MARKETING AND INVESTMENT STRATEGY
Contents
Contents 1
Marketing and Investment Strategy 4
1. INTRODUCTION 4
1.1 Purpose 4
1.2 background 4
2. BACKGROUND TO Marketing and investment strategy 5
3. DEFINITION OF THE WATERBERG DISTRICT MUNICIPALITY 7
4. waterberg distRICT MUNICIPAL PROFILE 8
4.1 Population Size 8
4.2 Employment Status 10
4.3 income status 11
4.4 Age groups 12
4.5 Education Levels 13
5. economic PROFILE OF WATERBERG DISTRICT MUNICIPALITY 15
6. investment opportunities in waterberg district Municipality 18
6.1 Investment Opportunities in Tourism 18
6.2 Investment Opportunities in agriculture 19
6.3 Investment Opportunities in mining 20
7. the policy and legislative mandate 21
7.1 linkages with National Initiatives 22
7.2 Linkages with provincial initiatives 24
7.3 focal area strategies for marketing and investment at waterberg District municipality 24
7.3.1 Rural Development Strategy 24
7.3.2 Agricultural Strategy 25
7.3.3 Transportation Strategy 25
7.3.4 Poverty Reduction Strategy 26
7.3.5 Cooperative Development Strategy 26
7.3.6 Sport, Art and Culture 27
7.3.7 Economic Infrastructure Strategy 28
7.3.8 Small, Medium and Micro Enterprise (SMME) Strategy 28
8. Market Growth Analysis 29
8.1 Waterberg Market Trends 29
8.2 Market growth projections and indicators 32
8.2.1 Capital Formation 32
8.2.2 Economic Growth 33
8.2.3 Job Creation 34
9. marketing and investment product portfolio 34
9.1 Product Portfolio in Agricultural Sector 35
9.2 PRODUCT Portfolio in Mining Sector 38
9.3 Product Portfolio In Tourism Sector 41
10. PUBLIC-PRIVATE partnerships: THE VALUE CHAIN and cluster chains of strategic sectors 44
10.1 The Classical Approach 45
10.2 creating value 47
10.3. value chain clusters in waterberg strategic sectors 49
11. adopting appropriate corporate strategies for Black Economic Empowerment 55
11.1 Legal Basis for Public-Private Partnership, Black Economic Empowerment and Small Micro-Medium Enterprises Policy 55
11.2 The BEE and the Enterprise Ownership 55
11.3 The PPP Code of Good Practice 57
11.4 Principles For Successful PPP And BEE Ventures 57
11.4.1 The PPP Feasibility Study 58
11.4.2 The Scorecard Measures 59
11.4.3 Applying the BEE principles in PPP Mining Sector 60
11.4.4 Applying the BEE principles in PPP tourism Sector 61
11.4.5 Applying the BEE principles in PPP Agricultural Sector 63
11.5 Vertical and Horizontal Strategies 64
11.5.1 Backward Vertical Integration 64
11.5.2 Forward Vertical Integration 64
11.5.3 Horizontal Integration 64
11.5.4 Vertical and Horizontal Strategic Integration 65
12. overall Strategy to Market the Waterberg District Municipality 67
12.1 strategic focal areas 69
12.1.1 Strategic Focus 1: Encouraging Local Business Growth and Retention 69
12.1.2 Strategic Focus 2: Improving the Local Business Investment Climate 70
12.1.3 Strategic Focus 3: Promoting Inward Investment 71
12.1.4 Strategic Focus 4: Investment in Hard Strategic Infrastructure 72
12.1.5 Strategic Focus 5: Integrating Low Income or Hard-to-Employ Workers 73
12.2 Intervention Strategies and Marketing Action Plan: 74
12.2.1 Developing Business Retention and Expansion Programmes 74
12.2.2 Corporate Liaison and Meeting With Investors 74
12.2.3 Strategic Alliances 74
12.2.4 Investment Facilitation 75
12.2.5 Free Trade Agreement Platform 75
12.2.6 Establishment of Backward and Forward Vertical Business Unit 75
12.2.7 Exposing the Waterberg BEE and SMMEs To Investment Trade and Export Opportunities 75
12.2.8 Industrial Recruitment 75
12.3 Branding And Positioning 76
12.3.1 Advertising in mass media 76
12.3.2 Participating in investment exhibitions 76
12.3.3 Advertising in sector and industry media 76
12.3.4 Conducting investment seminars 77
12.3.5 Utilising Waterberg District Municipality Website 77
12.3.6 Image Reputation 77
12.3.7 Uniqueness Reputation Management 77
12.3.8 Management Informal Modes of Communication 78
12.3.9 Dispelling Pessimistic Perceptions 78
12.3.10 Creation of Investor Friendly Climate 78
12.3.11 Follow-up Processes 78
12.4 outward and Inward missions 79
12.4.1 Inward Missions 79
12.4.2 Outward Missions 79
12.5 Using the Principal Media to Market Waterberg 80
12.6 Establishing an Information System 83
12.7 Implementing the Strategy 86
12.8 The Action Plan 88
12.6 Monitoring and Evaluation Plan 88
12.13 Funding the Marketing and Investment Strategy 89
13. summary and overall recommendation for implementation 92
References 94
MARKETING AND INVESTMENT STRATEGY
1. INTRODUCTION
1.1 Purpose
The purpose of the Waterberg Marketing and Investment Strategy is to provide a tool that promotes the District as a preferred investment and trade location in South Africa through marketing the competitive advantages of opportunities in the area.
Waterberg seeks to offer international investors a wide-ranging service to support and facilitate investment in the District and growth into Limpopo Province, South Africa and other respective international markets. It also seeks to be a leading business development network for the District businesses seeking to expand current operations into other parts of the world.
The overall aim of the strategy is to promote local initiatives that contribute towards poverty reduction and unemployment in the District, as much as attracting both national and international investors in order to ensure that local human capital and resources are effectively integrated.
1.2 background
Marketing and Investment Strategy is an integral part of the broader initiative of Waterberg District Municipality to identify potential investment opportunities within the District in order to improve the quality of life and the standards of living of its communities.
This is in consistent with the expectations set out in the White Paper on Local Government, which prescribes that municipalities are responsible for “reviewing existing policies and procedures to enhance employment and investment” and that:
...Municipalities need to develop a coherent infrastructure investment plan, which sets out how they will achieve infrastructure targets, and mobilise public and private funding sources for capital and recurrent expenditure.[i]
It is on the basis of this background that Waterberg District Municipality finds it necessary to formulate a strategy that provide overall guidelines with regard to the general marketing of the District’s opportunities and initiatives to attract potential investors in the area.
The major challenge for the Waterberg District Municipality is to generate opportunities, which will create jobs and reduce the high levels of poverty and unemployment experienced by the majority of the people, especially those residing in rural areas. By using a Marketing and Investment Strategy, the Waterberg District Municipality could identify investment opportunities that can be marketed locally, nationally, and internationally as need arise.
The present strategy sets out the following:
▪ First, it provides a broad definition of Waterberg District Municipality in terms of its strategic location within the Limpopo Province and its significance in terms of proximity to neighbouring countries such as Botswana, Zimbabwe and Mozambique;
▪ The Waterberg District Municipality Profile, which includes the population, employment status, income, age groups and education levels;
▪ The economic profile of Waterberg as well as the existing opportunities in terms of investing in agriculture, mining and tourism;
▪ The Policy and Legislative Framework guiding the marketing and investment strategies;
▪ The Marketing Growth Analysis, its trends and projections of potential growth in Waterberg area;
▪ The Product Portfolio in the different strategic economic sectors of Waterberg;
▪ The Value Chain Cluster of Waterberg Strategic sectors;
▪ Adoption of corporate strategies such as vertical and horizontal integration to advance the cause of BEE companies, PPP and SMME initiatives;
▪ The overall Strategy for Marketing and Investment of Waterberg as a region; and
▪ Essential guidelines of branding and positioning Waterberg as a preferred region for investment.
2. BACKGROUND TO Marketing and investment strategy
Traditionally, municipalities in South Africa have always played a role in local investment. Municipalities employ people from the local area, purchase goods and services, develop infrastructure and regulate the use of land. All of these activities impact on the local economy.
In addition to these ‘traditional’ roles of service provision and regulation, the Constitution defines one of the objects of local government as the “promotion of social and economic development.”
The White Paper introduces the concept of “developmental local government”, which is defined as: [ii]
Local government committed to working with citizens and groups within the community to find sustainable ways to meet their social, economic and material needs, and improve the quality of their lives.[iii]
The advent of the post-apartheid government, the Reconstruction and Development Programme (RDP), the New Constitution Act 108 of 1996, and new local government policy framework and legislation have promulgated that municipalities should promote economic development of communities, thus pushing local government structures beyond the narrow role of service provision.
In view of the above, the Constitution of South Africa regards a developmental local government as a municipality that is able to govern, which is equipped with the financial and administrative capacity to:
▪ Provide democratic and accountable government for local communities;
▪ Ensure the provision of services to communities in a sustainable manner;
▪ Promote social and economic development;
▪ Promote a safe and healthy environment; and
▪ Encourage the involvement of community in the affairs of local government.
The Municipal Structures Act of 1995 delineates the structures governing the municipalities, which are bestowed with the authority to initiate developmental activities. [iv]
The Municipal Systems Act of 2000 entrusts local government with developing its communities including the formulation of Integrated Development Plans (IDPs).[v]
Given this context, it has become clear that only a strong, synergetic partnership among spheres of government, public and private institutions, donors and civil society organizations, and respective local and international investors can bring about a desired economic development within the Waterberg District Municipality. The District seeks to provide communities with access to key resources needed to take control of their own economic destinies through identification and packaging of local investment opportunities,.
Notwithstanding the above background, there is a need to put the Waterberg District Municipality under context. In order to clearly ascertain the investment opportunities in Waterberg District Municipality, it is best to begin at the beginning, and review the profile of the area.
3. DEFINITION OF THE WATERBERG DISTRICT MUNICIPALITY
In order to clarify reference to the area in the strategy, it is critical to provide a clear definition of the Waterberg District Municipality. Waterberg District Municipality is located on the western part in the Limpopo Province. It is a “Bushveld Region”, which is predominantly rural in nature. The Limpopo Province shares borders with three countries: Botswana, Mozambique and Zimbabwe, which makes it a very strategic contact between those countries and South Africa.
In turn, Waterberg District Municipality shares its borders with Capricorn District Municipality in the north and Sekhukhune in the east. In the southwestern and southeastern are boundaries with the North West and Gauteng Provinces respectively.
The main entry roads to the Districts are N1 (national road) and 101 from Gauteng, N11 from Sekhukhune and R159 and R133 from the North-West. It is linked to Gauteng by one of the best stretches of the N1 in South Africa.
Waterberg District Municipality is approximately 4 951 882 hectares and is composed of six local municipalities namely:
▪ Bela-Bela Local Municipality;
▪ Lephalale Local Municipality;
▪ Modimolle Local Municipality;
▪ Mogalakena Local Municipality;
▪ Mookgophong Local Municipality; and
▪ Thabazimbi Local Municipality.
These municipalities are quite different in terms of their level of socio-economic development and active economic sectors. Nevertheless, the Waterberg has the first largest economy in the Limpopo Province, followed by the Capricorn District Municipality.
Given the above background, all references to “Waterberg District Municipality” in this report imply the area defined above. All demographic information provided hereunder in the report, unless otherwise stated, refers to the entire Waterberg District Municipality, not limited to the local municipalities.
However, in order to assess the extent of economic development needs and investment targeting within Waterberg, the section below reviews the municipal profile such as population size, age structure, education levels, employment and unemployment rate, income per household, and economic profile of the area.
4. waterberg distRICT MUNICIPAL PROFILE
The challenges facing the Waterberg District Municipality as a “developmental local government” are great. As part of the process, municipal profile providing for both spatial and attribute information is crucial. It is hoped that the information supplied hereunder will be of use to the Waterberg District Municipality as they attract both local and international investors, implement the Marketing and Investment Strategy, to government and potential investors as they promote the District and to those requiring information on the Waterberg municipal system.
4.1 Population Size
According to the Statistics South Africa, the total population of the Waterberg District Municipality amounts to 614 155 persons (2001). The average Waterberg household is home to 4,1 persons. Some households are home to more than ten persons. This varies considerably by season due to migrancy. However, it should be noted that these figures are only approximate. It is possible that the actual Waterberg population is above 614 155 due to a large number of people also live on farms throughout the area. In fact since the Census in 2001, the population has changed significantly. The Waterberg’s population changes with the seasons, since many residents migrate to work elsewhere, especially in other provinces such as Gauteng.
Compared to other Districts, the population density of Waterberg is significantly low, as indicated in both Chart 1 and Table 1 below.
Chart 1: Limpopo Population and Density per District
Data Source: Statistics South Africa – July 2003
The annual population growth is estimated at 2,3%, which represents the average provincial population growth rate. This is slightly higher than the national average of 1,9%. It is possible that the Waterberg area will be home to over one million people by the year 2015.
Table 1: Limpopo Population Density per District
|District |Population |Density |
|Sekhukhune |745472 |6 |
|Bohlabela |595202 |5 |
|Mopani |964237 |8 |
|Vhembe |1199883 |10 |
|Capricorn |1154692 |9 |
|Waterberg |615155 |5 |
|Limpopo |5274641 |7 |
Chart 2 and Table 2 represents population density and household average per local municipality.
Chart 2: Population Size Per Local Municipality
Data Source: Statistics South Africa: Census 2001
It is apparent from the above chart that more than 43% of the district population lives in Mogalakwena. The above scenario signifies that apart from outward migration, Waterberg has been also experiencing a significant proportion of inward migration between local municipalities, especially local towns perceived to have better economic opportunities.
Table 2: Population Figures per Local Municipalities
|Local Municipality |Estimated Population|Number of Household |Average Household Size |% of District Municipality |
|Bela-Bela |52122 |12279 |4.2 |8.49 |
|Lephalale |96074 |23401 |4.1 |15.64 |
|Modimolle |72797 |17536 |4.2 |11.85 |
|Mogalakwena |298419 |68010 |4.2 |48.58 |
|Mookgophong |30748 |6977 |4.4 |5.05 |
|Thabazimbi |63883 |20280 |3.2 |10.40 |
|Total |614041 |148483 |4.1 |100 |
Compared to previous statistics, there has been a decrease of almost 2%. Bela-Bela Local municipality seems to be where such a decrease occurs. Some observations point to the fact that decrease in population may be attributed to the fact that many people emigrate to other urban centres such as Polokwane, Pretoria and Johannesburg in search for jobs. While some of the emigrating persons do come back to support their families, most of them emigrate permanently. This trend demonstrates how much local people invest in other cities through expenditure they incur on travelling and subsistence, while residing in those cities. This poses a challenge for the Waterberg District Municipality to generate means of minimising the emigration trend through economic development strategies that promote growth and investment.
4.2 Employment Status
The segmentation of employment status in Chart 4 suggests that over 140 000 people in Waterberg are employed and over 62 000 are unemployed. This relatively good figure of the employment status should be analysed with caution considering that there is no clear definition of the 165 000 people who are not economically active and over 245 000 non-applicable responses. Through previous household surveys and other studies conducted by Waterberg, unemployment rate appeared to be a major challenge.
Chart 3: WDM Employment Status
Data Source: Statistics South Africa: Census 2001
As clearly reflected in Table 3 below, high rate of unemployment is concentrated in the Mogalakwena area, which represent a critical challenge for the District, together with the local municipality, to ensure significant investment that stimulate economic growth and generate employment.
