost of minimum wages for work created. The intention of the
EPWP Incentive Grant is to increase work creation efforts by public bodies by providing a
financial performance reward. The more work created, the higher the portion of the
incentive reward, that will be disbursed.
58
SECTION EIGHT
8. Co-operatives Development in Kannaland
8.1.
Background
Policy makers and community developers are increasingly interested in alternative
models that will be both responsive to community needs as well as stimulate local
economic growth. The co-operative form of business should be an obvious choice. Cooperatives have the potential to foster economic growth at the community level,
building on the spirit of co-operation that is often prevalent in rural areas.
Co-operatives also play a major self-help role in rural areas, particularly where private
businesses are unable to go and public authorities do not provide adequate basic
services. They are instrumental in providing opportunities for meaningful and sustainable
employment, while giving a stronger “voice” to rural communities.
8.2.
Definition of a Co-operative
Co-operatives have a universal definition, set of values and principles that have been
established formally. The universally accepted definition of co-operatives has been
promoted by the International Co-operative Alliance, the International Labour
Organisation and the National Government Policy Framework which states that:
59
“A co-operative is an autonomous association of persons united voluntarily to meet
their common economic, social, and cultural needs and aspirations through a jointlyowned and democratically-controlled enterprise”
In essence co-operatives are:

Voluntary institutions based on conscious and free choice to associate by individuals;

People centred and based on collective solidarity to achieve its objectives;

Places member and worker owner needs at the centre of the activity of the
institution;

Economic, social and cultural institutions depending on the activity performed;

Owned by its members for the benefit of all its members;

Empowers every member/worker owner to input into the decision-making by an
equal distribution of power through the principle of one-person-one-vote;

Are member controlled, leadership driven and self managed.
Strength of the Co-operative–Model
From a local development perspective, a critical feature of the co-operative model is that it can be owned
and controlled by community residents. Therefore, a co-operative is more likely to be interested in
promoting community growth than an investor-owned enterprise controlled by local or non-local investors.
Since community residents control the enterprise they can ensure their own objectives are met, and not
those of people who live elsewhere.
8.3.
A case for promoting the establishment of Co-operatives in Kannaland
Co-operatives.....
60

Create opportunity for employment, income generation, and increase the availability
of goods and services, all of which also contribute to local economic growth;

Are strongly rooted in their community, and are thus more likely to positively
influence it;

Are based on the values of self-help, self-responsibility, democracy, equality, equity
and solidarity; as well as ethical values of honesty, openness, social responsibility, and
caring for others;

Can transform survival-type activities into legally protected and productive work;

Balance the need for profitability with the broader economic and social development
needs of their members and the larger community, because members are both
producers and beneficiaries;

Help address many social and economic concerns such as community identity and
strengthen the social fabric;

Offer an economic future for the youth in Kannaland;

Are particularly valuable for women as they compensate for their often limited
resources, mobility and “voice.” This also applies for disadvantaged groups such as
disabled persons and the elderly.
8.4.
The Role of the Municipality in promoting the establishment of Co-operatives
The Municipality has a very important role to play in promoting the establishment of Cooperatives. In particular the Municipality has to ensure the following:

Establish institutional administrative capacity in support
of Co-operatives
development;
61

Align co-operatives development with the Municipality’s poverty alleviation plans,
IDPs and other developmental interventions;

Establish participatory forums to build strong partnerships with the Public Sector
[with regard to funding and support] including technical support and community
organisations;

Facilitate partnerships with the private sector for access to markets and information;

Co-ordinate its Co-operatives Development efforts very closely with National and
Provincial Government;

The Municipality may also encourage functional co-operatives in the area, to tender
for municipal work. This principle should be captured in the municipality’s IDP;

The Municipality to consider developing a directory/data base of co-operative support
organisations, mentors and trainers in the [National] Province and District;

Municipality should also consider providing preferential municipal rates for services
like water and electricity for co-operatives. This would assist in bringing down
operating costs and creating a conducive environment for the establishment of cooperatives.
62
SECTION NINE
9. The Green Economy and the Implications for Kannaland
The emergence of the green economy represents the next stage in the evolution of the
environmental sector and is growing in step with increasing public awareness of
environmental impact. It can be said that the green economy has experienced rapid
growth, in part, as the result of changing demand, where greater emphasis is placed on
the sustainability of products and services.
Greater public awareness, together with government policy, regulatory requirements
and financial incentives influence organisations to embrace green technology and adopt
greener practices. Municipalities and Kannaland is no exception is now considering the
‘greenness’ of their operations in decisions that differentiate their services, realising that
in many cases their decisions present long-term cost saving opportunities.
Green Economy is prioritised as one of the key economic drivers in the Medium Term Strategic
Framework (MTSF) 2009- 2014, Outcome 4 (Decent employment through inclusive economic
growth), Outcome 10 (Environmental Assets and natural resources that are valued, protected and
continually enhanced) and in the New Growth Path
9.1. What is the Green Economy?
63
In order to fully understand the breadth and importance of this emerging green economy
we must first define what is meant by the term, the genuine areas of business
opportunity and the implications it has on employment and skills, especially with regard
to Kannaland.
Through research, ECO Canada defines the green economy as:
The aggregate of all activity operating with the primary intention of reducing
conventional levels of resource consumption, harmful emissions, and minimizing all
forms of environmental impact. The green economy includes the inputs, activities,
outputs and outcomes as they relate to the production of green products and
services.
9.2.
Definitional criteria for greening the economy of Kannaland
Definitional criteria will provide the foundation for understanding and categorising green
economic activity as it specifically pertains to labour market development challenges
present in Kannaland.
The three main definitional criteria include an economic perspective, the development
process and a technical perspective.
Economic
perspective
Relates the characteristics of an activity to categorise its economic classification
system of sectors, industries, and occupations. Economic criteria might assess
whether products or services contribute to decreased greenhouse gas
emissions, or include sustainable resources in the manufacturing processes
64
Development
Identifies where in the development cycle a green job is situated. The
Process
development process includes the phases of development of a product or
service, from the research phase through to design, delivery, implementation,
ongoing use and maintenance
Technical
Defines the green economy through the application of quantitative, analytical
Perspective
criteria that measure exactly what it is about a product, process or service that is
‘green,’ and to what extent.
These criteria serve to inform the future development of a framework or model to
outline the extent to which an activity or industry can be classified as “green”. Applying
each perspective helps to clarify how a product or service aligns appropriately with the
green economy.
9.3.
The Impact of the Green Economy on Employment
There is no doubt that greening of Kannaland’s economy can involve large scale
investments in new technologies, equipment, buildings and infrastructure and therefore
will be a major stimulus to employment. Based on the definition, the green economy has
an impact on employment through (a) the adaption and reallocation of existing jobs;
and (b) the creation of new jobs.
The largest influence of the green economy on employment is in terms of jobs being
adapted or reallocated, with existing workers having to learn new skills and/or broaden
their pre-existing skill sets.
65
Green employment opportunities need to be meaningful and sustainable i.e. good jobs
which offer adequate wages, safe working conditions, job security, reasonable career
prospects and worker rights
9.4.
Opportunities in the Green Economy Kannaland Municipality can explore
In energy efficiency, there is the local manufacture [or assembly] and installation of solar
water heaters, including collectors, metal frames, glass, geysers and piping.
In recycling, there are significant opportunities for the creation of small enterprises
aimed at beneficiating waste at landfill sites-building rubble into bricks, plastic into
planks and garden compost and agricultural fertiliser, extracting and using landfill gas.
Waste management provides another source of opportunity in extracting re-usable
resources from industrial waste streams.
Retrofitting Municipal buildings with energy efficient equipment replacing incandescent
lamps with compact fluorescent [CFL] lamps or next-generation light emitting diodes
[LED] has job creation potential while contributing to energy saving.
Developments towards a Green Economy are the nexus of the growing need to develop
and further elaborate the economic case for environmental management and sustainable
development including scaling up labour intensive natural resources management
programmes that contribute to meaningful and sustainable employment creation and
poverty alleviation
66
SECTION TEN
10.1. Proposed Monitoring and Evaluation Mechanisms
A monitoring and evaluation plan is needed so that Kannaland Municipality can monitor
and evaluate and report the findings on how well the local economy is performing
against certain set benchmarks. The evaluation component is also intended to
incorporate lessons learnt into the decision-making process of implementing further
development programmes
In order to monitor and evaluate the effective implementation of the LED Strategy, the
following Monitoring and Evaluation template has been developed setting out different
development indexes:
67
Index
LED Implementation
Index
Indicator
2012
2013
2014
 The number of LED projects successfully
implemented
 The number of LED actions successfully
facilitated
 The number of direct permanent
employment opportunities created
 The number of direct temporary
employment opportunities created
SMME Development
 Number of SMME registered
Index
 Number of new SMME's and Co-operatives
registered
 Overall employment, formal and informal
Agricultural Sector
 Number of emerging farmers
Development Index
 Number of operational farmer/agricultural
co-operatives
 Agriculture Sector GDP
 Agro-processing Employment
 Agro-processing GDP (i.e. manufacturing)
 Agriculture Sector Employment
Tourism development
 Number of B-BBEE/Emerging tour operators
and promotion index
68
 Number of Emerging tour guides
 Number of established accommodation
tourism products
 Number of events held annually
 Number
of
employment
opportunities
created according to tourism products
Skills Development
 Skills Audit
Index
 Number of LED training workshops
undertaken
 Number of LED awareness workshops
undertaken
10.2. Institutionalisation of LED Monitoring and Evaluation [M&E]
The following approaches are a necessary requirement in order to institutionalise
Monitoring and Evaluation successfully:

