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Umhlosinga Development Agency (UMDA)
UMkhanyakude District Municipality
BUSINESS PLAN 2015/18
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ACRONYMS AND ABBREVIATIONS USED IN THIS DOCUMENT
UMDA Umhlosinga Development Agency
KZN KwaZulu-Natal
DoE Department of Education
DoA Department of Agriculture
ETEA Department of Economic Development, Tourism and Environmental Affairs
COGTA Co-operative Governance and Traditional Affairs
NSNP National Schools Nutrition Program
UKDM UMkhanyakude District Municipality
SMME Small, Medium and Micro enterprise
EXCO Executive Committee of the UMkhanyakude District Municipality
SLA Service level Agreement
MoU Memorandum of Understand
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TABLE OF CONTENTS...............................................................................pages EXECUTIVE SUMMARY……………………………………………………………..4 INTORDUCTION………………………………………………………………………6 Concept and Background…………………………………………………………..6-7 Locality………………………………………………………………………………8-11 The Role of the UMDA…………………………………………………………..11-12 Past Performance on Key Areas………………………………………………..13-17 Vision, Mission and Strategic Objectives………………………………………17-19 Swot Analysis……………………………………………………………………..20-21 STRATEGIC FOCUS AREAS……………………………………………………....22 Business Concept……………………………………………………………….22-27 Agribusiness Projects…………………………………………………………...28-30 Tourism Projects…………………………………………………………………31-32 Infrastructure Projects……………………………………………………………33-34 Urban Development Projects……………………………………………………34-35 Marketing Plan and Communications………………………………………….35-41 Information Technology Plan……………………………………………………41-42 Risk Management Plan……………………………………………………….....42 MANAGEMENT AND ORGANISATIONAL STRUCTURE………………………43 UMDA Board……………………………………………………………………...43-45 UMDA Team………………………………………………………………………….45 UMDA PMU…………………………………………………………………………..46 Organogram………………………………………………………………………47-48 Key Role Players…………………………………………………………………49-50 Governance and Leadership……………………………………………………50-51 FINANCIAL MODEL…………………………………………………………………52 Funding Requirements Capital Expenditure Operational Expenditure Cash Flow Analysis CONCLUSION
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1. EXECUTIVE SUMMARY
1.1 INTRODUCTION
This business plan culminates from the 5-Year Strategic Plan of the
uMhlosinga Development Agency (UMDA). UMDA has been in operation for
seven years and during this time built up a significant portfolio of projects
and plans. The most important of these plans were reviewed during a two-
day strategic planning workshop in order to give direction and impetus to the
future plans of the Agency.
The UMkhanyakude District Municipality is located in the Kwa-Zulu Natal. It
is situated in the North-Eastern part of KwaZulu-Natal, extending from the
uMfolozi River up to the Mozambique border, being bordered on the east by
the Isimangaliso Wetlands Park which encompasses the entire coastline
onto the Indian Ocean. It consists of 5 local Municipalities, which will be
reduced to 4 local municipalities from the 2016 local government elections
with the amalgamation of Hlabisa and Big 5 false Bay Municipalities into one,
which are shown on the diagram below:
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The number of individuals actually employed within the various local
municipalities is particularly low, and there are therefore high dependency
ratios and generally great amounts of poverty and low levels of economic
activity.
UMkhanyakude district municipality does have significant economic
challenges and that they intend investing significant resources into turning
the economy around and creating opportunities for growth in the future. The
UMDA, as the Economic Development arm of the UMkhanyakude District
Municipality specifically needs to stand up and be counted in the creation of
economic opportunities.
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Although, the District’s economy is the smallest in provincial comparative
terms (eg. less than 5% of the size of the eThekwini municipality in
2011), and growing from a small base, however the economy experienced
significant growth in excess of 9% per annum, especially in the period from
2000 onwards. Two dominant local economies within the district are the
Mtubatuba and Jozini Local Municipalities, accounting for approximately
R1.9 and R1.7 billion of GVA in 2011 respectively. The dominant economic
sectors in UKDM as measured by GVA is the retail, catering and
accommodation sector accounting for R1.45 billion in 2011, the
manufacturing sector (R1.37 billion), and the general government services
sector (R1.34 billion).
UMkhanyakude has outstanding potential for agriculture and tourism
development, with the district having a wealth of natural beauty and
outstanding landscapes, as well as a favorable climate and fertile soils for
major agricultural production. The district is closely associated with the
iSimangaliso, “Maputaland”, the Makhathini Flats and the Pongola-
Poort/Jozini Dam (constructed in the 1970’s with the intention of unleashing
the agricultural potential of the area).
Given the scarcity of development in the major part of UMkhanyakude, the
district and local municipalities operate off an extremely low tax base and
LED has therefore not been funded or contemplated as a mainstream activity
of local government in the area.
There is very little foreign direct investment in the area; investors lack
appetite for investments in the area and it is very expensive to establish
developments in the district due to legislative requirements, lack of
infrastructure, lack of development plans and unavailability of land. The
Environmental Impact Assessments coupled with further requirements for
developments within Isimangaliso Wetland Park and its buffer zones has
further exacerbated the lack of investment apetite.
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The Role of the UMDA is to act as an agent for and on behalf of the District
Municipality in implementing economic, social and environmental policies
and projects, as identified by or agreed with the District and local
Municipalities of UMkhanyakude. UMDA is required to co-ordinate the
implementation of a sustainable, long and short term District Development
Program; including its spatial, economic, social and environmental
dimensions, it’s regulatory, budgetary, financial and legal implications and its
social and economic consequences. UMDA is also required to provide the
District of UMkhanyakude with a ‘one-stop’ contact point for access to
possible development funding or technical assistance, as well as information
on the priorities and consequences of the implementation of the
UMkhanyakude District Development Program.
Vision, Mission and Strategic Objectives
Based on the above analysis of the challenges, opportunities and key past
performance of UMDA, the following Vision, Goals and Objectives of UMDA
have been developed. The Vision, Goals and Objectives are related to that
of the uMkhanyakude District Municipality. In this respect the Vision of the
uMkhanyakude District is: “To be a metro by the year 2030”.
The uMhlosinga Development Agency vision follows from that of the District
and is: “To be the preferred partner providing cutting edge investment
solutions to economic development in uMkhanyakude.”
The Mission of UMDA is:
“To co-ordinate, plan and manage the implementation of a locally driven
program of catalytic projects, to fast track the development of the local
economy of the district of uMkhanyakude.”
The Goals of UMDA that flows from the Vision and Mission Statements and
based on the challenges and opportunities are the following:
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1. To promote sustainable commercialization of agriculture and
establishment of agri-business industries in the district;
2. To develop a world class tourism sector;
3. To develop settlements that promote urbanization and industrialization;
4. To develop world class catalytic infrastructure that promotes economic
development;
5. To develop institutional capacity of the agency, at all levels, with the
capacity to effectively implement and raise funds for catalytic projects and
operational needs.
In implementing the Goals and Objectives UMDA will be providing
“consulting services” such as undertaking feasibility studies; preparing
business plans; undertake environmental and planning studies aimed at
gaining the required approvals; prepare funding applications and put project
and programme management systems in place when and where required.
UMDA will also manage capital projects on behalf of the District Municipality,
Local Municipalities and other government departments and in return will
charge a 10% development fee. UMDA will manage internally certain
strategic projects, in order to raise enough capital for operational expenses
and feasibility studies.
Finally, UMDA will also manage strategic economic investments on behalf of
the District Municipality and in return charge management fees and be
entitled to a portion of dividends as agreed to between UMDA and the
District Municipality.
1.2 STRATEGIC FOCUS AREAS
Business Concept
Investment into the district is very slow and foreign direct investments are
even worse, whilst there is some investments happening in property
development especially on shopping centers. There is limited investment in
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the industrial sector, whilst an investment into the tourism sector is minimal
and not in line with the transformation agenda of the country. A number of
factors could be attributed to these challenges, including planning,
availability of land, environmental authorisations, development approvals and
lack of infrastructure.
UMDA’s strategy is therefore to level the playing field for investors, thus
lowering the costs of investment in the district and promoting foreign direct
investment. In order to achieve the above, we have identified a number of
nodes for development, these ranges from tourism nodes, agricultural nodes,
urban (town) development nodes and industrial development nodes. UMDA’s
responsibility is to secure land, obtain environmental authorizations, obtain
development approvals, develop infrastructure and promote these nodes for
investment. Our projects’ portfolio is therefore structured to unleash the
economic potential of the district through unlocking the stumbling blocks to
investment.
We intend over the next ten (10) years to implement interventions that will
assist in creating over 100 000 Jobs in the district, facilitate investments of
over R10 billion, facilitate the establishment of over 50 000 Units (to increase
rates base of municipalities), to facilitate training of over 10 000 beneficiaries
and in the course support the development of at least 10 millionaires from
the district.
The UMDA will continue to engage the Private sector, Local, Provincial and
National Government in the identification of projects that would achieve this
goal. The establishment of networking relationships with National and
Provincial Developments, Finance Institutions and Agencies is pivotal to
assist in achieving both the Technical and Financial objectives of the UMDA.
Guiding Principles
The following guiding principles have been developed and are the foundation
for decision making in UMDA. It informs how the Agency is to prioritise and
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select its projects and assess its progress. The guiding principles are:
1. The nature and extent of the employment and income generation
ability of the economic sustainable interventions identified;
2. The nature and extent of external and internal, public and private
sector investment that the intervention can attract;
3. The multiplier impact of intervention through the creation of new and
additional backward and forward linkages within the District;
4. Building the capital asset base (economic infrastructure) of the District
on which further future interventions can be built;
5. Building the entrepreneurial, SMME, cooperative and small informal
economic base capacity of the District;
6. The ability of the interventions to empowerment of youth, women and
vulnerable groups and the contribution of the intervention towards
poverty eradication;
7. The ability of the intervention to advance further business
management principles also making allowances for the Agency to
generate an income for future investment and funding operations.
The application of the Guiding Principles to project selection will lead to the
identification of a multi-dimensional portfolio of projects rather than a
simplistic listing of priority projects. This will assist UMDA to strategically plan
its economic interventions to deliver different impacts at different time-scales
and with different risk profiles. This is best illustrated in the following diagram
that shows how UMDA will identify its strategic interventions in the District.
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Catalytic Projects and Actions
Projects come at various stages, forms and shape. However it has been agreed
that in principle our projects will follow the following projects pipeline.
a) Identification, inception and registration of catalytic Project
b) Development of concept
c) Pre-Feasibility study and report
d) Project packaging
Feasibility study
Business Plan
Land Security
Development approvals
EIA approvals
e) Fundraising & investments promotions
f) Implementation
Project Management
Construction & commissioning
Operations
In assessing the projects and action plans UMDA will implement a Process Flow
program to identify catalytic projects and actions and, package them to ensure
that a variety of interventions are planned to deliver on a sustainable basis.
Additional projects to be approved by the Board, through the pre-approved
selection criteria (Matrix).
