GREATER TUBATSE MUNICIPALITY

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					    GREATER TUBATSE MUNICIPALITY




LOCAL ECONOMIC DEVELOPMENT STRATEGY
Greater Tubatse Local Economic Development Strategy                                                                                                2

 TABLE OF CONTENTS

EXECUTIVE SUMMARY ............................................................................................................................ 3
SECTION 1: INTRODUCTION ................................................................................................................. 5
    1.1         BACKGROUND ........................................................................................................................ 5
    1.2         LED POLICY AND LEGISLATIVE FRAMEWORK ............................................................... 6
    1.3         METHODOLOGY ..................................................................................................................... 6
    1.4         STRUCTURE OF THE REPORT............................................................................................ 7
SECTION 2: BASELINE REVIEW........................................................................................................... 9
    2.1         SOCIAL PROFILE .................................................................................................................... 9
    2.2         ECONOMIC PROFILE ............................................................................................................. 9
    2.3         SPATIAL ANALYSIS .............................................................................................................. 10
    2.4         INFRASTRUCTURE STATUS .............................................................................................. 11
    2.5         THE ENVIRONMENT............................................................................................................. 11
SECTION 3: GREATER TUBATSE LED STRATEGY ...................................................................... 12
    3.1     TARGETED DEVELOPMENT OBJECTIVES ..................................................................... 12
       3.1.1 Accelerated Economic Growth ......................................................................................... 12
       3.1.2 Employment Creation ........................................................................................................ 13
       3.1.3 Poverty Reduction.............................................................................................................. 15
    3.2     LED STRATEGY BUILDING BLOCKS ................................................................................ 16
       3.2.1 Sector development ........................................................................................................... 16
       3.2.2 Economic infrastructure support ...................................................................................... 24
       3.2.3 Social development ........................................................................................................... 26
       3.2.4 Institutional/governance .................................................................................................... 28
SECTION 4: IMPLEMENTATION PLAN AND INSTITUTIONAL OPTIONS .................................. 31
    4.1     IMPLEMENTATION AND PRIORITISATION ..................................................................... 31
    4.2     INSTITUTIONAL OPTIONS .................................................................................................. 33
       4.2.1 Internal Arrangements ....................................................................................................... 33
       4.2.2 External Arrangements ..................................................................................................... 34
    4.3     RESPONSIBILITIES AND IMPLEMENTATION PARTNERS .......................................... 36
ANNEXURE: SECTOR DEVELOPMENT MAPPING.......................................................................... 38
REPORT 1: BASELINE REVIEW .......................................................................................................... 39
REPORT 2: DEVELOPMENT POTENTIAL ANALYSIS ................................................................... 40
REPORT 3: FORMULATING GTM LED STRATEGY......................................................................... 41
REPORT 4: IMPLEMENTATION PLAN AND INSTITUTIONAL ARRANGEMENTS .................... 42




Report compiled by Procurement Dynamics in collaboration with Glen Steyn & Associates                                                   May 2007
Greater Tubatse Local Economic Development Strategy                                            3




EXECUTIVE SUMMARY

Greater Tubatse Municipality appointed Procurement Dynamics (Pty) Ltd (in
collaboration with Glen Steyn & Associates) to undertake a Local Economic
Development Strategy (LED) for the Municipality. The LED is a component of the
Municipality’s overall strategic plan as outlined in the Integrated Development
Planning process. The strategy provides the Municipality with guidelines to
create and facilitate economic development, realise the underlying economic
development potential, and encourage private sector investment and job
creation.

The total population in the area is approximately 270 117. A very large proportion
of the labour force in Tubatse Municipality is unemployed (73%) - based on an
expanded unemployment definition) and 42.7% of the total households has no
income. Development constraints in the Municipality include inter alia lack of
education and skills, and lack of infrastructure. Furthermore, health services were
also found to be lacking. Weak capacity within the municipality as well as
absence of land tenure for investment in rural areas was also seen as
development constraints. These constraints need to be addressed to ensure
sustainable economic growth and development in Greater Tubatse.

The sector which contributed the most to the GGP in the local economy is the
mining sector (34.1%) followed by government services (14.0%), finance and
business services (13.2%), manufacturing (10.5%) and the trade & hospitability
sector (10.2%).

In light of the key sectors identified in Greater Tubatse Municipality and the
existing opportunities identified, the LED Strategy advocates four programmes
for economic development. This comprises (1) Sector Development, (2)
Economic Infrastructure Support, (3) Social Development, and (4)
Institutional/Governance Reform.

These programmes have been identified during the process of consultations with
various role players including government authorities, the community, and local
businesses. The cluster development approach as articulated in the Provincial
Growth and Development Strategy also served as a guideline.

These programmes are further supported by strategic thrusts and relevant
projects. The projects that have been identified in the LED are aimed at
economic development by ensuring that more job opportunities are created, skills
development takes place and that opportunities are created for SMME
development. Priority projects were identified based on the developmental goals
identified below and the project prioritization methodology as articulated in
Annexure 3.


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Greater Tubatse Local Economic Development Strategy                                             4


The following table indicates the programmes along with strategic thrusts
identified.

Table 1: GTM LED Strategy programmes & thrusts
 PROGRAMME                                       THRUSTS
 1. Sector Development                           1.1 Mining Cluster Development
                                                 1.2 Horticulture Cluster Development
                                                 1.3 Meat Cluster Development
                                                 1.4 Tourism Cluster Development
                                                 1.5 Nodal Development
                                                 1.6 Informal Sector Development
 2. Economic Infrastructure Support              2.1 Roads & Transport
                                                 2.2 Water
                                                 2.3 Electricity
                                                 2.4 Telecommunications
                                                 2.5 Infrastructure Investment Plan
                                                 2.6 Enterprise Development
 3. Social Development                           3.1 Education and Skills Development
                                                 3.2 Housing
                                                 3.3 Health
 4. Institutional/Governance Reform              4.1 Regulatory Framework
                                                 4.2 Waste & Environmental Management
                                                 4.3 Financial Management
                                                 4.4 LED Directorate Capacity Building

To ensure that the identified projects are implemented, a dedicated LED
Directorate is proposed. The latter will be headed by the Director: LED and
supported by Manager: LED and LED Coordinators/Officers specialising in Policy
& Research, Skills Development, Tourism Development & Marketing, Agriculture
& Cooperative Development and Trade & SMME Development & Support.

The establishment of an LED Forum would further aid the Municipality in the
implementation of LED driven projects. The proposed mining, tourism, agriculture
and trade & SMME working groups would serve as anchor sub structures within
the Forum to coordinate and support LED initiatives.




Report compiled by Procurement Dynamics in collaboration with Glen Steyn & Associates    May 2007
Greater Tubatse Local Economic Development Strategy                                            5

 SECTION 1: INTRODUCTION
Section 1 gives a broad orientation towards the purpose of the report, policy
framework, and the methodology that was followed.

The following aspects are thus discussed in this section:
   • Background to the study
   • LED policy and legislative framework
   • Methodology

1.1 BACKGROUND
Greater Tubatse Municipality appointed Procurement Dynamics (Pty) Ltd (in
collaboration with Glen Steyn & Associates) to undertake a Local Economic
Development Strategy (LED) for the Municipality.

The main purpose of this project is to develop an integrated LED strategy that is
linked to relevant planning frameworks such as the IDP, the Limpopo Growth and
Development Strategy, the Provincial Spatial Framework, the National Spatial
Development Perspective and ASGISA. The strategy should further tackle a
range of development challenges, including, among others:

    •    High level of poverty and unemployment in Greater Tubatse Municipality
    •    Business support services and inadequate entrepreneurial skills
    •    Collaboration between formal business sector and emerging business
         sector
    •    Limited private investment in the job-rich sectors despite significant
         business opportunities
    •    Creating opportunities for the marginalised
    •    Facilitating youth and women development
    •    Promoting and supporting rural development initiatives
    •    Urban renewal programmes.

The specific objectives of this project as stated in the terms of reference are:

    •    To develop an LED strategy that will:
             o Address the economic development objectives of the municipality
                through the identification and co-ordination of opportunities for
                development, and
             o Become the basis for the municipality to partner with other
                stakeholders (civic, business, NGOs, labour, etc) through formal
                LED forums representing all the identified stakeholders and other
                interested groups.
    •    Over and above the identified economic development issues, the LED
         strategy will also be an important basis for:-



Report compiled by Procurement Dynamics in collaboration with Glen Steyn & Associates   May 2007
Greater Tubatse Local Economic Development Strategy                                            6

              o Development of Platinum City 2015 Growth Plan (infrastructure
                planning and development)
              o Feasibility study for establishment of Local Economic Development
                Agency.


1.2 LED POLICY AND LEGISLATIVE FRAMEWORK
Local economic development planning derives its focus from various government
legislation and policy.