Monitoring and Evaluation requires commitment from, senior managers, politicians
and support personnel in the Municipality

M&E takes on a systematic perspective and address essential elements of the
Municipality [Vision, Mission and Objectives]

Monitoring and Evaluation must be an integral component of the Municipality and
not an add-on activity

Organisational culture must embrace Monitoring and Evaluation as a important
activity
69

It must be properly managed

Monitoring and Evaluation should be transparent, communicative and participative
 M&E can follow two distinctive processes, a traditional audit by an outside party or a
consultative approach. This is described in the following table:
Traditional Evaluation
Consultative Evaluation
Why
Accountability. usually summary judgements about the
project to determine if funding continues
To empower ,local people to initiate, control and take
corrective action
Who
Outside Experts
Municipal Officials and the Community
What
Predetermined indicators of success
The Community determine their own indicators for Success
How
Focus on “scientific objectivity:. Distancing of evaluators from
other participants, uniform complex procedures, delayed,
limited access to results
Self evaluation, simple methods adapted to local culture,
open immediate sharing of results through local
involvement in evaluation processes
When
Midterm and completion
Any assessment for programme improvement, merging of
monitoring and evaluation, hence frequent small evaluations
SECTION ELEVEN
11.1. Cross -Cutting Issues for Local Economic Development [LED] in Kannaland
These issues are incessant in the formulation of meaningful and sustainable Local
Economic Development interventions for Kannaland Municipality. The disquiet
surrounding skills development remains a critical concern for Kannaland, a municipality
with business opportunities for skilled labour. Inclusion of the informal sector and the
promotion of SMME development to help regulate this economic activity; are also
imperative cross cutting issues. The support of B-BBEE and other disadvantaged groups
like unemployed youth, women and people with disabilities brings to a close the
directory of multi-layered issues that are characteristic of all sectors.
 Skills Development
70
A critical gap identified by stakeholders in Kannaland Municipality is the scarcity of
suitably skilled labour. A determined attempt to promote and encourage the
development of scarce skills is important for the success of Kannaland’s Local Economic
Development [LED] Strategy.
Establishing partnerships with training providers like SEDA, the SETA’s, FET colleges in
Eden District and the Department of Labour will help bridge this skills shortage.
 The Informal Sector in Kannaland
The informal sector is not easy to define in Kannaland and the scope is far beyond to
what is commonly referred to as the informal economy – that of the traders of Ladismith
and Calitzdorp. Essentially, for the purpose of this LED Strategy it is understood as
economic activity that includes: casual workers in formal sector, employers in informal
enterprises, own account workers in informal enterprises, unpaid family workers both in
formal as well as informal enterprises.
The informal sector can also be understood using a production-based definition which
includes employment and production that take place in unregistered enterprises.
Employees in the informal economy are excluded from various legal protections and they
are unable to access the basic benefits or enjoy the fundamental rights granted to those
in the formal economy.
These unprotected conditions often include unsafe and unhealthy working conditions,
long working hours with insufficient and unsteady compensation, low skill and
productivity levels, and a general lack of access to information, markets, finance, training
and technology.
71
Undeviating absorption of the Informal Sector is not undertaken within the scope of
Local Economic Development, however, projects aimed at SMME development across all
key sectors will seeks to address this issue by supporting development of registered
micro and small enterprises in Kannaland Municipality.
This is in itself the first step in bringing protection and legal recourse to previous
participants in the informal sector.
 SMME Development
The small business sector can play an important role in Kannaland’s economy. SMMEs in
Kannaland can provide the balance between the supply and demand on the job market,
increasing the competition among the businesses which in turn leads to the more
proficient deployment of resources, development of skills and technology, and thus
overall development of the economy.
However, small businesses in Kannaland face a wide range of restrictions and challenges
and are not competent to deal with the problems on their own.
These restrictions and challenges relate, among others, to the legal and regulatory
environment confronting SMMEs, the access to markets, finance and business premises,
the acquisition of skills and managerial expertise, access to appropriate technology, the
quality of the business infrastructure and, in some cases, the tax burden.
The inclusion of SMME specific development projects within each sector will seek to
address these issues of emerging businesses within Kannaland.
 Youth, women and people with disabilities
72
Promoting the role of women in SMMEs, as well as labour and entrepreneurs is an
important factor. Special consideration should be given to promoting opportunities
directed as women in Kannaland.
Vulnerable groups like, people with disabilities and unemployed youth require
integration into economic spheres, attention and consideration should be given to assist
their inclusion as key productive members of Kannaland Municipality.
The SMME focussed projects in each sector as well as the “Work in Kannaland” campaign
are preferably suited to target these special groups, to make certain that Kannaland’s
Local Economic Development Strategy is as inclusive and supportive of all local
stakeholders.
11.2.
Mainstreaming Cross-Cutting Issues
Cross-cutting issues impact on the sustainability of the human race and the environment.
They require a multi-sectoral mainstreaming response and thus need to be integrated
into Kannaland Municipality’s entire core functions through both internal mainstreaming
as an employer, and external mainstreaming as a service provider and income generator.
Mainstreaming refers to the process of viewing the cross-cutting issues though a
developmental governance lens. It therefore requires all municipal directorates to firstly;
determine how the cross-cutting issues are impacted on by their municipal services and
secondly; how the cross-cutting issues impact on their municipal services.
Thirdly, as to where the specific directorate has a comparative advantage in order to
expand the positive impacts and eliminate or mitigate the negative impacts of its core
function on the cross-cutting issues.
73
The following developmental mechanisms can be utilised to ensure that mainstreaming
of cross-cutting occurs within all IDP clusters:
The Budgeting
Process Plan
11.3.
Ward Committees
Performance
Management
The Economic Cluster with regard to this LED Strategy
The economic cluster is a cross cutting cluster of the municipality. The Key Performance
Areas of the cluster should include programmatic activities of the LED Unit, and various
service departments of the municipality i.e. Engineering services, Planning and the
Finance department.
SECTION TWELVE
Conclusion
LED is now recognised as a key component in broader efforts to alleviate poverty. There
is also an emerging consensus that LED cannot bring about effective poverty alleviation
without incorporating clear poverty easing actions. Therefore, a key challenge is to
ensure the pursuit of inclusive economic development that provides for both the
promotion of local wealth creation and poverty alleviation; this ensures that those
traditionally left out are active participants and have access to opportunities resulting
from development. This stresses the importance of implementing projects in Kannaland
that are focused on poverty alleviation and human development.
Recommendations
74

Make use of experts for the drafting of the relevant project business plans, including the
responsible parties, the amount of funding required, the timeframes for implementation,
resources and equipment needed for implementation, etc.

