PRESENTATION TO THE PORTFOLIO COMMITTEE ON PROVINCIAL AND LOCAL GOVERNMENT BRIEFING ON THE NODES

1. 1 PRESENTATION TO THE PORTFOLIO COMMITTEE ON PROVINCIAL AND LOCAL GOVERNMENT BRIEFING ON THE NODES 12 June 2007 the dplg June 2007

2. PRESENTATION OUTLINE • NATIONAL AND PROVINCIAL SECTOR SUPPORT (slides 3-5) • FINDINGS OF STUDIES DONE: a. impact assessments of 4 nodes (slides 6-24) b. economic profiling research (slides 25-45) c. URP lessons learnt (slides 46-51) 3. KEY ISSUES FOR INTERVENTION (slides 52-53) the dplg June 2007

3. NATIONAL AND PROVINCIAL SECTOR SUPPORT • National level: • Coordination through the inter departmental task team • Consists of representatives of the three spheres of government • Well represented: challenges with DTI, DST, DSR • Clear contribution at nodal level from Agriculture, Health, DWAF, DME, DSD, Housing, DOL,DOT,DEAT, DOC. Idea of the Financing Protocol introduced in 2005, to encourage sector to have MTEF plans and resource allocation for each node . the dplg June 2007

4. NATIONAL AND PROVINCIAL SECTOR SUPPORT . the dplg June 2007

5. NATIONAL AND PROVINCIAL SECTOR SUPPORT . the dplg June 2007

6. RESEARCH DONE IN THE NODES. IMPACT ASSESSMENTS IN 2 RURAL AND 2 URBAN NODES : SUMMARY OVERVIEW OF KEY FINDING • BASIC SERVICES • HOUSING • ECONOMIC DEVELOPMENT • JUSTICE CRIME PREVENTION, SAFETY • COOPERATIVE GOVERNANCE the dplg June 2007

7. RESEARCH DONE IN THE NODESPRELIMINARY IMPACT ASSESSMENTS SUMMARY OF KEY FINDINGS Delivery Of Basic Services • Generally an improvement in all 4 nodes eg. 80% improvement in access to water in Maluti-a-Phofung, electricity access in Alexandra improved from 72% in 2001 to 88% in 2005. • Limited household incomes constrains the use of services such as electricity, and the free 50Kw is deemed to be inadequate for families with no source of income. • Expectations shift and increase as soon as basic delivery takes place – communities then expect higher levels of services and are unhappy about costs and quality (power outages, taste of water). • In urban nodes, most of funding spent went on extending and upgrading bulk infrastructure & maintenance of old and neglected infrastructure – this “under-the-ground: investment is not appreciated by communities. Implications • The Housing programme and infrastructure investment programme can hinder or help the rate and pace of service delivery. • Communities are concerned with quality and affordability and we are not measuring these aspects of service delivery. • More attention is needed to improve incomes and ability to pay for services the dplg June 2007

8. RESEARCH DONE IN THE NODES. PRELIMINARY IMPACT ASSESSMENTS: SUMMARY OF KEY FINDINGS: Housing • Blockages caused by lack of land, eligibility of communities, the need for relocations can take up to 5 years to resolve, resulting in a slow down of the entire development processes. • The current funding model for building rental housing meant that rental housing was constructed but is unaffordable to the community. • Poor quality construction in Motherwell meant that of the 6000 houses built, 1000 were unfit for habitation. • In Maluti-a-Phofung some felt the housing programme undermines traditional family structures and lifestyles. • Housing was communicated as the key deliverable, while in most cases this not deliverable at the scale and pace promised. Implications • Communicating clear, consistent and realistic delivery targets are key for managing community expectations. If housing targets are not met it affects negatively the community views of the entire development programme. • The housing policy may have unintended consequences of fragmenting traditional homesteads and families. • Land transfers and land redistribution delays delivery. • In urban nodes where infrastructure upgrading and land purchases must take place, housing delivery has a long lead-in time. the dplg June 2007

9. RESEARCH DONE IN THE NODES.PRELIMINARY IMPACT ASSESSMENTS Summary of key finding Economic Development • LED support has made no significant impact on long-term livelihoods and sustainable job creation. • Short term improvements in income has been facilitated through the infrastructure programmes and through programmes aimed at improving food security (food gardens etc). • Capacity of district and province to plan and stimulate economic growth is poor – most projects are “poverty-alleviation” in nature and relies heavily on the municipality for subsidies to ensure sustainability. • No clear distinction and variable plans for viable economic development interventions and social welfare interventions. the dplg June 2007