Section 152 of South African Constitution, requires municipalities to promote
social and economic development. Section 153 of the Constitution mandates
municipalities to structure and manage their administration, budgeting and
planning processes to give priority to the basic needs of the community, and to
promote the social and economic development of the community. Municipalities
are expected to develop local economic development strategies as means of
exploiting economic opportunities within their areas of jurisdiction. Municipal LED
strategies are further aimed at creating an enabling environment for business
creation, expansion and retention.

We also emphasize here the legislative directives that relate to coherence and
alignment with planning frameworks of other spheres of government. For
example, the Municipal Systems Act (32 of 2000) 24(1) states that ‘The planning
undertaken by a municipality must be aligned with, and complement, the
development plans and strategies of other affected municipalities and organs of
state so as to give effect to the principles of cooperative government contained in
section 41 of the Constitution.’

Accordingly, there must be alignment between the Tubatse LED strategy with
those of other neighbouring municipalities, the Sekhukhune 2025 Development
Strategy and the Integrated Development Plans (IDPs), Medium-Term Revenue
and Expenditure Framework (MTREF), the Limpopo Growth and Development
Strategy, and the National Spatial Development Perspective (NSDP), among
others.

1.3 METHODOLOGY
The strategy was formulated through a process that goes through 4 phases as
described below:

         Phase1: Stakeholder mobilisation and baseline review
         Phase 2: Development Potential Analysis
         Phase 3: LED Strategy formulation
         Phase 4: Implementation plan and institutional options




Report compiled by Procurement Dynamics in collaboration with Glen Steyn & Associates   May 2007
Greater Tubatse Local Economic Development Strategy                                            7

Phase 1: Stakeholder mobilization and baseline review

This stage involved mobilizing stakeholders from various sectors such mining,
agriculture, the trade sector and local community representatives

The baseline review went beyond mere statistical data analysis primarily
because reliable and useful information is not readily available at a disaggregate
level of a local municipality. The outcome of the review was a clear picture of the
economy of Tubatse, what the key drivers of growth are; how they can be
supported; constraints to present and future growth of the key sectors; how the
economic activity shapes the demographic profile of the area presently and into
the future; what infrastructure exists and its adequacy for present and future
economic activity. This culminated in a status quo report of the Municipality.

Phase 2: Development potential analysis

The purpose of this step was to identify the lead sectors for potential
development, the business linkages, and analyse the need for cluster
development and diversification into other sectors such as tourism.

Phase 3: LED Strategy formulation
The formulation of the strategy involved the consolidation of the baseline review
and the potential analysis into a coherent framework that identifies what can and
cannot be done; the phasing into stages the actions that must be taken to ensure
growth and development.

This included functional programme per lead sector identified in previous phases
and action plan towards addressing the identified development opportunities. The
strategy will also have targets focused on unlocking the development potentials,
exploiting comparative and competitive advantages.

Phase 4: Implementation Plan and Institutional Options

The aim of this step was to identify various funding sources, developing
institutional structures for implementing the LED Strategy, as well as identifying
various development initiatives, which would attract businesses and industries to
the area. This step also describes the roles of the LED Directorate within the
municipality and how to implement the LED with the aid of external resources.

1.4 STRUCTURE OF THE REPORT
The remaining structure of the report includes the following sections:

    •    Section 2 – Baseline Review




Report compiled by Procurement Dynamics in collaboration with Glen Steyn & Associates   May 2007
Greater Tubatse Local Economic Development Strategy                                            8

The baseline review provides a brief analysis of the socio-economic situation in
Tubatse. The analysis covers issues such as economic and social indicators
including contribution to GGP, education, employment, infrastructure, spatial, etc.

    •    Section 3 – GTM Local Economic Development Strategy

Key economic sectors in Tubatse are identified and development objectives are
briefly outlined. Furthermore LED Strategy programmes are provided. Each
programme is supported with thrusts and projects.

    •    Section 4 – Implementation Plan and Institutional Arrangements

This section provides guidelines with regards to the implementation of projects in
Tubatse. Anchor projects are identified and then prioritized. Suggestions on
strengthening the capacity to implement LED projects successfully in Tubatse
are further articulated.




Report compiled by Procurement Dynamics in collaboration with Glen Steyn & Associates   May 2007
Greater Tubatse Local Economic Development Strategy                                            9

 SECTION 2: BASELINE REVIEW
This section provides an analysis of the socio-economic situation in Greater
Tubatse Municipality.

The following aspects are analysed:
   • Social profile
   • Economic profile
   • Spatial analysis
   • Infrastructure status
   • Environmental conditions

2.1 SOCIAL PROFILE
It has been shown that the population of GTM is the largest and the fastest
growing. Various sources of information have pointed to a possibility of in-
migration into Tubatse from neighbouring municipalities in search of opportunities
in the mining sector.

Another trend was observed of migration within Tubatse from outlying areas to
areas that are better served with infrastructure and access to services. This
suggests that areas like Burgersfort are going to have to plan for a much faster
growing population than the rest of the municipality. On the other hand, the rate
of skills development was found to be lagging behind the needs of industry and
the quality of education largely questionable.

Health services were also found to be lacking. This suggests a need for
investment in social infrastructure alongside increased investment in economic
infrastructure. There is a need of paying particular attention to the movement of
people, and planning accordingly.

2.2 ECONOMIC PROFILE
Tubatse Municipality has significant mining and manufacturing (ferro-chrome
smelting) sectors, but unemployment is still considerably above the provincial
average. Information from media releases suggest that new mining
developments that have already been announced could reduce unemployment
from 73% (expanded unemployment rate definition) in 2001 to 44% in 2010.

Further reduction in the unemployment rate will depend on effective intervention
by public sector institutions to facilitate economic sector diversification through
competitive cluster value-chain development.            This implies upstream
development in the manufacturing and trade sectors to provide essential items in
the mining supply chain by local entrepreneurs. It also implies side-stream




Report compiled by Procurement Dynamics in collaboration with Glen Steyn & Associates   May 2007
Greater Tubatse Local Economic Development Strategy                                          10

development in the form of construction and urban renewal. This approach is
consistent with the Limpopo Growth and Development Strategy.

Constraints to cluster development include:
      Lack of infrastructure, with reference to water reticulation and availability,
      road conditions, electricity and sanitation.
      Land ownership limitations in former homeland areas and inappropriate
      land-use management.
      The shortage of skills, particularly in the local labour force and among
      unemployed people.
      Institutional capacity limitations in local government, with specific
      reference to economic development management capacity.

2.3 SPATIAL ANALYSIS
The main issues that have a direct or indirect impact on spatial development, or
are a result of the current spatial development pattern in Greater Tubatse
Municipal Area, are the following:
   • Informal and marginal economic activities are normally not the first choice
      of participants, but are the result of limited options due to limited formal
      sector opportunities, education and capital;
   • The natural resource base and economy of the Greater Tubatse Municipal
      Area is not yet fully developed and therefore cannot support the local
      population, forcing a large percentage of people in the economically active
      age cohorts to seek employment opportunities outside of the municipal
      area;
   • The scarcity of arable land forces communities to cultivate steep slopes
      and other environmentally unsuitable areas, which increases the
      occurrence of erosion with the resultant loss of fertile soils;
   • Rapid low density urban sprawl sterilises land that may have been used
      for agricultural and mining purposes;
   • Buying power limitations in settlements discourage investment in trading
      outlets, which leads to a leakage of buying power;
   • A second implication of the low levels of buying power is the inability of the
      community to pay taxes (e.g. property tax) for even the most basic level of
      services. This situation also weakens the financial viability of the local
      municipality and makes it difficult to provide the necessary social services
      and municipal infrastructure in the area;
   • The majority of land in the municipal area is held in trust for communities.
      Traditional authorities have a major influence on the manner in which land
      is made available to individuals for settlement, as well as the use thereof
      for economic purposes (e.g. mining, agriculture, tourism, etc.). Most of
      these decisions are made on an ad hoc basis and usually without any
      consideration of the impact it may have on the spatial pattern and the
      rendering of cost-effective and efficient services to communities.



Report compiled by Procurement Dynamics in collaboration with Glen Steyn & Associates   May 2007
Greater Tubatse Local Economic Development Strategy                                          11

    •    There is no formal security of tenure in the rural areas.
    •    Land claims are a major factor influencing development in the area.

2.4 INFRASTRUCTURE STATUS
There is a significant backlog in economic infrastructure in Greater Tubatse. Of
particular concern is the roads condition and access to water. In addition
electrical and telecommunication connectivity is inadequate, particularly for
residential use. This provides an investment opportunity for Tubatse, whose
current infrastructure investment in respect of roads, water and waste, electricity
and telecommunications is marginal.

Tubatse Municipality will need a single overarching plan for physical
infrastructure that would provide the vehicle for sector expansions and
development and integrated settlement.

2.5 THE ENVIRONMENT
There are three main factors that are likely to continue to pose an environmental
threat in GTM namely: development, climate changes, and waste management.