Table 3: Employment Status Per Local Municipality
|Status |Thabazimbi |Lephalale |Mookgophong |Modimolle |Bela-Bela |Mokgalakwena |Total |
|Employed |26249 |28672 |11196 |22799 |14372 |37090 |140378 |
|Unemployed |7045 |5274 |2649 |6992 |6965 |33699 |62624 |
|Not Economically Active|12618 |25040 |6183 |16295 |11076 |94272 |165484 |
|Total |63921 |96102 |30759 |72809 |52125 |298440 |614156 |
4.3 income status
According to the Census results released in 2003, an average annual individual income of Waterberg is considerably very low. Chart 4 below clearly reflects the extent of poverty in the Waterberg area in terms of an overall annual individual income profile.
Chart 4: WDM Income Category per Individual
Data Source: Statistics South Africa: Census 2001
Table 4 below reflects the income category per individual according to local municipalities within the Waterberg District Municipality.
Table 4: Income Status in Local Municipalities Per Individual
|Income |Thabazimbi |Lephalale |Mookgophong |Modimolle |Bela-Bela |Mokgalakwena |Total |
|R1 – R400 |6456 |16307 |4526 |9036 |3566 |14105 |53996 |
|R401 – R800 |6020 |10192 |4374 |9978 |7326 |33725 |71615 |
|R801 – R1600 |4507 |2659 |2198 |3585 |3467 |8242 |24658 |
|R1601 – R3200 |6488 |3160 |1471 |2896 |2331 |7016 |23362 |
|R3201 – R6400 |3287 |2695 |916 |2111 |1523 |5375 |15907 |
|R6401 – R12800 |1513 |1236 |359 |954 |582 |1946 |6590 |
|R12801 – R25600 |400 |328 |98 |204 |172 |506 |1708 |
|R25601 – R51200 |133 |145 |39 |72 |86 |174 |649 |
|R51201 – R102400 |51 |75 |34 |63 |48 |88 |359 |
|R102401 – R204800 |53 |48 |19 |24 |29 |86 |259 |
|R204801 – or more |17 |23 |11 |4 |4 |18 |77 |
|Total |63921 |96102 |30759 |72809 |52123 |298438 |614152 |
Over 414 000 people of Waterberg have no income. Just slightly above 199 000 have income. This means that only 32% of people are employed. These figures suggest that while 140 000 people are employed, but about 199 000 have income, then 59 000 get their income from other sources than formal employment. This scenario reveals that local people are also generating income from other economic opportunities that exist in the Waterberg area.
4.4 Age groups
The chart below - indicates that over 44% of Waterberg’s population is under 19 years old. Coupled with this figure is a high number of elderly residents in the area, as reflected hereunder. This implies that many people in Waterberg are dependent on the income of others.
Chart 5: WDM Age Group
Data Source: Statistics South Africa: Census 2001
Table 5 below reflects the dependency ratio (age) according to local municipalities within the Waterberg District Municipality.
Table 5: WDM Age Groups per Local Municipalities
|Age Group |Local Municipalities | |
| | |Total |
| |Thabazimbi |Lephalale |Mookgophong |Modimolle |Bela-Bela |Mogalakwena | |
|5-9 |5243 |11158 |2771 |7434 |5652 |41104 |73362 |
|10-14 |4638 |11319 |2843 |7530 |5816 |42488 |74634 |
|15-19 |4800 |10729 |2974 |7728 |5407 |40173 |71810 |
|20-24 |5805 |9513 |2673 |7015 |4440 |25439 |54887 |
|25-29 |6738 |8497 |2998 |7207 |4679 |19931 |50050 |
|30-34 |6485 |6965 |2595 |5869 |4000 |15140 |41054 |
|35-39 |6600 |6503 |2210 |4915 |3550 |14796 |38574 |
|40-44 |5882 |5073 |1733 |3740 |3021 |12529 |31978 |
|45-49 |4040 |4165 |1436 |3383 |2354 |11019 |26397 |
|50-54 |2650 |3098 |1250 |2312 |1767 |9199 |20276 |
|55-59 |1659 |2060 |969 |1849 |1514 |6898 |14949 |
|60-64 |1116 |2013 |1017 |1780 |1396 |8194 |15516 |
|65-69 |633 |1499 |726 |1308 |1070 |6079 |11315 |
|70-74 |425 |1143 |594 |1183 |908 |5786 |10039 |
|75-79 |237 |631 |337 |737 |546 |2973 |5461 |
|80-84 |133 |535 |193 |535 |370 |2788 |4554 |
|84+ |110 |365 |152 |258 |198 |1803 |2886 |
|Total |63921 |96103 |30759 |72810 |52125 |298375 |614093 |
4.5 Education Levels
Education is a major challenge in the Waterberg jurisdiction. According to Table 6 and Chart 6, over 111 000 of people are illiterate or have no formal education. Only over 51 000 have completed Grade 12, which means that only 8.3 have completed matric. This poses a challenge regarding the skilled labour development. Similarly, the number of senior degree graduate is very low. Senior degree graduates are critical since they contribute towards the strategic human resource development. In order for Waterberg to attract potential investments, a skilled labour force forms an integral part of the marketing and investment strategy.
Chart 6: WDM Education Levels
Data Source: Statistics South Africa: Census 2001
The following table has been compiled from the recent Census 2001 results, released in July 2003. It reflects very low levels of senior education qualifications and high levels of illiteracy. The labour market is demanding increasingly higher levels of education, which implies that many unemployed persons are unlikely to qualify for recruitment even if jobs can be created.
Table 6: Waterberg District Municipality Levels of Education Per Local Municipalities
|Level of Education |Local Municipalities |
| |Thabazimbi |Lephalale |Mookgophong |Modimolle |Bela-Bela |Mokgalkwena |Total |
|Grade 1/sub A |1916 |5722 |1427 |3955 |2993 |20143 |36156 |
|Grade 1/sub B |1623 |4082 |1129 |2939 |2305 |11514 |23592 |
|Grade 3/STd 1 |2748 |4907 |1490 |3879 |2713 |14802 |30539 |
|Grade 4/Srd 2 |3299 |5379 |1511 |3981 |3006 |15469 |32645 |
|Grade 5/Std 3 |3634 |5167 |1468 |3910 |2934 |14310 |31423 |
|Grade 6/Std 4 |3739 |5380 |1555 |4035 |3141 |14950 |32800 |
|Grade 7/Std 5 |4877 |6674 |1917 |5024 |3539 |18377 |40408 |
|Grade 8/Std 6 |4600 |5654 |1869 |4474 |3488 |17974 |38059 |
|Grade 9/Std 7 |3890 |4620 |1430 |3130 |2433 |15075 |30578 |
|Grade 10/Std 8 |4811 |5388 |2047 |4492 |3166 |17017 |36921 |
|Grade 11/Std 9 |2575 |3813 |1300 |2502 |2076 |16997 |29263 |
|Grade 12/Srd 10 |7228 |7249 |2971 |6343 |5213 |22299 |51303 |
|Cert less than G.12 |97 |176 |74 |58 |90 |372 |867 |
|Dip less than Grade 12 |63 |148 |48 |78 |66 |365 |768 |
|Cert with Grade 12 |432 |682 |230 |344 |597 |2010 |4295 |
|Dip with Grade 12 |904 |1436 |434 |1423 |1117 |5172 |10486 |
|Bachelor’s Degree |227 |431 |162 |371 |293 |1252 |2736 |
|Bach. Degree & Dip |165 |293 |130 |284 |179 |694 |1745 |
|Honours Degree |53 |119 |37 |116 |73 |364 |762 |
|Master’s or Doctorate |70 |104 |52 |175 |122 |214 |737 |
|NA |6727 |10837 |3288 |8027 |5437 |32036 |66352 |
|Total |63922 |96105 |30762 |72808 |52122 |298440 |614159 |
5. economic PROFILE OF WATERBERG DISTRICT MUNICIPALITY
The magnificence of the Waterberg District Municipality is self-expressed in its cultural diversity, history and natural environment, and is endowed with a range of habitats, tourist attractions and wildlife. Its economic profile is characterised by its six local municipalities and it revolves around agriculture, commerce, manufacturing, mining and quarries, residential development, smallholdings, water-bodies, etc. Despite high levels of unemployment, Waterberg District Municipality is among the highest contributors to the provincial economy and has a relatively good infrastructure.
However, many people and households in Waterberg District Municipality earn a living from the informal sector, spaza shops, hawking, and street vending. Many households would plan their informal merchandising opportunities around specific events such as old-age pension pay days, holiday seasons, Christmas and new period as travellers and tourist abound in the region.
Economic indicators state that the Waterberg District Municipality has the largest economy compared to other District Municipalities in Limpopo. It contributes over 26% of the total production in Limpopo and the mining sector is the largest contributor as presented in Table 7 and Chart 7 respectively.
Chart 7: WDM Employment Status by Economic Sector
Source: Statistics South Africa: Census 2001
[pic]
Table 7 below reflects the economic contribution made by different sectors in different local municipalities under the Waterberg District Municipality.
Table 7: Economic Profile: Employment by Sector Per Local Municipalities
|Sectors |Bela-Bela|Lephalale |Modimolle |Mokgalakwena |Mookgophong |Thabazimbi |Total |
|Mining & quarrying |51 |1726 |93 |1597 |79 |9532 |13078 |
|Manufacturing |542 |1178 |1609 |3021 |668 |1334 |8352 |
|Electricity, gas & |81 |739 |113 |202 |18 |78 |1231 |
|water | | | | | | | |
|Construction |819 |1015 |1535 |2105 |470 |1052 |6996 |
|Wholesale & retail |2655 |2365 |2689 |6148 |1411 |1489 |16757 |
|trade | | | | | | | |
|Transp. Storage & |381 |611 |400 |1302 |267 |363 |3324 |
|Communication | | | | | | | |
|Financial, & business |642 |906 |719 |2106 |325 |616 |5314 |
|services | | | | | | | |
|Community, social & |2714 |3249 |3766 |8399 |1222 |1782 |21132 |
|services | | | | | | | |
|Private households |1938 |5710 |3548 |5192 |1573 |3001 |20962 |
|Undetermined |1201 |1676 |1141 |3282 |770 |1305 |9375 |
|Total |14373 |28663 |22790 |37089 |11188 |26239 |140342 |
Chart 8 below summarises the contribution of various sectors, which constitute the District economy of the Waterberg area.
Chart 8: Average Growth Rate of Sector Contribution to WDM Economy, 1995-2000
Data Source: Statistics South Africa – July 2003
[pic]
The information in Table 8 forms part of the Limpopo Provincial Growth and Development Information Database (2001) and it shows the trends of gross geographic product from 1995-2000. This close analysis of trends from 1995 to 2000 is critical so as to see changes and the average growth of each sector.
Table 8: Average Growth Rate of Sector Contribution to WDM Economy, 1995-2000
|Economic Sectors |YEARS |Average Growth |
| | |(%) |
| |1995 |1996 |1997 |1998 |1999 |2000 | |
|Mining |2035090 |2299016 |2457691 |3010003 |3457856 |3904606 |13.9 |
|Manufacturing |122973 |147289 |156534 |171187 |181522 |211855 |11.5 |
|Electricity & Water |1086409 |1178710 |1283476 |1357812 |1483432 |1577327 |7.7 |
|Construction |18364 |21363 |22797 |21389 |20832 |18554 |0.21 |
|Trade & Catering |513904 |565311 |666172 |818224 |910748 |1009756 |14.5 |
|Transport & Communication |142320 |252782 |270842 |351979 |409968 |450968 |25.9 |
|Finance & Business Service |476617 |513878 |554965 |591459 |628280 |674851 |7.2 |
|Community Services |771785 |795514 |848641 |1144146 |1236281 |1325377 |14.3 |
|Total |5509856 |6139548 |6653508 |7845136 |8698696 |9581435 |- |
The trends in Table 8 show that Transport and Communication, have the highest growth rate of 14.3%, followed by Trade and Catering (14.5%), Community Services (14.3)%) and the Mining sector (13.9%), etc.
The apparent low growth rate in water and electricity and construction industry suggest that the Waterberg District Municipality has not had significant infrastructure development and may account for some part of unemployment or lack of job creation. In this regard, infrastructure development is one of the areas needing substantial investment.
6. investment opportunities in waterberg district Municipality
Waterberg is a region that covers extensive tracks of savannah bushes and mountains. It is a region that has attracted attention of many archaeological and palaeolontogical scholars since its establishment, due to its remains of early human origins. Until recently, the region has been estimated to be 3 million years old. It’s unique complex rocks, however, are acclaimed to be more than 600 millions years.
Waterberg District Municipality is one of the most mineralised regions in South Africa as it forms a unique complex of rocks dating back to more than 600 millions years. Minerals found in this region include chrome, platinum, nickel iron, tin, tungsten and many other metals that saw it flourishing in mining industry.
Waterberg District Municipality’s fertile soil has placed it to a high level of competitiveness in terms of agricultural and farming products. While it is a region still plagued with high levels of poverty and unemployment, Waterberg has substantial potential to attract investors in the areas of Agriculture, Mining and Tourism.
6.1 Investment Opportunities in Tourism
The region is so richly endowed with natural assets and is malaria-free – only two hours drive from Gauteng Province in South Africa, the principal source of domestic tourism and main dispersal point for foreign tourists. It is this competitive advantage that the Waterberg District Municipality intends to exploit. It has been placed on the world tourism map and a 414 000 hectares were declared by the United Nations a Biosphere Reserve. Moreover, Waterberg is also home to Nylsvley, an international recognised wetland, which has been accorded a RAMSAR status.
In view of the above, it is apparent that investment opportunities in tourism sectors in Waterberg abound. The atmosphere of tranquillity makes Waterberg an ideal Number-One-Stop for tourist re-energizing. It is no doubt that tourism would contribute towards employment generation, foreign exchange revenue, thus very optimistic in terms of poverty reduction.
Already in place, attractions include game farms and Nature Reserves. Similarly, hotels, guesthouses and caravan parks are niche areas to be considered as investment potentials. Archaeologists would also find the place interesting since the region has been declared a national heritage because of its status of being the cradle of mankind.
The Waterberg District Municipality is playing a significant role in developing tourism by upgrading roads leading to Marakele National Park and other game farms, and by contributing funds to local tourism associations, enabling them to more effectively market the region.
Therefore, taking into account the region’s capacity to attract more tourists, a monetary injection in the sector would see the region flourish and will positively impact on the quality of life of the Waterberg communities. The Investment opportunities offered by the tourism market are unlimited in the Waterberg area. The Waterberg region offers what can be defined as “tranquil haven” for tourists.
6.2 Investment Opportunities in agriculture
Agriculture is an economic sector on which many people rely to earn a living. It is one of the sector that extensively contributes to the District’s gross domestic product (GDP). Major crops include cotton, sunflower, tobacco, soya beans, etc. Other potential areas for investment include Marula processing, aquaculture, livestock improvement schemes, game farming and production of paprika, peach, grape and herbs for Traditional African Medicine.
Waterberg is renown for its fertile land, which produces citrus and sub-tropical fruit. Waterberg is the major contributor towards the Limpopo’s 70% of South Africa’s avocados and of tomatoes, 75% of mangoes and macadamia nuts, 65% of papayas; and 25% of citrus.
Well known for its production and processing of cotton and sunflowers, the region is experiencing growth in its tobacco industry, with farmers expanding operations to take up demand in the wake of the near collapse of the Zimbabwean crop. The agricultural sector is set to expand with plans to establish export-driven, R500 million soya food processing plant in the area. The available technology will remove the intrusive “beany” taste from soya, a protein-and fibre-rich food increasingly being consumed as an alternative to meat.
Such a bulky production has led to a range of processed products such as fruit juice, concentrates, soya bean products, and so on. In addition, the District envisages the development of several types of farming such as sugar, oils, catfish and goats, among many.