Use the tourism and agricultural sectors as economic catalysts for stimulating development
across all sectors of the local economy

Start LED by implementing the programmes and projects with the fastest anticipated impact on
job creation, poverty alleviation ,B-BBEE, SMME development, increase in living conditions,
human development, etc, followed by those with a medium and long term effect

Make sure all financial sources, equipment, human resources, etc are in place and available
before starting with the implementation of a programme and/or project

Focus on stimulating economic development and empowerment of local people at the same time

Make sure that the implementation of projects are executed by local people and not imported
labour
75
SECTION THIRTEEN: PROPOSED LOCAL ECONOMIC DEVELOPMENT PROJECTS
PROJECTS [PROGRAMMES] EMANATING FROM THE LOCAL ECONOMIC DEVELOPMENT [LED] STRATEGY CONSULTATION PROCESS
Project
Reference
Number
Project
Name
[Programmes]
Project/Programme
Description [abridged]
Project/Programme
Location/Purpose
Local Employment
Opportunities/
Project Outcomes
Possible Funding
Mechanisms/EntitiesFunding Requirement
Time Frame
P001
Establish strategic
partnerships to
lead LED in
Kannaland; in
which
stakeholders are
represented
To partner the Municipality with
meaningful and productive role-players in
Economic Development [Membership:
National& Provincial Government incl. the
District, the Municipality , The established
Private Sector in Kannaland and DFI
representatives]
Kannaland
Municipal Area
To be determined
through projects
identified and
implemented by the
Partnership
arrangement
DCOG, DBSA, the
Municipality in form of
administrative
resources, and IDC
4 Months
[The
Establishment] of a
Kannaland
Emerging
Businesses Forum
To organise Entrepreneurs/SMME’s into
one structure in order for them to derive
benefit from projects identified and
implemented by the KLF and the
Municipality and to have one unified
voice representing SMME’s
Kannaland
Municipal Area
The Municipality to be
secretariat [to have
administrative
function]
To be established
concurrently with P001
Upgrade of
Caravan Park
The re-development of Caravan Parkcreating quality overnight
accommodation, picnic/play spaces for
locals and tourist and a cultural village
[Developing break-away packages]
Ladismith
10 [direct]
10 [indirect]
Will also provide
opportunities to Local
Construction SMME’s
during the reconstruction phases
DTi’s Tourism Support
Programme or a PPP
P002
P003
[R 400,000-00]
TOR to be Formulated
TOR to be Formulated
3 Months
Initial R 250,000-00 for a
Feasibility study to be
conducted and TOR to be
formulated [incl. Public
consultations]
74
PROJECTS [PROGRAMMES] EMANATING FROM THE LOCAL ECONOMIC DEVELOPMENT [LED] STRATEGY CONSULTATION PROCESS
Project
Reference
Number
Project
Name
[Programmes]
Project/Programme
Description [abridged]
Project/Programme
Location/Purpose
Local Employment
Opportunities/
Project Outcomes
Possible Funding
Mechanisms/EntitiesFunding Requirement
Time Frame
P004
Neighbourhood
Street Markets
[The iKasi
Experience]
Income generating initiative for poor
neighbourhoods [communities]
Kannaland
Municipal Area
Can create temporary
income for families
The Private sector and
the Municipality
[Partnership]
Annually
[R 200,000-00]
P005
The Establishment
of Renaissance
Farms
The establishment of a mechanism that
will assist emerging farmers in Kannaland
to develop into more commercialised
farmers. The establishment of cooperatives is a potential vehicle that can
be utilised to capacitate communities
who lack the financial resources and
technical expertise
Kannaland
Municipal Area
P006
Procurement and
Promotion of
SMME activities
Establishment of business linkages
(funding access, technology, business
opportunity, etc.), emerging
entrepreneurial business forums [wth ref
to P002]
Kannaland
Municipal Area
10
Emerging Farmers
Dept. Of Agriculture the
Landbank and the DTi
[Co-op Incentive
Scheme]
Various Sector
Departments
77
PROJECTS [PROGRAMMES] EMANATING FROM THE LOCAL ECONOMIC DEVELOPMENT [LED] STRATEGY CONSULTATION PROCESS
Project
Reference
Number
Project
Name
[Programmes]
Project/Programme
Description [abridged]
Project/Programme
Location/Purpose
P007
Community
Capacity Building
Skills audit, incubation associated with
development potential of the
municipality; training of the community
on LED and its benefits; SMME training,
co-operatives training; mentorship
projects
Kannaland Municipal
Area
This project aims to cluster the available
Tourism opportunities in Kannaland.
Economic opportunities in tourism will
be matched with available
Emerging entrepreneurs. These
opportunities include
tour operations, accommodation
establishments and the promotion of
eco-tourism
Kannaland Municipal
Area
The beautification/landscaping of Towns
in Kannaland as one of the mechanisms
to unlock Tourism and increase
visitation
All Towns in
Kannaland
P008
P009
Tourism Sector
Development
The cleaning and
Greening of Towns
Local Employment
Opportunities/
Project Outcomes
Possible Funding
Mechanisms/Entities
and Other
Time Frame
Various Sector
Departments /National
Skills Development
Fund
Bi-annually
[R300,000-00]
Project to include
Unemployed Youth
through training and
capacity building
The Dept. Of Tourism,
the Tourism Seta and
NYDA
Annually
[R 500,000-00]
Contract
Employment for
emerging
entrepreneurs
DCOG’s Cleaner Cities
and Towns Project,
CWP and the Cities
support programme
78
PROJECTS [PROGRAMMES] EMANATING FROM THE LOCAL ECONOMIC DEVELOPMENT [LED] STRATEGY CONSULTATION PROCESS
Project
Reference
Number
Project
Name
[Programmes]
Project/Programme
Description [abridged]
Project/Programme
Location/Purpose
Local Employment
Opportunities/
Project Outcomes
Possible Funding
Mechanisms/Entities
and Other
P010
Waste
Management and
Recycling
The creation of small enterprises aimed
at beneficiating waste at landfill sitesbuilding rubble into bricks plastics into
planks and garden compost and
agricultural fertiliser. Waste
management can also provide another
source of opportunity in extracting
reusable resources from residential and
industrial waste streams
Towns to be
identified
Dependent on the
size of the Small
enterprise created
The IDC , the Dti and
Dept. Of Mineral
Resources
P011
Arts and Craft
development
The indigenous arts and craft trade has a
role to play in economic development in
that, is has a relatively high labour
absorption potential and it can be used
by the poor, rural women and
marginalised groups as a means for
survival. It will therefore provide an
opportunity for commercialisation and
development of small medium and micro
enterprises (SMME’s)
Kannaland Municipal
Area
Dependent on the
size of the Small
enterprise created
The Dept. Of Arts and
Culture and Dept. Of
Tourism
Time Frame
6 Months
[300-000-oo]
79
PROJECTS [PROGRAMMES] EMANATING FROM THE LOCAL ECONOMIC DEVELOPMENT [LED] STRATEGY CONSULTATION PROCESS
Project
Reference
Number
Project
Name
[Programmes]
Project/Programme
Description [abridged]
Project/Programme
Location/Purpose
Local Employment
Opportunities/
Project Outcomes
Possible Funding
Mechanisms/Entities
and Other
P012
Urban
Regeneration
The town of Ladismith serves as a
regional service centre and an economic
development hub. However, the visual
character and quality of the environment
remains the same. It was thus suggested
that an urban renewal
programme targeting the town area be
initiated. The programme focus areas
are the following:
 Infrastructure upgrading in selected
precincts and Town entrance areas
 Landscaping
 Urban design
Ladismith
Contract
Employment for
emerging
entrepreneurs
DCOG’s Cleaner Cities
and Towns Programme,
the Private Sector and
Neighbourhood
development
programme
P013
The marketing of
festivals and local
villages as Tourist
attractions
[Increased work for
local contractors]
Kannaland Municipal
Area
The creation of small
scale enterprises
Time Frame
The private sector
[Business Chambers],
The Municipality and
Department of Tourism
80
PROJECTS [PROGRAMMES] EMANATING FROM THE LOCAL ECONOMIC DEVELOPMENT [LED] STRATEGY CONSULTATION PROCESS
Project
Reference
Number
Project
Name
[Programmes]
Project/Programme
Description [abridged]
Project/Programme
Location/Purpose
Local Employment
Opportunities/
Project Outcomes
Possible Funding
Mechanisms/Entities
and Other
P014