10. RESEARCH DONE IN THE NODESPRELIMINARY IMPACT ASSESSMENTS Economic Development: implications • Very high expectations from communities in the nodes to obtain jobs through the development programme – these cannot be me and puts pressure on the development programme. • Communities could take more responsibility for management of LED projects with a social welfare focus, with government reducing its involvement, focusing more on oversight and start-up support. • Economic development strategies for the nodes need strengthening, with more focus on skills development and business growth. • A comprehensive plan needed by government to intervene to change the skills profile of nodal communities. • Integration is needed at nodal level, to provide one point where potential entrepreneurs can come for a range of support services. the dplg June 2007

11. RESEARCH DONE IN THE NODESPRELIMINARY IMPACT ASSESSMENTS SUMMARY OF KEY FINDING: Justice, Crime Prevention And Safety • No consistent downward trend in crime in urban nodes. • Safety is still seen as a high priority concern for nodal residents. • Positive support from national and provincial in the form of construction of new police stations and magistrate courts. • Interviews of beneficiaries show concerns with quality of service: perceived lack of professionalism from local police, understaffing, poor response time. Implications • Upgrading of policing and justice infrastructure has made some impact, but has made not significant impact on community perceptions of safety. • Crime prevention initiatives are uncoordinated and duplicated by a range of stakeholders (national, provincial, municipality, NGOs). • Cooperation between various agencies are needed, with more focus on community awareness, confidence building, crime prevention. the dplg June 2007

12. RESEARCH DONE IN THE NODESPRELIMINARY IMPACT ASSESSMENTS SUMMARY OF KEY FINDING Cooperative Governance • National and provincial line functions coordination with nodal priorities remain weak. • Positive results with the linkages between CDW, Ward Committees and Community Liaison Officers (in Alfred Nzo and Motherwell. • Lack of role clarification and the linkages of the CDW programme to the province cause some conflict (Maluti-a-Phofung, Alexandra). • It took at least 2 years to put in place the frameworks, systems and processes for effective implementation, impacting on the delivery targets. Implications • The multiple forums and engagements to facilitate coordination must be streamlined – formal IGR structures, in line with IGR Act, must become the forum where sector departments plan with and support the nodes. • Performance contracts of officials to be used as a tool to ensure commitments are made to the nodes and are met. • Role clarification needed for CDWs, Ward Committees, ward Councilors, CLO’s, in some cases. • Ward committees need support and training to assist them in their communication function. the dplg June 2007

13. RESEARCH DONE IN THE NODES. LESSONS LEARNT IN THE IMPLEMENTATION OF THE URBAN RENEWAL PROGRAMME (Note: ISRDP Lessons Learnt study currently underway, to be finalised July 2007). the dplg June 2007

14. URP LESSONS LEARNT LESSONS PERTAINING TO THE PROJECT CYCLE: • Project selection • Project objectives • Project preparation and design • Institutional arrangements • Implementation SECTORAL LESSONS • governance, finance, institutions • Economic development • Service delivery • Infrastructure and housing • Social services • Greening & environment • Public safety • Communications More than 100 lessons, supported by 25 case studies and stories. the dplg June 2007

15. URP LESSONS LEARNT INSTITUTIONAL PROCESSES • Institutionalising the programme is crucial. Good will and individual programme champions are useful, but the programme needs to be seated within institutional structures, contractual arrangements and clear lines of accountability. • Area based approaches such as the nodes have offered the greatest focus and coordinated interventions. GOVERNANCE • Sound and active leadership at political and administrative level is critical for the success of integrated nodal development. • Participatory structures (ward committees, development forums) must be resourced and capacitated for effective community ownership. • Learning by doing requires that parallel learning take place along side implementation. Regular strategic reviews should be undertaken in the URP to ensure cross learning between nodes and broader. the dplg June 2007