The developments that are taking place are not without a cost to the
environment. The development phase of mining and the production phase will
pose serious threats to the environment unless well managed. The national
regulations for the management of the environment, including water and air
pollution seem adequate and all that is necessary is their enforcement.

The changes in the climate will undoubtedly affect the environment in an
unimaginable way. Although most of GTM has only experienced between 1.6 to
1.7 degrees increase in the temperature, if past trends are expected to continue,
this could lead to a rapid loss of water resources and other bio species. A further
decline in the contribution of agriculture to GGP would result.




Report compiled by Procurement Dynamics in collaboration with Glen Steyn & Associates   May 2007
Greater Tubatse Local Economic Development Strategy                                                   12

 SECTION 3: GREATER TUBATSE LED STRATEGY
The purpose of this section is to provide the local economic framework which
includes development programmes and associated projects, which are aimed at
regenerating Greater Tubatse economy.

Opportunities for economic development in the area were identified through
consultation, desktop studies and business interviews. These opportunities are
categorized into projects to support each programme and thrust in this section.

This section focuses on the following aspects:

    •    Targeted development objectives
    •    Brief analysis of programme and projects

3.1 TARGETED DEVELOPMENT OBJECTIVES
3.1.1 Accelerated Economic Growth

The economy of Greater Tubatse depends highly on mining, government
services, manufacturing, finance, trade, transport and communication sectors
(see table below). The relative contribution of agriculture and construction is very
low.

Mining contribution is both directly and indirectly through spin-offs or multiplier
effects within the other economic sectors, for instance the increase in demand for
housing and elated infrastructure services for the mineworkers. This sector is
expected to expand exponentially in the next five years. Thus, interventions
have been articulated that should support acceleration of the development of this
sector and its subsequent contribution to local economic growth.

Table 2: Sector GGP Contribution in Tubatse, 2005
 SECTOR                                                               GGP                              %
                                                                      CONTRIBUTION          CONTRIBUTION
 Mining and Quarrying                                                      R1 500 million       34.1
 Government Services                                                        R614 million        14.0
 Finance, Real Estate and Business Services                                 R581 million        13.2
 Manufacturing                                                              R460 million        10.5
 Trade, Repairs, Hotels and Catering                                        R450 million        10.2
 Transport, Storage and Communication                                       R310 million        7.0
 Personal Services                                                          R167 million        3.8
 Water and Electricity                                                      R114 million        2.6
 Agriculture                                                                R145 million        3.3
 Construction                                                                R57 million        1.3
 TOTAL                                                                    R4 398 million        100
Source: Own calculations




Report compiled by Procurement Dynamics in collaboration with Glen Steyn & Associates            May 2007
Greater Tubatse Local Economic Development Strategy                                          13

Although agriculture seems to dominate most land use, most of the land that is
under cultivation is used for subsistence purposes. Only a small percentage of
the land is under commercial farming. Amongst others, the scarcity of water is
the reason why agriculture is the least contributor to the GGP of the local
economy. Moreover the status of land ownership and the fact that large
percentage of the land in Tubatse is under land claims hampers the development
of the agriculture sector.

Assessing the agriculture potential in the municipality could help unlock some of
the factors that inhibit the full usage of the land. The horticulture and meat cluster
development interventions proposed in this document can go a long way in
securing the livelihoods of most of the rural poor and marginalised communities.

There is also the trade sector, which includes all kinds of retail businesses. This
is, however, affected negatively by low employment levels, which impacts on the
buying power of the people.

Tourism has a potential to boost the local economy but has not been fully
exploited yet, and still needs coordination. Development potential interventions
have been proposed in this study and if implemented successfully will assist in
unlocking economic opportunities.

Besides the sectoral interventions, the LED Strategy advocates an integrated
intervention mechanism that includes instruments such as skills development,
infrastructure investments, enterprise development programmes, institutional
reform, etc. to grow the economy of Tubatse.

Although desk-top analyses suggest that the Tubatse economy has grown at a
rate of 4% in 2005, local observation suggests that is must be higher than the
national average. In the absence of a local survey, it is therefore assumed that
the current economic growth rate is 5%. The target for economic growth
therefore becomes 6% per year from 2007 to 2009 and 6.5% from 2010
onwards.

3.1.2 Employment Creation

According to the census of 2001 (see table 3 below), there were 19,227 persons
employed in Tubatse Municipality in that year and 30,678 persons who were
actively looking for work but who could not find it. This means that according to
the strict or official definition of unemployment, the unemployment rate in
Tubatse in 2001 was 61%, compared to a similar 61% for Sekhukhune District as
a whole and 36% in Limpopo.

In addition to the unemployed, there were 21,530 discouraged work seekers.
These are people who would like to work, but no longer make any active effort to




Report compiled by Procurement Dynamics in collaboration with Glen Steyn & Associates   May 2007
Greater Tubatse Local Economic Development Strategy                                          14

find work, either as a result of previous disappointments or due the lack of
resources to travel and apply for work.

The labour force according to the strict definition, excludes the discouraged work
seekers. This number comes to 49,905 persons, which was 18.5% of the
municipal population of 270,116 persons in 2001. The international rule of thumb
regarding this relationship in developing areas is between 25% and 30%. The
18.5% relationship therefore seems artificially low.

When the discouraged work seekers are added, the expanded labour force is
estimated as 71,435 persons, which is 26% of the population and exactly on the
international norm. The expanded labour force is therefore considered to be a
more accurate reflection of the actual labour supply situation in Tubatse
Municipality.

According to the expanded definition, which includes discouraged work seekers,
the unemployment situation is much worse at 73% in Tubatse, 72% in
Sekhukhune and 49% in Limpopo.

Strict unemployment in Limpopo has improved slightly from 36% in 2001 to
30.1% in September 2005 (LFS). It is possible that the situation has also
improved even more in Tubatse and the district unemployment rate is projected
at between 54% and 57%, depending on the level of local recruitment. The issue
of local unemployed persons being competent for the new jobs that are created
is crucial in terms of local economic development. A level of up to 40% foreign
labour is normal for mining companies in cases where local labour does not
qualify in terms of job requirements or where local persons are unwilling to work
underground. This issue is important not for the sake of promoting social tension
within communities, but because it requires a particular focus in terms of skills
development among unemployed persons.

The strict labour force in Tubatse is growing at a rate of approximately 650
persons per year (2002 -2014), whereas the expanded labour force is growing at
930 persons per year. These are the number of jobs that have to be created for
the unemployment rate not to become worse according to the two different
definitions. If a strict unemployment rate of 30% is to be achieved in 2014 (half
of the 61% in 2001), then there should be 41,400 jobs in Tubatse Municipality by
then (70% of 59,142). A growth rate of 1.3% is assumed for every year, based
on population growth projections for the municipality that were commissioned
from the Bureau for Market Research at UNISA. This implies 1700 new jobs
every year from 2002 to 2014.

If the expanded (more realistic) definition is used, and a target of 36% is set for
2014 (half of 72%), then there should be 54,080 jobs in Tubatse Municipality by
then (64% of 84,500). The expanded definition implies that 2,680 new jobs need
to be created every year from 2002 to 2014.



Report compiled by Procurement Dynamics in collaboration with Glen Steyn & Associates   May 2007
Greater Tubatse Local Economic Development Strategy                                               15


Table 3: GTM Labour Market
 2001          Employed                                                                         19227
 2001          Unemployed                                                                       30678
 2001          Strict Unemployment Rate                                                          61%
 2001          Strict Labour Force                                                              49905
 2001          Discouraged Workers                                                              21530
 2001          Expanded Labour Force                                                            71435
 2001          Expanded Unemployment Rate                                                        73%
 2014          Target for Expanded Unemployment Rate                                             36%
 2007-2014     Target for Job Creation Per Year (expanded unemployment rate)                     2680
 2007-2014     Target for Job Creation Per Year (strict unemployment rate)                       1700


The magnitude of the job creation need indicates that significant interventions are
required for any meaningful impact to be made on the current high level of
unemployment.

3.1.3 Poverty Reduction

According to the Limpopo PGDS, Sekhukhune District (of which Greater Tubatse
is part thereof) is one of the areas with the highest number of people in poverty.
This is attributed to the fact that this district draws people from the rural areas in
search of work. Migrant labour and job expectations are therefore distorting the
poverty profile of the district. This is, however, alarmingly high and it has a
significant bearing on the level of human development.

Distribution of income is highly skewed. It is evident from table below that a very
large proportion of households in Tubatse Municipality (42.7%) has no income
and has to rely on relatives for handouts. Only 27.4% of households earned
above R9,600 per year in 2001, which was the poverty datum line at the time.
This is consistent with the high level of unemployment and is also symptomatic of
the sectoral economic structure of Tubatse Municipality.