The immediate projects and actions that UMDA will be focusing on are listed
below. This list of projects and actions will be reviewed and updated on a
regular basis together with its Board and with its shareholder, the District
Municipality of uMkhanyakude. The list relates to the strategic Goals and
Objective areas identified:
Projects’ Implementation Masterplan
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Based on the strategic framework of Goals and Objective, UMDA is in the
process of developing a Master Plan of catalytic projects and actions to lead to
the development of the District. The purpose of the Master Plan is:
To provide a projects implementation master plan for the district up to 2030;
To provide maps for different sectors and targets;
To provide 3D models and costing of these projects; and
To obtain buy in from the District, planning commission, Local Municipalities
and other departments and agencies working in the area.
To create 100 000 jobs by 2030 and to facilitate investments of more that
R10 billion into the district economy.
AGRICULTURE AND AGRI-BUSINESS DEVELOPMENT
Through the Agri-business development strategy, UMDA will support and
facilitate the commercialization of the existing co-ops in the district by promoting
the processing of agricultural and forestry products and support the
establishment of District Agri-business Companies or secondary co-ops per
each commodity or group of commodities.
FRUIT AND VEGETABLE PRODUCTION AND DISTRIBUTION PROGRAMME
a) Ground Nut Processing Project
b) Mealies Production Project
c) Tmm Forestry Project
d) Fish Farming Project
e) Sugar Mill
f) Agribusiness Development Masterplan
TOURISM DEVELOPMENT
UMDA has undertaken substantial research and consultation in to the
development of tourism facilities in the District. The Route 22 study and the
corridor development study informed UMDA strategy on Tourism Nodes
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development, which is intended to facilitate economic growth and transformation
through tourism. The primary objective of this programme is to promote
investments into hotels and other tourism products within the identified nodes.
a) Tourism Nodes
The tourism Nodes identified are: Lake Sibaya, Kosi Bay/Bangneck,
Sodwana, False Bay, Jozini Mountain Ridge (Ogaluweni), Cecil Marks
Pass, Hlabisa and Saint Lucia (Already established)
b) Hotel School
c) Hotel Management Company
d) District Events and Marketing
INFRASTRUCTURE
The Development of infrastructure that is meant to support overall economic
development in the long terms of necessary in the short term.
a) Mkhuze Airport
b) Jozini Hydro Electric Project
c) District Broadband Rollout
d) Solar Electricity Generation
e) Manzengwenya Biomass Project
f) Wind Energy
g) Sewer Management Programme
h) Waste Management Programme
URBANISATION AND INDUSTRIALISATION PROJECTS
a) Small Town Rehabilitation And Development
b) Manguzi Special Economic Zone
c) Mkhuze Special Economic Zone
1.3 MARKETING PLAN AND COMMUNICATIONS
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The local economic development sector is a very broad industry. UMDA would
focus on implementation of catalytic projects and investment promotion. The
implementation of catalytic projects will involve feasibility studies, business
planning, obtaining development approvals and environmental authorizations
and project management.
UMDA will target development finance houses, like the IDC and DBSA including
government departments for grant funding especially for feasibility studies and
project packaging. We will also target other finance houses for finance required
in the implementation of projects, including the family of municipalities, the
business sector and local communities.
1.4 ORGANOGRAM
We are planning for growth and will implement an organogram that suites our
needs but also an organogram that will assist in implementing our projects
quicker and efficiently. It is important to create capacity within the agency to be
able to conduct our own feasibility studies and package catalytic projects
ourselves. It is also important to have capacity to manage large projects without
having to outsource the service and go on protracted tender processes.
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Chief Executive Officer
Mr. Mandla Ntuli
Chief Finance Officer
Mrs Qhamu Mntambo
Finance Officer
Mr. Sthe Mbatha
Receptionist
Ms. Sakhelephi Manzini
General Assistant
Ms. Joyce Biyela
General Assistant
Mr. Bheki Masango
HR & Records Officer
Vacant
PMU Manager
Vacant
Engineer
Vacant
Enviromentalist
Vacant
GIS/DATA Management
Vacant
Quantity Surveyor
Vacant
Admin Clerk
Vacant
Mkhuze Airport Manager
Mr. Siphamandla Madida
Receptionist
Ms. Simangele
Mabuza
General Assistant
Mr. Sipho Gumede
General Assistant
Mr. Lindelani Gumede
Agribusiness Project
Manager
Vacant
Agribusiness -Facilitator
Mr. Lucky Nxumalo
Tourism Project Manager
Ms. Nonhlanhla Biyela
Tourism Officer
Ms. Nomzamo Nxumalo
Urban Development
Project Manager
Vacant
Urban Development
Officer
Vacant
Personal Assistant
Ms. Maggie Sotshongaye
PMS Officer
Ms. Thobeka Ngcobo
Marketing and Communications
Officer
Vacant
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1.5 THE FINANCIAL PLAN
Needs Summary
A budget has been prepared and attached to this business plan as an annexure.
In summary, the agency requires finance for monthly operating costs and
periodic installments amounting to R20 million per annum.
In addition, the agency requires funding for capacity building, including the
setting up of the project management unit. We also require specific project
funding in order to implement projects successfully and in this regard specific
partners and funders will be engaged for funding. It is estimated that the agency
requires to raise R90 million in the first year of implementation.
Revenue Model
The agency will rely primarily on funding from the parent municipality for
operational costs. However since the parent municipality is also experiencing
certain challenges, the agency will also charge fees for work to be done
including prefeasibility studies, feasibility studies, project packaging and project
management. We will also charge a development fee of between 5% and 10%
on all funded projects in order to cover costs associated with investment
promotion and operations of the agency. Three strategic businesses will be
implemented in-house, in order to ensure sustainability of the agency in the
medium term.
1.6 CONCLUSION
During the next three financial years we have a pipeline of projects worth over
R3 billion rands. It is an exciting challenge to face and overcome. However,
before we get carried away, we have mammoth task of packaging these projects
and raising funds necessary for their successful development. It is therefore
critical that we build capacity within the agency to be able to package these
projects on our own and build stronger relationships with our partners and
stakeholder, as that will save costs and improve efficiencies.
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2. INTRODUCTION
2.1 Background
This business plan culminates from the 5-Year Strategic Plan of the uMhlosinga
Development Agency (UMDA). UMDA has been in operation for seven years
and during this time built up a significant portfolio of projects and plans. The
most important of these plans were reviewed during a two-day strategic
planning workshop in order to give direction and impetus to the future plans of
the Agency.
The strategy was largely formulated during the two day strategic planning
workshop that was held on the 4th and 5th of March 2014 at the Protea Umfolozi
Hotel. The strategy is also based on the preceding strategies and business
plans of the Agency but more importantly on the contextual District
Municipality’s strategic plans and the Provincial Growth and Development
Strategy and National Development Plan.
Towards the end of 2013 and beginning 2014 important changes took place at
the UMDA. A new Board of Directors was appointed and a change in the
management leadership took place. These changes created the impetus to
review the previous strategies, business plans and operational structures of
uMhlosinga to the extent that the intention of the 2-day workshop was to
completely overhaul the future plans of the Agency and the way in which it was
operating.
During the course of the workshop, discussion sessions were undertaken to
stimulate debate around the role of Umhlosinga Development Agency (UMDA)
in both its internal and external environment. The objective of these discussions
was to identify the key focus areas for the Development Agency and to direct its
institutional structures accordingly.
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The idea of establishing a local economic development agency was first
conceptualized in 2003. At the time, the agency was being established in terms
of the “old” Local Government: Municipal Systems Act, as a public (section 21)
company. In August 2004, a new set of national policy and legislative provisions
governing the establishment of municipal entities was introduced.
The introduction of the Municipal Finance Management Act and the
amendments to the Municipal Systems Act in the latter part of 2004, drastically
altered the nature of the processes required for the appointment and
composition of agency boards, introduced new control and reporting
relationships between municipal entities and their parent municipalities and
shifted the responsibility for the appointment of executive staff of the agency,
from the parent municipality to the directors of the agency.
The pre-establishment process did not occur without a fair degree of delay. In
the circumstances where key actors have nurtured differing interpretations of the
new legislation, the development of a fresh stakeholder accord concerning the
role and mandate of the municipality, has been a critical necessity for improving
the overall prospects of success of the entire initiative.
The delays resulted in a thoroughgoing process of institutional development of
the entity. Thus, consensus around the structure of the incipient agency, its
primary mandate and its future role in LED and the nature of its relationship with
the district and local municipalities of UMkhanyakude was cemented and the
following key milestones for the pre-establishment phase were attained. The
district municipality appointed a Board of Directors to govern the agency and
The municipality approved an appropriate institutional mandate for the agency
and for the board of directors.
In 2013, the UKDM council, as the shareholder, appointed a new Board of
Directors to replace the founding Board of Directors, whose mandate had
expired. Towards the end of 2013 the founding CEO retired and a new CEO
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was appointed. These changes required the organization to have a relook at its
mandate and strategy; hence a new five year strategy has been formulated.
2.2 Locality
The UMkhanyakude District Municipality is located in the Kwa-Zulu Natal. It is
situated in the North-Eastern part of KwaZulu-Natal, extending from the uMfolozi
River up to the Mozambique border, being bordered on the east by the
Isimangaliso Wetlands Park which encompasses the entire coastline onto the
Indian Ocean. It consists of 5 local Municipalities, which will be reduced to 4
local municipalities from the 2016 local government elections with the
amalgamation of Hlabisa and Big 5 false Bay Municipalities into one, which are
shown on the diagram below:
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The district is named after the UMkhanyakude Tree (Acacia Xanthophyllous,
Fever Tree which translated to English means “the light in the distance”). The
district covers an area of approximately 12 818 km2 and has a population of
some 625 846 persons (Source: census 2011, as published by Statistics South
Africa). The district is largely rural with only one formal town, namely Mtubatuba
in the south. There are several towns in the area that are experiencing rapid
growth including Mkuze, Hluhluwe, Jozini, Manguzi and Mbazwana. Mkhuze
have been identified as the capital city of the district and a services town.
The number of individuals actually employed within the various local
municipalities is particularly low, and there are therefore high dependency ratios
and generally great amounts of poverty and low levels of economic activity.
UMkhanyakude district municipality does have significant economic challenges
and that they intend investing significant resources into turning the economy
around and creating opportunities for growth in the future. The UMDA, as the
Economic Development arm of the UMkhanyakude District Municipality
specifically needs to stand up and be counted in the creation of economic
opportunities.
Primary access to the district is by road mainly via the national N2 route (which
links the southern and northern parts of the KwaZulu Natal province), and via
the coastal SDI route (MR439), which upon completion, will link the national N2
route, with the city of Maputo, in Mozambique. The district is strategically linked
to the provincial markets of KwaZulu Natal and Mpumalanga and to the
neighbouring market of Swaziland, via the N2 route.