16. URP LESSONS LEARNT SERVICE DELIVERY • URP is not only about housing and care has to be given to finding a balance between infrastructure development and human development related activities. • Unrealistic service standards such as in housing can cause a slow down in delivery, compromise quality and result in stalled projects. • Without control over the housing budget, cities have difficulties meeting delivery targets set by them, more so in the URP nodes which have severe backyard overcrowding, old informal settlements and new in-migration. • Land, its identification for housing and preparation and servicing for township development requires the coherent support from all of government. SOE’s and parastatals must make their land holdings available for development that will benefit the nodal communities. the dplg June 2007

17. URP LESSONS LEARNT LOCAL ECONOMIC DEVELOPMENT • Resources need to be committed for adequate supervision, training and support for emerging contractors. • Using public investment in a coordinated manner to prompt private sector response has proven to be a successful strategy – support must be provide to other nodes to implement this strategy, using IGR structures to get binding commitments from other spheres of government. • Townships are not and cannot be self-sufficient – linkages with nearby commercial areas are important. Analysis of the expanding sectors in the sub-regional context is important to assess which sectors offer the best possible opportunities for employment of the nodal communities. the dplg June 2007

18. URP LESSONS LEARNT FINANCIAL VIABILITY • Preparation funding is critical during the first 24 months of the URP, to establish PMUs, undertake essential planning and to source/lever delivery budgets from line functions. • The privates sector is under-invested in the townships and this represents an un-tapped opportunity. Government must be able to direct this interest by careful packaging and marketing of projects to get maximum benefit for the area. • If dedicated programme funding is made available for the URP, a model to explore is a requirement that it be made available on the basis of gearing on a set ratio with other funding. MANY OF THESE LESSONS OF THE ISDP AND URP WERE INCORPORATED INTO THE “FRAMEWORK FOR MANAGING JOINT PROGRAMMES” a joint DPSA DPLG project approved by Cabinet and included into the IGR Toolkit. the dplg June 2007

19. RESEARCH DONE IN THE NODES. ECONOMIC PROFILING OF THE 21 RURAL AND URBAN NODES the dplg June 2007

20. THE NODAL ECONOMIC DEVELOPMENT PROBLEM • Insufficient and unreliable economic information • Project-specific approach vs strategic, nodal-wide advantages • Deficiencies of economic inputs into IDPs and nodal business plans • Limited economic productive capacity in the nodes (eg. business capital, infrastructure, marketing info etc) • Absence of specified role for, specifically sector department. In response to these challenges, a Programme of Action for Building Productive and Sustainable Nodal Economies was developed. This POA is intended to: • provide an understanding of the economic potential in the nodes • identify opportunities for public and private sector investment • identify barriers and constraints to economic activity • recommendations on strategic interventions to improve the nodal business climate (including aspects of current public agencies/institutions tasked with supporting local entrepreneurs) the dplg June 2007

21. NODAL ECONOMIC PROFILES:CONTENT OF EACH NODAL ECONOMIC PROFILE Introduction Key Data Points Current Action Introduces the node; summarizes key issues Lists pertinent acts and figures Describes current interventions Snapshot Geography, Vegetation, Climate, Soil Governance Area Summary Spatial Development IDP Assessment Key Challenges Demography Development Projects Local People Portrait Income and Employment Education Health Development Scorecard the dplg June 2007

22. Rural Nodes: What needs to be done? Solutions to Constraints / Investment Opportunities (1/5) • A large, landmark tourism investment is needed to increase the profile of the area substantially. This will have positive spin-offs for small businesses as well • The agricultural potential of the area needs to be realised through provision of funding for local subsistence farmers to upscale to commercial ventures, and upgrading of infrastructure such as irrigation systems, market access routes, storage facilities, etc. • Investments which provide direct revenue for the municipality will help to address public service backlogs. The proposed hydro-electric plant at the Jozini Dam is a prime example of this, since it will address electricity backlogs, and will also generate revenue through the sale of electricity to other parts of the country and neighbouring states Umkhanyakude • Investments in the tourism sector need to be supported and fast-tracked because this is the sector that provides the multiplier effect for growth in the rest of the economy. Black entrepreneurs need to be educated and trained to be able to participate in this sector and reap rewards from it. This must be done in conjunction with creating new tourism initiatives in the rural area • The district municipality needs to provide incentives for new investment, for example, by waiving reticulation fees, lowering planning fees, providing rates holidays (e.g. for the first 5 years), reducing the cost of water, electricity and waste removal to be more competitive, etc. • Build a larger Chamber of Commerce, and possibly become more integrated with the Durban Chamber of Commerce, to allow members to have better visibility on investment opportunities and to work together to capitalise on them Ugu • Improve basic road, water and electricity infrastructure • Create a public-private sector model to incentivise private sector investment in agricultural value added processing • Buy in from a provincial level • Collective marketing strategy for the node and neighbouring nodes • Create a forum for all types of farmers to share experiences, knowledge and networks • Incentive structure for small and large farmers to form co-operatives or joint ventures between themselves UKhahlamba the dplg June 2007

