Ennersdale (J 12)

Name: Ennersdale

Uthukela DM covers an area of 11,329km², has a population of approximately 630,000 and isdivided into five LMs namely, Emnambithi (KZ233), Indaka (KZ234), Okhahlamba (KZ235) andImbabazane (KZ236). This district constitutes 12% of the provincial area, 6.5% of thepopulation and contributes 3.5% to the province’s gross geographic product (GGP). The regionis predominantly characterized by farmland and dense to scattered rural settlements situated inundulating topography, with 88% of the population living in the rural areas. Emnambithi LM hasthe largest population (230.511) and Umtshezi LM the smallest (48.328). The averagepopulation density is 56 people /km², ranging from 23 people /km² in Umtshezi to 157 people /km² in Imbabazane. The average household size varies within the rural area from 5 to 8persons. Urban areas include Ladysmith, Ezakheni, Colenso, Ekuvukeni, Estcourt, Emesis,Weenen, Berryville and Winterton / Khethani. The area forms part of the Tugela RiverCatchments that extends from the high-lying Okhahlambe-Drakensberg Mountains and FreeState Province in the west of the Indian Ocean in the east. High rainfalls of 700 to 1.200mm perannum are experienced, and numerous strategic water storage dams have been developed.The district economy is based primarily on manufacturing and trade (including tourism), withsecondary support through agriculture. Most commercial farmlands are located in Emnambithi(Klipriver), Umtshezi and Okhahlamba (Bergville), Imbabazane and Indaka are primarilyNgonyama Trust land, with significant underdevelopment and relative isolation from the main N3development corridor. The population within Uthukela is generally poor. Only 36% of thepopulation is potentially economically active (20 to 60 years; Census 1996, with 10% earningless than R500 per month and 66% having no income. Therefore a vast majority of thepopulation is unable to contribute meaningfully towards the provision of basic water services. There is large percentage of youth (55%) and 54% of the population is female, both which couldimpact on future water services requirements and ability to pay. The government has, howevercommitted itself to providing free basic water and sanitation services to all citizens.
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UMTSHEZI MUNICIPALITY 2008 / 2009 IDP REVIEW152.6. UMTSHEZI ECONOMIC ANALYSISThe economic analysis undertaken in the Status Quo report indicates that the poverty andunemployment rates in Umtshezi have increased, with employment opportunities not beingcreated quickly enough for the number of people entering the labour force. The DevelopmentBank (2005) has clearly indicated that employment (a job or an income generating activity) isthe best protection against poverty. This means that any strategy must protect and build formalemployment and assist the poor and second economy participants to access opportunities.The balance between the two approaches and the use of available resources isalso important.2.6.1. FORMAL SECTORThe economy experienced a negative growth rate until 1999 – 2000, and even since then hasexhibited a fluctuating growth rate in spite of the national positive growth. In terms of sectors thearea has had mixed success. The three most positive private sectors remain agriculture,manufacturing and trade. These are also the three most important sectors historically. The threesectors differ in their forecast in terms of potential growth, challenges, and the future ofemployment demand.The manufacturing and agri-processing sectors remain important, but have experienced adecline. The Estcourt area has been a key centre for the processing of agricultural products(60% of manufacturing was previously in food processing) – mostly meat and dairy products.There are obvious important backward and forward linkages between agriculture and foodprocessing which can be exploited. The manufacturing sector was well established in the pastbut has experienced a steady decline with a number of large firms closing down. The declinewas partly a result of the national slow down in the sector, but also as a result of industriesmoving to larger centres. The remaining industries are exhibiting growth as the sector as beengrowing in terms of GDP/GVA, but not in employment. The upturn in manufacturing will notnecessarily lead to industries coming back.The agricultural sector is well established and indicates a level of stability in terms ofemployment1. There are two key challenges in the sector. The first is that there is adependency on traditional crops and products with very little innovation or value addition. Thesecond is that the sector appears to be struggling with the possible impacts of land reform.