In terms of international trade links, the district’s has access to global markets
through the provincial ports of Durban and Richards Bay. Upon completion of
the SDI route between Hluhluwe and Maputo, especially from the Kosi Bay
Boarder to Maputo, the district will have a direct link to the Port of Maputo, in
Mozambique.
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Although, the District’s economy is the smallest in provincial comparative
terms (eg. less than 5% of the size of the eThekwini municipality in 2011),
and growing from a small base, however the economy experienced significant
growth in excess of 9% per annum, especially in the period from 2000
onwards. Two dominant local economies within the district are the Mtubatuba
and Jozini Local Municipalities, accounting for approximately R1.9 and R1.7
billion of GVA in 2011 respectively. The dominant economic sectors in UKDM
as measured by GVA is the retail, catering and accommodation sector
accounting for R1.45 billion in 2011, the manufacturing sector (R1.37 billion),
and the general government services sector (R1.34 billion).
The manufacturing sector increased its contribution to total GVA from 10.3%
to 19.1%, and the retail, catering and accommodation sector its contribution
from 13.5% to 20.3%. The Agricultural sector has shown some significant
growth of approximately 5.5% per annum over the period 1995 to 2011, but
represents the third lowest output amongst the districts within the province. The
number of formal employment opportunities in the agricultural sector remained
relatively stable at approximately 9000 over the period from 2000 to 2005 but
thereafter decreased significantly to a total estimated figure of 4983 by 2010.
The district economy became more concentrated in a select number of sectors
with the Tress index increasing from a value of 36.7 in 2000 to 42.2 in 2011.
(Source: DGDP, 2015)
General government sector and the community, social and personal services
sector remained the main sources of formal sector employment in the district
(13,909 and 11,342 respectively). The retail, catering and accommodation
sector showed considerable growth across all five municipalities and
employment in this sector more than doubled from 5 181 in 2000 to 10 718 in
2010.
Substantial decrease in employment opportunities in the agricultural sector from
8945 in 2000 to 4983 in 2010, despite the significant growth in this sector as
measured by GVA. Unemployment rate of 31% in UKDM is slightly higher than
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the overall provincial rate of 28.5%. High proportion of the economically active
population classified as discouraged work seekers (27.7%), a figure more than
double the provincial average of 13.8%. 35.2% of the unemployed population is
younger than 25 years of age with a further 34.9% between 25 and 34 years.
The education level of the largest proportion of the unemployed population is
those who completed their Grade 12 education (35%), with a further 30% who
completed some form of secondary education. The majority of the employed
population in the district is active in the formal sector (71.8%), with a further
18.8% involved in the informal sector. Individual monthly income earned in both
the formal and informal sectors in UKDM is lower than the provincial figures; and
The proportion of individuals in both the formal and informal sector earning less
than R800 per month is by some distance the highest amongst all district
municipality’s within the province.
UMkhanyakude has outstanding potential for agriculture and tourism
development, with the district having a wealth of natural beauty and outstanding
landscapes, as well as a favorable climate and fertile soils for major agricultural
production. The district is closely associated with the iSimangaliso,
“Maputaland”, the Makhathini Flats and the Pongola-Poort/Jozini Dam
(constructed in the 1970’s with the intention of unleashing the agricultural
potential of the area).
However, an anomaly exists in that for years the district has been one of the
most widely-researched areas in terms of its latent development potential, yet
still encompasses some of the poorest and most underdeveloped regions in the
province of KwaZulu Natal and of the country as a whole. In the midst of the
exceptional physical endowments, pristine natural environs, an abundance of
unique ecosystems and the rich cultural tapestry that distinguish the area, there
has been a distinctive lack of progress with development interventions, to build
sustainable economic gains around these opportunities.
Several initiatives have been taken in the post-apartheid period, in an effort to
boost economic activity in the sub region, including: The recognition of the
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iSimangaliso as a UNESCO World Heritage Site, in 1999; The rollout of the
Lebombo Spatial Development Initiative (LSDI), a joint program by South Africa,
Swaziland and Mozambique that aims to unlock economic development
potential of the wider Lebombo sub-region within the framework of the South
African Development Community (SADC); The Visa waiver agreements with
Swaziland and Mozambique (effective as of April 2005), to support mutually-
beneficial social and economic interchange in the region; Tripartite Conservation
Agreements with the two neighboring SADC countries of Swaziland and
Mozambique focused on the future establishment of a Trans-Frontier
Conservation Area (TFCA), to boost social and economic interchange, and
tourism in the region.
Notwithstanding the aims and objectives associated with the abovementioned
initiatives, the district currently remains an area characterized by extreme
poverty and a pronounced lack of development across vast areas of the
jurisdiction. The district has severe backlogs in the provision of essential basic
services, physical infrastructure and social amenities.
From the time of their establishment, the primary focus of the six new
municipalities has been directed to dealing concurrently with matters of
institutional formation, poverty eradication and with overcoming massive
backlogs in the provision of infrastructure and with extending essential basic
services to the rural poor.
Given the scarcity of development in the major part of UMkhanyakude, the
district and local municipalities operate off an extremely low tax base and LED
has therefore not been funded or contemplated as a mainstream activity of local
government in the area.
There is very little foreign direct investment in the area; investors lack appetite
for investments in the area and it is very expensive to establish developments in
the district due to legislative requirements, lack of infrastructure, lack of
development plans and unavailability of land. The Environmental Impact
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Assessments coupled with further requirements for developments within
Isimangaliso Wetland Park and its buffer zones has further exacerbated the lack
of investment apetite.
2.3 The Role of the UMDA
The Role of the UMDA is to act as an agent for and on behalf of the District
Municipality in implementing economic, social and environmental policies and
projects, as identified by or agreed with the District and local Municipalities of
UMkhanyakude. UMDA is required to co-ordinate the implementation of a
sustainable, long and short term District Development Program; including its
spatial, economic, social and environmental dimensions, it’s regulatory,
budgetary, financial and legal implications and its social and economic
consequences; UMDA is also required to provide the District of UMkhanyakude
with a ‘one-stop’ contact point for access to possible development funding or
technical assistance, as well as information on the priorities and consequences
of the implementation of the UMkhanyakude District Development Program.
In order to assist UMDA achieve its objectives, it may acquire, own and manage
land and buildings, and/or rights to land and buildings, on behalf of the District
Municipality of UMkhanyakude, to be used for economic and social development
purposes, for public service, public infrastructure, educational, health and
cultural purposes, and to prepare and equip such property as needed to fulfill
the development needs of the public infrastructure and for cultural, nature or
wildlife conservation purposes.
UMDA may also conduct, launch, manage and monitor any study that may be
necessary to further its objectives, collect income; raise, receive and hold funds;
or receive guarantees, from any lawful source, for the purposes of the Agency,
and to manage, administer and disburse those funds in pursuance of the objects
of the Agency and for administrative purposes, in accordance with terms and
conditions determined by the Umhlosinga Development Agency Pty (Ltd) and
approved by the Municipality of UMkhanyakude.
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2.4 Past Performance on Key Areas
2007 Establishment of Operational Office Open office at Hluhluwe and arranged
training for SMMEs from 5 Local Municipalities who sent 450 People. Hosted
First Business Retention Summit in collaboration with Trade & Investment KZN
and Growth Fund to Launch Agency to Business Community
2008 Finalized the service level Agreements for Mkhuze Airport and Jozini Hydro
Projects and UMDA received funding from DBSA for R5m for the feasibility
studies of two lead projects
2009 Receive Draft Feasibility and business plans for the Jozini Hydro Indicating a
bankable project and for the Mkuze Regional Airport Indicating an economic
Catalyst effect to tourism industry but no profitability in medium term.
2010 Launch of 5th Program of the UMDA Business Support and Development
Program Launched as 5th program of intervention by the UMDA Initial project
funded by the MTN Foundation for Business Support Centre with Business
Support Manager and one Administrator
2011 Route 22 Passive marketing Campaign Started. Urban Econ Consultants was
appointed and the outcome of study completed in July 2011.
2012 Corridor Development Strategy on Comprehensive Development of a District
Corridor Study to refocus and Align the District Economic Development Agenda
to That of the Province and National Planning Commissions.
2013 Funding for First social Enterprise Project Receive funding for Sicabazini Project
in Agriculture
2013 Manzingwenya, Mabaso & Mbazwana - UMDA to partner in the transfer and
rehabilitation of the 26000ha Forestry business to the Land Owners of three
traditional Authorities, Mbila, Mabaso and Tembe. The project received R100
million from the Jobs Fund and 800 jobs have been created.
2014 Mkuze Airport Operations and management of Airport being conducted by
UMDA. Landing Fees charged Maintenance being conducted. Precinct plan
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completed Authorizations acquired for aviation section and submitted for the
non-aviation section. In negotiations for unscheduled charters flights, with
certain airlines.
2015 National Schools Nutrition Feeding Fresh Vegetables to 532 schools. The
project commenced in January 2015 and immediately created 30 jobs from
logistics.
2.5 Vision, Mission and Strategic Objectives
Based on the above analysis of the challenges, opportunities and key past
performance of UMDA, the following Vision, Goals and Objectives of UMDA
have been developed. The Vision, Goals and Objectives are related to that of
the uMkhanyakude District Municipality. In this respect the Vision of the
uMkhanyakude District is: “To be a metro by the year 2030”.
In support of this Vision the following statement is quoted from the
uMkhanyakude District Growth and Development Strategy:
“ The district economy has consistently grown by more than 5% per annum
since 2014 and this growth resulted in the creation of decent employment
opportunities reducing the unemployment rate in the district by more than 50%,
resulting in significant increases in average income levels. The skills base of the
district labour force improved continually since 2014 and the proportion of
workers with tertiary education exceeds the average of the province. The
agricultural sector in UKDM is recognised as one of the food baskets of
Southern Africa and numerous agricultural and forestry processing facilities
have been established in the district. The district is internationally recognised for
the diversity of its tourism attractions and by 2030 annually attracts visitor
numbers approaching that of South African tourist icons such as Table Mountain
and the Kruger National Park. The land reform programme has been
implemented successfully and created various employment opportunities in the
agricultural and tourism sector”.
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The uMhlosinga Development Agency vision follows from that of the District and
is: “To be the preferred partner providing cutting edge investment
solutions to economic development in uMkhanyakude.”
The Mission of UMDA is:
“To co-ordinate, plan and manage the implementation of a locally driven
program of catalytic projects, to fast track the development of the local economy
of the district of uMkhanyakude.”
The Goals of UMDA that flows from the Vision and Mission Statements and
based on the challenges and opportunities are the following:
6. To promote sustainable commercialization of agriculture and establishment
of agri-business industries in the district;
7. To develop a world class tourism sector;
8. To develop settlements that promote urbanization and industrialization;
9. To develop world class catalytic infrastructure that promotes economic
development;
10. To develop institutional capacity of the agency, at all levels, with the capacity
to effectively implement and raise funds for catalytic projects and operational
needs.
The Goals are further unpacked into Objective areas as is indicated in the table
below.