Upgrade of
“Liggiepad” and
“Towersig” pad
Hiking plays a big part in our community.
The “Liggiepad” is a well know road by
not only locals but also internationally
Ladismith
The training of
unemployed youths
as tour guides
SAN Parks, NYDA and
other funding agencies
to be determined
P015
Ladismith “Lekka”
weekend/ naweek
This is a community based festival with
the big celebration on the 31st of May - 50
years of the “Liggie” in the Elandsberg.
The festival looks closely at how to
inform the community of Kannaland how
to be eco friendly and display some art,
culture and experience extreme 4X4
Ladismith
Temporary
employment for
local youths
The Private Sector , The
Municipality and other
funding agencies to be
determined
P016
ABSA Calitzdorp
Port en Wine
festival
Exploring the wine and port from
Calitzdorp-spin-off projects can also be
initiated e.g. local arts and crafts , the
sale of indigenous food and beverages
and township tours
Ladismith and
Calitzdorp
Temporary
employment
The Private Sector , The
Municipality and other
funding agencies to be
determined
Time Frame
81
PROJECTS [PROGRAMMES] EMANATING FROM THE LOCAL ECONOMIC DEVELOPMENT [LED] STRATEGY CONSULTATION PROCESS
Project
Reference
Number
Project
Name
[Programmes]
Project/Programme
Description [abridged]
Project/Programme
Location/Purpose
Local Employment
Opportunities/
Project Outcomes
Possible Funding
Mechanisms/Entities
and Other
P017
The marketing of
the Zoar Heritage
Festival
Community awareness about their
heritage.
Zoar
Temporary
employment
The Dept. Arts and
Culture and the Private
sector
P018
SMME Incubation
The established private sector in
Kannaland to incubate smaller related
enterprises/ Training and Mentoring of
these SMME’s/Technology
transfer/Management advice and
services/Finance in the form of loans and
providing markets
Kannaland Municipal
area
Will enable SMME’s
to grow at a
sustainable rate
hence employing
more people
To further engage the
Private Sector
P019
Kannaland
Investment Summit
One of the objectives of this summit is to
create a platform for LED partners to
engage on possible investment options for
Kannaland. This summit must identify and
promote such options.
Ladismith
Time Frame
The Municipality, Private
Sector and other
relevant Government
Departments
82
PROJECTS [PROGRAMMES] EMANATING FROM THE LOCAL ECONOMIC DEVELOPMENT [LED] STRATEGY CONSULTATION PROCESS
Project
Reference
Number
Project
Name
[Programmes]
Project/Programme
Description [abridged]
Project/Programme
Location/Purpose
Local Employment
Opportunities/
Project Outcomes
Possible Funding
Mechanisms/Entities
and Other
P020
Medium Scale Arts
and Craft
Manufacturing
Centre
The main aim of this project is to
formalise the arts and crafts sector in
Kannaland, thereby providing
employment opportunities and inclusion
of the second economy into the
mainstream economy
Abandoned
farmhouses on the
opposite sides of the
road between
Ladismith and
Calitzdorp
To be determined
The Department of Arts
and Culture and The DTi
[Landowner also to be
determined and
engaged with]
SMME
Development in
Kannaland
Tender Reform:
 Investigate the splitting or
unbundling of contracts to promote
small business access
 Develop simplified tender
documentation and conditions
where feasible
 Widely Publicise tenders and
contracts to ensure maximum
exposure
 Support Training and Capacity
Building of emerging entrepreneurs
Growth orientated
Small Businesses in
Kannaland
Time Frame
Business
Competiveness
P021
Linkages
Development
of twinning
relationships
SMME Publicity
Campaigns
The Municipality and
the Private Sector
83
PROJECTS [PROGRAMMES] EMANATING FROM THE LOCAL ECONOMIC DEVELOPMENT [LED] STRATEGY CONSULTATION PROCESS
Project
Reference
Number
Project
Name
[Programmes]
Project/Programme
Description [abridged]
Project/Programme
Location/Purpose
Local Employment
Opportunities/
Project Outcomes
Possible Funding
Mechanisms/Entities
and Other
P022
Graduate Into
Business
Programme
This programme is aimed at addressing
the graduate entrepreneurial deficit
across the Municipality by offering an
integrated approach to supporting
entrepreneurship, which will
stimulate and promote an enterprising
culture, increase levels of new start up
businesses , and encourage existing new
businesses to develop and grow through
targeted support and access to
information, advice and business
networks
Graduates in
Kannaland
New jobs can be
created for the
youth segment of
the community
National Youth
Development Agency,
the Private Sector and
other relevant
Government Agencies
P023
Retail
Development
Programme
This project is aimed at
encouraging local retailers to participate
in local business development and
training initiatives
Ladismith and
Calitzdorp
To be determined
The Municipality and
The Private Sector
Time Frame
Business
Competiveness
84
PROJECTS [PROGRAMMES] EMANATING FROM THE LOCAL ECONOMIC DEVELOPMENT [LED] STRATEGY CONSULTATION PROCESS
Project
Reference
Number
Project
Name
[Programmes]
Project/Programme
Description [abridged]
Project/Programme
Location/Purpose
Local Employment
Opportunities/
Project Outcomes
Possible Funding
Mechanisms/Entities
and Other
Diversification into
non-agricultural
activities
This measure will assist
farm households to diversify into non
agricultural activities on farm and, as a
consequence maintain or increase the
income of farm households and create
employment opportunities
Farms in the
Kannaland area
Self employment for
farm households
National and Provincial
Departments of
Agriculture/ Farmers in
the Kannaland area
Municipal
Information
Access Point
Online help-desk/query point for
business start-ups for municipal related
issues. Structured as an informative
webpage added to the Kannaland
Municipal website. The page would
include contact details of municipal
services branches as well as links to
useful sites like SEDA
Promotion of
municipal required
information and the
details of municipal
offices and services
for businesses at
start-up phase
Additional
information can
result in the ease of
opening of new
businesses within
the municipality
Internal
Time Frame
Agricultural
Diversification
P024
Additional
Projects
P025
85
PROJECTS [PROGRAMMES] EMANATING FROM THE LOCAL ECONOMIC DEVELOPMENT [LED] STRATEGY CONSULTATION PROCESS
Project
Reference
Number
Project
Name
[Programmes]
Project/Programme
Description [abridged]
Project/Programme
Location/Purpose
Local Employment
Opportunities/
Project Outcomes
Possible Funding
Mechanisms/Entities
and Other
P026
Proudly Kannaland
Buy-Local
Campaign
Marketing campaign to raise awareness
of local goods and services on offer in
Kannaland Municipality, services
advertising booklet and/or a annual
calendar
Raise awareness of
and encourage
usage of local
service providers
and goods
manufacturers
Share of Kannaland
driven business
increases as
percentage of
turnover for local
industrial sector
Internal
P027
Work in Kannaland
Campaign
Three phased publicity campaign
approach incorporating both a learners’
retention strategy and annual job fair
and hire local campaign: A school goers campaign of visits to
senior classes around the
Municipality by SEDA and similar
Organisations
 Incentives for Local Businesses to hire
local labour
 Annual Jobs fair highlighting existing
opportunities across all sectors
Counter the
emigration of skills
out of Kannaland
and act as an
attraction factor for
the immigration of
skilled labour into
Kannaland
Kannaland becomes
viewed as an
attractive
municipality in
which to work and
attracts local skilled
labour to remain in
the area and take
up economic
opportunities
The Private
Sector/NYDA and
SEDA/Internal
Time Frame
Additional
Projects
86
Section Thirteen [b]: To Grow SMME Participation within the Tourism Sector
Emerging entrepreneurs in Kannaland find entry into the tourism market exceedingly difficult due to a range of constraints – most notably the lack of
access to capital and relevant skills is prohibitive. In response to this, the scope for enhancing SMME potential within the Tourism sector is broken into
five key programmes, which are detailed in the table below:
Goal
Objectives
Improve skills of entrants into
Programmes
1.
the sector
To Grow SMME
participation within the
Assist established SMMEs
Internships
Actions

term interns
[Estimated Cost-R 20,000]
2.
with growing their skills base
Mentorships