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UMTSHEZI MUNICIPALITY 2008 / 2009 IDP REVIEW16There have been some positive signs as the Estcourt Farmers Association has beeninvestigating the local solution developed at Besters near Ladysmith. At the same time there isalso the area proposed for the Gongolo Game Reserve which has been unable develop acommon vision. The decline in manufacturing employment is notable and a cause for concern. The decline isprobably associated with the closure of some firms, the sensitive nature of the sector to broadertrends (foreign exchange, cost of raw material, transport etc) and an increase in mechanization.The sector as been growing in terms of GDP/GVA, but not in terms of employment. Theincrease in employment in community services is largely linked to the establishment of wall towall local government and the expansion of the public sector. This trend will tend to slow as newgovernment structures have been established. The stability in employment in the agriculturalsector is positive as this sector is a large employer and has experienced a general down turn inemployment at a national level. The construction sector should be showing an improved growthn employment, as should trade. There may have been additional capacity in these sectorswhich meant growth could take place without additional employment. Additional capacity mayalso have been taken on as ‘casuals’ without permanent employment being created. Financehas remained stable, although the sector is growing.2.6.2. INFORMAL SECTORThe most disturbing trend is that unemployment and poverty levels will continueto increase unless a new approach is developed. This is despite a growing economy (see Table1 below). The point is that the economy will not create as many formal sector opportunities asthere are job seekers. Future opportunities need to be generated in more creative ways.Unemployment Rate: 1996 and 2004MaleFemaleTotal199643.6%57.5%50.0%200453.1%73.7%62.7%
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UMTSHEZI MUNICIPALITY 2008 / 2009 IDP REVIEW17The statistics generated in the status quo assessment indicates the total number of peopleinvolved in the informal sector as follows:Manufacturing Construction Trade Transport Finance CommunityServicesTotalInformationEstcourt 3884341,493 84825373,019Weenen 1102150070296Total3984341,708 84826073,315This is probably an under assessment2. It does not clearly identify the number of smallbusinesses as some of the people counted above will in fact be employees in the sector. Tradeobviously dominates the informal sector, with community services following. (A communityservice in this context refers to service providers such as telephone kiosks.) It is unlikely that thesecond economy will disappear; it is a more realistic approach to manage and support thepeople who are involved in the second economy. The LED strategy must investigate ways inwhich the second economy or informal sector can be developed and supported.2.7 GEOGRAPHICAL DATAUmtshezi Municipality is comprised by the former Wembezi / Estcourt and Weenen TLCs. It islocated approximately 165km northwest of Durban and 400km south-east of Johannesburg. The National Road N3 also traverses the Municipality on its western portion linking these twomajor cities i.e. Durban and Johannesburg. Estcourt Town is the main urban center for theMunicipality. Umtshezi Municipality is bordered on its southeastern portion by the MooiMpofana Municipality, Msinga Municipality on its eastern portion, Indaka Municipality on itsnortheastern portion, both by Emnambithi and Okhahlamba Municipalities on its northwesternportion and Imbabazane Municipality on its southwestern portion. (See the map of Umtshezibelow)
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UMTSHEZI MUNICIPALITY 2008 / 2009 IDP REVIEW182.8 CONCLUSIONUmtshezi has identified critical focus areas for the 2008/09 financial year. These priority areaswill be addressed through the identified development strategies within the Municipality. It ishowever, important that Umtshezi gets support from other sectors that are interested in upliftingthe quality of life of the people. The following are the identified priority areas:1. Social and Local Economic Development.2. Infrastructure and Services.3. Institutional Development and Transformation.4. Democracy and Governance.5. Financial Management.
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UMTSHEZI MUNICIPALITY 2008 / 2009 IDP REVIEW19PHASE TWO:UMTSHEZI KEY PERFORMANCE AREASSTRATEGIC PLAN
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UMTSHEZI MUNICIPALITY 2008 / 2009 IDP REVIEW20CHAPTER 3SOCIAL DEVELOPMENT3.1 INTRODUCTIONThe municipality aims to improve access to social development services and information withthis chapter. Core to this chapter is the need for social needs analysis and programmes tofacilitate interfaces between different spheres of government charged with social developmentrole.3.2.1. ACCESS TO SOCIAL SERVICES3.2.1.1. EDUCATIONThere is great concern over the distribution of crèche’s, primary and secondary school facilitiesin the municipality. The quality of education in schools is also not satisfactory because of theshortage of teachers and location of schooling facilities in private land (farms). In some clustershigh school learners have to travel long distances because of uneven distribution of schools.The planning of education facilities is complicated by the fact that some parents may choose tosupport schools in other areas because they are perceived as offering a better service. 3.2.1.2. HEALTH FACILITIESFurthermore, the distribution of clinics and other primary health care facilities within themunicipality is uneven with the result that some clusters are left out. There is one hospitals inthe municipality which provides for emergency services and hospital care. They vary in size andthey cater for prams and wheelchairs, i.e. the facilities are user friendly. The impact of HIV /AIDS determines the need for hospitals and clinics. 3.2.1.3. HIV/AIDS There is still a great deal of ignorance about the spread of HIV/AIDS. Access to social welfareservices still poses another challenge on the access to social services. The Department ofWelfare and population Development is working together with the Municipality in ensuring thatsuch services are rendered to the local communities. This is one of the priority areas for theMunicipality.
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UMTSHEZI MUNICIPALITY 2008 / 2009 IDP REVIEW21The scourge of AIDS affects all the citizens of this country, mostly the youth. Umtshezi LocalMunicipality has realized that HIV/AIDS pandemic will have a devastating impact on its socio-economic development programs and formulated the HIV/AIDS council that was launched in2007. This has led to the formation of HIV/AIDS development plan, which seeks to ensure thatHIV/AIDS infection rates are lowered and that those who are affected and infected with thepandemic are given a necessary support. The Municipality will embark on HIV/Aidsprogrammes during the 2008/9 financial year that would contribute to the mitigation of thispandemic.3.2.1.4. SPORTS COUNCILThe absence of sport and recreation facilities in the municipality has a direct relationship withcrime and prevalence of HIV/AIDS among the youth. The facilities that exist are located only inurban settlements making them unreachable for the rural communities. There is a huge biastowards soccer and other sporting codes are not catered for. The provision of facilities is amatter of urgency so as to keep the youth engaged and thus reduce crime incidents. The youthneed extra mural activities to keep them busy. The youth can develop their talent and get toprofessional level. The Departments of Education and Sports and Recreation are part of theIDP Forum as well as the service provider’s forum where these priority areas are debated atlength and addressed to a certain extent by the relevant sector department. 3.2.1.5. CEMETERIESSome communities within the Municipality are still practicing on site burials as a culturalphenomenon and there is a general shortage of burial sites in the municipal area. There arenegative environmental implications because of contamination of ground water. The land thathas been used for cemetery purposes and it cannot be used for any other purposes. Thereneeds to be intensive awareness campaigns so as to sensitize people about the importance ofusing clearly demarcated cemeteries as per National Water Act, Act No.36 of 1998 andKwaZulu – Natal Cemeteries and Crematoria Act, Act No.12 of 1996 require that suitablebuffers be put in place as determined by a qualified professional. Uthukela District Municipalityconducted the Cemetery Crematorium Identification Study and the findings are yet to beimplemented.