The Waterberg District Municipality is supporting agricultural growth by developing a policy for the sub-division of agricultural land, setting up a task team to assist the Land Claims Commission, and entering into negotiations to acquire State land for sustainable development.
Pre-feasibility studies in the Limpopo Province indicate Waterberg is one of the areas where almond, cassava and bamboo production can flourish. Soil and climatic conditions in large parts of the province are well suited to these commodities and ready markets for almost any level of production can be found in the District, Province, in the country and in sub-Saharan Africa.
Cassava and bamboo are suitable for the production of staple foods and animal fodder. The first commercial cassava starch plantation was established in the province in January 1999. Production yields are significantly higher than in other areas such as the Far East and South America.
Bamboo can also be used for building materials, which are appropriate for sub-tropical and tropical climates. Several large irrigation facilities are also under-utilised and could form the basis for mutually rewarding public-private partnerships. Pre-feasibility studies that have been conducted on these projects indicate sound viability for sub-tropical fruit and citrus production.
Waterberg is rich in traditional African medicines. Herbs that have treated diverse diseases in Africa continue to survive in Waterberg. Potential investors would be those interested in developing sustainable projects that will bring traditional African medicine to the main stream of economy.
There are also a number of ongoing and potential projects such as Ostrich Farming; Cotton Production; Cut Flower Production; Herb Production; Table Grape Production and Tobacco Production. Among other projects, it is an ambitious initiative to produce one million goats a year to supply meat to the Middle East market. The initiative will also produce goat’s milk, cheese, offal, and hides for processing into leather for manufacturing of crafted products such as wallets, folders, key holders, shoes, handbags, etc.
6.3 Investment Opportunities in mining
Mining can be regarded as the most important economic sector of Waterberg District Municipality. The Waterberg District mining sector has been operational for many years. Aside from the Thabazimbi iron and ore mines, the region produces vast qualities of platinum at Mokopane and Northam areas. Its coalfield at Lephalale, formerly Ellisras, fuels a giant Eskom power station, but its remaining reserves of the black gold are largely untapped.
Its mining resources include the following:
▪ Precious metals: Gold, Diamonds (Kimberlite), and Platinum; and
▪ Ferrous and base metals: Copper, Tin, Manganese, Colbat, Iron, Nickel, Titanium, Molybdenum, Vanadium, Chrome, Lead, Berylium, etc.
Recent investment opportunities are found in the following:
▪ The Coal Mining cluster in the Lephalale area. The prospects could contribute towards job creation and turn the area into the province’s new coal source. Waterberg’s coal reserves have over 6.5 billion tons of coal, making it South Africa’s third largest coal reserve after Witbank and Highveld fields. In addition, various important minerals, such as chromium, tin, etc. are currently mined in the area.
▪ Apart from the popular precious and ferrous metals, Waterberg offers opportunities to expand the exploitation of minerals such as Attapulgite clay, Fluorspar, Phosphate Topaz, etc. Of special interest to potential investors, is a Government commissioned study report, which points to positive prospects for development including fuel-from-coal liquification. The mines have direct impact on employment creation as well as on disposable income.
▪ Furthermore, Waterberg is one area of the Limpopo province that has depository of antimony in the world. This strategic chemical element is used in alloys and in medicine. Also in the surroundings is a hub of smaller operations extracting a large range of minerals including gold, black granite, potassium and silica.
▪ Until recently,
▪ Iscor, Eskom and Sasol hold mining licences in the area, which operate the giant oil-coal plant in Mpumalanga Province. Elsewhere, large deposits of iron ore and vanadium remain unexploited.
It is evident from the above that Waterberg offers potential investors an opportunity to contribute towards the development of the region and be part of one of the most revered places in the universe.
7. the policy and legislative mandate
South Africa has a rapidly transforming national economy striving to expand and increase its competitive edge in the world and other regional markets. The South African Government has developed a range of policies and legislation, and implemented a range of incentive programmes aimed at facilitating investments in different economic sectors.
The model of promoting local sustainable developmental programmes has been recurring at international, national, provincial, and local levels. Central themes include improved quality of life for marginalized social groups, skills development, job-creation, economic development, and poverty reduction. The government role in realising these targets features in almost all policy documents, especially because of the disparity between economic growth with extreme unemployment and poverty.
Targets that have been set by organisations like the United Nations, NEPAD, African Union, and so on, are frequently employed at most policy levels. The targets are increasingly being classified along spatial dimensions for impact and sustainability purposes. Achievement of these targets at a municipal level is a requirement for their achievement at provincial and national levels. Consequently, as much as the Waterberg Marketing and Investment Strategy should have a local focus, it should also be viewed in the context of broader provincial, national, regional and international strategic goals. It strikes a balance between the social needs of local communities and the promotion of investments and economic growth interventions.
As already indicated, this strategy is informed by policy frameworks and legislation at international, national, provincial and local contexts.
In the case of a local government in South Africa, the following relevant legislation need to be considered:
▪ Section 152 of the Constitution assigns the Local Government to promote social and economic development, so as to involve the local communities and organizations in local governance issues;
▪ The 1998 White Paper on Local Government outlines a series of strategies with which to engage local communities and stakeholders in forging relevant strategies;
▪ The Municipal Structures Act of 1995 defines the delineates the structures governing the municipalities, which are bestowed with the authority to initiate developmental activities; and
▪ The Municipal Systems Act of 2000 entrusts local government with developing its communities including the formulation of Integrated Development Plans (IDPs).
7.1 linkages with National Initiatives
Within South Africa, the need for the country’s marketing has long been in both the national as well as the provincial strategic planning process. Among others are the following:
▪ The National Spatial Development Perspective (NSDP), which calls for infrastructure investment and development. It encourages provinces to use similar strategies.
▪ The South African Growth Summit (SAGS), which focused on growth and development with emphasis on job creation, investment and people-centred development. Resolutions taken in the summit have a common goal of halving unemployment by the year 2015. Further the resolutions articulated the following commitments:
a. Public investment initiatives, particularly in infrastructure;
b. Expanded Public Works Programmes, including erosion control, fencing and maintenance of public facilities;
c. Sector partnerships and strategies, incorporating sector summits;
d. Local procurement;
e. Small enterprise promotion;
f. Support for co-operatives; and
g. Job impact assessment and monitoring.
▪ The Broad-Based Black Economic Empowerment (BEE) Strategy, which regards broad-based black empowerment as an economic process that must ensure that black people manage, own and control most of the country’s economy;
▪ The National Micro-Economic Reform Strategy, which emphases on the reduction of poverty and job-creation. It focuses on agriculture, cultural industries, exports, information and communication technology and tourism; and
▪ The Intergovernmental Relations (IGR) Bill provides principles, objectives and platforms to promote good relations among the three spheres of government. The IGR ‘s main objectives include:
a. Integrated delivery of public goods and services;
b. Increased access to services;
c. Mutual consultation on policy and legislation;
d. Co-ordinated strategic planning linked with financial allocations;
e. Accountability for performance and expenditure; and
f. Sustainable development.
The IGR promotes the objectives of intergovernmental relations through institutional capacity building, information exchange among all government spheres and the establishment of appropriate intergovernmental forums.
7.2 Linkages with provincial initiatives
In turn, the Limpopo Provincial Growth and Development Strategy (PGDS) outlines a framework with which to turn its vision and mission into realizable goals and objectives. Critical in the PGDS is the quest for economic growth, employment origination, poverty eradication, creation of wealth and capital, and more. The PGDS sets out a comprehensive strategy for:
▪ Spatial Rationale;
▪ Integrated Sustainable Rural Development Strategy;
▪ Spatial Development Initiative;
▪ Agricultural Development Strategy;
▪ Mining Development Strategy;
▪ Manufacturing Development Strategy;
▪ Transportation Strategy;
▪ Tourism Growth Plan;
▪ Small, Medium and Micro Enterprise (SMME) Strategy; and
▪ Poverty Eradication Strategy.
It is the PGDS that provides the Waterberg District Municipality with a lead. Thus Waterberg District Municipality’s developmental planning is informed by the overall strategic goals of the province.
7.3 focal area strategies for marketing and investment at waterberg District municipality
There are many niche areas in which the Marketing and Investment Strategy may be applied. The Provincial Growth and Development Strategy have already recommended some of the following strategic areas.
7.3.1 Rural Development Strategy
The Waterberg District Municipality is committed to the empowerment and development of rural communities. This specific spatial focus is meant to improve the living conditions of people who are deprived of basic needs.
The Waterberg’s rural development strategy derives its intervention principles from the provincial Integrated Sustainable Rural Development Strategy, which is spatially specific, in order to improve the living conditions of people who are deprived of basic needs.
7.3.2 Agricultural Strategy
Provincial priorities that are particularly relevant to Waterberg include the high-value and export-orientated commodities, agro-processing, promoting competitive supply chains and providing support programmes for emerging previously disadvantaged farmers. The contribution from the sector to the District’s economy varies considerably from year-to-year according to weather patterns.
Therefore, the Agricultural Mission of Waterberg is to accelerate economic growth and reduce poverty by inviting potential investors and empowering people to manage natural resources in a sustainable manner.
The strategic priorities for marketing and investment in the Waterberg District Municipality agricultural programme are:
▪ Transformation of municipal controlled assets;
▪ Redesigning of land use;
▪ Poverty reduction;
▪ Animal health and production;
▪ Human resource development, and
▪ Agri-Business development within the AgriBEE Framework document.
The Waterberg’s Marketing and Investment Strategy sets up these priorities by detailing strategies, output service delivery for each priority.
7.3.3 Transportation Strategy
Waterberg’s economic prominence requires that it be endowed with robust transportation infrastructure and services. In this regard, there is a need for a comprehensive transport strategy, which will set out key intervention areas for marketing and investment. Such areas would include:
▪ Planning, co-ordination and consultation;
▪ Transport management;
▪ Freight transport;
▪ Passenger transport;
▪ Transport infrastructure, and
▪ Road traffic and safety.
This approach is in line with the provincial Limpopo in Motion Strategy and it fits the Waterberg District Municipality to develop business plans to guide the implementation process.
7.3.4 Poverty Reduction Strategy
An extensive investigation was conducted during 2001 to identify and recommend strategies that would improve the impact of poverty reduction projects in Limpopo. As sub- objective of the study was to provide a description of poverty, as it manifests within the Province.
The World Bank insists that in order to know what helps to alleviate poverty, what works and what does not, as well as what changes over time, poverty has to be ‘defined, measured and studied, and even lived’. As poverty has many dimensions, it has to be looked at through a variety of indicators – levels of income and consumption, social indicators and now increasingly, indicators or vulnerability to risks and of socio/political access.
The simplest way to measure poverty is to express the number of poor as a proportion of the population. This requires an income definition of poverty. The World Bank has arbitrarily set this level at one US dollar per person per day in the year 2000. In terms of this definition, poverty has almost been eradicated in East Asia and in the Pacific region, but the number of people living in poverty in Sub-Saharan Africa is increasing. International poverty alleviation strategies have programmes for income generation, education, health and the environment.
The Report on Poverty and Inequality in South Africa of May 1998 points out that government will have to adjust its fiscal, monetary policies, as well as its programmes for spatial and institutional reform. Policy measures that were recommended to achieve this, fall into three general categories dealing with improved endowments, preventative measures to avert deprivation; and protective measures that provide relief from deprivation. Support for small-scale agricultural activities, emerging entrepreneurs, the Community-Based Public Works Programme and housing subsidies, are seen as important ways to improve livelihoods and to create household assets. Restructuring of state assets can make a positive impact in this regard.
7.3.5 Cooperative Development Strategy
Aside from great agricultural development strategies, Waterberg envisages to invite investment into producer co-operatives as means to promote manufacturing, job-creation and economic empowerment within rural areas.
Members of co-operatives require training across a wide range of issues, from skills, operational and management aspects. The lack of founding and operating capital and problems directly linked to market are obstacles to co-operative development of the previously disadvantaged communities.
Therefore, the Waterberg District Municipality would need to formulate a Marketing and Investment Strategy that will attract potential investors to revive co-operatives. The plan would need to state in broad terms some basic intervention areas and where possible or necessary timelines and budgetary implications.
7.3.6 Sport, Art and Culture
A very crucial area needing investment is Sports, Arts and Culture. Aside from providing cohesion among different cultural groups within the Waterberg District Municipality, sport, art and culture can help minimise idleness and vagrancy. The White Paper on Sports and Recreation (1998) urges that sports and recreation activities be used for:
▪ Increasing the levels of participation in sports and recreations;
▪ Raising the profile of sports in the face of conflicting priorities;
▪ Maximising the probability of success in major events, and
▪ Placing sports in the forefront of crime reduction and prevention strategies.
While provincial authorities are responsible for policy regarding federations at that level, local authorities are responsible for policy at their level, the funding of clubs and the building and maintenance of facilities for provincial and local events.
In addition, the White Paper on Arts, Culture and Heritage (1996) supports the principle that arts, culture and heritage be used for social and economic development, nature creativity and innovation, and promote the diverse heritage of the nation. Therefore, the Waterberg District Municipality encourages investments initiatives that support:
▪ Arts, culture and heritage projects, which seek to pursue economic activity;
▪ The linguistic diversity of the District as a resource to empower all its communities to participate full in their District’s social, and economic life; and
▪ The equitable development and preservation of experiences, heritage and symbols or various cultural groups in the District.
In this regard, intervention priorities entail:
▪ Formulation of general principles and a management system to control the District’s heritage resources;
▪ Establishing a Committee that facilitates Marketing and Investment Strategy implementation process with regard to sports, arts and recreation; and
▪ Formulation of niche area action plans to guide potential investors with regard to specific output deliveries and time frames.
7.3.7 Economic Infrastructure Strategy
The importance of infrastructure in any economy is its role in terms of providing resources and technology that enable efficient delivery of goods and services as well as enhancement of performance in carrying out plans and activities assigned in relevant strategies. The attention in this sector is on the policy environment for infrastructure that promotes economic development and improves the quality of life of Waterberg citizens.
The Limpopo Integrated Infrastructure Plan has already provided a framework in this regard. Therefore, Waterberg District Municipality’s intervention areas entail the following:
▪ Undertake a comprehensive environmental and spatial analysis for infrastructure development and investment needs;
▪ Promote investment initiatives that will use technologies such as the Geographical Information Systems (GIS) as an informative resource to prospective potential investors in infrastructure; and
▪ Provide investment opportunities to improve the existing social infrastructure, with specific outputs delivery goal ends and time frames;
7.3.8 Small, Medium and Micro Enterprise (SMME) Strategy
Small, Medium and Micro Enterprise (SMME) Strategy is the Waterberg District Municipality’s key to originate employment opportunities, to empower previously disadvantaged communities and to reduce poverty. For this purpose it will establish a SMME Support Unit to develop a strategy to attract investment aimed at supporting SMME initiatives. The purpose of this strategy is to create an enabling environment for SMMEs to succeed.
Specific intervention steps include the following:
▪ Coordination and integration of support services to SMMEs, especial among government departments and to create an investor’s network for the Waterberg District Municipality’s SMME Support Unit;
▪ To improve on SMME access to finance in collaboration with Waterberg District Municipality and other Retail Finance Intermediaries (RFIs);
▪ To improve SMME engagement in the procurement processes of national, provincial and local government, as well as parastatals and the private sector;
▪ To create viable SMMEs in the construction, manufacturing, mining, tourism and agricultural sector;
▪ To create an entrepreneurial culture, particularly among the youth and the unemployed persons of the Waterberg District Municipality;
▪ To design a marketing strategy that would attract additional investment to SMMEs; and
▪ To develop a monitoring system for SMME interventions.
8. Market Growth Analysis
8.1 Waterberg Market Trends
Waterberg’s market growth ought to be understood within the Limpopo Provincial context. Such an approach is necessary given that the Waterberg District Municipality is the major contributor to the Limpopo Provincial economy.