GOALS OBJECTIVE AREA
1. Agriculture and Agri-
business Development
1.1. Exports
1.2. Commercial Farming
1.3.Agri-business Value chain
1.4. Agro-processing
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GOALS OBJECTIVE AREA
2.Tourism Development
2.1. Tourism investor attraction and promotion
2.2 New product development
2.3 Research and Knowledge Provision
3.Develop Infrastructure
and Green Economy
3.1. Commercial air transport
3.2. Renewable Energy
3.3. ICT Infrastructure
3.4. Bulk Infrastructure
4.Urbanisation and
industrialisation
Development
4.1. Urban nodal development
4.2. Industrial Development
5.Institutional
Development
5.1. Human Resources
5.2. Finance
5.3. Corporate Governance
In implementing the Goals and Objectives UMDA will be providing “consulting
services” such as undertaking feasibility studies; preparing business plans;
undertake environmental and planning studies aimed at gaining the required
approvals; prepare funding applications and put project and programme
management systems in place when and where required.
UMDA will also manage capital projects on behalf of the District Municipality,
Local Municipalities and other government departments and in return will charge
a 10% development fee.
Finally, UMDA will also manage strategic economic investments on behalf of the
District Municipality and in return charge management fees and be entitled to a
portion of dividends as agreed to between UMDA and the District Municipality.
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2.6 SWOT Analysis:
SWOT analysis of UMDA experience
Internal Strengths Weaknesses
The UMDA is a well-skilled and
capacitated institution, with a
sound reputation and effective
systems.
The UMDA is able to implement
capital projects on behalf of the
uMkhanyakude District Municipality
within time and budget, and at a
cost of 10% of the capital value of
these projects.
A pipeline of potential projects has
been developed through rigorous
rural, urban and spatial development
planning
The UMDA must secure a capital
budget allocation of at least R300
million per year to cover all operating
costs through the 10% development
fee, without requiring an additional
operating grant from the uMkhanyakude
District Municipality.
The UMDA’s capacity may be under-
utilised in 2015/16 if the operating
budget allocation is further reduced.
The sustainability of the impact of
UMDA’s projects depends on adequate
maintenance, upkeep and
management by other District’s
departments, local Municipalities,
beneficiaries and agencies.
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External Opportunities Threats
National policy requires a
sustained investment in new
infrastructure (a) to support
economic growth; and (b) to
eradicate service backlogs.
National policy supports
industrialisation through the
development of black industrialists
The Small Town Rehabilitation
Programme facilitates collective
regeneration action in this
strategically important part of
the province.
There are many areas in towns
and rural settlements that require
urban regeneration interventions
to unlock private investment
potential.
Decreased property investor
activity due to the economic
downturn, lack of zonings and
ITB land tenure
Increasing migration pressures,
specifically in to particular
towns i.e. Jozini, Manguzi,
Mkhuze and Mtubatuba.
Declining national and municipal
tax revenue will limit capital
budgets in the medium term.
Inability to attract and retain
personnel qualified in project
management, engineering and
related fields
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3. STRATEGIC FOCUS AREAS
3.1 Business Concept
Investment into the district is very slow and foreign direct investments are
even worse, whilst there is some investments happening in property
development especially on shopping centers. There is limited investment in
the industrial sector, whilst an investment into the tourism sector is minimal
and not in line with the transformation agenda of the country. A number of
factors could be attributed to these challenges.
Firstly, it’s planning; there is only one formal town and all other towns are
informal without town schemes. These towns lack development vision and
have no anchor industries dedicated to each town. Therefore it means that
there are no areas zoned for development and developers will have to fund
the zoning application. Without these spatial plans and adherence to them,
people have also build residences in areas suitable for business and
agriculture, which also means that in some instances, developers has to fund
the negotiation process, the removal of the occupant and compensation. The
above effectively delays the start of the development and increase costs of
such development.
Secondly, it’s availability of land and land tenure. Our Municipalities, both the
district and local municipalities do not generally, own land in all our
development nodes. Some of the land is state land, and some of it is in
private hands, especially in Mtubatuba, Hluhluwe and Mkhuze, whilst most of
the land is Ingonyama trust Land. The administration of Ingonyama trust land
is a challenge. The Ingonyama Trust itself has very few employees
managing vast tracks of land and is based in Pietermaritzburg. This land is
also co-managed by Traditional councils who are severely under resourced
and there are generally no spatial plans on this land and where there is, such
spatial plans are generally not observed by traditional councils and local
communities. The ITB does not grant freehold and only allows leasehold for
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40 years. This creates a challenge especially because there is freehold
tenure in the most part of the country and investors and finance houses
normally view this type of tenure as unsecure, despite the fact that it can be
registered at the deeds office.
Thirdly, it’s the environmental authorizations. It should be noted that
environmental authorizations per se are not an issue. It is the period it takes
to get approvals and uncertainty on approved development nodes that
creates a problem. In other words it is the developer’s responsibility to fund
the process of environmental approvals, which makes investment expensive
and takes longer for development to be realized. These authorizations also
delays the planning and development Act’s approvals (Development
approvals). This is also made worse by the fact that there is lack of spatial
plans, approved development nodes and town schemes.
Lastly, it’s infrastructure; there are currently no infrastructure plans dedicated
to stimulating economic development. This means that an investor, who after
a considerable monetary investment made and who has all the development
approvals must still invest a considerable amount of money in developing
infrastructure required by his/her business. This includes water, sewer,
electricity and roads, which escalates the development costs considerably
compared to cities. Investors have also complained that after investing a lot
of money on infrastructure, they still have to continue to manage such, which
also pushes up their cost of investment.
UMDA’s strategy is therefore to level the playing field for investors, thus
lowering the costs of investment in the district and promoting foreign direct
investment. In order to achieve the above, we have identified a number of
nodes for development, these ranges from tourism nodes, agricultural nodes,
urban (town) development nodes and industrial development nodes. UMDA’s
responsibility is to secure land, obtain environmental authorizations, obtain
development approvals, develop infrastructure and promote these nodes for
investment. Our projects’ portfolio is therefore structured to unleash the
economic potential of the district through unlocking the stumbling blocks to
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investment.
The basis of the UMDA intervention strategy is the district’s IDP priorities
which include the following KPI’s; unemployment, poverty alleviation, local
economic development, infrastructure development, SMME’s development
and Financial Viability of the agency. In line with the above KPI’s we intend
over the next ten (10) years to implement interventions that will assist in
creating over 100 000 Jobs in the district, facilitate investments of over R10
billion, facilitate the establishment of over 50 000 Units (to increase rates
base of municipalities), to facilitate training of over 10 000 beneficiaries and
in the course support the development of at least 10 millionaires from the
district.
The interventions of the UMDA are directly linked through alignment with
these KPI’s by developing, identifying and promoting projects that will speak
to addressing these KPI’s. By doing so the UMDA is able to assist in the
Spatial Planning and focusing the direction of revenue collection by both
Local and National Government.
The UMDA will continue to engage the Private sector, Local, Provincial and
National Government in the identification of projects that would achieve this
goal. The establishment of networking relationships with National and
Provincial Developments, Finance Institutions and Agencies is pivotal to
assist in achieving both the Technical and Financial objectives of the UMDA.
3.2 Guiding Principles
The following guiding principles have been developed and are the foundation
for decision making in UMDA. It informs how the Agency is to prioritise and
select its projects and assess its progress. The guiding principles are:
1. The nature and extent of the employment and income generation
ability of the economic sustainable interventions identified;
2. The nature and extent of external and internal, public and private
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sector investment that the intervention can attract;
3. The multiplier impact of intervention through the creation of new and
additional backward and forward linkages within the District;
4. Building the capital asset base (economic infrastructure) of the District
on which further future interventions can be built;
5. Building the entrepreneurial, SMME, cooperative and small informal
economic base capacity of the District;
6. The ability of the interventions to empowerment of youth, women and
vulnerable groups and the contribution of the intervention towards
poverty eradication;
7. The ability of the intervention to advance further business
management principles also making allowances for the Agency to
generate an income for future investment and funding operations.
The application of the Guiding Principles to project selection will lead to the
identification of a multi-dimensional portfolio of projects rather than a
simplistic listing of priority projects. This will assist UMDA to strategically plan
its economic interventions to deliver different impacts at different time-scales
and with different risk profiles. This is best illustrated in the following diagram
that shows how UMDA will identify its strategic interventions in the District.
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3.3 Catalytic Projects and Actions
Projects come at various stages, forms and shape. However it has been agreed
that in principle our projects will follow the following projects pipeline.
g) Identification, inception and registration of catalytic Project
h) Development of concept
i) Pre-Feasibility study and report
j) Project packaging
Feasibility study
Business Plan
Land Security
Development approvals
EIA approvals
k) Fundraising & investments promotions
l) Implementation
Project Management
Construction & commissioning
Operations
In assessing the projects and action plans UMDA will implement a Process Flow
program to identify catalytic projects and actions and, package them to ensure
that a variety of interventions are planned to deliver on a sustainable basis.
Additional projects to be approved by the Board, through the pre-approved
selection criteria (Matrix).
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Project Flow Process
The immediate projects and actions that UMDA will be focusing on are listed
below. This list of projects and actions will be reviewed and updated on a regular
basis together with its Board and with its shareholder, the District Municipality of
uMkhanyakude. The list relates to the strategic Goals and Objective areas
identified:
3.4 Projects’ Implementation Masterplan
Based on the strategic framework of Goals and Objective, UMDA is in the
process of developing a Master Plan of catalytic projects and actions to lead to
the development of the District. The purpose of the Master Plan is:
To provide a projects implementation master plan for the district up to 2030;
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To provide maps for different sectors and targets;
To provide 3D models and costing of these projects; and
To obtain buy in from the District, planning commission, Local Municipalities
and other departments and agencies working in the area.
To create 100 000 jobs by 2030 and to facilitate investments of more that
R10 billion into the district economy.
5. AGRICULTURE AND AGRI-BUSINESS DEVELOPMENT
Through the Agri-business development strategy, UMDA will support and
facilitate the commercialization of the existing co-ops in the district by promoting
the processing of forestry products and support the establishment of District
Agri-business Companies or secondary co-ops per each commodity or group of
commodities. It is envisaged that commercial stock and broiler farms will be
established to promote the following types of products; groundnuts, sugar cane,
cotton, timber, vegetables, fruits and game. UMDA will work together with the
KZN Agricultural Development Agency to develop markets and further
agribusiness opportunities.
The agri-business intervention is also aligned to the Makhathini Development
Masterplan, a provincial government initiative, aimed at stimulating economic
growth in Jozini and uMhlabuyalingana Municipalities. The purpose of the
Makhathini Development Programme is to support and facilitate the
commercialisation of Mjindi through the expansion of the Scheme, stimulate
further agricultural development in the area and increase the level of tourism
development is the area.
5.1 FRUIT AND VEGETABLE PRODUCTION AND DISTRIBUTION PROGRAMME
To develop a programme that produces fruits and vegetables from the district
and supply them to a number of markets, including the local schools, public
facilities, private and international markets. This is a district project with 70
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percent of the stock coming from Makhathini area. UMDA intend develop 3000
hectares for fruits and vegetables, creating about 3500 temporary and
permanent jobs.