23. Rural Nodes: What needs to be done? Solutions to Constraints / Investment Opportunities (2/5) • The area has the opportunity to produce a range of crops, livestock, and forestry products - national demand conditions are particularly strong for meat and forestry products; however, there is strong local demand for grains, fruits and vegetables • Investment opportunities in the area generally relate to agro-processing, including biofuel production, milling, and hide processing, or are linked to eco-tourism • Key constraints include low education and skill levels, high input costs, weak market access, and in the case of tourism, a lack of strategy and marketing efforts • To address this, it is imperative that skilled mentors are made available to farmers, that a collaborative body be developed to assist in sourcing inputs, marketing and transporting products • Finally, the private sector should be targeted with an aggressive investment promotion programme Alfred NZo • Improve basic road, water and electricity infrastructure • Make the land claim/land tenure process more transparent • Create a public-private sector model to incentivise private sector investment in the tourism and forestry sector • Marketing strategy for the node • Address skills gap for subsistence farmers • Address skills gap within municipalities OR Tambo • Mentorship programmes to bridge the skill gap between emerging and commercial farmers • Make the land reform process more transparent • Create a public-private sector model to incentivise private sector investment • Address skills gap within municipalities • Manufacturing in Msinga Umzinyathi the dplg June 2007

24. Rural Nodes: What needs to be done? Solutions to Constraints / Investment Opportunities (3/5) • Create the incentives for tourists and operators to come to the area: complete roads, build accommodation in eMakhosini, create attractions, develop products, etc. • Work with tour operators and tourism businesses within and nearby the node to create and market attractive packages that link multiple destinations • Support key investment opportunities, including the Pongolapoort Dam development and the construction of lodges in eMakhosini Valley • Build a mentorship system between established and emerging farmers • Create structures / organizations to aggregate emerging farmers and decrease input and transport costs • Attract private investment – a key place to start is the opportunity for a sugar mill on the Makatini flats, which would be a great boost to emerging sugar farmers in Zululand Zululand • Address skills gap within municipalities • Mentorship programmes to bridge the skill gap between emerging and commercial farmers • Develop an effective marketing strategy and delivery mechanism for tourism • There is a need for supporting investments in the sector, because this is the sector that provides the multiplier effect for growth in the rest of the economy • Black entrepreneurs need to be educated and trained to be able to participate in this sector and reap rewards from it. This must be done in conjunction with creating new tourism products highlighting the area scenic beauty Maluti • Water, infrastructure and skills are all common constraints across most sectors • Promising investment opportunities include: • Mining: Several new mines to be developed; opportunities for supporting industries (accommodation, housing, retail, restaurants / catering, processing) • Agriculture: Bio-diesel production to supply mining industry; fruit and vegetable processing plant • Tourism: Vacation property and resort development Sekhukune the dplg June 2007

25. Rural Nodes: What needs to be done? Solutions to Constraints / Investment Opportunities (4/5) • Improve basic road, water and electricity infrastructure • Create a public-private sector model to incentivise private sector investment in agricultural value added processing • Buy in from a provincial level • Collective marketing strategy for the node and neighbouring nodes • Create a forum for all types of farmers to share experiences, knowledge and networks • Incentive structure for small and large farmers to form co-operatives or joint ventures between themselves Chris Hani • A comprehensive tourism strategy must be developed and implemented • A comprehensive agriculture and land use plan must be developed and implemented (including: development of veterinary support services, utilisation of natural resources, priority to agri-processing investment opportunities) • Municipality and other government instruments can assist cooperatives and increase viability of community projects • Blockages and service backlogs in the system must be addressed • Land claims need to be urgently fast tracked • Bushbuckridge can exploit the fact that they are in a UNESCO Biosphere, but needs to integrate its tourism activities into provincial tourism plans Busbuckridge • Scale up current initiatives like Karoo Leather and Beaufort West Hydroponics • Build a correctional facility outside Beaufort West • Investigate the opportunity to introduce more game in Karoo National Park • Make Karoo Lamb a protected brand to increase the value of meat produced in Central Karoo • Upgrade the rail link between Gauteng and Cape Town Central Karoo the dplg June 2007