It is crucial to note that available indicators do no not show market trends areas directly linked to specific products; however, they do outline special sectors from which market growth can be understood. For example the Provincial Growth and Development Strategy (PGDS)[vi] indicates that in 2002 the economic structure of the Limpopo Province had Government Social Service as the most dominant sector (See Chart 9).
Chart 9: Limpopo Province Economic Structure in 1995
(Source: Limpopo Growth and Development Strategy. 2004)
While there is reason for concern regarding the apparent stagnation of agricultural, mining and tourism sectors during the past 6 years, aggressive interventions are set to attenuate the situation during this decade through a strong strategic diversification of the economy.
Chart 10: Limpopo Province Economic Structure in 2002
(Source: Limpopo Growth and Development Strategy, 2004)
Comparing the two charts (Chart 9 & Chart 10), Construction, Water and Electricity sectors have been relatively dormant during six years. This state of affairs may be attributed to the fact that in those years, shortly after the 1994 elections, municipal borders were still being redefined and there were uncertainties in terms of powers and functions. In market terms, this could have impacted negatively on the Province in general and Waterberg in particular.
Supporting this interpretation are the District indicators, which show the sectoral Gross Geographic Product (GGP) growth rate from 1995 to 2000 and the contribution of respective sectors to employment (See Table 9).
Table 9: Sectoral Employment of Waterberg District Municipality
(Source: Statistics South Africa, 2001).
|Sector |GGP Contribution |Average Growth Rate |Employment Contribution |
| | |(1995-2000) | |
|Agriculture and Forestry |4.3% |3.6% |21% |
|Mining |40.8% |13.9% |21% |
|Manufacturing |2.2% |11.5% |3% |
|Electricity, gas & Water |16.5% |7.7% |3% |
|Construction |0.2% |0.21%n |3% |
|Trade & Catering |10.5% |14.5% |18% |
|Transport & Communication |4.7% |25.9% |4% |
|Finance and Business |7.0% |7.2%n |4% |
|Community Services |13.8% |14.3% |23% |
|Total |100.00% |100.0% |100% |
IN MARKET TERMS, THE ANALYSIS OF THESE INDICATORS NEEDS TO BE CLEARLY UNDERSTOOD. FOR EXAMPLE, WHILE MINING CONTRIBUTES WITH 40% OF GGP AND 21% OF EMPLOYMENT, IT IS NOT EASY TO AFFIRM THAT THE EMPLOYMENT PART IS SOLELY ABOUT WATERBERG RESIDENTS ONLY, SINCE THIS SECTOR DOES ALSO HAVE A LABOUR IMMIGRATION COMPONENT.
Comparing the same figures with those of Provincial Economic Structure in 2002, the construction sector shows a dwindling at District level as well with 0.21% of growth rate while only contributing with 0.2% of GGP.
In market terms, the decrease in construction industry could be attributed to different factors:
▪ The first may be speculated that during this period Waterberg was less attractive as an ideal place to buy property and build homes; and
▪ The second could be attributed to limited infrastructure development in terms of roads, rails and recreation.
Despite these trivial shortcomings, in terms of market growth Waterberg continues to be the major contributor both in terms of economic and market growth compared to other District Municipalities in the Province (See Table 10).
Table 10: Gross Geographic Product per District Municipality
(Source: Limpopo Province Development Information Database, 2001)
| |DISTRICT MUNICIPALITY AREAS | |
| | |TOTAL |
| | | |
| | | |
|SECTOR | | |
| | | |
| |CAPRICORN |BOHLABELA |MOPANI |SEKHUKHUNE |VHEMBE |WATERBERG | |
|MINING |3.45% |0% |21.07% |7.51% |10.49% |57.48% |100% |
|MANUFACTURING |45.36% |4.26% |19.10% |3.98% |13.34% |13.95% |100% |
|ELECT. & WAT.ER |15.27% |3.99% |18.73% |3.00% |10.19 |48.82% |100% |
|CONSTRUCTION |40.75% |4.03% |30.47% |1.22% |21.46% |2.07% |100% |
|TRADE & CATERING |32.93% |6.62% |17.23% |6.7% |20.94% |15.41% |100% |
|TRANS & COMMUNICATIONS |40.65% |6.80% |21.39% |4.59 |0.93 |25.25% |100% |
|FINANCE/ BUSINESS |36.60% |3.09% |19.30% |0.31% |18.77% |21.93% |100% |
|COMM.\UNITY SERVICES |25.21% |10.99% |19.53% |12.94% |18.74 |12.59% |100% |
|TOTAL AVERAGE |24.17% |5.86% |20.00% |7.25% |15.93 |26.79% |100% |
IT IS IMPORTANT TO NOTE THAT TOURISM HAD BEEN PREVIOUSLY EXCLUDED FROM IMPORTANT ECONOMIC SECTORS AND THAT IT ONLY RECEIVED RECOGNITION AS A MAJOR PLAYER IN ECONOMIC DEVELOPMENT IN VERY RECENT YEARS.
Notwithstanding the analysis above, the PGDS has projected good prospects for job creation in 2005 whereby Waterberg will generate over 6000 jobs. These prospects can be linked directly with good market growths.
In addition to the preceding analysis is the need for economic diversification. Diversification will ensure that the Waterberg District Municipality has a competitive advantage and extend its value chains of activities from the competitive sectors, which are agriculture, mining and tourism.
8.2 Market growth projections and indicators
From the actual status quo to projections, the PGDS has provided generic indicators across all District Municipalities in the Province. The main aspects, which are linked to market growth, are Capital Formation, Economic Growth, Job Creation, and Economic Diversification.
8.2.1 Capital Formation
The PGDS has regarded Capital Investment as primary objective since it is a driver and indicator of economic growth (See Chart 11). The indicators in Chart 11 reveal good level of capital investment over R 5 billion per year, with major contribution of the mining sector. This surpasses the PGDS target, given the fact that Limpopo Province has the fastest growing economy in the country.
Chart 11: Levels of Capital Investments from 1998-2010
(Source: Limpopo Growth and Development Strategy, 2004)
The decline projected by the status quo from 2003 onwards does provide a rationale of the apparent slow market growth, which by implication impacts on Waterberg, the major economic contributor in the Province. An optimistic trend, however, enters in 2010 – assuming that the present capital projection has been met.
8.2.2 Economic Growth
Relating economic growth to market, it has a very critical role in that it is directly linked to job creation. Limpopo Province had the highest economic growth compared to all provinces in the country, scoring a 6.3% growth rate in 2001. With the prospects of platinum mining projects success, the economic growth rate needs to exceed the current 6% per year so that the 2020 vision, identified in the PGDS, can be achieved. The rate should at least be 7% to 8% annually.
Chart 12: Economic Growth Rate
(Source: Limpopo Growth and Development Strategy, 2004)
On the basis of the Provincial projections, the Market Growth trends in Waterberg appear very optimistic in the next decade and beyond.
8.2.3 Job Creation
Creation of jobs is among the top priorities of the PGDS and the Waterberg District Municipality. This is critical in that job proliferation directly impacts on the quality of life and the living standards of the communities in the District so as to reduce poverty and promotion of economic self-reliance.
The current state of affairs of unemployment is compounded by population growth and urbanisation. The actual projected unemployment rates from 1998 to 2010 are alarming (See Chart 13).
Chart 13: Actual Projected Unemployment Rates 1998-2010
(Source: Limpopo Growth and Development Strategy, 2004)
The projected figures in terms of unemployment do pose a challenge to Waterberg District Municipality with regard to market growth prospects. While the optimism projected at provincial level favours Waterberg because of its economic contribution, it is, nonetheless, an indicative that can never be neglected.
Despite the apparent challenges confronting the Waterberg region, there is optimism that market trends will change within this decade. However, there is a need to balance the provincial projections at broad level and the actual pressing day-to-day reality. This implies that the Waterberg District Municipality should devise proactive mechanisms to guard against disruptive elements in the market trends.
9. marketing and investment product portfolio
Challenges confronting Waterberg in terms of Market Growth and Investment needs can be improved through a systematic profiling of existing products in the three strategic investment sectors: Agriculture, Mining and Tourism. Basic understanding of potential derivates from the raw materials will increase the chances of strategizing for investment attraction and luring potential markets from within the country and abroad.
In this strategy formulation, portfolio of a product consists of the following:
▪ The identification or name of the product;
▪ The location where the product is found within Waterberg area;
▪ Possible and potential markets and clientele where the product is in demand or needed;
▪ A description of Waterberg’s competitiveness in terms of both capacity and expertise to proliferate such a product;
▪ The resources needed to multiply the product for market purposes in terms of infrastructure and monetary injection; and
▪ The extent to which potential project contribute to the overall strategic goals of Waterberg District Municipality such as BEE, SMME, PPP and IRD, etc.
In this regard, a product will receive development priority provided that it will contribute towards poverty reduction, job creation, Black Economic Empowerment, Integrated Rural Development, etc. The success of product portfolio is to reach balance between financial measures and social benefits as well as the ability to optimise the mix of product for common good.
9.1 Product Portfolio in Agricultural Sector
| |
|PRODUCT 1: Soya Processing |
| |
|Location: Currently located in Thabazimbi Municipality. It has a potential to expand into other municipalities. |
| |
|Potential Market: Potential markets are mainly found in Africa, where the prices of protein products are very high. In |
|South Africa, for example, Protein Industries such as Thabazimbi (Pty) Ltd considers the following as potential clients|
|in the soyamilk, soyamilk powder and okara edible markets: Grobler dairies, Nutri Bev, Nestle, Borden, Freddy Hirsh |
|Foods, CJ Petro etc. There is also huge international trade links with European countries. |
| |
|Competitiveness: Waterberg’s competitiveness is reflected in the Thabazimbi experience and expertise and the capability|
|of raw material mass-production. Derivate end-products include among others Soya Milk, Soya Milk Powder and Okara (wet |
|and dry). |
| |
|Resources Needed: Capital investment, machinery, human resources, in strategic areas, etc. |
| |
|Strategic Goals: The main strategic aims is to contribute towards job creation, poverty reduction, food security, rural|
|development. In addition, the Black Economic Empowerment and SMME establishments, ought to benefit from relevant |
|initiatives. |
| |
|PRODUCT 2: Integrated Animal Feed (Boskos) |
| |
|Location: This is a potential pursuit that may be initiated in all Local Municipalities. |
| |
|Potential Markets: The market includes the following segments: Game farming operation; Zoo operation; Horse owners; |
|International game markets and Cattle farmers. The market is spread throughout the District, Province and South Africa in |
|general with good prospects for exports. |
| |
|Competitiveness: Waterberg has long been involved in feed production plant, processing invader bush through a patented |
|process, to animal feed suitable for game, horses and cattle. It is endowed with internationally renown expertise and |
|knowledge. |
| |
|Resources Needed: Capital investment, machinery, additional human resources, etc. |
| |
|Strategic Goals: Job creation, investment attraction, poverty reduction, Black Economic Empowerment and Small, |
|Micro-Medium Enterprises development. |
| |
| |
|PRODUCT 3: Organic Farming |
| |
|Location: All Local Municipalities |
| |
|Potential Markets: A number of European countries have indicated the need for organic products. Some major food |
|wholesalers in South Africa have announced their intentions to sell only Organic Food within two years from now. The |
|African Continent in particular is the immediate market, which is currently consuming organic foods – against the western |
|genetically engineered products. |
| |
|Competitiveness: Waterberg area has a large amount of virgin land for organic farming, good climate and geo-political |
|conditions which cannot be found anywhere in the world. The Waterberg virgin organic land, gives both local and |
|international investors an opportunity to become world leaders in organic farming and world markets. Local expertise, |
|coupled with extensive indigenous African farming methods, makes Waterberg organic products unique at value and taste. |
| |
|Resources Needed: Machinery, human resources, capital investment, infrastructure as well as human resources in strategic |
|organic farming sectors, etc. |
| |
|Strategic Goals: Job creation, poverty reduction, food security, integrated rural development, |
| |
|PRODUCT 4: Traditional African Medicine (TAM) |
| |
|Location: All Local Municipalities |
| |
|Potential Markets: Research shows that 95% of all medicines come from plant roots, bark and leaves. Over 85% of the |
|African population use plant medicines. Therefore, potential market comprises majority of African in the Continent as well|
|as in Diaspora. With the recent rise of fatal diseases in the world, western and far-eastern scientists have been |
|interested in laboratory experiments of African plants. |
| |
|Competitiveness: It is no doubt that Waterberg is still endowed with virgin forests and savannahs, which have preserved |
|many of the most values medicinal plants in the world. Researchers investigating South Africa’s wealth of medicinal and |
|perfume plants have found that adequate financial backing, research and development, exposure, and marketing could open |
|opportunities for both local and international investors. |
| |
|Resources Needed: Human resources in strategic fields, capital investment; appropriate extraction, refining, packaging |
|technology, etc. |
| |
|Strategic Goals: Promotion of traditional African medicines to enter the mainstream market, job creation, SMME |
|development, promotion of cooperatives and incentives schemes, minimisation of medical expenses among the African poor in |
|rural areas, etc. |
In addition, there are a number of agricultural products, which could not be exhausted in the outline above. They are summarised in Table 11 below.