5.1.1 Vegetable Production Project
To develop a project that produces vegetables from the district and supply them
to a number of markets, including the local schools, public facilities, private and
international markets. This is a district project with 70 percent of the stock
coming from Makhathini area. UMDA intend develop 2000 hectares for
vegetables and create about 200 temporary and permanent jobs. The project
has commenced and land is currently being sourced for a more comprehensive
business planning.
5.1.2 Hydroponic Tunnels Development Project
To develop a Hydroponic tunnel network based on one project per Local
Municipality in order to capitalize on faster growth and water savings through
temperature control and drip irrigation. The project is based in the whole district
and about 500 jobs will be created. An investment is required for feasibility
study, technical designs and business plan
5.1.3 Fruit Farming Project
To support and facilitate the commercialization of the existing co-ops and
promote the establishment of commercial farmers through the establishment of
1000 Ha of land for fruit farming. Based in the whole district but about 80% to
come from Jozini and uMhlabuyalingana Municipalities. About 1000 jobs will be
created. The business plan is being concluded
5.1.4 National Schools Nutritional Programme (NSNP)
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Cabinet adopted a resolution for Development Agencies to implement the NSNP
by providing locally produced vegetables to schools. In uMkhanyakude 532
schools has been identified and a Service Level Agreement will be entered into
with the Department of Education to provide food to the schools. The key
objective of the programme is to provide food to the schools by 1st July 2014.
Fruits and
Vegetables
Year 1 Year 2 Year 3 Total
Concept 50 000 50 000
Pre-feasibility 250 000 250 000
Feasibility 1 200 000 1 200 000
Securing Land 500 000 500 000
Social
Facilitation
500 000 500 000
Technical
Studies
2 000 000 2 000 000
PDA Approvals
EIA
Business Plan 500 000 500 000
Implementation 24 000 000 100 000 000 50 000 000 150 000 000
Total 5 000 000 100 000 000 50 000 000 155 000 000
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5.2 GROUND NUT PROCESSING PROJECT
To support and facilitate the commercialization of the existing co-ops and
promote the establishment of commercial farmers through the establishment of
3000 Ha of land for Groundnut farming and the use of the existing processing
plant from ADA. Based in the whole district but about 80% to come from
Mhlabuyalingana and the plant to be based in Manguzi. About 4000 jobs will be
created. The plant exists but a business plan is being concluded.
Groundnuts Year 1 Year 2 Year 3 Total
Concept 50 000 50 000
Pre-feasibility 250 000 250 000
Feasibility 1 200 000 1 200 000
Securing Land 500 000 500 000
Social
Facilitation
500 000 500 000
Technical
Studies
2 000 000 2 000 000
PDA Approvals
EIA
Business Plan 500 000 500 000
Implementation 50 000 000 50 000 000 100 000 000
Total 5 000 000 50 000 000 50 000 000 105 000 000
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5.3 Mealies Production Project
To promote industrial development and job creation through the establishment of
a mealies production project, beneficiating the local farmers but also setting
aside more than 8000 hectares of land for the project. The project is based in
Makhathini, Jozini Municipality. About 10 000 permanent and temporary Jobs to
be created and an investment is required for feasibility study, EIA, development
planning and business plan.
Mealies
Production
Year 1 Year 2 Year 3 Total
Concept 50 000 50 000
Pre-feasibility 250 000 250 000
Feasibility 1 200 000 1 200 000
Securing Land 500 000 500 000
Social
Facilitation
500 000 500 000
Technical
Studies
2 000 000 2 000 000
PDA Approvals
EIA
Business Plan 500 000 500 000
Implementation 100 000 000 200 000 000 300 000 000
Total 5 000 000 100 000 000 200 000 000 305 000 000
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5.4 TMM FORESTRY PROJECT
To support and facilitate the handover of the Manzengwenya Mbazwane State
plantation to the local communities and to rehabilitate the plantation and also
implement beneficiation projects. The project is based in Manzengwenya,
Mseleni and Mbazwane; Mhlabuyalingana Municipality. About 700 Jobs already
created and 1000 more to be created after handover. An investment of R250 M
is required. A business plan concluded and R100 M already invested.
TMM Forestry Year 1 Year 2 Year 3 Total
Concept
Pre-feasibility
Feasibility
Securing Land
Social
Facilitation
Technical
Studies
PDA Approvals
EIA
Business Plan
Implementation 50 000 000 50 000 000 100 000 000
Total 50 000 000 50 000 000 100 000 000
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5.5 FISH FARMING PROJECT
To support and facilitate the commercialisation of the fish farming industry,
through the establishment of two mega fish farms. The project is based in
Mhlabuyalingana and Big 5 Municipality. About 500 jobs to be created. An
investment of R100 M is required. An investment to complete a feasibility study
and business plan
Fish Farming Year 1 Year 2 Year 3 Total
Concept 50 000 50 000
Pre-feasibility 250 000 250 000
Feasibility 1 200 000 1 200 000
Securing Land 500 000 500 000
Social
Facilitation
500 000 500 000
Technical
Studies
2 000 000 2 000 000
PDA Approvals
EIA
Business Plan 500 000 500 000
Implementation 50 000 000 50 000 000
Total 5 000 000 50 000 000 55 000 000
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5.6 SUGAR MILL
To promote industrial development through the establishment of a Sugar Mill,
beneficiating from the local Sugar Cane Farming. The project is based in
Makhathini, Jozini Municipality. About 500 Jobs to be created. An investment of
R200 M will be required. An investment of R8.5 M is required for feasibility study,
EIA, development planning and business plan. is required.
Sugar Mill Year 1 Year 2 Year 3 Total
Concept 50 000 50 000
Pre-feasibility 250 000 250 000
Feasibility 1 200 000 1 200 000
Securing Land 1 000 000 1 000 000
Social
Facilitation
1 000 000 1 000 000
Technical
Studies
3 000 000 3 000 000
PDA Approvals
EIA
Business Plan 2 000 000 2 000 000
Implementation
Total 1 500 000 7 000 000 8 500 000
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5.7 AGRIBUSINESS DEVELOPMENT MASTERPLAN
To promote industrial development through the establishment of a vibrant agri-
business industry. It is vital to have an overarching plan that covers both primary
agriculture and agroprocessing value add but also a plan that has concrete
project information, land and costings. All the stakeholders will be consulted and
required to abide by the plan.
Agri business
Masterplan
Year 1 Year 2 Year 3 Total
Project
Management
500 000
Agricultural 400 000
Agri-
Economist
700 000
Land Legal 300 000
Social
Facilitation
500 000
Technical
Studies
2 000 000
Planning 300 000
Environmental 500 000
Report Writing 200 000
Total 5 400 000 5 400 000
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6. TOURISM DEVELOPMENT
6.1 TOURISM NODES DEVELOPMENT AND ROUTE 22
UMDA has undertaken substantial research and consultation in to the
development of tourism facilities in the District. The Route 22 study and the
corridor development study informed UMDA strategy on Tourism Nodes
development, which is intended to facilitate economic growth and transformation
through tourism. The primary objective of this programme is to promote
investments into hotels and other tourism products within the identified nodes.
Components of the programme are:
To promote investment into associated retail and residential developments
within these nodes.
To promote world class tourism products and not only backpackers
To plan, obtain planning approvals, EIA and land tenure rights prior to
marketing
To ensure that the number of beds are doubled and the number of
international visitors to the district is also doubled, thus creating jobs and
increasing contribution to GDP
The tourism Nodes identified are:
Lake Sibaya
Kosi Bay/Bangneck
Sodwana
False Bay
Jozini Mountain Ridge (Ogaluweni)
Cecil Marks Pass
Hlabisa
Saint Lucia (Already established)
For the year 2015/16 UMDA will focus on three nodes only, which is Cecil Marks Pass,
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Hlabisa and Saint Lucia Nodes
Tourism Nodes Year 1 (2
nodes)
Year 2 (2
Nodes)
Year 3 (2 Nodes) Total
Concept
Pre-feasibility 500 000 500 000 500 000 1 500 000
Feasibility 2 500 000 2 500 000 2 500 000 7 500 000
Securing Land 500 000 500 000 500 000 1 500 000
Social
Facilitation
500 000 500 000 1 000 000
Technical
Studies
3 000 000 3 000 000 6 000 000
PDA Approvals 1 000 000 1 000 000 2 000 000
EIA 2 000 000 2 000 000 4 000 000
Business Plan 2 000 000 2 000 000 4 000 000
Implementation 100 000 000 100 000 000
Total 3 500 000 12 000 000 112 000 000 127 500 000
6.2 HOTEL SCHOOL
One of the key gaps in the tourism product and services identified in the District
is the lack of a Hotel School of international standard. Tourism is one of the main
sectors of the District and there is a substantial number of tourism products and
services already on offer. However, there is no facility that makes provision for
the professional training of staff. The key objectives of this programme is to:
Partner with established players in the field
Promote the development of Africans into managerial positions
Support and supply the tourism nodes with skilled employees.
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Hotel School Year 1 Year 2 Year 3 Total
Concept
Pre-feasibility
Feasibility
Securing Land
Social
Facilitation
Technical
Studies
700 000 700 000
PDA Approvals
EIA
Business Plan 300 000 300 000
Implementation 50 000 000 100 000 000 150 000 000
Total 1 000 000 50 000 000 100 000 000 151 000 000
6.3 HOTEL MANAGEMENT COMPANY
Closely related to the above projects is the need to develop black owned tourism
establishments. Many of the black-owned facilities are of a low standard due to
the inexperience of the owners and staff. Even those with facilities of a high
standards has a low occupancy rates. It is envisaged that a Hotel Management
Company will be established as a joint venture to bridge the gap between the
African tourism product owners and international strategic partners. These
establishment together with community owned establishments, will run the
company. The company will also promote these establishments and the district
internationally, including the provision of world class management in order to
improve service offered to tourists.
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Hotel
Management
Year 1 Year 2 Year 3 Total
Concept
Pre-feasibility 250 000 250 000
Feasibility 1 000 000 1 000 000
Securing Land
Social
Facilitation
300 000 300 000
Technical
Studies
PDA Approvals
EIA
Business Plan 250 000 250 000
Implementation 5 000 000 20 000 000 25 000 000
Total 2 000 000 5 000 000 20 000 000 27 000 000
6.4 DISTRICT EVENTS AND MARKETING
In order to promote the district as an events friendly district but also to promote
tourism through events, there are cultural events like umthayi, adventure like
Airshow and other sports and leisure events based in the whole district that
could create a number of temporary jobs. Event specific investment will be
required. Putting together an events profile of the district is also a
requirement. In this financial year we will focus on supporting the following
events:
a) Umthayi Marula Festival
b) St Lucia Car Spinning Show
c) Route 22 Launch
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District Events Year 1 Year 2 Year 3 Total
Concept
Pre-feasibility
Feasibility
Securing Land
Social
Facilitation
Technical
Studies
PDA Approvals
EIA
Business Plan
Implementation 500 000 500 000 1 000 000 2 000 000
Total 500 000 500 000 1 000 000 2 000 000
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7. INFRASTRUCTURE
7.1 MKHUZE AIRPORT
To develop a 76 Ha plot into a regional airport and a vibrant multi – use non
aviation precinct, with a shopping centre, a hotel, conference facility, hangars,
offices and residential apartments. The project is based in Mkhuze, Jozini
Municipality. It is estimated that between 1000 and 5000 permanent jobs will be
created. Runway present but need rehabilitation, fencing to be done soon, plans
at an advanced stage and there is environmental authorization for the terminal
building.