Table 4: Income Distribution in Tubatse Municipality; 2001
 Income Level                                                                           Total
 No income                                                                              23997
 R1 - R4 800                                                                             4263
 R4 801 - R9 600                                                                        12540
 R9 601 - R19 200                                                                        6393
 R19 201 - R38 400                                                                       4624
 R38 401 - R76 800                                                                       2712
 R76 801 - R153 600                                                                      1090
 R153 601 - R307 200                                                                      371
 R307 201 - R614 400                                                                      108
 R614 401 - R1 228 800                                                                     33
 R1 228 801 - R2 457 600                                                                   79
 R2 457 601 and more                                                                      21
 Total                                                                                  56229
Source: Stats SA; Census 2001




Report compiled by Procurement Dynamics in collaboration with Glen Steyn & Associates     May 2007
Greater Tubatse Local Economic Development Strategy                                                                                             16

Considering that the majority of the people of the area are unemployed, unskilled
or semi-skilled and still live in poverty, this poses significant socio-economic
challenges. The demographic and economic profile of the area in the baseline
review assessment suggested that urgent programmes of action against poverty
are required. This would include, firstly, attainment of the above goals of growing
the economy that can generate jobs. Secondly, identification and description of
poverty pockets in the area for maximum impact of suggested interventions.
Informal sector and enterprise development programmes, social development
interventions such as targeted skills development, education and health and
institutional interventions are advocated and successful implementation thereof
would address poverty in Tubatse.

In this regard poverty is viewed here as a multi-dimensional phenomenon
requiring more than simply an income-based solution.

3.2 LED STRATEGY BUILDING BLOCKS
3.2.1 Sector development

The main objective of the proposed interventions under this programme is to
encourage current and future sectoral expansion activities in the area and to
develop an economic base, which could provide business and employment
opportunities for the local community.

            3.2.1.1 Mining cluster development

There is a pipeline of mining development projects in Tubatse Municipality that
could increase the current platinum mines from two to twelve by 2015 and that
could double the capacity of the three ferro-chrome smelters.

The strategic thrust behind mining cluster development is to adopt the cluster
value-chain development approach, as a vehicle to raise the international
competitiveness and investment rating of the mining industry in Tubatse
Municipality in order to accelerate sustainable job creation and economic growth
and to reduce poverty.

Proposed targets include:

      •     Creation of 700 jobs per jobs for the local community;
      •     20% local procurement within the mining supply chain by 2010;
      •     Increased percentage contribution to GGP from 34.1% to 50%;
      •     Accelerate economic growth from the current 5%1 to 6% between 2007
            and 2009 and to 6.6% from 2010 onwards;
1
  Although desk-top analyses suggest that the Tubatse economy has grown at a rate of 4% in 2005, local observation suggests that is must be
higher than the national average. In the absence of a local survey, it is therefore assumed that the current economic growth rate is 5%. The target
for economic growth therefore becomes 6% per year from 2007 to 2009 and 6.5% from 2010 onwards.




Report compiled by Procurement Dynamics in collaboration with Glen Steyn & Associates                                                  May 2007
Greater Tubatse Local Economic Development Strategy                                          17

    •    Growth in sectoral investment by 5% per annum; and
    •    Establishment of a dedicated Mining Cluster Working Group by July 2007.

Strategic interventions to achieve the abovementioned targets include:

    •    A Procurement/Business Development Support Plan linked to the
         proposed Steelpoort Mining Supply Park;
    •    Mining Skills Development to promote the recruitability of local labour;
    •    Facilitation of access to infrastructure for mining developments; and
    •    Formation of a Mining Cluster Working Group to combine and integrate
         public and private sector contributions to development and to align the
         interventions of various public development institutions for greater impact.

The action plan for business development support for local emerging
entrepreneurs to successfully participate in the mining supply chain must include
the identification of products and services; the identification and screening of
entrepreneurs and the facilitation of appropriate support services to the screened
entrepreneurs. These support services refer to training, access to finance and
access to business premises. Training refers to business skills, as well as
technical skills that are appropriate to the particular product or service that is
being traded.

It is essential that the skills development initiatives for mining cluster
development should be extended to illiterate unemployed persons. The adult
basic education and training programme of the Limpopo Department of
Education in Tubatse should be considerably expanded. Training of unemployed
persons by the Department of Labour in Limpopo should include an option that is
relevant to mining. A more functional relationship needs to be facilitated between
the mining SETA (MQA) and employers in order to improve access to and the
efficient application of skills development levies within Tubatse Municipality.
Finally, Tubatse Municipality should facilitate the nomination of a local person,
preferably from the mining industry, to serve on the Limpopo Skills Development
Forum that is chaired by the Department of Labour.

Roads rehabilitation, water supply, energy usage and housing were identified as
key infrastructural needs for the mines. However, given the limited local budgets
it is proposed that Tubatse engage effectively with infrastructure implementing
agencies and further consider the development of public-private partnerships,
where possible

Comprehensive action plans for business development support, skills
development & infrastructure facilitation interventions are outlined in Phase 4
report.

The primary role of Tubatse Municipality is to establish a Mining Cluster Working
Group whose purpose would be co-ordination of policy issues and integration of



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operational issues among all stakeholders in support of accelerated mining
development in Tubatse.      These operational issues include infrastructure
provision, spatial development, skills development and business development
support for emerging entrepreneurs in the mining supply chain. The mandate of
the proposed Working Group is discussed in detail in Phase 4 report.

The municipality should further consider a visit to the City of Sudbury in Northern
Ontario, Canada in order to obtain first hand experience of international best
practice with regard to mining cluster development.

         3.2.1.2 Tourism cluster development

It is recommended that Tubatse Municipality should adopt two different strategies
with regard to tourism cluster development. The first is to promote a small
number of high-impact projects as identified in the Sekhukhune Tourism
Development Strategy and the second is to promote small, local community
tourism projects that can be financially sustainable.

Proposed targets include:

    •    Creation of 140 jobs per year for the local community;
    •    Increased percentage contribution to GGP to 8%;
    •    Accelerate economic growth from the current 5% to 6% between 2007 and
         2009 and to 6.5% from 2010 onwards;
    •    Growth in sectoral investment by 5% per annum;
    •    Establishment of a dedicated Tourism Cluster Working Group by July
         2007; and
    •    Establishment of one tourism flagship project every year between 2007
         and 2010.

Strategic interventions to achieve these targets include:

    •    The development of the Tjate Heritage Project;
    •    Development of a mountain resort at Echo Caves;
    •    Development of a tourist route that would link Tjate and Echo caves with
         smaller tourist attractions throughout Tubatse and with tourist routes
         outside Sekhukhune; and
    •    Establishment of a tourism working group for Tubatse.

The proposed action plan for Tjate Heritage Project is that stakeholders (public
and private) should be called together under the auspices of the Limpopo
Heritage Resource Agency to facilitate the implementation of the Tjate Heritage
Management Plan and to develop an economically viable model for the provision
of infrastructure at this site.




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The proposed action plan for the Echo Caves Mountain Resort is for Tubatse
Municipality to arrange an exploratory discussion with the owners of the current
facility at Echo Caves, with the Planning and Economic Development department
of Sekhukhune District Municipality and with the Tourism Branch of the Limpopo
Department of Economic Development, Environment and Tourism. The purpose
of the exploratory discussion should be to establish the willingness of the current
owner to participate in the development of an expanded mountain resort and
escarpment adventure route as envisaged in the Sekhukhune District Tourism
Development Strategy.

The Southern Drakensberg is a case study on sustainable and successful
adventure tourism destination development from which Tubatse Municipality can
learn from. Table mountain in Cape Town, Mount Kilimanjaro and The Blue
Mountains near Sydney Australia, are also good examples to learn from. The
evidence suggests that environmental impact has to be given particular attention.

The proposed action plan for Route Development is to appoint a suitable
consultant to investigate, assess and recommend options for route development
with Tjate Heritage Site and the Echo Caves Mountain Resort as two major
anchor projects. Smaller tourist attractions, such as Mahubahube and Mankele
(see previous planning documents), as well as other heritage sites, should be
assessed from a feasibility point of view. The consultant should also prepare a
management plan for the route in the event that a feasible route option can be
developed. It is essential that the route should link with other tourist routes
outside Tubatse Municipality.

A site visit to Kamoka Route (Sun Valley Tourism) should be considered, as it
could be useful to assist Tubatse Municipality with the route development
process. There are several other tourism route concepts to learn from. For
example, Route 62 is probably the best case study of a successful route as a
direct marketing drive for a particular geographical area.

         3.2.1.3 Horticulture cluster development

The strategic thrust behind horticulture cluster development is to improve the
competitiveness of this sub sector and to create opportunities for small emerging
farmers.