Table 11: Summary Of Waterberg Agricultural Products Per Local Municipality
|Municipality |Crops |Fruits |Vegetables |Livestock Poultry Piggery |
|Bela – Bela |Cotton |Citrus |Potatoes |Cattle: zebu type Afrikaner |
|Modimolle |Maize |(oranges) |Tomatoes |Brahman, Nguni, senglen, Tuli, Bonsmara,|
|Mookgophong |Millet |Peaches |Cabbage |Drakensberg and Summwntaller. |
| |Tobacco |Table |Carrots |Sheep: Dorper, Damara and Van Rooyen. |
| |Paprika |Grapes |Onions |Goats: Boer goats, |
| |Sorghum | |Curcubits (the pumpkin |Poultry: New Hemisphere white leghorns |
| |Lucerne | |type) |Austrolopers, |
| |Cowpeas | | |Potchefstroom Kokoes, Black leghorns. |
| |Groundnuts | | |Piggery: Large white, Minnesota and |
| |Wheat | | |Landras |
| |Jug beans | | | |
| |Chinabeans | | | |
| |Sunflower | | | |
|Lephalale |Ground nut |Citrus |Potatoes |Cattle: Zebu type Afrikaner, Brahman, |
| |Cotton |Peaches |Tomatoes |Nguni, Senglen, Tuli, Bosmara and |
| |Millet |-Table |Cabbage |Drakensberger. |
| |Tobacco |Grapes |Carrots |Sheep: Dorper, Damara and Van Rooyen. |
| |Paprika | |Onions |Piggery: Large white, Minnesota and |
| |Sorghum | |Curcubits (the pumpkin |Landras |
| |Lucerne | |type) |Poultry: New Hemisphere white leghorns |
| |Cowpeas | | |Austrolopers, |
| |Groundnuts | | |Potchefstroom Kokoes, Black leghorns. |
| |Wheat | | | |
| |Jug beans | | | |
| |Chinabeans | | | |
| |Sunflower | | | |
|Mogalakwena |Peanuts |Citrus (oranges |Baltimoore: Potatoes, |The whole area has the capacity for |
| |Maize, | |Orions, Tomatoes, Melons,|cattle and game farming, with |
| |Sorghum and Babala. | |Pumpkinbeet, Carrots |beef/cattle dominance in the Mapela/ |
| |Sunflower, | |Onions potatoes |Bakenberg area and Robone/ Baltimoore |
| |Wheat, | | |having the potential for goat farming. |
| |Sorghum | | |The most dominant breed is the Bonsmara.|
| |Cotton. | | | |
| |Tobacco | | | |
|Thabazimbi | Maize |Citrus |Potatoes |Cattle: Afrikaner, Brahman, Nguni, |
| |Manna |Peaches |Tomatoes |Simmentaller, Senglen, Tuli, Bonsmara |
| | |TableGrapes |Cabbage |and, Van Rooyen. |
| |Tobacco | |Carrots |Goats: Boer goats. Poultry: New |
| |Paprika, Cow | |Onions |Hemisphere, White leghorns, Australops, |
| |Peas | |Curcubits and Spinach |Potchefstroom Kokoes, Black Leg Horns. |
| |Sorghum | | |Piggery Large white, Minnesota and |
| |Lucerne | | |Landras. |
| |Groundnuts | | | |
| |Wheat | | | |
| |Jug beans | | | |
| |Sunflower | | | |
9.2 PRODUCT Portfolio in Mining Sector
|PRODUCT 1: Coal Liquification |
| |
|Location: Lephalale Local Municipality |
| |
|Potential Markets: Markets do exist nationally and internationally. As raw material coal may be supplied to gas |
|producers, direct as fuel, or cooking. The Waterberg coal can be used for the following purposes: gas generation; direct |
|liquification as fuel, blend coking in ferro-alloy industries and PF combustion for electricity generation. |
| |
|Competitiveness: Since the major coal producing areas in South Africa have reached maturity and large scale expansion |
|limited, it is necessary that energy strategy be developed for sustainable development of the coal and gas resources of |
|the Waterberg. The Waterberg coalfield offers the potential to sustain energy development in the long term when coal |
|production enters a declining phase in the traditional high producing areas. |
| |
|Resources Needed: Infrastructure, machinery, human resources, capital investment, etc. |
| |
|Strategic Goals: Job creation, Black Economic Empowerment, poverty reduction, integrated rural development, etc. |
| |
|PRODUCT 2: Platinum |
| |
|Location: It is found in Mogalakwena, Mookgophong and Thabazimbi. Its availability extends 60km North-West of Polokwane|
|within the East-West Spatial Development Initiative. |
| |
|Potential Markets: Markets for platinum are found nationally and internationally. It is in demand for manufacturing of |
|corrosion-resistant products. Prognoses show that the metal will be in demand for the next ten years. |
| |
|Competitiveness: It is to mine Platinum Group Metals on seven farms in northern limb of the Bushveld Complex (Platreef).|
|Mineralisation is most intense in 20m thick pyroxenite and disseminated base metal sulphides are common. |
| |
|Resources Needed: Infrastructure, human resources, capital investment, etc. |
| |
|Strategic Goals: Black economic empowerment, job creation, poverty reduction, etc. |
| |
|PRODUCT 3: Vanadium |
| |
|Location: Mollendraai. The main magnetic layer in this area is about 8m thick and occurs about 230m above the first |
|appearance of the magnetite in the sequence and some 110m above the lowest layer. The farms Gezond 235 KR, Commandodrift|
|238 KR, Mollendraai 807 LR and Mozambique 807 LR were investigated by Mining Corporation during 1986 and found the layer |
|to be containing an average of 1,69% vanadium (V205). |
| |
|Potential Markets: The market for vanadium is mostly at international level and prospects are that demand will exceed |
|supply for the next ten years. Silvery white toxic metallic element is used in steel alloys; it occurs in several complex|
|minerals including carnotite and vanadinite. Heavy metallurg industries are also likely to be target markets. |
| |
|Competitiveness: Mogalakwena is known to have sufficient repositaries of Vanadium and could become the major source of |
|this metal in the next 15 to 20 years. |
| |
|Resources Needed: Infrastructure, human resources, capital investment, etc. |
| |
|Strategic Goals: Black economic empowerment, job creation, poverty reduction, etc. |
| |
|PRODUCT 4: Gold |
| |
|Location: Bela-Bela Plat River and Thabazimbi (Madikwe) |
| |
|Potential Markets: Gold is amongst the most popular metals. Its markets are both national and international. |
| |
|Competitiveness: Relatively at small scale, Thabazimbi is known to have good prospects in gold mining. |
|Resources Needed: Infrastructure, human resources, capital investment, etc. |
| |
|Strategic Goals: Black economic empowerment, job creation, poverty reduction, etc. |
| |
|PRODUCT 5: Diamonds (Kimberlite) |
| |
|Location: Bela-Bela (Mckenzie) and Lephalale (Swatwater) |
| |
|Potential Markets: These very hard indigenous African crystalline carbon stones valued as gems are in demand all over |
|the world. |
| |
|Competitiveness: Relatively at large sufficient scale for exploitation, Lephalale has had extensive mining experience |
|and has the drive to pursue diamond products development. |
| |
|Resources Needed: Infrastructure, human resources, capital investment, etc. |
| |
|Strategic Goals: Black economic empowerment, job creation, poverty reduction, etc. |
Waterberg has many mining opportunities, which were not outlined above, but are summarised in Table 4 and Table 5. These include precious and ferrous metals respectively.
Table 12: Precious Metals And Diamonds Per Local Municipality
(Source: Council For Geoscience)
|Municipality |Mineral Name |Location |Deposit Status |Corridor Status |
|Bela-Bela |Gold |Plat river |Small scale |Our the 50 km radius of the |
| | | | |East-West corridor, within the |
| |Diamonds Kimberlite) |Mackenizie |Sufficient |20 km radius of the |
| | | | |Trans-Limpopo corridor |
|Modimolle | | | |20 km radius of the Trans |
| | | | |Limpopo corridor |
|Mogalakwena |Platinum |Platinum reef |Sufficient |Within the 20 km radius of the |
| |Gold |Rebone |Small scale |East-West corridor |
| | |Ga-Mathapo |Small scale | |
|Mookgophong |Platinum |Swaershoek Mountains |Medium scale |50 km corridor area |
|Lephalale |Diamond (Kimberlite) |Swartwater |Large and small scale |50 km outside 50 km radius |
|Thabazimbi |Platinum |Northam complex Kaya put (Madikwe) |Sufficient Sufficient |Outside the 50 km radius |
| |Gold |Dwaalboom |Medium scale |Outside the 50 km radius |
| | | | |Outside the 50 km radius |
Table 13: Ferrous And Base Metals Per Local Municipality
(Source: Council For Geoscience)
|Municipality |Mineral name |Location |Deposit status |Corridor status |
|Bela – Bela *1 |Managanese |Plat river |Small scale Small scale |Outside 50 km radius |
| |Copper | |Small scale | |
| |Tin | |Small scale | |
| |Cobalt | | | |
|Modimolle *1 |Silica |Modimolle |Sufficient |Outside the 50 km radius |
| |Manganese |Modille-Vaalwater |Small scale | |
| |Iron |Alma |Small scale | |
| |Tin |Alma |Small scale | |
| |Zirconium |Witkop |Small scale | |
|Mogalakwana *1 |Nickel |Droomdlea |Sufficient |Within a 20 km radius |
| |Vanadium |Along the N11 |Sufficient |Core of the SDI |
| |Tin |Tin mines |Sufficient |Within the 20 km radius |
| |Titanium |Waterberg mountains |Small scale |Within the 20 km radius |
| |Molybdenum |Tin mines |Small scale |Within the 20 km radius |
|Mookgophong *1 |Chrome |Chrome mines |Sufficient |Within the 20 km radius |
| |Lead |Vlakfontein/Uitgedaght |Small scale |Within the 20 km radius |
| |Tin |Swaerhoek Mountains |Sufficient |Within the 20 km radius |
|Lephalale *2 |Iron |Kauletsi |Small scale |Within the 20 km radius |
| | |Tom burke |Small scale |Outside the 50 km radius |
| |Copper |Kauletsi/ |Small scale |Within the 50 km radius |
| | |Glennover/ Rosedale |Small scale |Outside the 50 km radius |
| |Nickel |Doornfontein |Small scale | |
|Thabazimbi |Iron |Thabazimbi |Sufficient (CPR) |Outside the 50 km radius |
| |Nickel |Northam |Sufficient |Outside the 50 km radius |
| |Beryllium |Rooibokkraal |Small scale |Outside the 50 km radius |
9.3 Product Portfolio In Tourism Sector
| |
|PRODUCT 1: Waterberg Biosphere |
| |
|Location: The Waterberg Biosphere Reserve, which has been acknowledged by the United Nations. It is mostly popularised |
|by the Nylsvlei Nature Reserve, which for decades has been declared a nature reserve and acquired an RAMSAR in 1998. |
| |
|Potential Markets: Middle-income tourists and scholarly research institutions interested in biodiversity. |
| |
|Competitiveness: It posses some of the natural beauties of sandstone formations and natural caves that are aged with the |
|early San-Bushman habitation. In it dwells various species of wildlife and a diversity of bird species. |
| |
|Resources Needed: Infrastructure, well-equipped laboratories, human resources, capital investment, etc. There is a need |
|to develop compatible infrastructure for preservation and research. |
| |
|Strategic Goals: Conservation function: To contribute to the conservation of the full hierarchy of biodiversity, |
|including landscapes, econ-systems, species and genes. Developmental function: To foster economic and human development,|
|which is socio-culturally and ecologically sensitive. Logical function: To foster support for research, monitoring, |
|education and information exchange related to local, nation and global issues of conservation and development. |
| |
|PRODUCT 2: Makapan Lodge and Conference Facility |
| |
|Location: Makapan Lodge and Conference Facility is located in the Makapan Valley adjacent to the Potgietersrus Game |
|Breeding Centre, which is stocked with both exotic and indigenous animals. |
| |
|Potential Markets: The growing trend to host meetings, training workshops and other occasions in rural locations, |
|provides Makapan Lodge and Conference Centre with the opportunity to successfully target the Meetings, Incentives, |
|Conferences and Exhibitions. |
| |
|Competitiveness: The site is of great natural, historical, archaeological and palaeontological significance and includes |
|a number of caves and other historical sites, and is in the process of applying for world heritage site status. |
| |
|Resources Needed: Need to improve and expand the existing infrastructure. |
| |
|Strategic Goals: Small Micro-Medium Enterprises and BEE ownership as |
|well as Integrated Rural Development. |
| |
|PRODUCT 3: Moepel Farms Eco-Training Centre |
| |
|Location: The project is located between Mokopane and Marken in East-West Spatial Development Initiative of the Limpopo |
|Province. |
| |
|Potential Markets: Currently Eco-Tourists want to learn more about the environment, wildlife, ecosystems, etc. There is |
|a need for a product that serves both the supply and demand sides of the eco-tourism sector. There is a potential for |
|eco-tourism population, the hunting market and leisure tourism. |
| |
|Competitiveness: Moepel Farm is a suitable location for a centre that can address this demand as it lies in the heart of|
|one of South Africa’s foremost developing ecotourism areas and offers easy access from its feeder markets. |
| |
|Resources Needed: Need to improve and expand the existing infrastructure. |
| |
|Strategic Goals: Job creation, SMME, BEE and IRD. |
|PRODUCT 4: Makapan Valley Adventure Camp |
| |
|Location: Makapan Valley Adventure Camp is located outside Mokopane, in Trans-Limpopo Spatial Development Initiative of |
|the Limpopo Province. |
| |
|Potential Markets: Leisure tourism (national and international, collective events, youths camping, church groups, sports|
|groups, etc.) |
| |
|Competitiveness: The physical, natural and historic attributes of this facility make it an ideal location for the |
|development of a camp catering for school and youth groups. Features of the site that provide it with a competitive |
|advantage include its proximity to the primary source markets of Limpopo and Gauteng, the archaeological sites of Makapan|
|and the Potgietersrus Game Breeding Centre. |
| |
|Resources Needed: Need to improve and expand the existing infrastructure |
| |
|Strategic Goals: Job creation, SMME, BEE and IRD. |
| |
|PRODUCT 5: Doorndraai Dam Leisure Village |
| |
|Location: Doorndraai Dam Nature Reserve is located approximately 100km south of Polokwane. It is located at the |
|crossroads of N1 between Pretoria in the south and Polokwane in the north, and the N11, which leads towards Groblersbrug |
|on the Botswana border. |
| |
|Potential Markets: Leisure market: free independent tourists, tour groups, special interest tours and day visitors and |
|the MICE markets. |
| |
|Competitiveness: The inclusion of Entabeni Nature Reserve and the surrounding private game farms enhances the product |
|offering of the destination and create a unique experience to attract the relevant markets. |
| |
|Resources Needed: Need to improve and expand the existing infrastructure |
| |
|Strategic Goals: Job creation, SMME, BEE and IRD. |
| |
|PRODUCT 6: Mokolo Dam Nature Reserve |
| |
|Location: Lephalale Local Municipality |
| |
|Potential Markets: Leisure tourists, holidaymakers, hiking clubs, school excursions, etc. |
| |
|Competitiveness: The area is know for its natural beauty and has a commercial water lodges. |
| |
|Resources Needed: Infrastructure, human resources, capital investment, etc. |
| |
|Strategic Goals: Black economic empowerment, job creation, promotion of cooperatives, poverty reduction, etc. |
|PRODUCT 7: D’Nyala Nature Reserve |
| Location: Lephalale Local Municipality |
| |
|Potential Markets: Leisure tourists, sports clubs, hiking clubs, school excursions, birding lovers, etc. |
| |
|Competitiveness: The area has been a good tourist and holiday destination. |
| |
|Resources Needed: Needs upgrading of infrastructure, human resources, and other facilities, etc. |
| |
|Strategic Goals: Black economic empowerment, job creation, promotion of cooperatives, poverty reduction, etc. |
| |
|PRODUCT 8: Witvinger Nature Reserve |
| Location: Mokopane |
| |
|Potential Markets: Leisure tourism, school excursions, sports clubs, birding, etc. |
| |
|Competitiveness: The area is well known for its natural beauties, which preserve some of the most ancient admired |
|vestiges. Sediments, fossils, bones and artifacts preserve unique history of hominid habitation and evolution acclaimed |
|to be more that 3.3 million years. |
| |
|Resources Needed: Needs upgrading of infrastructure, human resources, and other facilities, etc. |
| |
|Strategic Goals: Black economic empowerment, job creation, promotion of cooperatives, poverty reduction, etc. |
Other tourism products, which are found throughout Waterberg districts are summarised in Table 14. They are listed according to Local Municipalities.