Mkhuze Airport Year 1 Year 2 Year 3 Total
Concept
Pre-feasibility
Feasibility
Securing Land
Social
Facilitation
Technical
Studies
PDA Approvals
EIA
Business Plan
Implementation 20 000 000 50 000 000 100 000 000 170 000 000
Total 20 000 000 50 000 000 100 000 000 170 000 000
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7.2 JOZINI HYDRO ELECTRIC PROJECT
To develop a Hydro electric project on the Pongolapoort dam wall generating
between 5 and 10 Megs. Electricity will be sold back to the grid. The project is
based at Jozini Dam wall, Jozini Municipality. About 10 direct jobs will be
created. The project requires an investment of R250 M. Feasibility studies done
and only the EIA, water use licence, technical designs and capital required.
Jozini Hydro Year 1 Year 2 Year 3 Total
Concept
Pre-feasibility
Feasibility
(Update)
3 000 000 3 000 000
Securing Land
Social
Facilitation
500 000 500 000
Technical
Studies
2 000 000 2 000 000
PDA Approvals
EIA 3 000 000 3 000 000
Business Plan 1 500 000 1 500 000
Implementation 100 000 000 150 000 000 250 000 000
Total 10 000 000 100 000 000 150 000 000 260 000 000
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7.3 DISTRICT BROADBAND ROLLOUT
To develop a district wide broadband infrastructure, including fibre optic lines
and towers, in order to facilitate easy access to ICT eco systems and access to
internet. The project will cover the whole district. About 1000 temporary jobs will
be created during construction. Total investment required will be R100 Million,
while R5 M is already provided by IDC. A consultant has been appointed to do a
feasibility study with a business plan.
Broadband Year 1 Year 2 Year 3 Total
Concept
Pre-feasibility
Feasibility
(Update)
Securing Land
Social
Facilitation
Technical
Studies
PDA Approvals
EIA
Business Plan
Implementation 10 000 000 50 000 000 250 000 000
Total 10 000 000 50 000 000 260 000 000
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7.4 SOLAR ELECTRICITY GENERATION
To develop Solar electricity generating capacity. The electricity generated will be
fed back to the grid. The solar panels will be placed next to the current
substations. The project will be based in four substations, in Nondabuya,
Ndumo, Phelandaba and Mbazwana; Jozini and uMhlabuyalingana
Municipalities. About 500 temporary jobs and 50 permanent jobs. Investment
required is about R200 M. Investment required for feasibility and business plan
Solar
Electricity
Year 1 Year 2 Year 3 Total
Concept
Pre-feasibility 250 000 250 000
Feasibility 2 000 000 2 000 000
Securing Land 1 000 000 1 000 000
Social
Facilitation
500 000 500 000
Technical
Studies
3 000 000 3 000 000
PDA Approvals 500 000 500 000
EIA 2 000 000 2 000 000
Business Plan 1 000 000 1 000 000
Implementation 50 000 000 50 000 000
Total 250 000 10 000 000 50 000 000 60 250 000
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7.5 MANZENGWENYA BIOMASS PROJECT
To develop a Biomass project, generating electricity through the burning of
timber biomass. Electricity generated will be fed back to the grid. The project will
be based in Manzengwenya/Manguzi; uMhlabuyalingana Municipality. 200 jobs
will be created. Investment required amounts to R100 M. An investment of R5 M
is required for feasibility study and business plan.
Manzengwenya
Biomass
Year 1 Year 2 Year 3 Total
Concept
Pre-feasibility 250 000 250 000
Feasibility 2 000 000 2 000 000
Securing Land 1 000 000 1 000 000
Social
Facilitation
500 000 500 000
Technical
Studies
3 000 000 3 000 000
PDA Approvals 500 000 500 000
EIA 2 000 000 2 000 000
Business Plan 1 000 000 1 000 000
Implementation 50 000 000 50 000 000
Total 250 000 10 000 000 50 000 000 60 250 000
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7.6 WIND ENERGY
To develop capacity to generate electricity through wind turbines based on two
sites. One strategically based along the coast and the other based on the
lebombo mountains.The project is based on two areas, the coast and lebombo
mountains; Mhlabuyalingana and Jozini Municipalities. 500 temporary jobs and
20 permanent jobs to be created. Investment required amount to R200 Million.
R5 Million investment required for feasibility study and business plan.
Wind Energy Year 1 Year 2 Year 3 Total
Concept
Pre-feasibility 250 000 250 000
Feasibility 2 000 000 2 000 000
Securing Land 1 000 000 1 000 000
Social
Facilitation
500 000 500 000
Technical
Studies
3 000 000 3 000 000
PDA Approvals 500 000 500 000
EIA 2 000 000 2 000 000
Business Plan 1 000 000 1 000 000
Implementation 50 000 000 50 000 000
Total 250 000 10 000 000 50 000 000 60 250 000
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7.7 SEWER MANAGEMENT PROGRAMME
To develop a district wide sewar management programme, based on two mega
plants fed from town based transfer stations in order to maximise economies of
scale through possible gas and/or electricity generation capacity. This is a
district wide project with the two mega plants based in the north and the south of
the district. About a 1000 jobs will be created. Investment required will initially be
R1 Billion. An investment for feasibility study and business plan is required.
Sewar
Management
Year 1 Year 2 Year 3 Total
Concept
Pre-feasibility 250 000 250 000
Feasibility 2 000 000 2 000 000
Securing Land 1 000 000 1 000 000
Social
Facilitation
500 000 500 000
Technical
Studies
3 000 000 3 000 000
PDA Approvals 500 000 500 000
EIA 2 000 000 2 000 000
Business Plan 1 000 000 1 000 000
Implementation 50 000 000 50 000 000
Total 250 000 10 000 000 50 000 000 60 250 000
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7.8 WASTE MANAGEMENT PROGRAMME
To develop a district wide waste management programme, based on two mega
plants fed from town based transfer stations in order to maximise economies of
scale through possible gas and/or electricity generation capacity. This is a
district wide project with the two mega plants based in the north and the south of
the district. About a 1000 jobs will be created. Investment required will initially be
R1 Billion. An investment for feasibility study and business plan is required.
Waste
Management
Year 1 Year 2 Year 3 Total
Concept
Pre-feasibility 250 000 250 000
Feasibility 2 000 000 2 000 000
Securing Land 1 000 000 1 000 000
Social
Facilitation
500 000 500 000
Technical
Studies
3 000 000 3 000 000
PDA Approvals 500 000 500 000
EIA 2 000 000 2 000 000
Business Plan 1 000 000 1 000 000
Implementation 50 000 000 50 000 000
Total 250 000 10 000 000 50 000 000 60 250 000
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8. URBANISATION AND INDUSTRIALISATION PROJECTS
8.1 SMALL TOWN REHABILITATION AND DEVELOPMENT
The objective of this programme is to rehabilitate and beautify the existing
targeted six towns in the District. It is also the intention to identify about three
industries per town that would drive development which will lead to the planning
and implementation of a town development plan in line with vision 2030.
Small Town
Rehabilitation
Year 1 Year 2 Year 3 Total
Concept
Pre-feasibility
Feasibility 1 500 000 1 500 000
Securing Land
Social
Facilitation
500 000 500 000
Technical
Studies
2 000 000 2 000 000
PDA Approvals
EIA
Business Plan 1 000 000 1 000 000
Implementation 4 800 000 50 000 000 54 800 000
Total 4 800 000 5 000 000 50 000 000 59 800 000
8.2 MANGUZI SPECIAL ECONOMIC ZONE
UMDA is planning to develop a special economic zone in Manguzi. The purpose
is to promote the establishment of BBEEE industrialist in the district owned by
locals. This will entail the planning and development of EIA approval and
development rights plans, secure land tenure and develop the Special Economic
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Zone
The main objectives of the programme are:
To promote the economic revival of this town with specific focus on industrial
hubs
To plan, obtain development and EIA approval, secure land tenure and
develop industrial precinct.
To secure incentives for businesses willing to invest and set up shop within
the development.
To construct mini factories and warehouses to be owned by UMDA for
leasing to SMME’s
Manguzi SEZ Year 1 Year 2 Year 3 Total
Concept 50 000 50 000
Pre-feasibility 250 000 250 000
Feasibility
(Update)
1 200 000 1 200 000
Securing Land 500 000 500 000
Social
Facilitation
200 000 300 000 500 000
Technical
Studies
1 000 000 2 000 000 3 000 000
PDA Approvals 1 000 000 1 000 000
EIA 2 000 000 2 000 000
Business Plan 500 000 1 000 000 1 500 000
Implementation 50 000 000 50 000 000
Total 3 200 000 6 800 000 50 000 000 70 000 000
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8.3 Mkhuze Special Economic Zone
UMDA is planning to develop a special economic zone in Mkhuze. The purpose
is to promote the establishment of BBEEE industrialist in the district owned by
locals. This will entail the planning and development of EIA approval and
development rights plans, secure land tenure and develop the Special Economic
Zone.
The main objectives of the programme are:
To promote the economic revival of this town with specific focus on industrial
hubs
To plan, obtain development and EIA approval, secure land tenure and
develop industrial precinct.
To secure incentives for businesses willing to invest and set up shop within
the development.
To construct mini factories and warehouses to be owned by UMDA for
leasing to SMME’s
Mkhuze SEZ Year 1 Year 2 Year 3 Total
Concept 50 000 50 000
Pre-feasibility 250 000 250 000
Feasibility 1 200 000 1 200 000
Securing Land 500 000 500 000
Social
Facilitation
200 000 300 000 500 000
Technical
Studies
1 000 000 2 000 000 3 000 000
PDA Approvals 1 000 000 1 000 000
EIA 2 000 000 2 000 000
Business Plan 500 000 1 000 000 1 500 000
Implementation
Total 3 200 000 6 800 000 10 000 000
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9. MARKETING PLAN AND COMMUNICATIONS
We intend to promote the agency as a reputable, reliant and successful
municipal entity, which will implement projects to the value of over 10 billion
rands within the next 10 years. The above interventions should create at lease
100 000 jobs, 10 millionaires and 50 000 property units. This will in turns
increase the contribution of the district to the GDP and also increase the rates
base of our municipalities.
9.1 The Market
The development field is saturated with firms of development practitioners and
consultants providing similar services. Anyone who has been to school can
probably provide development advise and can also draft a business plan.