Promote the use of local interns

Identify established tourism businesses in the municipality that would be willing
and able to provide mentorship to an emerging tourism businesses
[Estimated Cost-R 15,500]

Tourism Sector
Identify existing businesses in the Municipality that will be able to absorb short
Run a mentorship workshop with both established and emerging tourism
businesses in Kannaland
Assist emerging SMMEs in
accessing funding
3.
Funding Access
[Estimated Cost-R 30,000]

Identify specific SMME’s to partner specific businesses

Generate data base of available funders and their full contact details

Make data base available to the Kannaland Tourism Office and satellites

Provide training for SMME’s formal funding requests [e.g. letter writing and
business plan formulation]

Provide assistance to SMME’s in drafting formal letters of request
87
Goal
Objectives
Growing the number of
To Grow SMME
participation within the
Tourism Sector
Programmes
4.
participants in this aspect of
Tour Guiding
[Estimated Cost-R 45,000]
Actions

Identify training partner [THETA]

Seek partnership with WESGRO , National Dept of Tourism , Provincial
tourism
Improving the management
of existing sites by raising
Department of Economic Development and Tourism and the Dti
5.
Site Management
[Estimated Cost-R 100,000]

Identify training partners

Seek partnership with WESGRO , National Dept of Tourism , Provincial
Department of Economic Development and Tourism and the Dti
awareness of the
opportunities for SMME

Identify specific sites that require upkeep
involvement
88
SECTION FOURTEEN
Project Implementation Guidelines
The rationale for this section is to provide LED Unit officials with an implementation
guide that could support the implementation of certain proposed LED projects [ref p 91].
This step is viewed as critical, owing to the fact that numerous LED Strategies have failed
during their implementation phases.
Consequently this section will entail the following:
1
2
3
Project
Classification
Recommendations to
enable LED
Implementation
General
Guidelines
1. Project Classification
During the LED Consultation processes a number of projects have been identified;
possible projects stipulated on page 89. These projects however require different actions
from LED officials in order to enable their implementation.
However, before providing guidelines on the implementation, it is imperative to
recognise the characteristics of these projects.
As a result the projects will be classified into the following groups in order to enable the
identification of general implementation guidelines. [Please refer to p 98]
89
Private Sector
Projects that can only be implemented by the private sector. These
Projects [PriSP]
are purely profit driven projects. Government will not be the ultimate
beneficiary of this project but it should play a role in enabling the
opportunity to be realised
Public Sector
These projects are implemented by the public sector and are projects
Projects [PuSP]
that will constructively improve conditions/circumstances for all
stakeholders
Public Private
This relates to projects which will be owned by both the public and
Partnerships
private sector
[PPP]
2. Recommendations to support/facilitate Local Economic Development [LED]
Strategy Implementation
In addition to providing recommendations to facilitate the implementation of the
identified opportunities, this section will also provide recommendations on the stages
that need to be embarked upon in order to support the implementation of these
identified opportunities. These stages have been informed by previous sections and are
stipulated below.
Strengthen the LED
Unit
Create a more
Inform communities
informed local
about opportunities/
communities
projects
Implement a investor
attraction framework
Create a enabling
environment
90
The aforementioned stages are the preliminary activities that need to be taken. Each of
the stages is briefly discussed below:
2.1.
Strengthen the LED Unit
This relates to creating a more efficient and effective LED institutional structure. The
steps to improving this unit have been emphasized elsewhere in this LED Strategy and
therefore the following would need to be ensured

The possible signing of a memorandum of understanding between Kannaland
Municipality and other LED support structures,

Restructure the LED unit without increasing the staff component too much as this
could negatively affect the funds available for LED implementation,

Ensure that the existing LED unit members have the required level and skill to
enable them to effectively carry out their stated mandates.
2.2.
Create more informed local communities
Local communities have different and at times misleading information regarding local
government’s role in Local Economic Development [LED].
Although public awareness
and consultation processes have been embarked upon in order to address LED issues, it
is recommended that, these steps should be continuous and more structured.
2.3.
Inform Communities about possible opportunities/projects
One of the key factors to ensuring the implementation of this LED Strategy is to ensure
that local stakeholders buy-in into the strategy and will look to implement the identified
opportunities. As a result these stakeholders’ needs to be aware of the LED Strategy and
the main opportunities identified within the strategy.
91
2.4.
Implement a Investment attraction framework
Besides informing local communities about the possible opportunities/projects within the
Municipal area, other potential investors from outside Kannaland should also be
approached. The following processes is recommended, to attract outside investors to
Kannaland

Identifying the target investor,

Establish the primary message to communicate to investors including,

Approach to attract investors
2.4.1. Identifying the target investor
The first step to attract investors to Kannaland is to identify the main investors that need
to be targeted. Given the opportunities identified, it has been determined that the
following investors, among others, are to be approached:
Farmers
Investors in the
agro-processing
industry
Tourism and
hospitality
investors
ManufacturingRetail&Wholesale
These investors can include local investors and foreign investors. The foreign countries
that could potentially be targeted, can be the countries which import from the District
Municipality or the Province.
2.4.2. Establish the primary message to communicate to investors
In order to attract investors, Kannaland Municipality should be promoted as a pro
business environment. The promotion of the municipal area as pro-business need to be
supported by effective government services that ensures all business requirements are
92
catered to. In addition, general information regarding the local municipal area as well as
information regarding the strengths and opportunities should be conveyed to potential
investors.
2.4.3. Approach to attract investors
This sub-section discusses the various mechanisms and tools that can be utilised in order
to attract investment to Kannaland. These mechanisms include but are not limited to the
following;

Brochures,

Electronic Media/Internet/Websites

Magazines [e.g. Town and Country Magazine]

Newspapers [e.g. die Burger supplement BY]

National and Provincial Investment Publications.
The following are however viewed as the key approaches that Kannaland Municipality
can follow/embark upon, in order to attract investment to the area:
Partnerships with
Host sectoral investor
Conduct trade missions
relevant institutions and
workshops/summits
[Local and International]
structures
[Private and Public]
93
2.5.
Creating a enabling environment for LED Implementation
A quintessential prerequisite for the implementation of this LED Strategy is to make sure
that an enabling environment is created for business/enterprise development.
Throughout the LED public consultation process, a number of challenges have been
identified with regard to the provision of basic services; and these include;

Backlogs in the provision of infrastructure, this relates to water and roads,

Power supply and reliability, and

Access to basic household and community services
Whilst the LED unit cannot provide basic services within the Kannaland municipal area, as
this is not its mandate, it can assist and lobby for the improved provision/delivery of basic
services.
3. General project implementation guidelines
The subsequent narrative will stipulate the general implementation guidelines that are
relevant to the proposed projects, which were identified during the LED consultation
process.
3.1.
Project ranking [in order of importance] and IDP incorporation
Projects should be ranked in order of importance by utilising a project ranking
mechanism. It is essential that these ranked projects be validated as important by the
Municipality and stakeholders.
After this step has been completed, the ranked LED projects can be incorporated into the
Integrated Development Plan [IDP].
94
3.2.
Finalisation of the Projects Location
Although initial spatial allocation for certain LED projects has been identified during the
LED Consultation process, this however does indicate the precise location of projects.
The final identification of locations for the projects can only be determined through
consultation with the spatial planning experts, through communication with the local
stakeholders and when pre-feasibility and feasibility studies for projects have been
completed.
3.3.
Pre-feasibility and feasibility studies
A pre-feasibility study is generally required for some of the larger projects. The purpose
of this study will be to determine if there is a sufficient basis to conduct a feasibility
study. A pre-feasibility study should be conducted if there is limited information
regarding the projects and if conducting a feasibility study would be too expensive.
On the other hand the feasibility study relate to an in depth analysis of the proposed
project. The key objective of a feasibility study is to provide investors with information
regarding the viability of the project. It should also indicate the projects anticipated
return. This return on investment should be informed by the market demand and supply.
The key elements that should be contained within the feasibility study include the
following:
Location Analysis
Technical
Processes and
Requirements
Financial Analysis
Owneship
Structure
Organisational
[With regard to
Structure
B-BBEE]
Risk and
Opportunity
Analysis
The Role of the
Municipality
95
In short the feasibility study must present a comprehensive breakdown of the viability of
the project and it should function as validation for implementing the project.
3.4.
The formulation of business plans for projects
In order to enable a clear understanding of the steps that will be involved in the
establishment and operation of the business, a business plan needs to be formulated.
A business plan is also generally a key requirement for banks and funders and is thus a
key document if external funding is required.
The business plan should be informed by the feasibility study that may have been
compiled. The key elements which should be included in the business plan are the
following:

Description of the Proposed Project

Background Information about the Location and Beneficiaries

Market Strategy

Management and Human Resources

Operational Plan

Expected Outcome of the Proposed Project

Implementation Timeline

Risks Assessment/Management [Political, Funding or other]

Environmental Impact Assessment [if required]

Summary

Monitoring and Evaluation Plan and

Financials
96
3.5.
Project Partnership Identification
This step relates to the identification of partners and beneficiaries who will eventually be
solely responsible for the project if it is a private sector project. The identification of
partners for projects should however take place during the LED Strategy formulation
process; when consulting with the private sector and communities.
If the project is driven by the public sector like in the case of the Community Work
Programme, it is recommended that the Municipality establish partnerships with relevant
organisations that can support the expansion of the project.
An example of this would be the development of a skills programme within the local
municipality, in which institutions involved in training programmes will be approached.
Establishing partnerships for public sector projects will not only increase the resources
available to the LED unit, but it will also assist in mitigating the challenges associated
with the institutional structure.
97
APPENDIX ONE:
Legislative and Regulatory Framework
This section will provide an overview of legislation and regulations applicable to
local economic development; and is discussed in the subsequent narratives.
The legislation and regulations include, inter alia, the following :
1. The Constitution [Act 108 of 1996]
2. Local Government: The Municipal Systems Act, No. 32 of 2000
3. Local Government: Municipal Finance Management Act [No. 56 of 2003]
4. Broad-Based Black Economic Empowerment Act, No. 53 of 2003
5. New Growth Plan Framework
6. National Strategy for the Development and Promotion of Small Businesses in
South Africa
7. Comprehensive Rural Development Programme
8. Review Framework for Economic Development: Department of Cooperative
Governance
9. The Integrated Strategy on the promotion of co-operatives & collective
Entrepreneurship, 2008
10. Eden District Growth and Development Strategy
11. The Integrated Development Plan [IDP]
98
1. The Constitution [Act 108 of 1996]
The development duties of Local Government requires that the
management of their administrations and budgeting processes
ensure that it gives precedence to the social and economic needs
of local communities.
Section 152 [1] identifies the following as the objectives of local government:

To provide democratic and accountable government for local communities;

To ensure the provision of services to communities in a sustainable manner;

To promote social and economic development;

To promote a safe and healthy environment; and

To encourage the involvement of communities and community organisations in the
matters of local government.
Impact on Kannaland Municipality
The Constitution provides the framework and mandate for local spheres of government, to
promote social and economic development. Development efforts should address the basic
needs of the community and promote employment creation for local people.
2. Local Government: Municipal Systems Act, No. 32 of 2000 and Local Government
Laws Amendment Act [No.19 of 2008]
The Municipal Systems Act, 32 of 2000 lists the duties of a municipal council, within its
financial and administrative capacity, as follows in Section 4[2]:
99

Exercise the municipality’s executive and legislative authority and use the resources
of the municipality in the best interests of the local community

Provide, without favour or prejudice, democratic and accountable government

Encourage the involvement of the local community

Strive to ensure that municipal services are provided to the local community in a
financially and environmentally sustainable manner

Consult the local community regarding:

The level, quality, range and impact of municipal services provided by the
municipality, either directly or through another service provider; and


The available options for service delivery
Give members of the local community equitable access to the municipal services to
which they are entitled

Promote and undertake development in the municipality

Promote gender equity in the exercise of the municipality’s executive and legislative
authority

Promote a safe and healthy environment in the municipality

Sub-section 24 of Chapter 5 further stipulates that any planning activity
undertaken by a Municipality must be aligned with the “development objectives
and strategies” of other organs of state. This alignment will allow the
Municipality to comply with the primary element of co-operative governance as
set out in section 41 of the Constitution
3. Local Government: Municipal Finance Management Act (No. 56 of 2003)
The objectives of this Act are to safeguard unassailable and sustainable management of
the fiscal and financial affairs of Local Government and Local Government entities by
establishing norms and standards and other requirements for:
100

Ensuring transparency, accountability and appropriate lines of responsibility in the
fiscal and financial affairs of municipalities and municipal entities:

The management of their revenues, expenditures, assets and liabilities and the
handling of their financial dealings

Budgetary and financial planning processes and the co-ordination of those processes
with the processes of organs of state in other spheres of government:

Borrowing;

The handling of financial problems in municipalities;

Supply chain management
4. Broad-Black Economic Empowerment Act No. 53 of 2003
The Broad- Based Black Economic Empowerment Act of 2003 provides a legal framework
and road map for achieving the fair and equitable participation of all our population in
the economy.
The following stipulates why support for B-BBEE is important:
It promotes fairness,
BBBEE is a financial and
equity and economic
growth imperative
justice
It ensures that the previously
excluded majority have a share in the
economy which they will safeguard
and develop
101
4.1. The Broad-Based Black Economic Empowerment Amendment Bill, December 2011
Section 1 of the Broad-Based Black Economic Empowerment Act, 2003 was amended by
the substitution for the definition of "Broad-Based Black Economic Empowerment" of the
following definition:
 "Broad-Based Black Economic Empowerment" means the sustainable economic
empowerment of all black people, [including] in particular women, workers, youth,
people with disabilities and people living in rural areas, through diverse but
integrated· socio-economic strategies that include, but are not limited to:
Increasing the number of black people that manage, own and control enterprises
and productive assets;

Facilitating ownership and management of enterprises and productive assets by
communities, workers, co-operatives and other collective enterprises;

Human resource and skills development;

Achieving equitable representation in all occupational categories and levels in the
workforce;

Preferential procurement, including the promotion of local content procurement;
and

Investment in enterprises that are owned or managed by black people
"Fronting B-BBEE Practice" means a transaction, arrangement or conducts that directly or
indirectly undermines or frustrates the achievement of the objectives of the B-BBEE Act and
amendments or the implementation of any of the provisions of the B-BBEE Act and amendments
102
5. New Economic Growth Plan Framework, 2010
The New Economic Growth Path stipulates that, there is mounting consent that to
generate meaningful employment, reducing inequality and alleviating poverty can only
happen through a new growth path founded on a premise of restructuring the South
African economy as to enhance its performance in terms of labour absorption.
The primary reason for the new economic growth plan is to concentrate on
unemployment, inequality and poverty. One of the objectives of the New Economic
Growth Path is to create five million jobs by 2020
The primary reason for the new economic growth plan is to concentrate on
unemployment, inequality and poverty. One of the objectives of the New Economic
Growth Path is to create five million jobs by 2020. In order to reach this objective, a
number of job drivers have been identified; which are the following:

Infrastructure for Employment and Development

Improving job creation in economic sectors

Seizing the potential of new economies

Investing in social capital

Spatial development
Impact on Kannaland Municipality
The new economic growth path is an important strategic document, which sets out mechanisms
on how government want to develop the country. There are a number job drivers and
programmes relevant to Kannaland Municipality.
103
6. National Strategy for the Development and Promotion of Small Businesses in
South Africa
The vision of the government is that of meaningful and sustainable economic
development, which can only be obtained by increased investment, enhanced
productivity, expanding employment opportunities and an overall increased
competitiveness.
The Strategy contains programmes and policies, which can donate to the process of
inspiring the small business sector, which is the core of sustainable and unbiased
growth in South Africa. Different categories of small business can be distinguished,
each one with its unique characteristics, obstacles and requirements for support.
7. Comprehensive Rural Development Programme
The Department of Rural Development and Land Reforms mandate according to the
Strategic Plan (2010 – 2013) is to create a “vibrant, equitable and sustainable rural
communities and food security for all”. In order to achieve this mandate the department
has developed, amongst others, the Comprehensive Rural Development Programme
(CRDP).
The vision of the CRDP is to create vibrant, equitable and sustainable rural communities
by ensuring the following:
Contributing to the
redistribution of 30% of the
country’s agricultural land
Improving food security of the
rural poor
De-congesting and rehabilitation
of over-crowded former
homeland areas
Creation of business
opportunities
Expanding opportunities for
women, youth, people with
disabilities that stay in rural areas
104
The primary objective of the CRDP is to achieve social cohesion and development in rural
communities. It is based on the following:
Coordinated and integrated
broad-based agrarian
transformation
Improved land reform
programme
Strategic investments in
economic and social
infrastructure in rural areas
8. Review Framework for Economic Development: Department of Cooperative
Governance
The 10 guiding principles of the National LED Framework are the following:
1
Through a developmental approach, Government has a decisive and unapologetic role to
play in shaping the economic destiny of our country
2
Creating an environment in which the overall economic and social conditions of the
locality are conducive to the creation of employment opportunities is the responsibility of
Local Government
3
Local Economic Development is an outcome of actions and interventions resulting from
local good governance and the constant improvement and integration of national
priorities and programs in local spaces
4
Inward investment from the state or private sector will only be effective where the
potential and competitive advantages of each area are known and exploited
5
Promoting robust and inclusive local economies requires the concerted, coordinated
action of all spheres and sectors of government centred on the application and
localisation of the principles espoused in the National Spatial Development Perspective
(NSDP)
105
6
Locally owned appropriate solutions and strategies must emerge to support national
frameworks in both rural and urban local spaces and should promote sustainable
development and sustainable human settlements
7
South Africa competes in a global and increasingly integrated world economy whose
threats must be minimised and whose opportunities must be exploited
8
Private companies, including social enterprises and cooperatives, form the heart of the
economy and have a crucial role to play as partnerships with public and community role
players that will ultimately stimulate robust and inclusive local economies
9
People are the single greatest resource and including all citizens in development and
increasing their skills leads to increased opportunities for stimulating local economies
10
Local initiative, energy, creativity, assertive leadership and skills will ultimately unlock the
latent potential in local economies and will shape local spaces
9. The Integrated Strategy on the Promotion of Co-operatives & Collective
Entrepreneurship, 2008
The rationale of this strategy is to build an integrated Co-operative sector with the ability
to contribute towards economic growth, poverty alleviation and the creation of
meaningful and sustainable employment opportunities, as well as assist in bringing about
economic transformation.
According to the strategy, Co-operatives are viewed as a global driver to economic
growth.
Currently there are a substantial number of Co-operatives registered in South Africa,
however given the registration growth; these Co-operatives are still faced with a number
of vexing challenges.
106
10. Eden District Municipality’s Growth and Development Strategy
The District Municipality’s Growth and Development Strategy identifies the following key
principles; upon which, Economic Development efforts in the region should be based:
Sustained economic
growth
Fostering
[establishing]
partnerships
Meaningful and
sustainable
employment
creation
Human resource
development
B-BBEE
Poverty
alleviation
11. The Integrated Development Plan [IDP]
IDP is a process by which municipalities prepare 5-year strategic plans that is reviewed
annually in consultation with communities and stakeholders.
These plans adopt an implementation approach and seek to promote integration by
balancing social, economic and environmental pillars of sustainability without
compromising the institutional capacity required in the implementation, and by
coordinating actions across sectors and spheres [tiers] of government.
107
11.1.
The IDP’s importance to Local Economic Development
Local Economic Development [LED] must be developed within the context of the
provincial Integrated Development Plan (IDP), as described in Section 25 of the Municipal
Structures Act.
In view of the government mandates discussed, it is critical for municipalities to:
Understand the
government's approach
to LED
To plan and implement
LED strategies within the
context set out by various
national and provincial
policy and legislative
frameworks
Understand their
functions and duties as
municipalities and the
impact of each of these on
Local Economic
Development
Have clarity on LED roles
and responsibilities for the
different spheres of
government and civil
society in order to affect a
more coordinated effort
in realising LED ideals
108
APPENDIX TWO:
Stakeholder Analysis:
STAKEHOLDER
DESCRIPTION OF KEY I NTEREST
DESCRIPTION OF KEY POTENTIAL
C ONTRIBUTION
PARTNERSHIP
ASSESSMENT
Is their Involvement:
A=Essential-: Process will fail without their
involvement
B=Important: Process is limited and
Implementation may suffer without it
C=Minor: Nice to Have
G OVERNMENT:
N ATIONAL , PROVINCIAL AND
L OCAL/DISTRICT
Nat. Dept of Cooperative
Governance


MAYCO-Kannaland
Municipality

The Establishment of
LED Board and SMME
Forum for Kannaland
Implementation of the
Community Work
Programme

Poverty Alleviation and
the Creation of
Meaningful and
Sustainable Employment
Opportunities



Funding for the
Establishment of entities
Poverty Alleviation
A
Supporting the LED
process
Providing clear
decisions, rules and
procedures [Ensure safe
political and
administrative
environment]
A
Nat. Dept of
Public Works

Implementation of the
Expanded Public Works
Programme with regard
to the alleviation of
Poverty in Kannaland

Extending EPWP
Incentive Grant to
Kannaland Municipality
A
Prov. Dept of Economic
Development and Tourism

SMME Development and
Tourism Promotion

To assist with the
development of the
emerging tourism
market in Kannaland
The Training and
Development of SMME’s
To provide possible
funding mechanisms
A


109
Eden District
Municipality


STAKEHOLDER
The promotion of
Kannaland as a Tourism
destination
The Promotion of
Kannaland as an
attractive investment
climate for potential
investors
DESCRIPTION OF KEY I NTEREST



To assist in the training
of emerging tourism
operators and the
provision of markets
Include Kannaland in
Tourism Development
and Investment Plans
Assist Kannaland with
Social Development
Issues
DESCRIPTION OF KEY POTENTIAL
C ONTRIBUTION
B
PARTNERSHIP
ASSESSMENT
Is their Involvement:
A=Essential-: Process will fail without their
involvement
B=Important: Process is limited and
Implementation may suffer without it
C=Minor: Nice to Have
THE P RIVATE
SECTOR :
Ladismith Kaas


Parmalat



Support of local
entrepreneurs in the
cheese making process
Supports the hosting of
a Cheese festival in
Kannaland

Contemplating a huge
expansion of the
existing plant in
Ladysmith which could
allow for a further 300
jobs
Need for an engineering
workshop to be
established
Establishing a roofing
company as they could
not find any company
who could do roof
repairs to their building
sites


Will provide markets and
other own resources to
emerging cheese makers
Training of local
entrepreneurs in cheese
making
Creating more
employment and SMME
opportunities in
Kannaland
A
Keen to assist in developing
Kannaland
A
Keen to assist in developing
Kannaland
110
Touwsberg



Mrs. Erika Carlitz


Developing the
emerging Tourism
market in Kannaland
Stresses the need for all
role-players in
Kannaland’s LED process
to have a common goal
towards development
Marketing and Branding
of Kannaland

The need for Kannaland
to have a person to
champion tourism
Expanding the festivals