Table 14: Summary of Waterberg Tourism Products (facilities) in Local Municipalities
| |Holiday |Holiday |
| |Resorts |Flats |
|Municipality | | |
|Output Specifications |To clearly identify what the Institution |Draw up a list of BEE outputs that the |
| |wants to deliver |Institution wishes to achieve the project, |
| | |using the PPP BEE Balanced Scorecard as |
| | |reference |
|Solution Options |To identify the pros and cons of each |Set out a preliminary view of the impact of|
|Analysis |option that can meet the Institution’s |each option on the intended BEE outputs, |
| |needs and output specifications; to examine|and identify the possible BEE outcomes of |
| |the risks, benefits and impacts to govt of |the preferred option |
| |each; and to select a preferred option. | |
|Due diligence |To undertake a due diligence - assessing |Identify project-specific BEE |
| |all budgetary, institutional, |sectoral conditions, black enterprise |
| |legal, regulatory, site, and socio-economic|strength, impact of |
| |factors that constrain and/or enable the |sectoral BEE Charters, and any constraining|
| |project. |factors to the |
| | |achievement of the intended BEE outputs. |
|If the preferred option can be procured through a PPP, the Institution must then establish affordability, value-for-money and risk |
|transfer. This entails constructing a Public Sector Comparator model, and a PPP Reference model, both risk-adjusted. |
| | |Draft a proposed BEE Balanced Scorecard for|
| | |the project, based on the PPP BEE Balanced |
| | |Scorecard, taking account of factors |
| | |identified in due diligence. |
|Risk identification |To identify all possible risks in the |Identify all possible BEE risks in the |
| |construction and operation of the project, |project, using the proposed BEE Balanced |
| |probability of each arising, the value of |Scorecard for the project as reference, |
| |each risk, and strategies and costs of |probabilities of each such risk arising, |
| |mitigation |values for each, and the strategies and |
| | |costs of mitigation. |
|Public Sector Comparator (PSC) |Life-cycle cost model of the output |Cost the achievement of the project’s |
| |specifications where the public sector |identified BEE objectives if it were |
| |takes construction and operating risks. |procured conventionally i.e. Calculate |
| | |preferential procurement as stipulated by |
| | |the PPPFA’s 90:10 formula, and include this|
| | |in the model. |
|PPP Reference |Life-cycle cost model of the same output |Cost the achievement of the project’s |
| |specifications where the private sector |identified BEE objectives by calculating |
| |takes substantial construction and |how the private sector would cost each of |
| |operating risk. |the BEE elements of the proposed PPP BEE |
| | |Balanced Scorecard for the project in the |
| | |PPP Reference model. |
|Sensitivity analyses |To test the resilience of the models to |Test varying BEE targets for the project, |
| |changes in assumptions and risk over the |their costs, and their assumptions to |
| |project term. |assess the impact on affordability and |
| | |value-for-money |
|Value Comparison |To reach a justified conclusion analysing |Write up a separate analysis of the BEE |
|Report |the outcomes of the modelling as to which |outcomes (quantitative and qualitative) of|
| |procurement route will achieve optimal |each procurement option, and which is going|
| |value for the Institution |to best achieve the project’s BEE |
| | |objectives. |
|Thereafter, produce the optimal proposed BEE Balanced Scorecard for the project, with |
|appropriate targets for the project. |
|Economic analysis |To establish the economic rationale for the|Identify economic benefits for |
| |project, where required |BEE, and opportunity cost to BEE of |
| | |‘no-project’ scenario. |
11.4.2 The Scorecard Measures
The scorecard measures three core elements of BEE:
▪ Direct empowerment through ownership and control of enterprises and assets;
▪ Human resource development and employment equity; and
▪ Indirect empowerment thorough preferential procurement and enterprise development.
The BBBEE Strategy notes that BEE criteria, reflecting the balanced scorecard, will be applied whenever government, inter alia, “grants a concession to a private enterprise to operate an asset or enterprise on behalf of the state” or “enters into a public private partnership.”[xvii]
The scorecard will be issued as a Code of Good Practice, which allows for a measure of flexibility in order that it can be adapted to the particular circumstances of specific sectors or enterprises, while at the same time bringing a measure of standardisation to the definition and measurement of BEE. In particular, government will apply BEE criteria, as set out in scorecard (or charter) whenever it:
▪ Grants a licence to engage in a specific regulated economic activity, for example, gambling or mining;
▪ Grants a concession to a private enterprise to operate an asset or enterprise on behalf of the state;
▪ Sells an asset or a state-owned enterprise;
▪ Enters into a public-private partnership; and
▪ Engages in any economic activity.
11.4.3 Applying the BEE principles in PPP Mining Sector
The South African Mining Charter has laid basic principles catering for BEE policy. One of the main focus of the Mining Charter is a socio-economic strategy, which calls for redress of the imbalances of the past, so as to improve the lot of the Historically Disadvantaged South Africans (HDSA).[xviii] Its approach includes:
▪ Redressing the results of past or present discrimination based on race, gender or other disability of historically disadvantaged persons in the minerals and petroleum industry, related industries and in the value chain of such industries; and
▪ Transforming such industries so as to assist in, provide for, initiate, facilitate or benefit from them;
▪ Ownership participation in existing or future mining, prospecting, exploration and beneficiation operations;
▪ Participation in or control of management of such operations;
▪ Development of management, scientific, engineering or other skills of HDSA's;
▪ Involvement of or participation in the procurement chains of operations;
▪ Integrated Socio-economic development for host communities, major labour sending areas and areas that due to unintended consequences of mining are becoming ghost towns by mobilising all stakeholder resources.
The Charter goes on to list its focal areas noting the need to address the following:
▪ HDSA Companies are those companies that are owned or controlled by historically disadvantaged South Africans.
▪ Major labour sending areas refer to areas from where a significant number of mineworkers are or have been recruited.
▪ Ghost towns refer to areas whose economies were dependent on mining and therefore could not survive beyond the closure or significant downsizing of mining activities.
In terms of ownership, the Charter outlines the following possibilities for BEE initiatives:
▪ A majority shareholding position, i.e. 50% + 1 share,
▪ Joint ventures or partnerships (25% equity plus one share).
▪ Broad based ownership (such as HDSA dedicated mining unit trusts, or employee share ownership schemes).
11.4.4 Applying the BEE principles in PPP tourism Sector
Deriving its principles from the Broad Based Black Economic Empowerment Act, the Tourism BEE Charter and Scoreboard defines Black Economic Empowerment as
…an integrated and coherent socio-economic process that directly contributes to the economic transformation of South Africa and brings about significant increases in the number of black people that manage, own and control the country's economy, as well as significant decreases in income inequalities.[xix]
Using a scoreboard as per expectation of the Code of Good Practice, the Tourism BEE Charter and Scoreboard derives its approach from the Tourism BEE Scoreboard launched by Minister of Environmental Affairs and Tourism in July 2004.
The Steering Committee was requested to accomplish the following, inter alia:
▪ The development of a BEE Scorecard for the Tourism sector in order to advance the objectives of the Broad-Based Black Economic Empowerment Act no. 53 of 2003;
▪ Develop and promote the BEE process in the Tourism industry;
▪ Be committed to the development of the BEE Scorecard;
▪ Drive the scorecard development process, particularly in terms of promotion, deliverables and the solicitation of input;
▪ Communicate the process and broader principles of the BEE Scorecard; facilitate access to research, input and information in the Tourism industry; facilitate partnerships between organs of state and the private sector that will advance the objectives of the Scorecard.
Other responsibilities of the Steering Committee included:
▪ Providing recommendations with respect to the amendment of the Tourism Charter to ensure its alignment with the negotiated Tourism BEE scorecard;
▪ Providing recommendations for the consideration of a BEE Tourism Council and the submission of a recommendation to the Minister for his approval.
The process after the launch of the Scorecard process and the appointment of the Steering Committee in July 2004 include:
▪ Establishment of Sub-sector working groups involving Steering Committee members and representatives of major stakeholders in key tourism sub-sectors;
▪ Consultation with the major stakeholders in key tourism sub-sectors and the collation and moderation of input into the preliminary scorecard in September 2004;
▪ Provincial road-shows and other communication mechanisms to solicit further input from all major stakeholders, as well as any other existing and potential stakeholders, on the preliminary scorecard in October 2004;
▪ Collation and finalisation of the final draft Scorecard by the Steering Committee during November and December 2004; and
▪ Submission of the draft Scorecard to the Minister of Environmental Affairs and Tourism on 8 December 2004.
All these items were strictly aligned with the principles of BEE Act of 2003. The Charter applies to all tourism related fields of the Tourism Value Chain Cluster, inclusive:
Accommodation
▪ Hotels;
▪ Resort properties and timeshare;
▪ Bed and Breakfasts;
▪ Guesthouses;
▪ Game Lodges; and
▪ Backpackers and hostels;
Hospitality and Related Services
▪ Restaurants (not attached to hotels);
▪ Conference venues (not attached to hotels);
▪ Professional catering;
▪ Attractions; and
▪ Consulting and professional services companies;
Travel Distribution Systems
▪ Tour wholesalers;
▪ Tour operators;
▪ Travel agents;
▪ Tourist guides;
▪ Car rental companies; and
▪ Coach operators
11.4.5 Applying the BEE principles in PPP Agricultural Sector
The implementation of the BEE principles in Agricultural Sector should be integrated within the agenda of Integrated Rural Development Strategy. The BEE Commission Report pointed to the need for drastic interventions to improve the livelihoods of the rural poor, including:
▪ Establishing a framework for increased State intervention in rural areas aimed at breaking the cycle of underdevelopment and stimulating rural economies. This will require targeted initiatives that meet the needs of rural communities.
▪ Substantially improving the economic and social position of women in rural areas through specific programmes aimed at women and targets in all other development initiatives.
▪ Increasing levels of food security in rural areas. While there is adequate food at national level, some 30 – 50% of the population has insufficient food or is exposed to an imbalanced diet due to low incomes.
▪ Empowering rural people to unleash their full potential by providing increased access to schooling and adult basic education and training (Abet). Skills development and entrepreneurial capacity should be promoted within existing schools, tertiary institutions and SME support agencies.
▪ Giving rural communities real ownership of productive assets by increasing access to financial services and through land reform programmes.
▪ Enabling rural communities to utilise land productively through appropriate extension services, including technical support, marketing and product development.
▪ Providing access to the information and communication technology (ICT) infrastructure to improve the delivery of Government services, enhance the use of productive assets and to improve access to affordable financial services and markets.
▪ Increasing levels of state welfare to rural households through a Comprehensive Social Security System.
This strategic approach needs to be enhanced by clear and systematic process of land reform, promotion of community ownership, access to finance and investment in rural infrastructure.
The first piece of legislation passed by the democratic Government was the Restitution of Land Rights Act of 1994. Since then the Government enacted relevant laws such as the Provision of Land and Assistance Act of 1998, The Land Reform (Labour Tenants) Act of 1996, the Interim Protection of Informal Land Rights Act of 1996, the White Paper on South African Land Policy and the Extension of Security of Tenure Act of 1997.[xx]
11.5 Vertical and Horizontal Strategies
An integrative strategy is commonly known as a combination of backward and forward vertical strategies, as well as horizontal strategies. This strategy would enable the exploitation of technical talent and strength in the primary business and economic affairs when opportunities are available and compatible with the District’s mission and vision.
11.5.1 Backward Vertical Integration
Backward vertical integration is the strategy followed by an enterprise seeking increased control of its supply sources. The enterprise can create its own source of supply or can purchase an existing supplier. This strategy is very attractive if there is uncertainty regarding availability, cost or reliability of the deliveries of supplies. It does, however, require a large capital investment.
For example, if a Waterberg BEE company manufactures citrus derivate drinks such as orange juice, orange flavoured biscuits and beverages, it needs to ensure that suppliers make the raw material are supplied uninterruptedly. But when the supplier does not match the BEE company’s production tempo, the later can simply decide to buy the supplier’s business so that it supplies itself without unnecessary obstacles. The approach is quite common in today’s emerging black South African entrepreneurs.
11.5.2 Forward Vertical Integration
When the strategy involves the acquisition of a business nearer to the ultimate, it is called forward vertical integration. An example would be a paper producer purchasing a bookstore. Forward vertical integrated is an attractive alternative if an enterprise is receiving unsatisfactory service from the distributor of its products. Another example would relate to the emerging BEE Farming Company struggling with market monopoly. The Company may decide to buy retail venture such as Fruit and Vegetable Company so that it supplies and retails its own products directly.
In a tourism context, for example, an African entrepreneur who has started a holiday resort in Waterberg and is not receiving satisfactory service and publicity from an influential travelling agency can decide to take over the agency so that its resort is advertised properly, so as to lure tourists and holiday makers.
11.5.3 Horizontal Integration
Horizontal integration is a long-term growth strategy by which one or more similar enterprises are taken over for reasons such as scale of operational benefits or a larger market share. Such acquisitions, on the one hand, provide access to new markets and, on the other hand eliminate rivalry and competition. In South Africa a similar merger was seen recently among Shoprite, Checkers and OK Stores.
For instance, the combination of two Waterberg emerging African shirt manufacturing companies, this merger would be classified as horizontal integration. The diagram in Figure 12 depicts such a model of vertical and horizontal integration between companies.
Beyond the process of horizontal integration is the necessity of a strategy that blends together the vertical and horizontal processes. Such a blending advances a scenario where the backward and forward vertical strategies are combined with horizontal integration to provide emerging BEE and SMME initiative with a robust competitive foothold in the market.
11.5.4 Vertical and Horizontal Strategic Integration
The discussion and analogies provided a benchmark to another level of understanding the need for an integrative approach. The strength into the proposition is the existing policy on BEE and SMME. The importance of such integration is to bring to realisation the goals set out in the BEE and SMME policy framework.
During the early 1990s, black business organisations adopted the BEE targets to be achieved by the year 2000. However, the goals are still very far to be attained. Despite the relative implementation of Affirmative Action in many companies, black ownership, control and management is still very small.
It is thus important to include other measures of empowerment while recognising that, in the long run, increased ownership of enterprises by blacks in Waterberg will remain a challenge and a necessary element of empowerment.
Small business development and affirmative procurement have the potential to account for a large proportion of BEE activity in the Agriculture, Mining and Tourism sectors of Waterberg, and are especially significant for those companies whose current shareholding structures place constraints on their ability to increase black ownership.
The diagram in Figure 12 proposes how vertical and horizontal processes should be integrated, whereby at all vertical levels 25% of shareholding is black, including the horizontal layers in the hierarchy of products.
There are three broad challenges for the Waterberg District Municipality when adopting the approach in Figure 12:
▪ Firstly, locating businesses that are able to provide goods and services of an acceptable quality;
▪ Secondly, providing medium-term support and capacity-building to those small businesses that require it; and
▪ Thirdly, communicating with small businesses, which have neither e-mail nor internet connectivity nor a reliable contact telephone number. Black SMMEs, especially community-based small businesses, may lose business opportunities due to lack of access to information about tourism related tenders, events, products or initiatives.
Figure 12: Illustration of Vertical and Horizontal Integration Model for BEE and SMME
12. overall Strategy to Market the Waterberg District Municipality
The quest for investment strategy in Waterberg is prompted by globalisation and the recent trends of urbanisation as many people from rural areas are moving to towns and cities. Leading municipalities in the country and other parts of the world have established investment recruiting agencies to promote their regions and the available opportunities. It is within this global and regional context that the Waterberg District Municipality has embarked on a process to position its region as an investment destination within the Limpopo Province.
Therefore, the Waterberg District Municipality Marketing and Investment Strategy is propelled by three fundamental factors:
▪ First, this strategy is a consequence of the market and socio-economic imperatives of Waterberg District Municipality itself;
▪ Second, global and regional trends have made it a compelling task for states, cities, and towns, especially those in the developing world to market themselves in order to improve their plight and their quality of life of their citizens; and
▪ The South African legislative mandate, which compels the local government to pursue developmental programmes that improve the socio-economic conditions of their citizens and communities.
These three factors do not necessarily depend on which products Waterberg can provide rather they constitute a compelling environment within which the Waterberg must market itself.
Further, this marketing strategy needs to outplay four aspects that have a critical bearing on the process of marketing: (See Figure 15):
▪ Favourable circumstances: These are immanent conditions within Waterberg area, which include the current natural attraction that makes it unique, in terms of friendliness, culture and its people, reliable infrastructure, and so on.
▪ Hostile environment. Those circumstances that pose a challenge on Waterberg’s desire to become the most preferable place for investors in the Limpopo Province. The “hostile environment” may include aspects such as rivalry and stiff competition from other districts within or outside the province, crime, etc.
▪ Local and national socio-political context. Socio-political stability of the country – nationally, provincially and locally – are paramount to marketing strategy and investor attraction. Socio-political stability of the District is key to formulating good marketing strategy that attracts potential investment.
▪ Regional and international socio-political context. While this aspect does not necessarily have a direct bearing on Waterberg District, it has a potential of impacting on Waterberg. For example, a negative political instability in neighbouring states, or proliferation of drugs in the region, can be perceived as influencing the good administration of South Africa, then Limpopo and therefore Waterberg.