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UMTSHEZI MUNICIPALITY 2008 / 2009 IDP REVIEW22CHAPTER 4SERVICE DELIVERY AND INFRASTRUCTURE 3.1 INTRODUCTIONThis chapter seeks to address the 2006 local government manifesto by acceleratingservice delivery so that:• No community will still be using the bucket system for sanitation by 2007• All communities will have access to clean water by 2008• All houses will have access to electricity by 2012• Formalisation of all informal settlements by 2014• There is a universal provision of free basic services• Improvement of housing provision so that better quality houses closer to economicopportunities is developed.3.2 ENERGY AND ELECTRICITYThe Umtshezi Municipality is divided into Eskom Licensed Area of Supply and the UmtsheziMunicipality licensed area of supply. Currently all households within the Umtshezi MunicipalityLicensed area of supply are electrified. The Municipality is only doing in fills and electrifying thelow cost housing schemes. Therefore there are no electrification backlogs within UmtsheziMunicipality Licensed area of supply. Within Eskom Licensed Area of Supply but within Umtshezi Jurisdiction, there are householdswithout electricity. The table below indicates the progress on that to-date.AREASTAGETOTAL PROJECT COSTEkuthuleni NkwaleniPre - EngineeringR1.500.000ErnsdalePre - EngineeringR1.000.000Frere CornfieldBeing ElectrifiedR3.700.000NhlawePre - EngineeringR8.100.000ThembalihleBeing ElectrifiedR2.900.000All households that reside within the Municipal Boundary are within the electricity national grid;therefore it will be cost effective to provide the grid energy than the use of the renewable energy
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UMTSHEZI MUNICIPALITY 2008 / 2009 IDP REVIEW23sources. The current plan is to connect all the people to the national grid as soon as the fundsare made available. When the REDS were first initiated there was a political will to participate, however the issue offunding the processes to make the Municipality ready for the reds was a constraint. There is notevidence that the Municipality signed the cooperative agreement with EDI Holdings. With theREDS loosing momentum in the last few years, the momentum was lost too. The Municipalityhas however done the Electricity Asset Valuation in preparation of REDS. This will need to beupdated when the processes are revived. Also the Municipality in partnership with EDI Holdingswill need to conduct workshops to ensure that the decision makers are refreshed on the matter.The Municipality is conducting an assessment into its tariffs as it was found to be below theNERSA benchmarks. A tariff harmonization plan will be established that will see the Municipalitybridging the gap between the NERSA benchmarks as well as the existing tariffs. This hasresulted in the Municipality being strained financially in terms of resources to keep the electricitydepartment going. The Municipality is currently doing Skills assessment on its electricity staff to identify the skillsgap as well capacity. This will inform the organizational structure review, the skills developmentas well as the optimum capacity required. This will be completed in first six months of 2008/09. The Municipality does have an Electricity Master Plan, but it is has not been updated. ThisMaster Plan also deals with the electricity issues within the Umtshezi Municipality licensed areaof supply. 3.3 ROADS AND TRANSPORTThe Municipality relies heavily on MIG funding for infrastructure development. The Municipalityis working closely with the Department of Transport, through the Rural Transport Forums, inidentifying roads that need funding and upgrading within the Municipality. A Transport Plan hasalso been developed which stipulates clearly their plans for the building of new roads andmaintaining in the next five years. The O&M of old roads is funded to a total of R1.2 millionbudgeted for the next financial year; these projects are included in the Project Schedule:
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UMTSHEZI MUNICIPALITY 2008 / 2009 IDP REVIEW24Infrastructure and Services. The Municipality also has a Storm Water Drainage Budget and Planto manage and maintain storm water drainage, hence, it needs updating for future use.3.4. FREE BASIC SERVICESThe Municipality is also focusing on the provision of free basic services to the indigent. Theindigent policy is in place and the register is updated regularly for this purpose. However, thereare still some challenges that are experienced in this area due to lack of human resources thatcould focus entirely on this function. Regarding free basic electricity, the Municipality hassigned a service level agreement with ESKOM to provide free basic electricity to those areaslisted in the agreement. At the moment there are backlogs reported in those areas that need tobe addressed by ESKOM. The Municipality is also providing alternative sources of energy inthose communities where there is no electricity. On Free Basic Water, Uthukela DistrictMunicipality has also entered into an agreement with the Local Municipality on this function. Regarding Free waste removal, there are no programmes in place for this service. There is afunding which is provided by National Treasury to manage the Indigent policy.3.5. REFUSE REMOVAL AND WASTE MANAGEMENT There is no municipal wide waste disposal site with the result that dumping is uncontrolled andlitter bears testimony to this. Only Estcourt, Weenen and Wembezi experience some measureof waste management although there is a need for the identification of a new waste disposalsite. The majority of people, especially in the farming areas, dispose of their waste on-site anddiseases emerge because they do not have information on how to manage the situation. As aresult, diseases are spread and animals are also exposed to hazardous conditions because ofplastics. Awareness campaigns on the importance of proper waste management in attractinginvestment. Currently, funds are inadequate to provide formal waste disposal sites, hence, aWaste Management Plan is underway 3.6. HOUSING PROVISIONThe majority of the population resides in urban settlements of Weenen, Escourt and Wembezi.This is informed by the historic growth pattern of the municipality. The two main nodes ofWeenen and Escourt evolved as agricultural service centres. While Wembezi complex on theother hand served the residential area of Wembezi, The municipal population of 59 822residents distributed across seven municipal wards represents a range of predominantlyurban, farming communities and rural settlements. Development intensity and housing need