26. Rural Nodes: What needs to be done? Solutions to Constraints / Investment Opportunities (5/5) • The district and local municipalities must become more efficient in dealing with the private sector when potential investment opportunities are being undertaken (reduce delays) • Focus on a few specific opportunities that prove to be both viable and sustainable • Key learning from past projects must be applied to guide future actions • Municipality must initiate projects but ensure that the beneficiaries take control and responsibility for future activities Kgalagadi • Improve basic road, water and electricity infrastructure • Actively facilitate and incentivise private sector investment in agricultural value added processing in cooperation with the District Municipality as well as Provincial departments and agencies • Develop an effective branding and marketing strategy for the area in respect of both tourism and agricultural offerings • Develop and implement a spatial development framework for the node to actively manage development and investment and more effectively retain potential benefits Maruleng the dplg June 2007

27. Urban Nodes: What needs to be done? Solutions to Constraints / Investment Opportunities (1/3) • Close Skills Gap: Raise quality of basic education, improve English language skills, establish tertiary institutions in area / trade schools, establish apprenticeship and internship programmes, etc. • Target growth sectors in the Durban economy (knowledge industries, chemicals, metals, transport and logistics), as well as construction and trade skills to help workers access employment opportunities along the growing North Coast • Support Local SMME’s: Reduce constraints to local business growth through an ongoing business support service that would provide mentorship and help entrepreneurs create business plans, apply for funding, and access larger markets. Also, build quality trading space located in high traffic, secure areas. • Market the area to large private investors and continue to improve the environment for external businesses INK • In the long-term Kimberley could be positioned as an important hub in the regional flow of goods between Johannesburg and Cape Town, and between Durban / Richard's Bay and the west coast of Southern Africa. This will require that investment strategies of entities in the national transport network are designed to achieves this, rather than some other pattern. • In the absence of being able to reposition Kimberley in the national spatial economy, attention must be paid to up-skilling residents for opportunities outside of the area and eliminating any obstacles they may have in moving elsewhere. • Kimberley’s short-term opportunities lie in mineral beneficiation, tourism and agro-processing. Given the relatively high quality of the Northern Cape’s matric results, it is possible that further opportunities in the services space – eg call centres – exist. • In Galeshewe, the opportunities for any meaningful job creation revolve around housing delivery and public sector construction. Ghaleshewe • The housing market is beginning to tick over, but concerns about the enforceability of property rights remain • The area’s business climate is poor and more work needs to be done on addressing this • Much more attention needs to be paid on increasing residnetial densities • Given Motherwell’s proximity to Coega, attention should be paid to maximising the development potential of this by (a) focusing skills training in Motherwell on the skills needed in Coega and (b) giving its residents preference in allocating employment from Coega Motherwell the dplg June 2007

28. Urban Nodes: What needs to be done? Solutions to Constraints / Investment Opportunities (2/3) • Focusing on business upgrading through building partnerships with businesses in the surrounding area, while also encouraging formalisation, may improve the business environment • Moving more swiftly on tenure issues will help unlock Alexandra’s potential • Developing the franchised landlord model, as well as the other housing stock and tenure options which the ARP has developed, offers the prospect of real improvements to the area Alexandra • The erection of decent housing in the area is a continuing priority • Transport infrastructure needs to be coordinated in order to increase the efficiency of public transport • The development of the transport node at Kuyasa should be based on Mitchell’s Plain’s Station Plaza in order to become a thriving commercial centre • Many businesses in Khayelitsha are highly informal, and assistance with formalisation would be helpful Kayelitsha • Transport infrastructure needs to be coordinated in order to increase the efficiency of public transport • The Mitchell’s Plain False Bay College branch is in need of funding from the Province’s FET grant • Social interventions are necessary to limit gang activity in Mitchell’s Plain • Informal businesses in Mitchell’s Plain need to be educated about the benefits of formalisation Mitchell’s Plain the dplg June 2007