Creating more
employment and SMME
opportunities in
Kannaland especially in
the Tourism sector
Also willing to use own
resources to enhance
LED in Kannaland
The training of
vulnerable youths as
tour/field guides and in
culinary skills
A
Keen to assist in developing
Kannaland
B
Keen to assist in developing
Kannaland
in Kannaland to include:
Cheese, Architecture and Arts
and Crafts/Culture
STAKEHOLDER
DESCRIPTION OF KEY I NTEREST
DESCRIPTION OF KEY POTENTIAL
C ONTRIBUTION
PARTNERSHIP
ASSESSMENT
Is their Involvement:
A=Essential-: Process will fail without their
involvement
B=Important: Process is limited and
Implementation may suffer without it
C=Minor: Nice to Have
THE C OMMUNITIES OF
KANNALAND
Zoar



Van Wyksdorp



Poverty Alleviation
Creation of Meaningful
and Sustainable
Employment
Opportunities
Infrastructure
Development

The Establishment of an
Inclusive Community
Development Forum
representing the needs
of the community
Poverty Alleviation and
the Creation of
Meaningful and
Sustainable Employment
Opportunities
Having dignity and an
end to quasiexploitation



Support to the
Municipality’s LED
process
Community Participation
A
Support to the
Municipality’s LED
process
Community Participation
A
111
Carlitzdorp



Ladismith




To organise SMME’s in
the Carlitzdorp area
The establishment of Cooperatives
Poverty Alleviation and
the creation of
meaningful and
sustainable employment
opportunities

The establishment of a
functioning Business
Chamber
Poverty Alleviation and
the Creation of
Meaningful and
Sustainable Employment
Opportunities
The establishment of a
SMME Co-operative
Training and
Development of
Entrepreneurs





To support the
Municipality’s LED
process
Constructive community
participation
The Community will also
establish an LED Forum
which will liaise with the
Municipality
A
To support the
Municipality’s LED
process
Constructive community
participation
The Community will also
establish an LED Forum
which will liaise with the
Municipality
A
APPENDIX THREE:
Examples of Green Industrial and Infrastructure Programmes
Programme
Description
Government
leadership
programme in
greening public
buildings and
precincts
Government buildings and developments offer an excellent opportunity for
providing leadership, setting an exemplary trend for new buildings and retrofitting
existing buildings where feasible. A programme to support the initiatives of the
Department of Public Works in greening public buildings provides an opportunity to
develop norms and standards for green upgrades, which can be incorporated into
future development guidelines
Scaled-up rollout of
solar heaters
Solar water heaters have been identified as an important intervention for shifting
demand by replacing electricity consumption with solar heat. The government’s
Solar Water Heating Programme has set a target for renewable energy to
contribute 10 000 GWh of final energy consumption by 2013. It is estimated that
solar water heating could contribute up to 23% of this target. In addition, solar
water heaters have been identified as a means whereby renewable energy could
significantly contribute to alleviating poverty, through improving the general
welfare of households and developing productive activities to generate
employment.
112
Sustainable solid
waste management
The growth in the volume of general waste highlights the economic potential of the
waste management sector, with its estimated total expenditure of R10 billion per
year. Waste collection and the recycling industry make a large contribution to job
creation and the gross domestic product, and there is considerable potential to
expand this. An example is a pilot project in Mafikeng, which services 30 000
households. The project has created 75 jobs and five small businesses, which now
own their own waste collection trucks.
Up scaling,
expansion and
improvement of the
current ‘Working
for’ programmes
South Africa initiated the Working for Water Programme in 1995. The programme
has been recognised internationally as an effective resource management and jobcreation initiative within the concept of a green economy. Other ‘Working for’
programmes have been initiated and continue to demonstrate benefits in terms of
resource management and job creation. However, there is a need to:
 Expand the efforts of the programmes, especially in terms of broader
ecosystem rehabilitation and river management.

Ensure that existing programmes are fully functional and adequate to
achieve effective outcomes.

Integrate the planning and implementation of the programmes to ensure
that benefits are sustained
Programme
Description
Rural livelihood
resilience through
rainwater
harvesting
There is an urgent and widespread need for strategies to strengthen the resilience
of rural households in the face of poverty and growing climate variability. Providing
water for productive purposes through rainwater harvesting supports household
food security and the possibility of a wider range of productive uses
The programme can contain the following:
 Landscaping to optimise water infiltration and retention
 Construction of large holding reservoirs to capture run-off
 Provision of gutters and rainwater tanks on schools and houses
 Greater availability of water for productive purposes – from brick-making
to hair salons, each with its own job-creating potential
Reduce water
losses in agriculture
and municipalities
The programme will build on existing initiatives at municipal level. In particular, the
programme provides for a funding mechanism and a facilitation unit to assist major
users, primarily commercial agriculture and municipalities, in planning, packaging
and securing funding for programmes to reduce water loss
113
Strengthen
demand-side
management,
through
comprehensive
municipal water
metering systems
This proposal addresses one of the most important instruments for incentivising,
monitoring and improving water demand management: comprehensive water
metering
In particular, the programme could:
 Require the retrofitting of water-efficient devices
 Propose mandatory installation of specified fittings of a prescribed quality
in line with national regulations and standards
 Train local artisans for household and municipal maintenance – to ‘walk the
lines’ to identify leaks and bursts, do basic repairs, check household fittings
for leaks, and the like
 Create opportunities for local manufacturers to meet the demand for
robust fittings and devices that promote greater water-use efficiency
The installation of water meters can also provide employment opportunities to
unskilled workers
APPENDIX FOUR:
Possible Financial/Funding Support Agencies for LED Projects
A number of financial support agencies have been identified, which the Municipality can
possibly approach for funding for LED Projects.
A list of potential funding support agencies is pointed out in the table below:
SECTOR
POSSIBLE FUNDING SUPPORT
AGENCY
ADDITIONAL COMMENT
114
Agriculture/Agro 
Processing
Tourism
Business
Development
National and Provincial
Departments of Agriculture
Funding Source for Agricultural SMME’s

SETA and SEDA
Training and Development /The Small
Enterprise Development Agency [SEDA]
and The Small Enterprise Finance Agency
[SEFA] is the DTi’s agencies for supporting
small businesses/ [new entrants]
entrepreneurs

The Department of Trade
and Industry [the DTi]
Agro Industry Development Fund for the
development and expansion of the
agricultural food sector

The Land Bank
Funding source for the acquisition of
agricultural land

The Departments of Trade
and Industry and Tourism
The Dti’s Tourism Support Programme
[TSP]- The TSP is a reimbursable cash grant
that aims to support the development of
tourism enterprises that will stimulate job
creation and increase the geographic
spread of tourism investment

Cape Town Routes
Unlimited [CTRU]/WESGRO
Funding Source for Tourism SMME’s

WESGRO
To provide investors with the insight into
Kannaland’s economy
115
SECTOR
SMME
Development
POSSIBLE FUNDING SUPPORT
AGENCY

SEDA
ADDED REMARKS
The Small Enterprise Development Agency
[SEDA] is the Department of Trade and
Industry's agency for supporting small
business in South Africa.
Small Enterprise Development Fund
Business Referral and Information
Network [BRAIN]
Franchise Advice and Information Network
[FRAIN]
Skills
Development
and Capacity
Building

The SETA’s
Sector Education and Training Authorities
have been established to ensure that the
skill needs for every sector of the economy
are identified and that training is available
to provide for these skill needs
116
APPENDIX FIVE:
Practical Management of the Local Economic Development [LED] Processes
When LED projects are to be started and implemented on a practical level, five important
actions have to be identified. It should be noted that these important actions are
interrelated and are not detached from each other
These important actions are the following:
Identification
Defining the
Marketing
Funding
Implementation
Approach
One
Identification
Refers to those activities pertaining to the identification
of potential projects and opportunities that can be
developed in the local economy and is the first step of
the LED
Two
Defining the Approach
Refers to the process if specifically defining the project
and implies the actual formulation of business
plans/feasibility studies
Three
Marketing
Refers to place marketing as well as the marketing of
specific products or services produced by the respective
projects
Four
Funding
Refers to the acquirement of funding/finance for the
implementation and development of projects
Five
Implementation
Refers to the culmination of the preceding activities
resulting in the identified opportunities being put into
action
117