Whether the advise is sound and whether the business plan will pass the funding
test, is another story.
In KwaZulu Natal there are a number of consulting firms focusing in the
development field but there are currently only three District Development
Agencies. The Provincial cabinet took a resolution that all district municipalities
should have a district development agency. COGTA was mandated to
implement the decision and a consultant was appointed to facilitate the
establishment of these district development agencies. Consulting firms and
municipalities per se are competition to district development agencies. It is
therefore critical that the relationship with municipalities and consultants is
managed properly to avoid unnecessary competition. Municipalities generally
work with consultants once they have funding approved for specific projects
whilst DDA’s are left in the cold.
Special relationships between certain individuals also creates a challenge for the
agency, in that sometimes it’s difficult to work with a particular municipality on a
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project because they want a certain consultant to handle it. Also municipalities
and provincial departments will from time to time parachute projects that could
be done by the DDA, because someone wants credit for that project.
Whilst there are challenges facing DDA’s, it should be noted that it is not all
doom and gloom and there are many more opportunities that still exist, but these
opportunities require a dynamic DDA that is willing to change and adapt to the
current market conditions, while ensuring that they still provide a professional
service that addresses the needs of our communities.
9.2 Market Segmentation
The local economic development sector is a very broad industry. UMDA would
focus on implementation of catalytic projects and investment promotion. The
implementation of catalytic projects will involve feasibility studies, business
planning, obtaining development approvals and environmental authorizations
and project management.
UMDA will target development finance houses, like the IDC and DBSA including
government departments for grant funding especially for feasibility studies and
project packaging. We will also target other finance houses for the for finance
required n the implementation of projects.
UMDA will also target municipalities in order to establish working relationships
that will ensure that UMDA work as a team with the family of municipalities. All
projects that UMDA is working on, are based in these municipalities and
therefore belong to the municipalities and there is no need for competition. We
will also target provincial departments in this regard to ensure a smooth working
relationship on specific projects.
The business community is of vital importance both from the district and beyond.
As part of government our role is to level the playing field and business will thrive
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and create jobs. It is therefore important to deal with business since they are the
ones that create jobs and will bring investments into the district.
The local communities are the ultimate beneficiaries of our intervention. It is
therefore important that they are part of the process at all times and also are
informed of what is being done regularly.
UMDA has used the market segmentation strategy to identify the market it wants
to operate in. Whilst the market of banks, development finance houses, business
sector, communities and government has been identified, it is also noted that
their needs may not be the same all the time. The UMDA will therefore ensure
that when dealing with each sector their needs will be identified and solutions will
be developed to address that specific sector’s needs.
9.3 Target Audience
The target Audience is segmented. Development finance institutions are
targeted for grant funding especially for feasibility studies and project packaging.
Whilst other finance houses will be targeted for financing the implementation of
projects.
Government and in particular Municipalities are targeted for funding, PDA
approvals, environmental approvals, technical support and partnership. They will
also assist with stakeholder mobilization.
Business sector will also be targeted for guidance and advice on development
opportunities and priorities including investment on economic opportunities,
whilst local stakeholders will also be targeted as the main beneficiaries of our
interventions.
9.4 Competitor Analysis
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There are no companies or entities specializing on local economic development
in our area. However municipalities, government departments and consulting
firms all play a role in one way or another, related to local economic
development. Even though there are consultants with capacity to do the work we
are doing, they normally start doing the work once there is confirmation of funds.
On one hand government departments and municipalities do not have capacity
to do the work we are doing except that when they have funded projects, they
prefer to appoint consultants to do the work because of special relationships and
lack of capacity within UMDA.
9.5 STRATEGIES
9.5.1 Sales and Market Strategy
The objective of the UMDA is to grow the market penetration through better
servicing of the old clients and finding new ones while ensuring market stability.
We also have to inform our stakeholder and especially communities of our
progress achieved in implementing catalytic projects. In the course, the following
tools will be employed in implementing the said objective.
9.5.2 Target market
Our target market will consist mainly of existing clients, new client and potential
clients and would comprise mainly of banks, development banks, funders,
municipalities, government departments, business sector and communities.
9.5.3 Service
The agency will focus in providing cutting edge local economic development
solutions, including investment promotion services. In particular we will provide
research, feasibility studies, business planning and funding proposals, project
packaging (securing land tenure, obtaining environmental approvals and
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securing development approvals) and project management during
implementation.
9.5.4 Promotions
Promotional items in the form of pens, note pads and calendars will be
developed and handed out as gifts to all stakeholders. This will ensure that they
see the name and contact details of the UMDA on daily basis, thus when they
need local economic development support, they will think of UMDA first.
9.5.5 Entertainment
Entertainment for certain executives at convenient times will also be carefully
done. The company will only entertain relevant people who are decision makers
or have influence in their workplace. The intention is to create a close working
relationship with these executives.
9.5.6 Investment Seminars
Since there are new developments happening all the time, seminars will be held
with particular investors. They will be required to bring their key staff and we will
showcase development opportunities available in the district and receive
feedback from them. In this way we will create a working relationship with
investors while also educating them about the economic conditions of the
district.
9.5.7 Brochures
A two page brochure will be developed, which will be kept at the company’s
reception area. The brochure will contain basic information about the company’s
vision and mission, current projects, investment opportunities and its partners.
This brochure will be in a glossy finish in line with the company’s image.
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9.5.8 Quarterly Newsletter
A quarterly newsletter will be developed to provide information on the status of
current projects, investment opportunities and economic development news
relevant to the area. This will also ensure that we keep in touch with our
stakeholders all the time. Since we have embarked on a cost saving exercise
and costs need to be cut at all times, the company will distribute this
newsletter electronically, through emails and posted on the firm’s website.
9.5.9 Sponsorship
Sponsorship for a good cause will also be considered as corporate social
responsibility. Initially the company will consider non-financial sponsorship. This
will also put the company’s name into the public arena and raise its profile.
9.5.10 Website/Internet/Technology
Technology is the fastest growing form of marketing. The company will develop
and maintain a website that is part of the search engines and also interactive
with users. Facebook and twitter will also be used to market the company.
9.5.11 Personal Networking
The directors and managers of the company will be encouraged to also use
personal networking as one of the least expensive tools that can be used to
grow the company out of the current financial difficulties. Here they will be
encouraged to look at their relatives, fellow church members, golf club members
etc. People who occupy key positions in their entities that part of our target
market will be identified and approached.
9.5.12 Strategic Alliances
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The company will forge strategic alliances with certain partners especially, the
local municipalities, provincial departments, parastatals, traditional authorities,
funding agencies and business to fastrack the successful implementation of
projects.
9.5.13 Conclusion
It is therefore important that UMDA should have a unique selling proposition that
differentiate it from the rest of the pack. This unique selling proposition will define
the success or failure of the company. Our unique selling proposition, is based
on the specialized service that we provide and service to be provided to our
clients.
Since the service is almost the same, it is important that the company has
identified the niche in the market, will do things quicker, relate better to their
clients and maintain their relationship with stakeholders. We will focus on
eliminating stumbling blocks to development through feasibility studies, project
packaging and project management.
Challenges exist in the market, like the relationships that certain consultants may
have with municipalities, and government departments providing similar service
and lack of qualified practitioners in our team. Therefore it is critical that UMDA
work smarter in capturing the market and build sufficient capacity to implement
catalytic projects.
10. INFORMATION TECHNOLOGY PLAN
It is important to note that information technology components and gadgets are
tools to assist management to manage the agency and the workflow. When
doing the need’s analysis, focus was made on the following tools and gadgets.
Computers – up to date computers are required for typing, printing, saving
information and uploading other software applications.
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Backup devices – these could be servers or computers used as servers
for backing up data. These devices make copies of data found on
computers and store it in a location where that data can be retrieved from
when needed.
Accounting system – the agency needs an accounting system that
complies fully with the GRAAP. The main characteristics of which should
be that the system caters for the needs of the agency.
Document generation – Microsoft provide this software and it may not be
necessary to purchase a separate product.
Emails and sms systems –We need to have the sms system that will
allow for multiple sms’s to be sent at the same time. This will assist the
agency in communicating with our stakeholders.
Specialist software – this is provided to allow the project manager to
manage his/her workflow and productivity. There are programmes that
assist with project management. Although these are not a requirement,
they assist the project manager to be more effective.
Website - The Agency has its own registered website to communicate
current and future project information the site is linked to several
government Agencies and Local Business: this site is now updated on a
monthly basis. www.umda.org.za
When choosing the software referred to above, we looked at the needs of the
agency, software available in the market, ability of the software to adapt to our
agency’s changing needs, whether that software enhances value to stakeholder,
affordability, month to month contract and reputation of the provider.
Capacity building is important in ensuring that the practice does not end up with
state of the art technology system that cannot be used by its employees. It is
therefore important to train the staff accordingly in terms of the use and benefits
of technology. Training is provided by the service provider on the use of their
software package. Management and staff will be required to attend these
training sessions.
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11. RISK MANAGEMENT PLAN
The Board of Directors, together with the Chief Executive Officer, will be
collectively responsible for the adoption of a proactive approach to the
management of physical, operational, compliance and other risks to the integrity
of the organization. The CEO will be accountable to the Board for ensuring that
effective controls against risk are embedded in the everyday operations of the
organization. A risk management plan in attached as an annexure.
12. MANAGEMENT AND ORGANISATIONAL STRUCTURE
12.1 UMDA Board
The Agency is governed by an independent Board of Directors, who have been
nominated by the residents of the district and appointed by the district
municipality, in accordance with the provisions of the Systems Act (as
amended).
The Board is responsible for ensuring that the company is managed effectively
and that the resources of the entity are legitimately utilized for the sole and
exclusive purpose of furthering the mandate of the organization.
The primary role of the board shall be, inter-alia, to:
ensure that the agency is governed in an effective, transparent and
accountable manner;
ensure corporate and organizational compliance with applicable legislation;
ensure adherence to the highest standard of corporate conduct and ethics;
maintain effective oversight of the performance and affairs of the agency;
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attract and retain skilled personnel in the employ of the organization;
12.1.1 Relationship with Shareholder
A number of shortcomings and challenges have been identified in the
institutional structuring of UMDA and its relations with its key stakeholders. In
order to address these shortcomings the following actions are planned; To
develop and conclude a Shareholders compact with the District Municipality and
to review and update the agreement annually; To conclude a Service Level
Agreements for individual projects that relate to UKDM and to the local
municipalities; To organise structured and planned meetings, between the Board
Chairman and the Mayor and the CEO and the MM and between the Board and
the Shareholder; To adhere to the provisions of the Municipal Systems Act and
the MFMA relating to reporting procedures between the MM and Mayor.
12.1.2 Functioning of the Board
The way in which the Board is structured and operates will also be addressed.