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UMTSHEZI MUNICIPALITY 2008 / 2009 IDP REVIEW25particularly is in the urban areas of Estcourt and Weenen and Wembezi with a population of 29934 residents (49%) of municipal population. These settlements are located on the majoractivity routes.The second largest population density with a population of 19 950 (33%) of municipal residentsis located on privately owned commercial farmlands. The tribal areas make up 10 038 (16%) ofthe residents of the municipality. According to Census 2001 there are 13 961 households in the municipality profiled as follows:6 506 (47%) are formal houses or structures4 929 (35%) are traditional huts583 are flat-lets443 are rooms in backyards93 are informal dwellings or shacksTaking into account the composition of settlements that is, urban population (49.9%) whilefarmlands and tribal settlements comprise 33% and 16 % respectively. It is evident that the35% of traditional huts are in farmlands and communal areas. The municipal IDP (2007/2008)states that the houses in these areas are in a bad state of repair. They are subjected to periodiccollapse during the rainy season or windy times. In terms of Section 9 (1) of the NationalHousing Act the municipality through its planning takes all reasonable and necessary steps toensure that, conditions that are not conducive to health and safety of its residents areprevented and removed. It is therefore without doubt that the greatest areas of housing need in the Umtshezi Municipalityare the farmlands and tribal areas. This correlates to the housing development projects plannedby the municipality as the majority of them are in rural settlements (see Table 5). The lack ofhousing development in the rural areas and farm areas can be ascribed to a number of factors,the most important of these being security of tenure on Ingonyama Land and lack of landownership by farm dwellers. The project linked subsidy which requires beneficiaries to have outright ownership of the site towhich the subsidy relates has been until recently the preferred Housing subsidy Scheme. As aresult thereof, housing development has taken place in urban areas as all the current housing
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UMTSHEZI MUNICIPALITY 2008 / 2009 IDP REVIEW26developments are in urban settlements. The foreseen challenge in the housing development infarmlands is access to tenure as this land is privately owned. Consequently, there has been no development on Ingonyama Land and farmlands resulting inless than adequate housing standards. Almost half of the municipal population resides in theseareas. The introduction of the Institutional subsidy now provides a mechanism for developmenton Ingonyama Land which provides the beneficiary with a long term-lease. For farm dwellersaccess to housing opportunities is reliant on tenure reform.3.7. WATER AND SANITATIONAccess to water within 200m of one’s home is an acceptable minimum standard irrespective ofwhether the water comes from a hand pump, borehole, a reticulation system supplied from ahigh yielding borehole or a reticulation system from a bulk line or reservoir. In the UmtsheziMunicipality the water services backlog is at 7% (UTDM IDP 2007/2008) while the sanitationbacklog is estimated at 8%. The planned housing projects are guaranteed access to water through CMIP funding. Thushousing development provides opportunities for households to access water and sanitation.This is a district competency and therefore housing projects have to be aligned to the districtinfrastructure plan to ensure that they the bulk infrastructure component of the development issupplied. 3.8 SPATIAL INTEGRATIONFrom a development planning point of view, the key issue is to promote the social, economicand spatial integration of the Municipality. The description of land uses in the Municipality clearlyoutlines the spatial configuration of the Municipality based first on the primary economic activityand past racial planning. While the ideal outcome is to change the past planning legacyhowever the Municipality can neither socially or economically afford to relocate long-establishedcommunities. The strategic response to spatial integration particularly to the tribal settlements inthe periphery encompasses two major planning interventions, that is,To ensure access to social and economic services.To promote mixed use that includes economic activities based on skills that already exist inthe community.
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UMTSHEZI MUNICIPALITY 2008 / 2009 IDP REVIEW27Housing Development provides a platform for the delivery for other basic services such aselectricity, water, road infrastructure amongst others. Furthermore it is critical that the identifiedland for housing development promotes spatial integration and access to social services (withbasic amenities, sports and recreation, clinics, libraries, shopping malls, cemeteries, schoolsand other social services), economic (access to employment opportunities, trade and industry).There are service delivery backlog, with respect to water, electricity, roads and others, in manyof the municipal areas especially the identified land that is in the communal or commercial land.This section is premised on the vision for settlements in both urban and rural settlements. Thisvision envisages urban settlements that would be centers of vibrant urban governance, centersof economic, environmental and social opportunity where people live and work in a closeenvironment while the rural settlements must ensure much greater access for rural people togovernment support and to commercial services with a more logical spatial networks of towns,services, roads and transport system serving both market traders and customers. Furthermore,rural settlements must ensure close availability of water, sanitation and fuel sources, givingeveryone more time for economic productivity and better health.In identifying land for housing development the following has to be taken into account andensure the dignity, safety and security of access for all, especially women and youth, to usefulemployment, housing and land, with people able to exercise control over their society,community and personal lives, and to invest in the future.