29. Urban Nodes: What needs to be done? Solutions to Constraints / Investment Opportunities (3/3) • Top officials in Buffalo City municipality must commit to MURP for the project to have full-scale benefits • The Department of Labour could reassess the role of the Border Training College, which could be used to upskill Mdantsane residents and prepare them for future employment at the IDZ • National government departments need to accelerated their processes when and where their action is required, e.g. Mount Ruth development and providing vacant land for housing • National government needs to recognise that Mdantsane can only grow if East London grows – this may require harbour upgrades • A change in policies is required to improve the current human resource bottlenecks at MURP and at the municipality to speed up service delivery and planning processes Mdantsane the dplg June 2007

30. NODAL ECONOMIC PROFILING: INVESTMENT OPPORTUNITIES IDENTIFIED • Key projects are selected that could form the basis for kick-starting the nodal economy. • A profile of each project is provided: - description - economic rationale - employment - enabling conditions - contact details - status of available documents FOR THE 13 RURAL NODES, 88 INVESTMENT OPPORTUNITIES HAVE BEEN IDENTIFIED AND PROFILED. the dplg June 2007

31. Economic profiling project: actions for sector departments • Rural Nodes • Urban Nodes the dplg June 2007

32. Rural NodesDepartment of Agriculture Summary of Actions for Dept of Agriculture Initiate mentorship programmes between commercial and emerging farmers Aggregate emerging farmers and decrease input costs Prioritise support for investment opportunities in bio-diesel and agri-processing Scale up small scale viable initiatives to commercial Address Skills gap for local farmers Activate targeted investment opportunities the dplg June 2007 Source: Node Profiles

33. Rural NodesDepartment of Environmental Affairs and Tourism Summary of Actions for DEAT Assist local municipalities with the development and implementation of tourism strategies which are integrated into South Africa’s global tourism plan. the dplg June 2007 Source: Node Profiles

34. Rural Nodes:Department of Land Affairs Summary of Actions for Dept of Land Affairs Formulate a policy applicable to all nodes – especially former homelands to fast track all claims. Expedite the land claims as they seem to be the primary deterrent to private investment the dplg June 2007 Source: Node Profiles

35. Rural Nodes: Department of Provincial and Local Government Summary of Actions for dplg • Increase municipality's ability to provide basic services and bulk infrastructure by • Addressing capacity shortages in local municipalities • Provision of adequate funding • Up-skill the municipality to become more efficient in dealing with the private sector • Focus on few specific LED opportunities that are bankable • Create and support private/public sector equitable partnerships that attract private sector investment the dplg June 2007 Source: Node Profiles

36. Rural Nodes: Department of Trade and Industry Summary of Actions for Dept of Trade and Industry Support a public/private sector model to incentivise private sector investment Create greater visibility on investment opportunities for the private sector the dplg June 2007 Source: Node Profiles

37. Rural Nodes: Other Government Departments the dplg June 2007 Source: Node Profiles

38. Urban Nodes: Government Departments the dplg June 2007 Source: Node Profiles

39. NODAL ECONOMIC PROFILING: NEXT STEPS The Profiles are intended to act as a decision support tool for government and other stakeholders who would like to understand and act on the economic character and potential for each node. Work to be done in 2007/08 – 2009/10: 1. Cabinet Lekgotla: formally report on progress to date, and next way forward activities. Future reporting in line with the GPoA 2. Design an Institutional Support Mechanism – off the findings of the national, provincial and municipal economic development institutional review 3. National Nodal Economic Development Indaba: formally launch the Nodal Economic Development Programme (The Profiles, Atlas, the Agency and concrete implementation support commitments) 4. Nodal Economic Development Programme of Action: A consolidated implementation scheduling in the implementation of the Nodal Investment Atlas, and Institutional Support Mechanism 5. State of the Nodal Economies Report – pulling together key themes for influencing government thinking around economic development in townships and rural areas 6. Economic Development Capacity Building: Township Practitioners Development Programme, and possibly, Certified Economic Developers Programme (CeDC) the dplg June 2007

40. ISSUES FOR INTERVENTION the dplg June 2007

41. ISSUES FOR INTERVENTION the dplg June 2007

42. URD BRANCH BUDGET the dplg June 2007

43. THANK YOU the dplg June 2007