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Urban renewal tripartite
co-operation agreement signing ceremony

11 September 2007

Galeshewe, SOL Plaatje Municipality

Address by executive mayor Zintle Peter
Some Achievements and Challenges of the Urban Renewal Programme in the Economic Development of Mdantsane

Ntombentle Peter Good morning, Programme Director, ladies and gentlemen, colleagues and comrades.

I have been allocated no more than twenty minutes to share some thoughts on the achievements and challenges of the Urban Renewal Programme in the economic development of Mdantsane. In view of our time constraints I would like to say, “all protocol observed”, but I think it is proper for me, if no-one will take offence, at least to recognize specifically our Deputy Ministers of Social Development and Provincial & Local Government respectively, as well as my counterparts, the Executive Mayors of Sol Plaatje and Nelson Mandela Bay, who are here with us today.

For the rest of you, whether you are a person who is elected or appointed to your office, I think it is appropriate in any event to address you all as comrades, because I know that you are all here today because you have a passion for the development of our disadvantaged areas, because you share a commitment to the cause of building a new and transformed Galeshewe, a Motherwell that the people of Nelson Mandela can be proud of, and a Mdantsane where residents can work and play in safety. To me, that means that you are all comrades, and I greet you as such.

Allow me to start with a blunt comment on the spatial and economic reality of Mdantsane, without boring you with too many statistical details. We all know the distorted logic of apartheid planning that said, “Let us create a dormitory on the other side of the mountain for a labour pool that can find its way to work in our factories and our kitchens and gardens for 8 hours each day, and then return to their own world at night.”

Mdantsane is of course a classic example of such a dumping ground. A woman living in the middle of Mdantsane who works in our Daimler-Chrysler plant or our new IDZ on the West Bank has a daily commute of more than 25 km in up to three taxis, that ultimately costs her a significant slice of her monthly income.

Up until recently, many of the residents of Mdantsane – those who were lucky enough to have jobs – were spending a sizeable portion of their monthly earnings outside the township itself, at retail outlets in the more privileged parts of the municipality’s urban core. This meant that a lot of the cash earned by Mdantsane residents was leaking out of Mdantsane to the detriment of the economic development of the township.

Another observation that must be made bluntly is that when the architects of Mdantsane sat down to design a place where blacks could pursue their separate and supposedly equal development, the quality of the infrastructure that was installed – the sewage systems, the water reticulation, the roads and the electricity – left much to be desired. Also, the social amenities that are essential to support the development of proper human communities were totally insufficient – to give an example, there was one swimming pool for more than 300,000 people.

As with all black townships, Mdantsane was therefore very much the third-class coach in the apartheid train. To make matters worse, after it was installed, the third-class infrastructure was left to disintegrate, which meant that by 1995, after the first local government election and the establishment of the East London TLC, the picture that confronted the newly-elected Council was not a pretty one. The deferred maintenance and rehabilitation costs were estimated to be well in excess of a billion rands, a figure far beyond what the new local authority could afford.

An example that I have used before (in addressing a plea for assistance to the honourable Minister of Sport) is that of the Mdantsane swimming pool and sports complex. During the community uprisings of the 1980s, the complex was left to become derelict, and for the last twenty years has been standing unused and useless. The estimate to rehabilitate it to a proper standard is R40 – R50 million. Meanwhile, the people of Mdantsane do not have a facility anywhere in the township where their children can learn to swim.

It may be a fair criticism of us as government that during the transitional phase of local democratic development, we did not perhaps move as decisively as we could have done to begin the process of redressing the legacy of neglect and underdevelopment that characterized particularly our black townships. Our first priority was to fast-track the provision of new houses to address the massive backlogs and to deal as quickly as possible with the inhuman and undignified conditions in which many of our people were living in informal settlements.

Of course, we have done very well in housing delivery, with many international observers rightly pointing out that no country of a similar size has succeeded as we have done in building two million houses in about ten years. In today’s rand value, this amounts to about eighty billion rands that has been transferred into the hands of the beneficiaries, who are the poorest of the poor.

But it was only in the post-transitional phase that we really came to recognize that we needed somehow to balance the need to roll out new houses to cater for the increasing urbanization of our people, with the critical duty also to make sure that the assets that we already have in place were properly maintained and enhanced.

I have said that our black townships particularly were like third-class coaches. And it was our President Thabo Mbeki who recognized that while we were doing very well in adding new coaches to the train, in the old and somewhat neglected coaches one was beginning to see signs of increasing frustration among our communities at unreliable electricity and water supply, pot-holes in the roads that were tarred and dongas in the roads that were not tarred. And a number of areas where the evidence of social fractures was most compelling (evidence such as the frequency of serious and violent crime or unemployment statistics) were identified as Presidential “Urban Renewal” nodes, including Mdantsane.

Since the advent of the Urban Renewal Programme in 2001, we have worked very hard to engage the people of Mdantsane in serious dialogue as part of our annual participatory process of reviewing our IDP together with the budget, to ensure as far as possible that our budget is people-centred and meets the real needs of residents. We have a vision that applies equally to the whole of Buffalo City: that we want to be “a people-centred place of opportunity where the basic needs of all are met in a safe, healthy and sustainable environment.”

But much as our vision is supported by all of our communities, we recognize that people do not put visions on the family table for supper. So we must ask ourselves what it means practically for Mdantsane to be people-centred; what it means for Mdantsane to be a place where people can enjoy opportunities to live productive, safe and fulfilled lives.

At the end of the day, there is no community, even those where the majority may be unemployed or very poor, that is satisfied to live perpetually on hand-outs. Our experience is that people want the dignity of being able to work, to earn their bread and butter, rather than to be dependent on the state or their relatives for welfare support.