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UMTSHEZI MUNICIPALITY 2008 / 2009 IDP REVIEW28CHAPTER 5INSTITUTIONAL DEVELOPMENT AND TRANSFORMATIONThe Municipality has a Human Resource Strategy Document which responds to the long-termdevelopment plans which reflect on recruitment, retention, succession plan, scarce skills, skillsdevelopment plan, etc, and an adopted organogram, with 325 current posts, 45 vacant postsand 16 frozen posts. There is one frozen post in the Section 57 staff but all other positions inthis category are filled (Refer to the Organogram). There is a budget allocated for the review of the Performance Management System for theMunicipality. This will be implemented in the 2007/8 financial year. The Municipality hasestablished a Special Programmes Units that will ensure there is effective implementation of theEquity Plan in order to address the issues relating to HIV / AIDS, youth, gender, pensioners andpeople with disabilities. Policies to address the foregoing Special Programmes have beendeveloped.Of importance also is the involvement of the both internal and external stakeholders in thedecision making processes on Umtshezi. The Municipality has devised clear roles andresponsibilities for each structure. For example, the internal role players include the councilors,officials, IDP steering committee and the representative forum (RF). The external role-playersinclude the District Municipality, the ward committees as well as the sector departments. TheRF provides a platform for all role players to take part in the decision making process to ensurethe effectiveness of the IDP Review Phase. The Municipality has approved the Skills Development Plan which also includes the WorkplaceSkills plan. This plan promotes education and training in the Municipality and to empower allemployees as per the Skills Development Act, Employment Equity Act and the Basic Conditionsof Employment Act.
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UMTSHEZI MUNICIPALITY 2008 / 2009 IDP REVIEW29CHAPTER 6LOCAL ECONOMIC DEVELOPMENT6.1 INTRODUCTIONThe economic analysis undertaken in Umtshezi indicates that the poverty and unemploymentrates have increased, with employment opportunities not being created quickly enough for thenumber of people entering the labor force age group. The Development Bank (2005) has clearlyindicated that employment (a job or an income generating activity) is the best protection againstpoverty. This means that any strategy must protect and build formal employment and assist thepoor and second economy participants to access opportunities. The balance between the twoapproaches and the use of available resources is also important. The formal economyexperienced a negative growth rate until 1999 – 2000, and even since then has exhibited afluctuating growth rate in spite of the national positive growth.6.2 TOURISM PARTICIPATIONThe Bushman’s River Tourism Association in partnership with the Umtshezi Municipality havefor the past two years been developing a Tourism Route through the area which is known as the“The Drakensburg Experience”, which will be ready to launch during 2008. This venture willassist in boosting the economy and will create job opportunities in the Umtshezi area.6.3 LED STRATEGY & PLANThe Umtshezi Mission and Vision provides the context for the LED Plan. The LED Plan supportsthe municipality in achieving the goals as set out in the IDP. The Umtshezi LED plan is driven bythe following strategies: 6.3.1. Strategy 1: Municipal – Multi StakeholderThe previous LED policies have emphasized the need for partnerships and forums forinteraction and communication. The Umtshezi Municipality and the business community havean inconsistent relationship to date. The municipality and the business community also need anenvironment where issues relate to Municipal functions and programme focus areas – land usemanagement, economic infrastructure provision, business service provision, etc. Therelationship between the broader economic community (including trade unions, the informaltraders, and youth groups) can meet the municipality’s need to be established. These types of
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UMTSHEZI MUNICIPALITY 2008 / 2009 IDP REVIEW30forums are essential as they enable broader platforms for integration between thesestakeholders, is not usually shared.6.3.2 Strategy 2: Municipal FunctionsThe 2006 LED policy reflects on the ‘Market and Public Confidence’, which emphasizes the rolethat the municipality has in creating the environment that promotes business development. These areas include local policies and by-laws, which reflect on: -2.1. Municipal by-laws (including enforcement).2.2. Land Use Management Systems or Land Use Schemes.2.3. Rates and levies.2.4. Budget preparation and reporting.2.5. Integrated Development Plan.2.6. Procurement policies.2.7. Policies dealing with the indigent, youth, woman, disabled, etc2.8. Business support institutions (Community Tourism Organization, Business SupportCenters, etc).In terms of service delivery, municipalities are urged to review the level of integration of theirsystems. Referring to the policy document reflects, “Infrastructure development, servicedelivery, municipal financial viability and local economic development are not mutually exclusiveconcepts.6.3.3 Strategy 3: Sector Support and Strategy The sector support approach is based on the assumption that economic growth can be drivenby interventions in specific markets and sectors. The analysis typically makes use of an analysisof sector stakeholders, product development and selection, supply and value chains, marketareas and international trends. The strategy should begin by making use of the resourcesavailable to undertake sector interventions. A sector strategy would provide the basis for shortand medium interventions. The strategy should begin by making use of the resources availableto undertake sector specific interventions. A sector strategy would provide the basis for shortand medium term interventions.