The Waterberg District Municipality has factored in all optimistic ingredients, which have been successful to outplay all potential pessimistic elements as it has become a distinctive and unique identity, with which every potential investor would like to be associated.
Figure 15: Interplay between Marketing Strategy and Socio-political Dynamics
Granted the circumstances surrounding the market strategy, the Waterberg District Municipality has devised proactive measures to address all possible aspects of the strategy as it relates to that of specific products. These measures may include: Branding and Positioning Strategy, Image Reputation Strategy and Reputation Management. These ingredients provide a solid strategy with which the Waterberg District Municipality will promote its region to potential investors and other types of clientele.
12.1 strategic focal areas
The Waterberg District Municipality has determined strategic focal areas, which can be used as a starting point of an investment process. Such strategic focal areas include those programmes that aim to improve the business enabling environment and those that support the development of BEE and SMME initiatives. The selection should depend on the results of the economic status.
12.1.1 Strategic Focus 1: Encouraging Local Business Growth and Retention
|Most local industrial and economic growth are generated by small and medium-sized businesses that are already established in the |
|District. These strategies are classified as business retention and expansion strategies. |
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|Waterberg offers a range of opportunities to support local businesses including: |
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|Business retention visits and surveys |
|Visits and surveys of the District firms can be used to help identify problems and determine how the business is performing, from |
|where it sources its inputs, whether it is expanding, etc. These visits can be used to elicit potential investment information and |
|to encourage local businesses to source more inputs locally, identify and finance training and skills needs. An important role |
|these visits can have is to devise proactive measure to prevent brain-drain and exodus of skilful human resources from leaving the |
|District. |
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|Technical assistance to business |
|This includes broad-based management and marketing programmes, quality and environmental standards training and advice through to |
|more specialized export training or research and development support. |
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|Financial advice and assistance |
|One of the hardest issues for BEE businesses is to access capital. Waterberg District Municipality will facilitate a financial |
|support programme, which will provide advice and training on financial planning, access to capital, credit, etc. In some cases it |
|may be possible to establish small grant or loan programs to encourage, for example, investment in modern technology, mining, |
|tourism, manufacturing, and agriculture. Great care is taken with these to ensure fairness, so as to ensure that these schemes are |
|always transparent. |
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12.1.2 Strategic Focus 2: Improving the Local Business Investment Climate
|A business environment assessment for the Waterberg District Municipality will assess the performance of the Local Municipalities |
|in terms of those aspects of the investment climate that it has control over. These include, but are not limited to: |
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|Land and Property |
|Land title |
|Property registration |
|Planning and Development Control |
|Real estate improvements |
|Building plans passed |
|Infrastructure Provision and Maintenance |
|Roads |
|Electricity |
|Water and sewage |
|Garbage collection |
|Business Registration and Licensing |
|Business registration |
|Business licenses |
|State Revenue Methods |
|Tax rates |
|Fiscal system |
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|Health and Safety (including environmental) |
|Support for HIV/AIDS programs |
|Environmental standards |
|Occupational health standards |
|Internal Operations and Procedures |
|Passing of by-laws |
|User friendliness of LGA |
|Who is the right person |
|Once the diagnosis is completed then a Local Investment Strategy can be developed. In addition the above list, Waterberg District |
|Municipality will develop strategies aimed at reducing bureaucratic bottlenecks, which discourage potential investors. |
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|The amount of permits and approvals that businesses need to obtain, and the time it takes to obtain them, are not only expensive |
|and time consuming, they can also be a disincentive to register into the formal economy or expand. A good place to start is to |
|review existing regulations and laws, consult with stakeholders and develop a feasible plan. This will probably include |
|streamlining local government processes and may also include a lobbying program to reduce bureaucracy in the provincial and |
|national government spheres. |
12.1.3 Strategic Focus 3: Promoting Inward Investment
|Waterberg District Municipality will promote foreign direct/inward investment means to attract businesses to an area from elsewhere|
|in the country and from other countries. Careful consideration is given to the costs and benefits of attracting inward investors. |
|Therefore, Waterberg will embarked on a strategic process to ensure the following:: |
|A stable macro-economic climate |
|A stable political and regulatory environment |
|Market access and open competition |
|A welcoming environment |
|Available sites and/or premises |
|Appropriate, available and reliable utilities and transportation |
|Available skilled workforce |
|Available local suppliers and resources |
|Appropriate education, training and research facilities |
|A good quality of life, especially when bringing ex-patriots |
|Manageable regulation and taxation systems |
|Incentive schemes, etc. |
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|These processes are meant to ensure great achievements. Besides direct employment, an increase in the tax base and indirect |
|employment, there are potential wins for the Local Municipalities through the skill transfer to the workforce, increases in wages, |
|and opportunities for local SMMEs that supply and buy from these investors. |
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|In order to ensure that Inward investment strategies are successful, the Waterberg District Municipality will devise mechanisms, |
|which will ensure that: |
|They are a component of a broader strategy of the local economy |
|The community has the appropriate hard and soft infrastructure in place or available to support the likely investments |
|Targeted investments fit the competitive advantage of the receiving community (normally a sector/cluster approach is likely to be |
|most successful) |
|Marketing strategies are carefully prepared, budgets are appropriate and follow up procedures are in place |
|Incentive programs are considered, varied and not excessive; |
|Staff involved in attracting strategic investors have an understanding of investment needs and what the local context has to offer;|
|Opportunities for local businesses are optimised through careful aftercare programs. |
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|This means that when a new investor is attracted to Waterberg, every opportunity is taken to encourage the investor to source |
|his/her supplies locally, enabling supply and value chain advantages to be exploited locally. Waterberg District Municipality will |
|provide guidance with regard to the development of Investor Aftercare Programme. Such programs are aimed at ensuring investors are |
|happy and that they are given every opportunity to source their inputs locally. |
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12.1.4 Strategic Focus 4: Investment in Hard Strategic Infrastructure
|The Waterberg District Municipality intends to open investment opportunities in hard infrastructure. This entails investing in |
|order to improve the physical environment for businesses thereby making it more attractive for business retention, expansion and |
|recruitment. |
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|Prospective projects in this strategic focus include, but not limited to: |
|Building or improving key access roads; |
|Improving the railway for passenger and goods services; |
|Developing, improving and/or expanding the local airport; |
|Developing, improving and/or expanding industrial sites and buildings. This could include anything from planting trees, to |
|comprehensive landscaping, to building entire new science parks; |
|Developing, improving and/or expanding commercial sites and buildings (for shops and offices); |
|Increasing the availability of industrial and potable water; |
|Improving and/or expanding the sewerage disposal system; |
|Improving and expanding the telecommunications systems; |
|Improving and expanding the energy systems; |
|Environmental enhancements; and, |
|Crime prevention technology installation. |
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|All these projects involve considerable expense, outside agencies and often national government departments and the private sector.|
|Competing demands for hard infrastructure investment are always hard to prioritise, especially when there are massive poverty |
|issues for communities to face in both urban and rural areas. |
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|However, investment strategy can help Waterberg prioritise infrastructure investments according to need, potential for |
|cost-recovery, opportunities for leveraging additional resources, etc. It can also provide an opportunity to identify possible |
|public-private partnerships in the provision of infrastructure and related maintenance. |
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12.1.5 Strategic Focus 5: Integrating Low Income or Hard-to-Employ Workers
|Targeting Disadvantaged Groups |
|Recognising the socio-economic imbalances, the Waterberg District Municipality will embark on special projects that deliberately |
|target specific social groups. Targeting disadvantaged groups means that measures are targeted at groups of individuals such as |
|poor children, the urban poor, redundant workers, the long-term unemployed and youths. |
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|Possible projects include: |
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|Language training |
|This is a key issue where there are groups of illiterate people seeking employment in urban centres. Seeking command of |
|bureaucratic and professional language is critical. |
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|Skills retraining and job placement programmes |
|Skills retraining can be done using a demand-led approach i.e. businesses need to be involved in articulating the skills needs. |
|There is little point in retraining individuals in skill areas for which there is no local demand. Job placement programs assist |
|individuals in acquiring the skills they need to access jobs and assist in identifying opportunities. |
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|Raising educational achievement |
|This is usually an issue for an entire region, but specific Local Municipalities may need of extra support. |
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|Enterprise training |
|Many disadvantaged groups have both high unemployment and a large proportion of workers in the informal sector. Basic training in |
|terms of business management, finance and marketing can have a significant impact on these communities. |
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|Helping women to access employment and self-employment programmes |
|Projects could include skills development, confidence building programs, and provision of crèches and after-school clubs. |
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|Micro-enterprise lending programmes |
|This area of activity is also well suited to assisting disadvantaged groups to access self employment. |
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|Work experience and teacher/pupil placement schemes |
|These schemes involve teachers and students working for short periods of time in businesses to gain work experience and work ethic |
|skills. Teachers do this, which gives them a better understanding of workplace requirements. |
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|Developing mentor programmes |
|The idea is to ensure that more experienced business people mentor new starters and give them support, encouragement and ideas. |
|Mentor programs can be very informal, and are a way of helping individuals to start their own business. |
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|Health awareness programmes |
|Often the most disadvantaged suffer from the worst health. Besides the direct effects on individuals, poor health becomes a serious|
|limiting factor when trying to access work. Health awareness programs can be closely targeted at, for example, specific schools, |
|communities and so on. |
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12.2 Intervention Strategies and Marketing Action Plan:
In order to realize the Marketing and Investment Strategy, the Waterberg District Municipality will embark on a series of activities that lead to attraction of national and foreign investment in the region. The main purpose of the Action Plan is to take the strategy to achieve its objectives.
The first step towards affecting a marketing strategy is to determine the kind of clientele and investors Waterberg purports to attract. It entails a systematic process of identifying potential markets within and outside Waterberg. These include among others the following:
12.2.1 Developing Business Retention and Expansion Programmes
|This aspect entails assisting the existing businesses in Waterberg to create jobs by growing existing business so as to empower the|
|local people. In addition, this programme will undertake the following: |
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|Analysis of the results for critical issues and common concerns; |
|Identify the needs and concerns to local business through a structured survey; |
|Develop and win local support for an action plan to address them; |
|Locate the necessary resources from national, provincial and local government; and |
|Implement a plan to assist the industries to remain in the area and to look at opportunities for growth through local task teams. |
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|This programme could be more effective when driven in partnerships with Local Municipalities, the business community of Waterberg |
|and other stakeholders. Where necessary, expertise from other spheres of government may be borrowed. |
12.2.2 Corporate Liaison and Meeting With Investors
|In the light of this new strategic climate, the Waterberg District Municipality will need to engage in a process of systematic |
|information sharing with potential investors locally and outside the region. The objective can be aligning with the provincial as |
|well as the national policy environment on investment, which would underpin the approach of the Waterberg District Municipality. |
|In this regard, it is necessary to undertake a feasibility study, of which results will guide the entire protocol interacting with |
|potential investors. |
12.2.3 Strategic Alliances
|Strategic Alliances could take a form of establishing partnerships with other entities nationally and abroad. This strategy is |
|useful in terms of consolidating good relationships with BEE and SMME companies so as to win support and to attract potential |
|investors to the Waterberg region. |
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|In order to realize this, it is crucial to undertake outreach missions to the SADC region selected regions in the developing |
|countries European Unions and Asia. |
12.2.4 Investment Facilitation
|Aside from facilitating interaction and meetings with and amongst potential investors, the Waterberg District Municipality will |
|focus on developing investment methodologies and strategies for Local Municipalities. This will entail developing an Investor’s |
|Guide Protocol to capacitate all Local Municipalities on the nitty-gritty of investment mechanics at local, provincial, national |
|and international levels. |
12.2.5 Free Trade Agreement Platform
|In order to maximize the opportunities of luring potential investors, there will be a need to establish free trade agreement |
|between Waterberg and other regions within SADC and Europe. Agreements of such magnitude require well trained personnel to engage |
|in excellent negotiations. Expert capabilities on qualitative and quantitative economic and trade analysis is paramount. It needs |
|to be noted that linkages with provincial and national spheres of government must be maintained in order to avoid unnecessary |
|replications |
12.2.6 Establishment of Backward and Forward Vertical Business Unit
|Taking a lead from the notion of the Value-Chain and Integrated Vertical and Horizontal Strategy, it is absolutely critical that |
|investors commit to the cause of BEE and SMME in Waterberg. |
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|The Waterberg could use the backward strategies concept to implement the BEE Act. This can be done by a holistic approach to black |
|economic empowerment, looking at a wide range of enterprises and individuals and where they fit into the economic value chain. The |
|BEE Act looks at the suppliers to large companies, the downstream beneficiation of goods produced by companies, the development of |
|human resources, the levels of BEE in the ownership in companies, and very importantly, the levels of BEE in management. |
12.2.7 Exposing the Waterberg BEE and SMMEs To Investment Trade and Export Opportunities
|In order for the Waterberg District Municipality’s strategy on Marketing and Investment to be embraced by the formerly |
|disadvantaged groups, there is a need to establish a programme that can impart knowledge on Investment, Trade and Exports to BEE |
|and SMME emerging enterprises. Exposure to trade exhibitions at local, provincial and national levels can play a major role in |
|increasing investment and trade between Waterberg and other companies in South Africa or abroad. Even more valuable is the |
|opportunity to interact with countries that had never done business with Waterberg directly. Exhibitions are also another form of |
|inward or outward missions. The make export, import, trade and investment opportunities translate into transactions, and |
|consolidate vital milestones for trade and investment relationships. |
12.2.8 Industrial Recruitment
|Existing investment opportunities in Waterberg need a systematic strategic approach to recruit potential local talents and |
|industries to spark a momentum of job creation and poverty reduction. From the market growth and value chain analysis, it is wholly|
|critical to encourage potential industries, communities and individuals to develop sectoral cluster projects or cooperatives |
|initiatives. |
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|At core of this strategy is the whole concept of “clustering” either in a form of cooperative, associations, or community initiated|
|projects so as to ensure that there is a local-driven beneficiation of existing opportunities. Further the strategy starts with a |
|three-pronged approach in clustering: |
|Inclusion of leading industries; |
|Establishment of network for business support; and |
|Strengthening of economic infrastructure. |
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|The interdependence and relationship of this arrangement entails: |
|First, leading industries such as tourism, agriculture, and mining will be engaged in activities that attract direct industrial |
|investment;[xxi] |
|Secondly, there is a category of middle range networks, emerging businesses, cooperative-based and cluster projects, which will |
|derive support from the leading industrial sectors; and |
|As consequence, communities in the District benefit through the improvement of infrastructure and living conditions. In turn, the |
|government at local provincial and national levels has a direct stake through the existing revenue and fiscal systems (See Figure |
|13) |
In total, intervention strategies are summarised by the diagram in Figure 18.