Proposed targets include:

    •    Creation of 170 jobs per year for the local community
    •    20% procurement within the horticulture supply chain from local
         entrepreneurs by 2010
    •    Increased percentage contribution to GGP from 3.3% to 5%;
    •    Accelerate economic growth from the current 5% to 6% between 2007 and
         2009 and to 6.5% from 2010 onwards;



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    •    Growth in sectoral investment by 5% per annum; and
    •    Establishment of a dedicated Horticulture Cluster Working Group by July
         2007.

The proposed strategic interventions to achieve these targets include:
   • Mapping the local horticulture cluster value chain and identifying cluster
       opportunities for local enterprises;
   • Establishment of a Horticulture Cluster Working Group mandated to
       combine and integrate public and private sector contributions to
       development and to align the interventions of various public development
       institutions for greater impact
   • Integrating the progress that is made with horticulture cluster
       development in Tubatse with the local economic development plan for
       Sekhukhune District and with the Limpopo Growth and Development
       Strategy.

The action plan to map the horticulture value chain can be derived from the
standard methodology for cluster development that is recommended in the
PGDS. It requires the appointment of a competent consultant to undertake a
study to map horticulture sub-sector value chain and to identify opportunities for
local enterprises. Detailed study contents are outlined in Phase 4 report.

The action plan to form a horticulture work group is for Tubatse Municipality and
the Tubatse Office of the Limpopo Department of Agriculture to invite all
commodity groups in the municipal area to an information meeting where the
cluster development process is explained and any information regarding the
cluster mapping process is provided. The consultant for the horticulture mapping
process should also be present. An interim working group should be elected or
nominated after the information meeting. The task of the working group should
be to deal pro-actively with the results of the cluster mapping process, that is
promote the development of new opportunities, lobby for the removal of
constraints,   facilitate the provision of essential infrastructure and skills
development programmes and build networks with other relevant organizations.
The composition of the working group can change as the need arises and as the
cluster development process gathers momentum.

The action plan for the integration of progress with regard to horticulture cluster
development in Tubatse with that of Sekhukhune and for this to be reflected in
the PGDS, is to request the Manager Planning and Economic Development at
Sekhukhune District Municipality to participate in the horticulture cluster working
group. This office will then be responsible for communication with the Office of
the Premier regarding the PGDS.




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         3.2.1.4 Meat cluster development

The strategic thrust informing meat cluster development is improvement of the
competitiveness of this sub sector and to creation of opportunities for small
emerging farmers.

Proposed targets include:

    •    Creation of 170 jobs per year for the local community
    •    20% procurement within the meat supply chain from local entrepreneurs
         by 2010
    •    Increased percentage contribution to GGP from 3.3% to 5%;
    •    Accelerate economic growth from the current 5% to 6% between 2007 and
         2009 and to 6.5% from 2010 onwards;
    •    Growth in sectoral investment by 5% per annum; and
    •    Establishment of a dedicated Meat Cluster Working Group by July 2007.

The proposed strategic interventions to achieve these targets are:

    •    Development of a Farmer Livestock Support Programme that focuses on
         cattle, goats and game production;
    •    Assessing the feasibility of a Feed Production Facility and Feedlots;
    •    Assessing the feasibility of a Meat Processing Centre/Abattoir

The main purpose of the livestock farmer support model should be to improve the
productivity and competitiveness of cattle, goat and game farming in Tubatse
Municipality.    This requires exploration of farmer support models and
establishment of a suitable combination of livestock farmer support activities that
is appropriate for Tubatse.

The following five critical elements should be included in the model:
   1) Balanced feed intake (hence the improved feed production referred to
       above)
   2) Breeding cycle management (to improve effective reproduction)
   3) Genetic improvement (to improve herd quality)
   4) Water supply (to provide more drinking points for animals in communal
       areas)
   5) Crime prevention (to remove the disincentive for livestock farming that
       arises from persistent livestock theft).

The proposed action plan for feed production and feedlots for each of these
three, cattle, goats and game, is to assess the demand for feed and use of local
raw materials (e.g. lucerne and sorghum) to produce feed for livestock
requirements and commissioning a study that assesses the viability of a local fee
production facility and feedlots.




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Still further down the value chain the feasibility of a local abattoir should be
considered. Meat packaging and distribution options should be assessed and
marketing channels should be evaluated in conjunction with commercial cattle
farmers in Tubatse.

Tubatse Municipality should play a role by mobilising appropriate development
assistance for support to emerging livestock farmers and facilitating the formation
of a Meat Cluster Working Group. The task of this working group should also be
to deal pro-actively with the results of the livestock farmer support process, that
is promote the development of new opportunities, lobby for the removal of
constraints,    facilitate the provision of essential infrastructure and skills
development programmes and build networks with other relevant organizations.

         3.2.1.5 Nodal development

The proposed objective is to adopt the spatial hierarchy as proposed in spatial
frameworks at the provincial, Sekhukhune District and Tubatse Municipality
levels in order to promote nodes where manufacturing value-added activities can
occur and where commercial facilities will be available to retain purchasing power
in the local economy. It is also essential that sustainable communities should be
promoted at these selected nodes, in the sense that residential property rights,
employment opportunities, essential urban infrastructure, shopping and
recreational facilities should all the available within a functional local
environment.

Family residential property development and the provision of suitable recreational
facilities are particularly important to encourage the permanent settlement of
employees with their families. Mining growth points have a tendency to attract
single employees who leave their families behind and migrate on a weekly basis.
This has inherent social challenges, but also keeps the proportion of earnings
that is circulated in the local economy at a minimum. Congestion in Burgersfort
must also be addressed. The central business district has become so
dysfunctional due to its inability to cope with the demands of growth, that new
investment is probably being discouraged.

The proposed targets include:

    •    Creation of 240 jobs per year for the local community;
    •    Accelerate economic growth from the current 5% to 6% between 2007 and
         2009 and to 6.5% from 2010 onwards; and
    •    Growth in investment by 5% per annum.

The proposed strategy is to develop nodal development plans as per the
provincial, district and local SDF frameworks’ node priority/growth hierarchy and
to appoint competent project managers to facilitate and co-ordinate the planning
and implementation of all the infrastructure, residential, economic, social, spatial



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and institutional aspects of development in the following nodes, particularly in the
context of the cluster development proposals that have been made in this report.
Table 5: Higher Order Settlement Classification in Tubatse Municipality
 Settlement                                           Classification
 Burgersfort                                          Provincial Growth Point (1st order)
 Steelpoort                                           District Growth Point
 Mecklenburg                                          Municipal Growth Point
 Orighstad                                            Municipal Growth Point
 Driekop                                              Municipal Growth Point
 Batau-Praktiseer                                     Population Concentration (2nd order)
 Ga Masha                                             Population Concentration (2nd order)
 Kgautswana                                           Third order service point
 Mophalema                                            Third order service point
 Mampuru                                              Third order service point
 Malokela                                             Third order service point
Source: Limpopo Spatial Rationale, 2002

The project managers should mobilize additional resources for this purpose
through the nodal status of Sekhukhune District in terms of the Integrated and
Sustainable Rural Development Strategy until all the standards for a provincial
growth point are achieved as indicated in the Tubatse Spatial Development
Framework.

A proper township establishment process has to be undertaken for the eight of
the proposed nodes (excluding Burgersfort, Steelpoort and Orighstad).
Township establishment processes should be done in terms of the relevant
legislation to formalise the nodes for residential settlement and the business
services that are associated with municipal growth points.

Considering the scarcity of land for economic and development purposes in the
area, it is important that the municipality embark on a parallel process to design
an effective land use management plan that should ensure that recommended
interventions on nodal development are implemented successfully. This should
be done in conjunction with current landowners (especially traditional leaders).

         3.2.1.6 Informal sector development

The proposed development objective is to provide sustainable livelihood
opportunities in the informal sector (second economy) for most of the people who
cannot be accommodated in the formal sector (first economy).

The proposed targets are:

    •    Creation of 200 jobs per year for the local community;
    •    Increased percentage contribution to GGP to 20% per annum; and




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    •    Accelerate economic growth from the current 5% to 6% between 2007 and
         2009 and to 6.5% from 2009 onwards.

The proposed strategic intervention is to formulate and implement an informal
sector development strategy in such a manner that every one of the 11
development nodes of Tubatse Municipality, as identified in the nodal
development section above, has a designated informal activity operating area,
with support services; and with opportunities for informal economy operators to
make a successful transition to the formal economy.

3.2.2 Economic infrastructure support

Infrastructure development is identified in the IDP for Tubatse as a priority.
Roads are vital for the transportation of goods, services, and local labour. While
water infrastructure and resources constitute a primary means of production
especially in agriculture and mining. Electricity is a means of production and
enabler of economic activity in all sectors and there should be a reliable supply to
ensure efficient production for business enterprises.

Proposed target include increased percentage of GGP spent on infrastructure by
the public and private sectors to an average of between 8 and 10% per annum
from 2007 until 2014.

         3.2.2.1 Roads and Transport

The objective is to ensure good road access into and within the area as part of
an economic strategy of upliftment and improvement.