The following is important in this respect: To create an environment conducive
for an Activist Board as opposed to a Passive Board that is not involved with the
planning, decision making and implementation of the activities of UMDA. In this
respect the Board is to actively promote trade and investment into the district; to
adhere to the highest standard of corporate governance principles. The board is
to actively participate in the selection and prioritisation of catalytic projects
undertaken by the agency and to monitor the implementation of the strategy and
through proper reporting by the CEO. To achieve the above objectives the Board
is to establish additional Committees for the following: Governance and
investment promotion, Audit Committee, Tourism Development, Agribusiness
Development, Infrastructure and Urban Development.
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12.1.3 Audit Committee
The primary function of the audit committee is to ensure the development of and
proper compliance with the internal/external controls of the agency and to
ensure the proper and timeous implementation of appropriate auditing and
related processes. The committee has been charged with the responsibility,
under the terms of its appointment, to ensure that the board of directors is
regularly informed of all audit-related matters that pertain to the agency.
12.2 UMDA Team
12.2.1 Executive Management.
The Board of Directors appoints a Chief Executive Officer to lead and manage
the organization, on a fixed five-year contract. The Chief Executive Officer is the
accounting officer of the Agency. The Chief Executive Officer is required, inter-
alia, to perform the following key functions:
UMDA BOARD OF DIRECTORS
Governance and Investment Promotions
Mr RP Tembe
BOARD Member
CEO
CFO
PED-GM
TIKZN
IDC
Agri-business
Mr ZJ Ndwandwe
BOARD Member
Agri-Business Facilitor
Dept. Agriculture
MJINDI
Dept. Rural Dev
Tourism
Mr S. Gumbi
BOARD Member
Project Manager
UKDM
ETTEA
TOURISM kzn
CTO
Urban Development
Mr M Thango
BOARD Member
project Manager
UKDM (Boxer)
COGTA
TIKZN
Infrastructure Developments Mr S
Nyawo
BOARD Member
project Manager
UKDM( Technical)
Dep of Transport
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Prepare a fully integrated and sustainable economic development programme
for the District of UMkhanyakude.
Coordinate and facilitate the implementation of the programme, including its
spatial, economic and environmental dimensions, its regulatory, budgetary,
financial and legal implications and its social and economic consequences.
Manage relationships with investors and entrepreneurs on a continuous basis.
Ensure the management and coordination of stakeholders relations through an
effective communication strategy.
Raise financial support for the agency and for agency-led projects.
Identify and facilitate donor, public and private sector investment to LED projects
in the district.
12.2.2 Organising For Implementation
The future organogram for UMDA focuses on the implementation of the strategic
plan and catalytic projects. The overarching managing body of the Agency is its
Board of Directors to which the CEO reports. Chief Executive Officer to manage
and oversee the day to day functions of the entity. The organogram makes
provision for sector based portfolio managers dealing with agriculture and agri-
business, tourism, urban development and infrastructure. The Chief Financial
officer will be responsible for the overall administrative functions of UMDA
including HR issues and development. Important is the provision that is made for
a Project Management Unit. Most of the projects required technical inputs such
as engineering, environmental and planning functions and GIS / Data
management. The Project Management Unit will be instrumental in providing in-
house professionals to fast track the implementation of catalytic projects.
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Since we are growing organically, the agency will for the 2015/16 financial year
operate on an organogram that allows for growth. No senior manager will be
appointed in the coming financial year but only in the financial year 2016/17.
Project managers will therefore be appointed for each unit and the structure of
the agency would be the following.
12.2.3 Organogram
We are planning for growth and will implement an organogram that suites our
needs but also an organogram that will assist in implementing our projects
quicker and efficiently. It is important to create capacity within the agency to be
able to conduct our own feasibility studies and package catalytic projects
ourselves. It is also important to have capacity to manage large projects without
having to outsource the service and go on protracted tender processes.
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Organogram for 2015/16
Chief Executive Officer
Mr. Mandla Ntuli
Chief Finance Officer
Mrs Qhamu Mntambo
Finance Officer
Mr. Sthe Mbatha
Receptionist
Ms. Sakhelephi Manzini
General Assistant
Ms. Joyce Biyela
General Assistant
Mr. Bheki Masango
HR & Records Officer
Vacant
PMU Manager
Vacant
Engineer
Vacant
Enviromentalist
Vacant
GIS/DATA Management
Vacant
Quantity Surveyor
Vacant
Admin Clerk
Vacant
Mkhuze Airport Manager
Mr. Siphamandla Madida
Receptionist
Ms. Simangele
Mabuza
General Assistant
Mr. Sipho Gumede
General Assistant
Mr. Lindelani Gumede
Agribusiness Project
Manager
Vacant
Agribusiness -Facilitator
Mr. Lucky Nxumalo
Tourism Project Manager
Ms. Nonhlanhla Biyela
Tourism Officer
Ms. Nomzamo Nxumalo
Urban Development
Project Manager
Vacant
Urban Development
Officer
Vacant
Personal Assistant
Ms. Maggie Sotshongaye
PMS Officer
Ms. Thobeka Ngcobo
Marketing and Communications
Officer
Vacant
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Organogram for 2016/17
Chief Executive Officer
Chief Finance Officer
Finance
Manager
Finance Officer
Receptionist
General Worker
General Worker
Project
Finance
Manager
HR &
Record
Officer
SCM Officer
Personal Assistant
PMU Manager
Engineer
Specialist
Enviromentalist
Specialist
GIS/DATA
Management
Specialist
Quantity Surveyor
PMU Admin
Infrastructure
Development Project
Manager
Infrastructure
Development
Project Manager
Mkhuze Airport
Officer
Mkhuze Airport
Receptionist
Mkhuze Airport
General Assistant
Mkhuze Airport
General Assistant
Infrastructure
Development
Project
Manager
Infrastructure
Development Admin
Agribusiness
Senior
Manager
Agribusiness
Project
Manager
Agribusiness
Project Manager
Agribusiness
Officer
Tourism Senior
Manager
Tourism Project
Manager
Tourism Project
Manager
Tourism Officer
Urban Development
Senior Manager
Urban
Development
Project Manager
Urban
Development
Project Manager
Urban Development
Officer
Personal Assistant General Manager
PMS Officer
Marketing and
Communications Officer
Legal and Compliance Officer
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13. The Human Resources Plan
13.1 Key players
Since UMDA is a small company that is navigating challenges at the moment,
the agency does not have many staff members. This is critical in order to
maintain costs as well as effective management.
There are two executive directors, the CEO and CFO, three project managers
and six officers, one PA, two receptionists and four general assistants. The
executive directors are key players in the management of the agency.
13.2 Human Resources Plan
The plan is to maintain the number of employees the firm has for the time being.
However the development of staff is critical to the success of this business plan.
The staff will be enrolled with courses provided by relevant institutions which are
highly effective and economical as well.
The educational qualifications, previous work experience and training courses
attended by management and staff, the number of staff required, job titles and
what they will do, remuneration packages, fringe benefits if any, conditions of
service, disciplinary or grievance procedure and a recruitment plan all informs
the agency’s Human Resources policy.
13.3 Recruitment policy
The UMDA’s recruitment policy is in compliance with legislation and in particular,
the Employment Equity Act 55 of 1998, which provides against unfair
discrimination of an employee or applicant for work, in employment practices or
policies, on one or more grounds, including race, gender, sex, pregnancy,
marital status, family responsibility, ethnic or social origin, colour, sexual
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orientation, age, disability, religion, HIV status, conscience, belief, political
opinion, culture, language and birth.
The UMDA’s recruitment policy also adheres to the following principles;
Criteria must be based on inherent job requirements;
The focus must be on whether the candidate can do the job or not,
irrespective of the candidate’s race and gender.
A candidate that can do the job should be barred on some or other subjective
criteria;
The same information should be gathered on all the candidates;
Access to an opportunity should not be barred or limited;
Procedures must be applied consistently;
Arbitrary notions about groups as criteria must be limited.
Staff selection will be a systematic process involving choice, but also utilising the
following basic tools;
Prior to shortlisting and inviting candidates for interviews, the resumes need to
be evaluated objectively. The agency would also have an application form which
will assist the management in terms of obtaining additional information not
provided for in the resume. The interview will give an opportunity to the partners
to get information from the applicant regarding his/her background, experience
and interests.
13.4 Training and development of staff members.
For a company to benefit it is important to have a workplace skills plan and apply
for financial assistance as and when the existing employees are trained. The
company may also register learnerships to allow for training of new entrants to
the jobs market.
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The agency will develop a workplace skills plan, in order to ensure that its staff
are property skilled and trained to be able to deal with the current changes to the
legal profession, current trends and be able to implement this business plan.
14. THE FINANCIAL PLAN
14.1 Needs Summary
A budget has been prepared and attached to this business plan as an annexure.
In summary, the agency requires finance for monthly operating costs, periodic
installments, and once off costs relating to this business plan.
In addition, the agency requires funding for capacity building, including the
setting up of the project management unit. We also require specific project
funding in order to implement projects successfully and in this regard specific
partners and funders will be engaged for funding.
14.2 Revenue Model
The agency will rely primarily on funding from the parent municipality for
operational costs. However since the parent municipality is also experiencing
certain challenges, the agency will also charge fees for work to be done
including prefeasibility studies, feasibility studies, project packaging and project
management. We will also charge a development fee of between 5% and 10%
on all funded projects in order to cover costs associated with investment
promotion and operations of the agency.
There is a need for uMhlosinga Development Agency to have a funding model
that promotes its independence and self-sufficiency. UKDM to provide funding
for their projects undertaken by the agency separately. The funding stream of
the agency to be split in the following context:
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20% from UKDM
40% from fees charged on services offered
40% from strategic investments
Agri-business Urban
Development
Tourism Infrastructure Total
Concept 650 000 50 000 700 000
Pre-feasibility 1 150 000 250 000 750 000 1 250 000 3 400 000
Feasibility 4 300 000 1 200 000 3 500 000 3 000 000 12 000 000
Securing Land 1 800 000 500 000 2 300 000
Social Facilitation 2 000 000 200 000 300 000 500 000 3 000 000
Technical Studies 8 000 000 1 000 000 700 000 2 000 000 9 900 000
PDA Approvals 300 000 300 000
EIA 500 000 3 000 000 3 500 000
Business Plan 1 700 000 500 000 550 000 1 500 000 4 250 000
Implementation 24 000 000 4 800 000 500 000 20 000 000 49 300 000
Total 44 400 000 8 000 000 6 800 000 31 250 000 90 450 000
15. CONCLUSION
During the next financial year we have a pipeline of projects worth over R3 billion
rands. It is an exciting challenge to face and overcome. However, before we get
carried away, we have mammoth task of packaging these projects and raising
funds necessary for their successful development. It is therefore critical that we
build capacity within the agency to be able to package these projects on our own
as that will save costs and improve efficiencies.
We have a balanced and capable board that is led by a visionary chairman. Our
core staff members are young, vibrant and focused. This provide an excellent
opportunity and capacity to be able to implement plans contained in this
business plan. Successful implementation of these plans will create and
environment conducive for business investment to thrive and accordingly create