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UMTSHEZI MUNICIPALITY 2008 / 2009 IDP REVIEW31The Provincial Spatial Economic Development Strategy is the key development which driveseconomic development thinking at present and identifies four key sectors as drivers of economicgrowth in the province. The following sectors were identified:-1. The Agricultural Sector (inclusion of agri-processing) and land reform2. The Industrial Sector3. The Tourism Sector4. The Service Sector (inclusion of government services)6.3.4 Strategy 4: Enterprise SupportThis strategy emphasizes enterprise support to co-operatives and other small businesses. Theinstruments to implement the strategy include the establishment of enterprise InformationCenters, skills development and a Mentoring Programme Center is a central intervention beingintervened within the ASGISA Initiative, The National LED strategy and within ProvincialInterventions. The need is to assist those “who are presently economically trapped in the non –functioning local township and rural marginalized economies of the Second Economy”. TheASGISA documentation refers to the notion of “eliminating the second economy”. That willprobably not to be possible and in some middle income countries the informal sector providesmore than 50% of the employment and income generating opportunities. The enterprise supportstrategy aims at assisting in the establishment of a centre (Enterprise Information Centre) butalso in ensuring that the center is effective, relevant and targeted.6.3.5 Strategy 5: Support to Land Reform BeneficiariesAs it is suggested in Strategy 3 an Agricultural Plan needs to be prepared. It is important thatsuch a sector plan make clear provision for the inclusion of land reform as transformativeprocess. The experience of land reform in the municipal area has included a high level ofcompetition and conflict. It is important that the strategy make resources available for mediationand stakeholder support.
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UMTSHEZI MUNICIPALITY 2008 / 2009 IDP REVIEW32The following table summarizes the current extent of the land reform programmes in Umtshezi.ProgrammeExtentRestitution72 claimsRedistribution23 projectsLand Redistribution for AgriculturalDevelopment(LRAD)3 projectsLabour Tenant14 projectsThe LED aspects of the land reform projects are generally poorly developed. The Framework forLand Reform in KwaZulu Natal (2005) notes that: “Very few land reform projects, except thoseinitiated by the private sector or in partnership with the private sector, facilitate the integration ofbeneficiary groups into commercial agricultural markets or provide opportunities for ruralhouseholds to generate small amounts of income from their agricultural produce or naturalresource products” (71). Land reform projects require not only the same kinds of support thatother emerging farmers do; but additional support in the enterprise transformation process andresettlement process. This is termed ‘post- transfer support’ and requires enterprise, livelihood,infrastructure and social support interventions.6.3.6 Strategy 6: Municipal and State ProcurementThe national LED strategy noted that state expenditure (at all levels) is having a limited impacton development goals. This strategy intervention is based on the use of the municipalprocurement system to undertake targeted and preferential procurement. This should beundertaken as a specific study within the corporate services section. The intervention should notend at this point – but also the Municipality should monitor that any other state agencies areensuring that maximum benefits are accruing to local enterprises and local labour. This wouldinclude infrastructure development such as water systems and road construction.
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UMTSHEZI MUNICIPALITY 2008 / 2009 IDP REVIEW33CHAPTER 7FINANCIAL MANAGEMENT7.1 INTRODUCTIONUmtshezi Municipality has recognized that to be successful, the IDP must be linked to aworkable financial plan. The purpose of the five year financial plan is to create the medium andlong term strategic financial framework for allocating resources through the municipal budgetingprocess and to ensure the financial viability and sustainability of the Umtshezi Municipality’sinvestments and operations. Other important reasons for developing the financial plan are:7.2 AUDITOR GENERAL AND AUDIT COMMITTEE REPORTSOn receiving the audit opinion, annually, from the auditor general, uMtshezi municipalitycouncil deliberates on the auditor’s report and provides the response to the auditorgeneral. Over and above these mechanisms are put in place to prevent the sameincidents recurring within the municipality.The municipality has a shared service agreement with uThukela district municipality interms of services of the audit committee. This is in line with the requirements of theInter-Governmental- Relations. The audit committee deliberates on annual performanceof the municipality and reports to Council. Thereafter Umtshezi full Council adopts theannual report.7.3 FINANCIAL PLANThe municipality has put together a financial plan inorder to: • To ensure a close planning and budgeting link;• To inform municipal budgeting over tier;• To facilitate inter-governmental alignment with regard to capital requirements and sources offunding;• Assess financial management arrangement and financial strategy; and• To outline revenue and expenditure forecast.