Key interventions include (1) establishment of effective dialogue with
Implementing Agencies such as Roads Agency Limpopo, SANRAL and the
district municipality to ensure the prioritisation of the needs of GTM, (2) the
development of an Integrated Road and Transport Plan to create linkages
between road and other transport systems for Tubatse Municipality, and (3)
consideration of rail infrastructure development as an alternative means of
transportation, especially for freight.

In the short to medium term Tubatse Municipality should facilitate the upgrading
of R37 (between Burgersfort and Polokwane) and R555 (between Burgersfort
and Steelpoort). This should be a key priority for all economic infrastructure
support interventions.

         3.2.2.2 Water Supply

The objective is to provide uninterrupted water supply for residential and
business use




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Proposed options for addressing the water issue include improving efficiency of
water usage, water transfer schemes, development of groundwater, recycling of
treated sewage effluent for industrial use and re-allocation of water from other
uses through trading. Options that are obviously not feasible should not be
considered further, while implementation of the most suitable options will need to
be fast-tracked to meet the rapidly increasing demands.

Environmental Impact Assessments (EIA) of the feasible options, including a
socio-economic impact assessment would have to be undertaken and
consultation with DWAF should be prioritised to fund and implement these
options.

The municipality should therefore work closely with DWAF and the GSDM as the
water services authority for prioritisation of the uses as informed by LED strategy
priorities. Promotion of partnerships between the municipality and the Local
Government, Water & Related Services Sector and Construction Education &
Training Authorities should further serve to equip local community and
enterprises with the necessary skills to participate in the proposed water supply
projects.

         3.2.2.3 Electrification

The proposed intervention serves to ensure that the Municipality provides reliable
and economical electricity for both residential and industrial use.

Tubatse Municipality must work closely with ESKOM to ensure that they prioritise
uses that will unlock economic potential and contribute positively to social
development. Preliminary investigations show that ESKOM is confident that it will
have sufficient electricity supply for both economic and social purposes. In
addition to residential uses, the municipality must ensure that health facilities and
schools are connected to the national grid as this has long-term positive spin-
offs.

         3.2.2.4 Telecommunication

The aim is to improve the connectivity of the local area. As the very basic, access
to voice services is important and must be addressed immediately followed by
broadband connectivity as part of the long-term strategy.

The recommended way forward is for the municipality to keep up to date with the
process of awarding of Under Serviced Area License (USAL) as it should in the
long run be a solution to the connectivity problems.

Proposed actions to be pursued include:
   • Supporting ICT infrastructure development interventions;
   • Bargain with Telkom, Neotel, GSM network operators for better coverage
      of the area and for better prices.


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    •    Promote ICT based business opportunities in collaboration with public
         institutions such as the CSIR’s Meraka Institute.
    •    Providing Multipurpose Community Information Centres that comprises
         internet, e-mail, telephones, etc.

         3.2.2.5 Infrastructure Investment Plan

Infrastructure spending patterns in Tubatse are not always linked to or informed
by local economic priorities. Whereas the large businesses, like the mines, can
provide clear guidance with regard to their requirements such as water and the
resulting decision to build De Hoop dam, the needs of the smaller businesses are
not that visible. Therefore the infrastructure budgets need to be informed
annually by the LED priorities of Tubatse Municipality.

It is proposed that the Municipality should invest in a detailed Infrastructure
Investment Plan that would quantify the need for infrastructure, guided by this
report and other frameworks. The proposed plan should conform to best practice
for infrastructure investment and should support strategic thrusts as contained in
other government programmes such as ASGISA, NSDP, GSDM LED Strategy
and Limpopo GDS.

         3.2.2.6 Enterprise development

The strategic thrust behind enterprise development in Tubatse is to formalise the
organisation of informal and formal businesses in the municipality and to up-skill
and improve the quality of offerings by local enterprises

Proposed interventions include facilitation to the establishment of a formal
trade/business association and development of a Supplier Development
Programme (SDP) that is informed by local area issues. The aim of the SDP
would be to up-skill and improve the quality of offerings by the local enterprises
(especially for identified procurement opportunities in different sectoral clusters).

3.2.3 Social development

The proposed interventions serve to equip the local community with relevant
education and training and to further improve their well being so that they can
actively participate in the local economy.

         3.2.3.1 Education and skills development

The proposed skills development intervention serve to encourage the
municipality to produce trained and competent workforce to take advantage of
opportunities derived from various sectors in the local economy.




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The proposed strategic interventions include development of a Skills
Development Strategy, consideration of an Employment & Skill Development
Agency (ESDA) and youth and women empowerment development strategy.

The proposed course of action with regard to the Skills Development Strategy is
to commission a study and to tap into underutilized resources that have been
dedicated to the National Skills Development Strategy and to focus these
resources on the project proposals that have been identified specifically for
Greater Tubatse Municipality. This course of action should cover both the up-
skilling of currently employed persons and appropriate training for unemployed
persons.

This would require a closer collaboration with the relevant SETAs including,
amongst others, the Mining Qualification Authority (MQA) Tourism and
Hospitality SETA (THETA), Agricultural SETA (AgriSETA), Local Government
SETA (LGSETA) and the Wholesale and Retail Education and Training Authority
(WRSETA). Together with these SETAs, GTM and its local stakeholders should
determine the training needs, and development mechanisms for meeting the
training needs.

With regard to the proposed ESDA, the way forward is for Tubatse to prepare a
pre-feasibility study together with the department of Labour so as to assess its
developmental impact locally.

Youth and women empowerment is a priority issue in all government
development policies as youth and women empowerment and youth
development are critical to economic stability. The development of mentorship
and support programmes that link the youth and women with skills to jobs or
entrepreneurial support would serve as the way forward for Tubatse Municipality.
Umsobomvu Youth Fund has established mentoring programmes countrywide
and it should be the ideal institution to partner with in order to empower the local
youth and women.

GTM must work closely with the Department of Education to ensure that
educational problems are addressed holistically.

         3.2.3.2 Housing

The purpose of the articulated housing intervention is to ensure that the local
community is provided with proper housing. Secure housing is an IDP priority in
the municipality as the housing backlogs are high and lack of access to land
worsening.

It is proposed that Tubatse should develop a Housing Development Strategy to
address the challenges faced by communities in particular at the entry level. Key
to the strategy should be the resolution of the land issue to facilitate
development. This would entail bringing landowners both private and public


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around the table and getting their support for the strategy and showing how it is
in their interest to release the land for development as failure to do so will lead to
rapid increase of the informal sector

         3.2.3.3 Health

The purpose of the advocated intervention is to encourage the municipality to
ensure improved health services to the local population.

The recommended way forward is for the municipality to establish an effective
dialogue with the provincial and the district health authorities with a view to jointly
assessing local health facilities condition and recommending strategies to
alleviate the challenges.

3.2.4 Institutional/governance

Dysfunctional and unclear regulations create high transaction costs for local
businesses and possible investors. Municipalities need to support the local
businesses and possible investors in creating an enabling environment for
achieving their economic potential by offering a platform for businesses to have
confidence in expanding and investing in Tubatse.

It is also important to address environmental requirements for the municipality.
Development can have both positive and negative implications for the
environment, a balance that needs management.              Research shows that
municipalities experiencing growth and development such as in Tubatse, face the
challenges of the ‘brown’ issues agenda, such as air, soil, and waste pollution,
noise, and traffic congestion. These have a direct and immediate effect on
human health and safety, especially for the poor, and for business productivity.

Moreover, Greater Tubatse Municipality has limited financial resources. Yet this
municipality is tasked with the provincial and district agenda of sustainably
growing the local economy whilst improving the quality of life of its local
population. It is therefore essential that the municipality should consider a sound
local financial management plan that would support economic development.

         3.2.4.1 Regulatory framework

The purpose of regulatory interventions is to ensure that there is administrative
and regulatory flexibility to allow firms to adapt to relevant procedures and
standards without incurring prohibitive costs.

The way forward is for Tubatse Municipality to undertake a local business
enabling environment survey to identify and highlight policies and practices that
hinder business development. The Municipality should further consult with other




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government business regulatory organisations whose policies have an impact on
the operations of local enterprises.

         3.2.4.2 Waste Management Plan

The purpose of this institutional plan is to address pollution and possible threats
to the environment.

The way forward is for the municipality to design a waste management plan. The
purpose of such a plan would be to systematically formalise waste disposal in
Tubatse, particularly at villages, so as to reduce environmental pollution. The
plan should, among others, serve to identify highly affected areas and establish
relevant sites for waste disposal at nodal points.

Furthermore, the community has to be educated on the use of sites through the
use of, for example, an Environmental Awareness Campaign. Alternative
methods of waste removal such as a community-based system should be
considered. This has been proven to be a high impact initiative in that it
enhances service delivery and create jobs at the same time.