This observation has informed our strategies and programmes aimed at the economic development of the Mdantsane area, and I want to briefly highlight four areas where we have been working: business development, trade and investment promotion, tourism development and urban agriculture.

1. Business Development
Since the inauguration of the Programme and over the past few years, the promotion of entrepreneurship has taken centre stage. Mdantsane has always been a hub for Small, Medium and Micro Enterprises (SMMEs), whether they were regarded as formal or informal. This old culture of enterprise, however, was in decline and in dire need of support in the past decade owing to a number of reasons.

Entrepreneurial development in Mdantsane is driven from a very narrow economic base, with many enterprises in the wholesale, retail and personal services sectors. There is therefore a need to diversify the entrepreneurial activity in Mdantsane into other key economic growth sectors of the region, thus ensuring that new kinds of SMMEs take full advantage of sector opportunities. Such diversification needs to be in line with the key growth sectors identified in the Provincial Growth and Development Plan of the Eastern Cape, the Local Economic Development Strategy and the Integrated Development Plan of the Buffalo City Municipality.

A business survey in Mdantsane revealed that about 70% of the respondents are not registered businesses. The majority of those registered are Close Corporations (9%). Included in the 70% of unregistered businesses are sole traders and community-based projects.

The research further revealed that the majority of the employed persons are women at 51%. Youth employment is about 39%. Of the 1012 shareholders or owners of the respondent businesses, 50% of the owners are women, whereas 21% are youth (defined as those who fall between the ages of 18 – 35 years).

Lack of access to affordable and appropriate business premises in Mdantsane remains one of the key challenges confirmed by the findings of this research. Only 24% of businesses operate from an appropriate trading environment or premises such as in a business complex, centre, industrial building or a stand-alone building. The majority of small businesses are trading from home, on the streets and shacks.

As in many parts of the country, the main problem facing these SMMEs remains access to funding, which affects their growth potential. The challenge is ensuring that the SMMEs have bankable business ideas and improve their business skills.

In response to some of the above challenges, Buffalo City Municipality established the Mdantsane One Stop Shop as a flagship project in 2003, which has become the first port of call for SMMEs in Mdantsane and which works closely with a number of providers of business development services. The Centre provides the following services:

  • Cooperatives Development Programme
  • Business Registrations
  • Business Skills Training Programme (including, amongst others, Emerging Contractor Development)
  • Business Plan development
  • Business Information, Linkages and Networking

2. Trade and Investment
Since the inception of the Urban Renewal Programme, the private sector has taken a keen interest on investing in the area. Over the past couple of years, the Fort Jackson Industrial area has seen more investors come in, with co-operation from ECDC with affordable rates. Those range from furniture manufacturing to those that supply Daimler-Chrysler.

A major shopping complex is under construction and more are on the cards. The emphasis on ensuring a safe and secure business environment and major government capital investments has improved business confidence. A new police station was opened close to the CBD, assuring investors of their safety.

3. Tourism Development
Township tourism is a growing phenomenon in South Africa and Mdantsane is increasingly benefitting. The area is rich in heritage and culture. Mdantsane is known for having produced a number of world champions in boxing such as Happyboy Mgxaji, Welcome Ncita, Vuyani Bhungu, etc. It is also in close proximity to recreational areas such as Bridle Drift Dam which is well-known for water sports.

A number of Bed & Breakfast establishments and Guest Houses, the Mdantsane Hotel, crafters, tour operators and other attractions are some of the products in the area.

Since 2003, the focus has been on building capacity and improving service levels amongst those offering tourism services in Mdantsane. At the 2007 Tourism Indaba two product owners from Mdantsane scooped awards for the best accommodation and emerging tour operators respectively.

A Tourist Information Centre has since been opened at the Highway rank, a promotional video has been developed and a network of tourism product owners in the name of the Inyathi Buffalo Route was established in 2004, which is part of a bigger network of operators known as “Open Africa”.

The development of a “Mdantsane Tourism Brand” is under way, which will help position Mdantsane as one a preferred township destination in the country.

4. Urban AgricultureM
Urban Agriculture is not a new phenomenon in Mdantsane, with many residents owning small vegetable patches. The municipality assisted in the promotion of sustainable agricultural production and encouraged communities to take advantage of areas with basic infrastructure such as fencing, water, etc. such as schools. The municipality also facilitated technical and business skills training, which has seen many of these emerging farmers supplying retailers and health shops in East London and surrounding areas. The emerging farmers are focusing on Organic Agriculture as a growing niche market.

The recently established Mdantsane Urban Agricultural Forum is active and mobilizing resources for expansion of the programme as it has generated a number of jobs for local people.

Conclusion
In conclusion, Programme Director, the following can be summarized as major improvements and developments in Mdantsane:

  • Improved business confidence, seen in the expansion of existing businesses and mushrooming of new ones.
  • Thriving entrepreneurs
  • Revived business structures (Mdantsane Chamber of Business and Informal Traders)
  • Growth in tourism
  • Improving sustainable agricultural production and job creation
On the other hand, more investment in critical economic infrastructure is still required in the area. Many aspiring entrepreneurs cannot access finance due to absence of sureties as most do not have title deeds. Creating a safe and secure environment is an ongoing struggle and requires stronger partnerships.

All of our positive steps forward of course do not mean that we could not have done more, or better, or faster. We therefore look forward to the mutual learning and cross-pollination of ideas that will flow from the formal co-operation that we are establishing today. We know we have a lot to learn, and we look forward to sharing what we have learnt so that together we can find new and better ways to build the better life that our people legitimately expect.

Thank you.

BUFFALO CITY
METROPOLITAN MUNICIPALITY
A City growing
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