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UMTSHEZI MUNICIPALITY 2008 / 2009 IDP REVIEW34The financial plan is an integral component of the IDP and addresses:• Establishing financial management systems and efficient, effective internal audit systems. • Funding availability over a 3- 5year planning period• The balancing of this limiting factor relating to income with objectives established in terms of the IDP.7.3.1 OPERATING EXPENDITURE BY VOTE2006/07 Current Year 2007/082008/09 Medium Term Revenue & ExpenditureFrameworkDESCRIPTIONAuditedOutcomeOriginalBudgetAdjustedBudgetFull YearForecastBudgetYear2008/09Budget Year+1 2009/10Budget Year +22010/11Office of the Municipal Manager665,5731,391,6881,365,2881,561,711022,86824,469Corporate Services17,269,712 14,661,470 14,796,09116,196,122 13,586,20714,433,33915,243,673Office of the Mayor and Council0000575,000575,000575,000Finance and Administration7,271,0389,700,237 10,013,2627,394,446 23,138,12624,180,89525,565,438Civil Services12,073,9178,557,2568,553,0375,532,3447,790,7388,077,3848,142,801Social Services16,604,004 18,363,215 18,524,12420,905,000 22,349,82923,183,28524,465,661Electrical Services54,924,561 44,348,486 49,466,03648,744,969 60,467,58463,762,72567,241,646TOTAL OPERATINGEXPENDITURE108,808,805 97,022,352 102,717,838 100,334,592 127,907,484134,235,496141,258,688
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UMTSHEZI MUNICIPALITY 2008 / 2009 IDP REVIEW357.3.2 FINANCIAL MANAGEMENT ARRANGEMENTSThe following financial management arrangements in the municipality are in place:7.3.2.1 ADMINISTRATIONUmtshezi Municipality has got a reasonable capable finance department although there aresome challenges that need to be addressed, also has an internal audit function responsible formonitoring financial and other controls. In addition, council is committed to sound financialmanagement and the maintenance of a sound economic base. Financial management policiesand procedures for the entire municipality have been developed to address the cash forecastsand cash flow monitoring against forecasts, budgeting methods, management reporting, assetpolicy, investment policy, credit risk management and procurement policies.7.3.2.2 FINANCIAL PROCEDURES AND POLICIESTo-date some policies are properly documented and in place. These policies include supplychain management policy, tariff policy, by-laws (including credit control and debt collectingpolicy) transport policy.7.3.2.3 COUNCIL REPRESENTATIONA portfolio councilor for finance serves on the executive committee and advises the mayor onmatters in the executive committee agenda. The council is responsible for approving the IDP,the operating and capital budgets that are prepared on recommendations of the executivecommittee.The council adopted financial strategy that encompasses the following fundamental issues, afinancial resource mobilization (capital and operational), asset management, revenue baseexpansion, and operational cost effectiveness methods. All aspects of matters relating to thefinancial matters will take into account council’s social responsibilities and these includecouncil’s indigent policy and recognizing that certain sections of the community do not have theability to pay for services. A further aspect of social responsibility will focus on transformationand empowerment as called for in council’s preferential procurement policy.7.3.3 INCOME/ FINANCIAL RESOURCES7.3.3.1 RATES AND GENERAL SERVICES
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UMTSHEZI MUNICIPALITY 2008 / 2009 IDP REVIEW36The municipality has a reasonable good property valuation roll but with a challenge of generalrevaluation. With the introduction of new Municipal Property Rates Act of 2004, the municipalityhas high potential increase on the property rates income. Also municipality needs to strengthencontrols in the implementation of credit control and revenue collection by- laws. This should beclosely coupled with good customer care and community education around area of billing ofrates and services. This will improve the collection rate and ultimately the picture of revenuegeneration. The municipality is currently the second in provincial pilot project on debt collectionand credit control for municipalities with highest debtors. This project is also expected to yieldgood results towards end its second year (2007&8).7.3.3.2 GRANTS AND SUBSIDIESThe Municipality derives most of its income form internal sources to fund its capital andoperational budget. For next three years (07/08, 08/09, 09/10) the total grants and subsidies willaverage at 19% of the total budget. This means that the municipality is mostly dependent on theinternal revenue sources. This is a serious challenge that the municipality has taking intoconsideration high levels of unemployment versus very high infrastructure backlogs in vast ruralareas of the municipality. More serious attention should be given to the Statistics SA censusprocesses as figures currently do not show the correct picture to inform the national governmentequitable share allocation.7.3.3.3 OTHER FUNDING The council has obtained donation funding from SWAME for community related projects. Alsoopportunities of accessing grant funding for capacity building are being explored frominstitutions like DBSA and other capital markets.7.3.4 EXPENDITUREExpenditure is closely monitored and control by the finance department. Expenditure is strictlylinked to approved budget and when it is necessary urgently adjustments within are done andalso adjustments in between votes are done after six months of the financial year. Departmentaldirectors are held responsible and accountability for any over expenditure. With the support ofthe finance department are responsible for analysis of monthly expenditure reports. Themunicipality has had slow spending on capital expenditure due cash flow problems. Only grantsand subsidies funded capital projects were done, specifically electricity and housing projects.The 2008 / 2009 capital expenditure is as follows:
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UMTSHEZI MUNICIPALITY 2008 / 2009 IDP REVIEW377.3.4.1 CAPITAL EXPENDITURE BY VOTE2008/09 Medium Term Revenue &Expenditure FrameworkDESCRIPTIONBudgetYear2008/09BudgetYear +12009/10BudgetYear +22010/11Municipal Manager000Corporate Services51,000535,500316,500Council (Special Projects)31,050,00000Finance211,000157,00071,000Civil Services31,247,000 3,487,000630,000Social Services3,697,000 4,177,000936,000Electrical Services9,550,000 8,001,000 10,669,000TOTAL CAPITAL EXPENDITURE75,806,000 16,357,500 12,622,5007.3.4.2 CAPITAL BUDGET FUNDED AS FOLLOWS:Municipal Infrastructure Grant (MIG)5,187,000 Department of Minerals & Energy (DME)1,200,000 DBSA Loan9,950,000 `Council Funded5,769,000 Grant (Wembezi Urban Renewal Project) 30,000,000 Management Assistance Programme(MAP)200,000 Hostel Redevelopment & UpgradingGrant23,500,000 (KZN Provincial Government)75,806,000
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UMTSHEZI MUNICIPALITY 2008 / 2009 IDP REVIEW387.3.5. FINANCE POLICIESThe municipality embarked on a process of reviewing the financial environment with a view todetermining which areas required enhancement to ensure overall financial stability. This hasbeen done by reviewing financial policies on the following areas but not limited to:• The IDP and Budgeting process; • Financial procedures and manuals;• Financial accounting and reporting;• Debt Collection and Revenue Management• Resource mobilization;• Management of grants and subsidies;• Raising of other income; andSupply Chain Management and Asset Management67.3.6. FIVE YEAR CAPITAL INVESTMENT PLANUmtshezi municipality is composed of various rural areas where serious challenges ofinfrastructure backlog, high rate of unemployment are evident. Also statistics show high figuresof illiterate in most of the rural areas of the municipality. As an integral component of the IDP themunicipality has developed a five year capital investment plan. This five year capital invest planis aimed in addressing the challenges faced by the communities in the entire municipality aswell as to ensure a close planning and budgeting link, inform municipal budgeting over tier andas a sphere, facilitate inter-governmental alignment with regard to capital requirements andsources of funding, assess financial management arrangements and financial strategy; andoutline revenue and expenditure forecast.
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UMTSHEZI MUNICIPALITY 2008 / 2009 IDP REVIEW41CHAPTER 9IMPLEMENTATION PLAN AND MONITORINGUMTSHEZI KEY CHALLENGESOBJECTIVESSTRATEGIESKEY OUTCOMETIMEFRAMESLack of SkillsMost of the community members areilliterate because there was no money fortheir education. Therefore Umtshezicommunity is lacking skillsTo create an environmentthat allows training anddevelopmentThe Umtshezi Municipalitymust assist in sourcingbursaries, In-servicetraining, Internships andLearnerships in partnershipwith relevant stakeholders.The community will beeconomically active andthey will be able toparticipate in differentprograms. OngoingCommunicationThere is a communication breakdownbetween the Municipality and thecommunity which therefore result in slowprogress of Municipal DevelopmentProcesses- To ensure full communityparticipationinDevelopment process ofthe Municipality will beensured. - Ensure that there iseffectiveandefficientinternalcommunicationchannelsThe MunicipalCommunication Strategyhas been developed andmust be implementedThe community will becontinuously updated aboutwhat is happening in theirarea through theMunicipality.OngoingLack of InfrastructureThere is no water and electricity in thearea. Even the farmers use boreholesbecause there is lack of Infrastructure forservicesTo facilitate the process forthe District Municipality toprovide bulk Infrastructureto the community for watersupply and ESKOM toaddress electricitybacklogs.The Municipality need toFormulate InfrastructureBusiness Plan to sourcefundsThere will be fully-servicedhouseholds.2014Under-resourced Service Centres(nodes)Banks and shopping centres areconcentrated in Escourt. Communitymembers from Weenen and Wembezihave to travel to Estcourt for theseservice centresTo Improve Socio-economic Development inService CentresAn enabling environmentfor investors in ServiceCentres have to be created.There will be well-resourced Service Centres2012
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UMTSHEZI MUNICIPALITY 2008 / 2009 IDP REVIEW42Inadequate Safety and Security. There is a shortage of Police Stations inthe municipality with the result that manyclusters are not covered. This makeseffective policing virtually non-existentand leads to an increase of criminalelements.. Umtshezi is however servedby SAPS Estcourt; Weenen andWembezi, also Estcourt Stock Theft Unit. The SAPS together with the Departmentof Justice and the South AfricanDemarcation Board are in the process ofre-aligning SAPS, Magisterial andMunicipal boundaries which might bringabout minor changes to the boundariesof the various stations serving theUmtshezi Local Municipality To create a Safer Town andsurroundings where allcitizens enjoy a betterquality of life is in greatneed.The Municipality needs toDevelop the CrimePrevention Strategy andProvide basic householdsneeds.There will be a Safe andSecured environment.OngoingThere is a High Prevalence ofEpidemic and Pandemic diseasesbecause the community is not wellinformed of these diseases such asHIV/Aids, Tuberculosis and KwashiorkorTo minimise the prevalenceof Epidemic and Pandemicdiseases.Consultants need to beappointed to help thecommunity with HealthAwareness ProgramsPrevalence of Epidemicand Pandemic diseases willdefinitely be reduced.2012Low Economic Growth andinvestmentThere is a potential of high economicgrowth because Estcourt is situated inbetween of Durban and Johannesburg,on a main road and railway line.To create an enablingenvironment to EconomicGrowth Sectors andengage potential investors. The Municipality also needto adjust the rates to avoidfactories from leaving thearea.Economic Growth Sectorsand engage potentialinvestors will be identified. Offering of incentives towilling investors andMaintain existing investorsThis will create a VibrantEconomic Growth andInvestment.2014

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