         3.2.4.3 Financial soundness and management

The aim is to grow the finances of the municipality and to develop the
management of the municipality’s finances. The municipality is currently
sustained through intergovernmental fiscal transfers and grants (comprising sixty
five percent of budget revenue). There is a need for financial management
capacity and information systems plan that will improve the tax base, through, for
example, service fees (rates) and other charges for the area.

The proposed action plan is to commission a financial capacity building study for
the municipality that will serve as guideline to mobilize and apply funds in an
effective manner. The study should identify alternative means to finance capital
projects from own revenue rather than reliance of the municipality upon grants.

Furthermore, creditworthiness is critical to support financial viability of the
municipality, as it enables it to access market-based credit instruments to finance
development. Due to the current situation of having a low revenue base the
municipality would find it difficult to borrow in capital markets other than the
public sector development finance institutions such as the DBSA.                The
municipality should consider inclusion of creditworthiness assessment in the
proposed study to assist them with their status and develop an improvement
strategy for the future.




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         3.2.4.4 LED Directorate capacity building

The purpose is to develop the capacity of Tubatse Municipality LED Unit in order
to implement and coordinate the LED strategy successfully. Internally, a
dedicated Local Economic Development Directorate (reporting directly to the
Municipal Manager) and an Interdepartmental Forum (to enhance LED
implementation and avoid duplication) are proposed.

Externally, a Local Economic Development Forum is advocated as a broader
stakeholder forum with the aim of providing input on municipal policies,
strategies, delivery processes and other strategic programmes. The LED Forum
would be assisted by sector working groups in Mining, Trade & SMMEs, Tourism
and Agriculture development.




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 SECTION 4: IMPLEMENTATION PLAN AND
 INSTITUTIONAL OPTIONS
The purpose of this section is to map the implementation path and advocate
prioritisation of key projects to unlock development potential in Tubatse.
Furthermore this section identifies institutions that are necessary to support the
implementation of Greater Tubatse Municipality LED Strategy. An overview of
internal and external institutional options is provided and the mandates and
responsibilities relevant to each institutional arrangement are defined.

4.1 IMPLEMENTATION AND PRIORITISATION
Implementation of this LED strategy urges the need to establish the proposed
institutional drivers. These establishments need to be accompanied by a political
ambition to ensure success. This ambition can be initiated and developed
through the inclusion of all interested and affected parties, stakeholders and role
players during the planning and implementation phases.

By including all of these, a political will, interest and communication are
stimulated which, all together will contribute to the success of the strategy.

Another important aspect for successful implementation is to ensure that all
involved take ownership of the programmes and projects. Without the taking of
ownership of a programme and/or project, success cannot be seen at the end of
the tunnel. It is also important to incorporate the monitoring and evaluation
elements of the strategy into the performance management system of Greater
Tubatse Municipality, to ensure accountability and responsibility for
implementation.

The process below provides general preliminary actions that are required to start
implementation of the LED Strategy.

1. Finalization of project action plans (as detailed in Phase 4 report) by the
   responsible institution/official(s)
2. Risk assessment of projects
3. Final choices of projects for implementation
4. Establishment of the coordinating and organizational bodies for
   implementation
5. Determining the role, reporting mechanisms and funding for the coordinating
   institution/official (s)



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Greater Tubatse Local Economic Development Strategy                                                          32

6. Setting up institutional mechanisms for implementation
7. Implementing the selected projects
8. Monitoring and evaluating implemented projects

The LED Strategy has identified projects that should be regarded as having
highest priorities and should be addressed in the immediate future as depicted in
the tables below. These projects have been identified as having the potential to
have the largest immediate impact in the area and requires the involvement and
facilitation from the Municipality to ensure increased economic development.
The methodology used to prioritize the projects is comprehensively covered in
Phase 3 report.

Table 6: Social, Economic and Institutional impact of Sector Development Projects
 Project                                  Social         Economic       Institutional   Total    Rank
 Procurement Plan                             80            100               85          265    Very High
 Mining Skills Development Plan              100             80               30          210    High
 Mining Infrastructure Support               100             95               85          280    Very High
 Tjate Heritage                               70             90               20          180    Medium
 Echo Caves                                   70             90               20          180    Medium
 Route development                            70             90               20          180    Medium
 Horticulture cluster mapping &               70            100               20          190    Medium
 opportunities
 Livestock FSP                                 70            100              30           200   High
 Feed Production & Feedlots                    40            90               20           150   Medium
 Meat processing centre/Abattoir               40            100              20           160   Medium
 Urban Development Plans                       70            100              65           235   High
 Informal Sector Development                   90            100              45           235   High
 Strategy


Table 7: Social, Economic and Institutional impact of Economic Infrastructure Support Projects
 Project                                Social        Economic         Institutional    Total    Rank
 Integrated Road and Transport              30            90                 100           220   High
 Plan
 Infrastructure Investment Plan             30              90              100            220   High
 Dialogue with Implementing                 30              90              100            220   High
 Agencies
 Water Resources Development                70              75               75            220   High
 Supplier Development Programme             100             90               45            235   High
 ICT Infrastructure strategy                100             85               20            205   High
 Trade/Business Association                 30              20               20            70    Low


Table 8 : Social, Economic and Institutional impact of Social Development Projects
 Project                                Social        Economic         Institutional    Total    Rank
 Skills Development Strategy                80            50                 85            215   High
 Job Placement Agency                       80            30                 20            130   Medium
 Youth and Women Empowerment                80            50                 20            150   Medium
 Plan
 Housing Development Strategy               30              30              100            160   Medium
 Dialogue with Health Authorities           30              90              100            220   High
 Dialogue with Education                    30              90              100            220   High
 Authorities


Table 9: Social, Economic and Institutional impact of Institutional/Governance Reform Projects
 Project                                Social        Economic         Institutional    Total    Rank
 Business Enabling Environment              20            90                 90            200   High
 Waste Management Plan                      50            20                 100           170   Medium




Report compiled by Procurement Dynamics in collaboration with Glen Steyn & Associates               May 2007
Greater Tubatse Local Economic Development Strategy                                                  33

 Financial Soundness &                      70              85               90         245   High
 Management
 LED Directorate Capacity Building          20              90               90         200   High




4.2 INSTITUTIONAL OPTIONS
4.2.1 Internal Arrangements

         4.2.1.1 LED Directorate

It is proposed that the LED Unit be a Directorate on its own, reporting directly to
the Office of the Municipal Manager. More importantly, as a strategic Directorate,
it requires a Head/Director, who will be able to represent economic development
issues in management and in other related structures effectively. It requires
someone who will effectively mobilise resources to implement the strategic
objectives of the LED Strategy, and also to drive the economic vision of the
municipality as a whole, without him/her being overloaded with non-LED related
issues.

The Director will be supported by two (2) technical experts who will serve as Unit
Managers in Policy and Research Unit and Enterprise Support Unit. The former
Unit will be mandated to (1) manage, coordinate and monitor economic related
policies, (2) coordinate and commission socio-economic research, (3) identify
LED constraints and opportunities and mitigating strategies, and (4) coordinate
the monitoring and evaluation framework of the LED department. Two (2)
coordinated would be required to serve within this Unit. The duties and
responsibilities of officials required to serve within this Unit are comprehensively
described in Annexure 5.

The mandate of the Enterprise Support Unit would be to (1) facilitate and
coordinate all municipal LED related projects, (2) facilitate growth of agricultural
and cooperative development projects, trade and SMMEs development, mining
projects, and tourism sector, and (3) skills development.

Four (4) Sector-specific Development Officers would be required to serve within
the Enterprise Support Unit. The duties and responsibilities of officials required
to serve within this Unit are comprehensively described in Annexure 5.

         4.2.1.2 Interdepartmental relations

The LED Directorate should also work closely together with other departments to
guarantee the alignment of efforts and to avoid duplication of work. For example,
Land Development, which deals with Spatial Development Frameworks (SDFs);
Strategic Support Service Department, which manages, oversee and monitor IDP
as well as maintenance and coordination of the intergovernmental relations; as



Report compiled by Procurement Dynamics in collaboration with Glen Steyn & Associates           May 2007
Greater Tubatse Local Economic Development Strategy                                          34

well as Technical Service department, which provides procurement services,
infrastructure development and service delivery.

4.2.2 External Arrangements

         4.2.2.1 LED Forum

This will be a formal structure consisting of key stakeholders from the mining,
tourism, agriculture, trade and SMMEs and representatives from the local
community, Tubatse Municipality, Sekhukhune District Municipality and Limpopo
Provincial Government.

The proposed Sector/Sub sector Cluster Working Groups would be part of this
Forum. Central to the goals of the Forum would be working towards achieving
the alignment of different policies and programmes of various stakeholders for
successfully implementation of Greater Tubatse Municipality LED Strategy

In a nutshell the Forum would:

•   Function as broader stakeholder forum;
•   Identify economic development bottlenecks hindering the development of
    GTM’s economy;
•   Identify interventions to address those constraints;
•   Provide relevant direction and assistance to sectoral working groups;
•   Provide input on other municipal policies, strategies, and delivery processes,
    e.g. IDP, crime prevention plan, etc;
•   Meet twice a year to discuss economic related problems;
•   Serves as a growth coalition where matters hampering the local economy are
    discussed and resolutions sought.

The functions of the proposed working groups include:

•   Serving as a stakeholder forum of the sector;
•   Identifying and communicating issues hampering business development of
    each sector in the GTM;
•   Identifying interventions to address those constraints;
•   Consulting with the broader LED Forum;
•   Developing and implementing the intervention strategies;
•   Participating in the implementation of all by-laws;
•   Establishing and maintaining partnerships to facilitate LED activities.

Members of the Mining Cluster Working Group should include:

•   Departmental Managers for Local Economic Development and for Technical
    Services at Sekhukhune District Municipality,



Report compiled by Procurement Dynamics in collaboration with Glen Steyn & Associates   May 2007
Greater Tubatse Local Economic Development Strategy                                          35

•   Head of Technical Services at Tubatse Municipality
•   Representative of the Planning Division in the Office of the Premier in
    Limpopo,
•   Mining directorate in the Limpopo Department of Economic Development,
    Environment and Tourism,
•   Representative of the DME Provincial office in Limpopo,
•   DWAF planning manager for Sekhukhune District,
•   Department of Labour Employment and Skills Development Manager for
    Limpopo,
•   Steelpoort Producers Forum,
•   Sustainable Development Managers of all mines in Sekhukhune District,
•   Representative of Eskom,
•   Representative of Spoornet,
•   Representative of the Roads Agency Limpopo,
•   Representative of DBSA for Sekhukhune District,
•   Representative of Trade and Investment Limpopo for the mining sector, and
•   Representatives of business development support and finance institutions in
    Limpopo.

Members of the Agriculture Cluster Working Group should include:

•   Department managers for Local Economic Development in GSDM and
    Tubatse
•   Representative of Limpopo Department of Agriculture
•   Representative of Greater Sekhukhune Department of Agriculture
•   Representative of commercial farmers in Tubatse
•   Representative of small emerging farmers in Tubatse
•   Representative of Trade and Investment Limpopo for agriculture sector
•   Representatives of business development support and finance institutions in
    Limpopo.

Members of the Tourism Cluster Working Group should include:

•   Department managers for Local Economic Development in GSDM and
    Tubatse
•   Representative of Limpopo Dept of Arts & Culture,
•   EPWP Coordinator,
•   Limpopo Heritage Resource Agency,
•   Sekhukhune Royal House,
•   Representative of Limpopo Tourism Parks Board,
•   African Heritage Consultants,
•   Bapedi Heritage Development,
•   Representative of Limpopo Department of Economic Development,
    Environment and Tourism, and
•   Representative of Trade and Investment Limpopo for tourism sector.



Report compiled by Procurement Dynamics in collaboration with Glen Steyn & Associates   May 2007
                 Greater Tubatse Local Economic Development Strategy                                                           36




                 Members of the Trade & SMME Development Working Group should include:

                 •    Representatives of business development support and finance institutions in
                      Limpopo (e.g. LIBSA, SEDA, LIMDEV, etc.).
                 •    Department managers for Local Economic Development in GSDM and
                      Tubatse
                 •    Representative of SMMEs in Tubatse

                          4.2.2.2 Intergovernmental relations

                 The facilitation of communication and cooperation between GTM and other
                 spheres of government, particularly the district municipality is ineffective
                 currently, and needs to be revived. The proposed LED Directorate has to work
                 towards aligning its programmes to those of district, provincial and national
                 government. In addition, sharing of information and expertise with other spheres
                 of government should be advocated. It is advisable that Tubatse Municipality
                 should commit itself to structures such as the District’s Intergovernmental Forum,
                 LED Forum and other strategic forums.

                 4.3 RESPONSIBILITIES                                      AND                IMPLEMENTATION
                     PARTNERS
                 The table below depicts the responsibilities and implementation partners of the
                 proposed interventions as articulated in Greater Tubatse Municipality Local
                 Economic Development Strategy.

Programmes/Projects                                        Responsibility                                Implementing Partner(s)
Sector development
 Procurement/Business Development            Head of LED                                       Mining Cluster Working Group
 Support Plan                                Trade & SMME Development & Support                LED Resource Centre (Turfloop)
                                             Officer                                           DPLG International Business Development Experts
 Skills Development                          Head of LED                                       Mining Cluster Working Group
                                             Skills Development Officer
 Infrastructure Support                      Head of Technical Services                        Mining Cluster Working Group
 Tjate Heritage                              Head of LED                                       Tourism Cluster Working Group
 Echo Caves                                  Head of LED                                       Tourism Cluster Working Group
                                             Tourism Development and Marketing Officer
 Route development                           Head of LED                                       Tourism Cluster Working Group
                                             Tourism Development and Marketing Officer
 Cluster Mapping & Opportunities             Head of LED                                       Agriculture Cluster Working Group
                                             Agriculture and Cooperative Development
                                             Officer
 Livestock FSP                               Head of LED                                       Agriculture Cluster Working Group
                                             Agriculture and Cooperative Development
                                             Officer
 Feed Production and Feedlots                Head of LED                                       Agriculture Cluster Working Group
                                             Agriculture and Cooperative Development
                                             Officer




                 Report compiled by Procurement Dynamics in collaboration with Glen Steyn & Associates                 May 2007
                Greater Tubatse Local Economic Development Strategy                                                          37

 Meat Processing Centre                     Head of LED                                       Agriculture Cluster Working Group
                                            Agriculture and Cooperative Development
                                            Officer
 Nodal Development Plans                    Head of LED                                       Representative of Provincial and District DLGH
                                            Chief Town Planner
 Informal Sector Development Strategy       Head of LED                                       LED Resource Centre (Turfloop)
                                            Trade and SMME Development & Support              Trade & SMME Development Working Group
                                            Officer
Economic Infrastructure Support
 Dialogue with Implementing Agencies        Head of Technical Services                        Representative of Limpopo Dept of Transport,
                                                                                              SANRAL, Road Agency Limpopo, and GSDM
 Integrated Road & Transportation Plan      Head of Technical Services                        Representative of Limpopo DoT, SANRAL, Road
                                                                                              Agency Limpopo, GSDM
 Water Sources                              Head of Technical Services                        Representative of DWAF, GSDM
 Dialogue with ESKOM                        Head of Technical Services                        Representative of ESKOM, GSDM
 ICT Infrastructure Strategy                Head of Technical Services                        Representative of Limpopo Department of
                                                                                              Communications, ICASA
 Infrastructure Investment Plan             Head of Technical Services and LED                Representative of GSDM, DBSA
 Business Association                       Head of LED                                       Representatives of business development support
                                            Trade and SMME Development & Support              and finance institutions in Limpopo (e.g. LIBSA,
                                            Officer                                           SEDA, LIMDEV, etc.).

 Supplier Development Programme             Head of LED                                       Representatives of business development support
                                            Trade and SMME Development & Support              and finance institutions in Limpopo (e.g. LIBSA,
                                            Officer                                           SEDA, LIMDEV, etc.).

Social Development
 Skills Development Strategy                Head of LED                                       Representatives of provincial and district
                                            Skills Development Officer                        Department of Labour
 Employment & Skills Development            Head of LED                                       Representatives of provincial and district
 Agency                                     Skills Development Officer                        Department of Labour
 Youth and Women Empowerment                Head of LED                                       Representatives of provincial and district
                                            Skills Development Officer                        Department of Labour
 Housing Development Strategy               Head of Technical Services and LED                Representatives of provincial and district DPLGH
 Dialogue with Department of Health         Head of Technical Services and LED                Representatives of provincial and district
                                                                                              Department of Health
  Dialogue with Department of               Head of Technical Services and LED                Representatives of provincial and district
  Education & SETAs                         Skills Development Officer                        Department of Education and SETAs
Institutional/Governance
  Business Survey                           Head of LED                                       Representatives of business development support
                                            Trade and SMME Development & Support              and finance institutions in Limpopo (e.g. LIBSA,
                                            Officer                                           SEDA, LIMDEV, etc.).
 Waste Management Plan                      Head of Technical Services and LED                Representatives of Limpopo DEDET, DWAF
 Financial Capacity Building Plan           Chief Financial Officer                           Representative of the GSDM’s Department of
                                                                                              Finance
 LED Directorate Capacity Building          Municipal Manager                                 Procurement Dynamics
                                            Head of ELD




                Report compiled by Procurement Dynamics in collaboration with Glen Steyn & Associates                 May 2007
Greater Tubatse Local Economic Development Strategy                                          38




Annexure: Sector Development Mapping




Report compiled by Procurement Dynamics in collaboration with Glen Steyn & Associates   May 2007
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