Figure 18: Steps in Intervention Strategies for Investment Attraction
12.3 Branding And Positioning
Image building and positioning constitutes a critical factor in the investment promotion pipeline. The Waterberg District Municipality has developed a measurable marketing and positioning strategy. It will re-brand itself and launch its new brand within a determined period within the first year of its implementation strategy. The Waterberg District Municipality Marketing and Investment Strategy can consist of the following ingredients:
12.3.1 Advertising in mass media
|The merits of advertising in mass media such as local newspapers, radio, television, magazines, etc. will be exploited to the |
|advantage of branding Waterberg. |
12.3.2 Participating in investment exhibitions
|This method of branding yields to higher success, especially because of human interaction and relationships that are forged between|
|encounters of people in the events. |
12.3.3 Advertising in sector and industry media
|Advertising is a good tool to build a brand. This will consist of Waterberg proliferating information in a form of magazines, |
|newsletters in companies and other sectors. |
12.3.4 Conducting investment seminars
|This method is crucial and it presupposes that Waterberg District Municipality facilitate investment opportunities to the region. |
12.3.5 Utilising Waterberg District Municipality Website
|The Website will be very informative and will embody all interests and values of Waterberg as a region. The website on its own will|
|not suffice to market Waterberg region; therefore, it must be supplemented by other relevant material that will be developed in due|
|process. |
12.3.6 Image Reputation
|Marketing concentrates progressively on developing strong brand reputations to build equity and ownership. The region of Waterberg |
|has a reputation onto which the brand is attached. In the past there has not been the opportunity of developing a brand-product |
|from scratch, and therefore the Waterberg District Municipality has had to adopt the existing product package, which is mostly at |
|variance with, and often lacking the integrative approach. While the Waterberg District Municipality cannot define itself outside |
|the Limpopo Province and South Africa in general, its strategy will include distinctive features that emphasize the best aspects of|
|the region so that good brand image is preserved |
12.3.7 Uniqueness Reputation Management
|While naturally having a unique and self-contained context-brand, Waterberg acknowledges several factors at the national context |
|and translate them where possible into a marketing strategy at local context. The are five basic principles of managing uniqueness |
|and reputation: |
|Distinctiveness. The distinctive leadership style of Waterberg makes it a desirable region first, to visit and admire its scenic |
|landscapes, and secondly as an attractive investment destination. |
|Focus. This entails identifying specific main focal points that exalt individual product at its control; |
|Consistency. As a product, Waterberg must complement the pride of its people through the promotion the amicable culture and warm |
|hospitality to tourists and visitors; |
|Identity. Considering the involvement of various stakeholders in forging good management practice, Waterberg, as a product identity|
|reveres all parties involved, so that the products are associated with everyone’s effort. |
|Transparency. In all its operational ramifications, Waterberg encourages strong transparent practice in order to win clientele |
|confidence. |
12.3.8 Management Informal Modes of Communication
|Verbal communication and information propagated through conversation and informal modes of personal recommendation can have a |
|drastic impact on how Waterberg is perceived by prospective clientele and potential investors. This approach entails motivating the|
|Waterberg District residents of the importance of the area’s image and reputation. For example, attracting tourists, or delegates |
|who come to the area for official purposes such as conferences, research, etc. should be instilled with positive feelings and are |
|able to give strong recommendations on return to their home countries. However, if they return with negative experiences or |
|perceptions, their word-of-mouth comments will severely affect the Waterberg District Municipality’s reputation. |
12.3.9 Dispelling Pessimistic Perceptions
|Another approach of maintaining the region’s reputable status is to underplay negative assumptions about the area. It is assumed, |
|and this cannot be proved due to absence of research, that Waterberg District is negatively perceived internationally due to the |
|extent of negative South African publicity in the media. While this is true, it can be argued that Waterberg District has no |
|separate or unique reputation internationally. Without scientific media analysis this will remain a pure speculation. However, |
|communication campaigns directed at the international market to overcome negative perceptions will be encouraged to potential |
|investors. |
12.3.10 Creation of Investor Friendly Climate
|The ability to lure trade and investment into the region is a challenge to Waterberg District Municipality to conduct a market |
|research into the nature of the market it is drawing into. From an investment perspective, this means that it is critical to turn |
|raw data into intelligence for strategic decision-making and identification of key industries and opportunities. A critical |
|success factor to prospective investor is the provision of reliable information and research. The easier to access reliable |
|information the quicker to make decision to invest on the part of potential investors. |
12.3.11 Follow-up Processes
|This entails devising follow-up mechanisms to revive all investment pledges and economic development treaties agreed upon. The |
|main questions to be addressed could include: |
|Progress reports on signed agreements and memoranda; |
|Identify potential hindrances impeding implementation of agreements and treaties; and |
|Explore possible methods of effecting all signed agreements and treaties. |
All the ingredients outlined under 12.3 subsection are necessary for a composite strategy to make Waterberg a unique reputable brand.
12.4 outward and Inward missions
12.4.1 Inward Missions
Inward mission initiatives require the establishment of linkages and networks with potential investors in order to promote and market the region’s investment opportunities. This could include the following activities:
▪ Establish networks with national municipalities across all provinces for mutual economic development and investment interests;
▪ Develop capacity building programmes that enhance the knowledge and skills of Local Municipality officials, BEE and SMME managers with regard to investment and trade issues.
▪ To borrow relevant experiences from other similar context in order to strategise for more efficient marketing and investment strategies;
▪ To promote and convene potential stakeholders and investors within the District in order to identify potential projects for investment in an ongoing basis; and
▪ Establish relationship with Diplomatic Missions and Consulates of countries from which potential investors may be persuaded to come to Waterberg.
During the missions, Waterberg representatives have as essential focus guaranteeing the investor of the conducive and amicable atmosphere for investment and trade. A friendly environment is vital to convince diplomatic representatives to persuade their home country citizens to invest in Waterberg.
12.4.2 Outward Missions
Outward missions would be strategic intervention, which require the Waterberg District Municipality to carry special tasks of marketing its products and the region outside its borders, nationally and internationally. Among others, the following form part of this outward strategic intervention:
▪ Devising mechanisms and carry out promotional trips to market Waterberg District Municipality nationally and abroad; and
▪ Establish an information exchange programme that promotes Waterberg with the aim of attracting investment.
Outward missions require a systematic and periodic programmes targeting specific regions, countries and/or other peer municipalities. In sum, Outward Investment Missions are other methods of raising the profile of the Waterberg region. However, it must be noted those entrusted with representing Waterberg act as ambassadors of the region, the Limpopo Province and the country as a whole. Table 20 simulates an example of Inward/Outward Mission for Marketing and Investment Strategies.
Table 20: Example of Inward/Outward Mission Planning
|Sector | | | |
| |Target |Missions and Purpose |Projections |
| |Country or Region | | |
| | |Inward |Outward Missions |Timelines |Milestones |
| | |Missions | | | |
|Agricultu|People’s Republic of |Invitation to visit the virgin |PPP, BEE, SMEs, Corporate,|6 months |Free Trade |
|e |China |forests of Waterber and assess | | |Agreements and |
| | |potential herbal medicine | | |Memoranda of |
| | |plants | | |Understanding |
| | United States |Hosting of experts to provide |Fact finding trip to US to|12 months |Exchange programmes|
| | |advice and share experience |acquire experience | | |
| |United Arab Emirates |Host conferences |Fact-finding in UAE, for | |Trade Agreements |
| | | |further | |and MoUs |
|Mining |United States |Mining Sites visits for |Staff Exchange Programmes |2 years |MoUs |
| | |analysis | | | |
|Tourism |KZN tourism | |Go to that region to learn|6 months |Information |
| | | |about other tourism | |Exchange |
| | | |strategies | | |
| |SADC |Host Toursim Conference for |Attend Tourism product |12 months |A hosted conference|
| | |strategic economic projects |exhibition in the region | |by the District |
12.5 Using the Principal Media to Market Waterberg
Using a variety of media will enhance the dissemination of information that will position Waterberg District Municipality in good prospects, thus shaping its image and attract potential investors and clientele. The fundamental principle in this regard is publicity and advertising Waterberg as a unique region on its own right.
A public relations effort should have a specific objective. A mix of media is ideal; and one important aspect in this regard is the choice between controlled and uncontrolled media. For example, a billboard is an example of a controlled medium. There can be complete control over its content and its appearance and place where it must be erected. On the other hand, television is an uncontrolled medium, since even when the content of a message is controlled; it is not possible to have control over its context – what spot is shown immediately before or after it and what content the surrounding programme will have. Thus, there is an element of uncontrollability in every aspect of communication. There is no guarantee that the audience to whom a message is sent will pay attention or respond to it.
Therefore, three questions must be considered in selecting the proper medium for the message:
▪ The first is “What audience is the District trying to reach, and what is its credibility rating for its medium?”
▪ When does the District need to reach this audience, and what does it need to receive the message in order to respond to it?
▪ How much does the District needs to spend, and how much can the District afford to spend?
After answering these questions, there are more four additional questions:
▪ Which medium reaches the broadest segment of its target audience at the lowest cost?
▪ Which one has the highest credibility, and what is its cost?
▪ Which medium to count on to deliver the message within the necessary time constraints for the message to be effective?
▪ Should a single medium be used? If a media mix is preferred, which media types should be used to complement one another?
In the context of Waterberg, for example, newspapers, as compared to radio, maybe cost-effective in terms of printing costs but ineffective in terms of reaching the audience in rural areas. Besides, newspapers need a literate audience. On the other hand radio would be far effective, yet expensive in terms of time costs to the Waterberg District Municipality.
Table 21: Example of variety of choice in mass media to Market Waterberg
| |Domain |
|Medium Type | |
| |Local |International |
|Print |Waterberg Newspaper |Mail and Guardian |
| |Sowetan |Time Magazine |
| |Daily Sun |Financial Mail |
| |Sunday Times |Tourist Booklets |
| |City Press | |
| |The Citizen | |
| |Bona Magazine | |
| |Drum Magazine, etc. | |
|Electronic |Radio Thobela |BBC TV Channel |
| |SAFM |BBC Radio |
| |SABC TV channels |CNN International |
| |SABC AFRICA |SKY Television |
| |5FM |SAFM |
| |Ukhozi FM, etc. |Radio Netherlands, etc. |
All types of media need special attention since they operate within friendly or hostile political environment. For instance, Table 22 presents a comparative analysis of advantages and disadvantages of each medium.
Table 22: Principal Media: Advantages and Disadvantages
| |Comparative Analysis |
|Medium Type | |
| |Advantages |Disadvantages |
|Television |Combined sight, sound and motion attributes |Message limited by restricted time segments |
| |Allows physical demonstration of product |No possibility for consumer referral to message |
| |Belivabilty due to immediacy of message |Availability sometime difficult to arrange |
| |High impact of message |Hi time costs |
| |Huge audience |Waste coverage |
| |Good product identifiction |Hi production costs |
| |Popular medium |Poor colour transmission |
|Radio |Selectivity of geographical markets |Message limited by restricted segments |
| |Good saturation of local markets |No possibility for consumer referral to message |
| |Ease of changing advertising copy |No visual appeal |
| |Relatively low cost |Waste coverage |
|Magazines |Selectivity of audience/readership |Often duplicates circulation |
| |Reaches more affluent clientele |Usually cannot dominate in local market |
| |Offers prestige to an advertiser |Long closing dates |
| |Pass-long readership |No immediacy of message |
| |Good colour reproduction |Sometimes high production costs |
|Newspapers |Selectivity of geographical markets |High cost for national coverage |
| |Ease of changing advertising copy |Shortness of message life |
| |Reaches all income groups |Waste circulation |
| |Ease of scheduling advertisements |Differences of sizes and formats |
| |Relatively low costs |Rate differentials between local and national |
| |Good medium for manufacturer advertising |advertisements |
| | |Sometimes poor colour reproduction |
|Direct Mail |Extremely selective |Often has poor image |
| |Message can be personalized |Can be very expensive |
| |Little competition with other advertisers |Many restrictive postal regulations |
| |Ease message effect of advertisement |Problem in maintaining mailing list |
| |Provide easy means for clientele action | |
|Point-of-purchase |Presents message at point of sale |Dealer apathy in installation |
|displays |Great flexibility for creativity |Long production period |
| |Ability to demonstrate product in use |High unit cost |
| |Good colour reproduction |Transportation problems |
| |Repetitive value |Space problems |
|Outdoor posters |Selectivity of geographical markets |Often has poor image |
| |High repetitive value |Message must be short |
| |Large physical size |Waste circulation |
| |Relatively low cost |National coverage is expensive |
| |Good colour reproduction |Few creative specialist |
|Billboards |Selectivity of geographical markets |Message must be short |
| |High repetitive value |National coverage is expensive |
| |Large physical size |Few creative specialist |
| |Relatively low cost | |
| |Good colour reproduction | |
|Transit posters on |Selectivity of geographical markets |Cannot be used in all contexts |
|moving vehicles |Captive audience |Waste circulation |
| |Very low cost; High repetitive value |Surroundings may be disreputable |
| |Good colour reproduction |Few creative specialists |
|Advertising |Unique representation |Subject to fads and exaggeration |
|specialists |High repetitive value |Message must be short |
| |Has a “gift” quality |High unit cost |
| |Relatively long life |Effectiveness difficult to measure |
|Pamphlets and |Offer detailed message at point of sale |Dealers often fail to use |
|booklets |Supplement a personal sales presentation |May have relatively high unit cost |
| |Offer to potential buyers a good referral means |Few creative specialists |
| |Good colour reproduction |Effectiveness difficult to measure |
|Computers and |Highly personalized |Restrictive group users |
|information |Creativity and flexibility |Accessible to relatively affluent clientele |
|technologies |Home, office and remote use |High unit cost |
In turn, to attract international audience, television and digital technology are ideal. For example, Waterberg may choose to advertise its products on international television channels such as SABC Africa, BBC, SKY TV, CNN, etc. Distribution of digital materials and glossy magazines to travel agencies will reach travellers and tourists.
Table 22 provides a possible list of print and electronic media that may be used to market Waterberg. To make effective use of the media selected, the strategist must know enough about the mechanics and technology of each medium to prepare the content and message properly. For example, some commercial airliners may be willing to have Waterberg magazines distributed on board for both domestic and international flights.
12.6 Establishing an Information System
An information system for the strategy is critical. The Waterberg District Municipality will employ three systematic steps of information management system: Input, Processing and Output.
▪ The Input is effectuated at higher level of Management and Decision-Making of the Waterberg District Municipality;
▪ The Processing is handled at information transformation, which is to be turned into product for public consumption; and
▪ The Output concerns the finished or transformed inputs into usable knowledge for the intended recipients.
This process is well captured in Figure 19 and it demonstrates how this process functions in Local Government investment strategic setting.
An information system has three basic interactive components:
▪ Input, which involves assembling of data, ideas, facts and opinions from stakeholders, interest groups, experts, and the public in general regarding potential investment projects in Waterberg;
▪ Processing entails transforming the input into knowledge or usable information. In terms of the present strategy, this could mean that data gathered could be transformed into knowledge to make proper decision on feasible investment areas and viable programmes; and
▪ Output involves packaging, transferring and distributing such knowledge and information to ultimate destinations such as Municipal Managers, strategists, interest groups, potential investors, the Waterberg public in general, etc. The information can be made available to all intended recipients through new media such as the Waterberg District Municipality website as well as classical printed, electronic (radio, television), magazines, newspapers, brochures, travel guides, town hall and other formats for those sections of the recipient that prefer and desire to use a particular medium. The Output is critical in building the confidence level of the District, as it is at this level that stakeholders and communities read about the development and improvement of their lot on regular basis.
To keep a system in equilibrium there is a need for feedback, which can be seen as a fourth basic component, particularly in relation to the Marketing and Investment Strategy.
Figure 19: Mechanics of Information System for Investment Strategising
Like other functional aspects, an information system is a component of the strategy. The fundamental purpose of the information system is to convert data into information that is useful for the investment and marketing of Waterberg. In this regard, there are three categories of information:
▪ Strategic Information aimed at supporting the strategic planning in marketing and investment strategy. It is generally handled at mayoral level or other municipal department charged with District marketing and investment; At the top level of strategic planning of the Municipality, the management requires information that assists in making long-term planning decisions of the District as a whole. Since strategic plans are of a long-term nature, they require approximate indications of future conditions rather than exact statements about the past or present.
▪ Tactical Information is deliberately furnished to assist managers to monitor and control operations and to allocate their resources effectively to achieve the marketing and investment goals. Tactical information is used to monitor and gauge performance of investment projects of the Waterberg District Municipality. Tactical information has an intelligence component in approach, as it also as a barometer to measure the market forces that environ the context in which competition occurs. Middle-level managers need tactical information to monitor and control operations as well as to gauge opportunistic circumstances that may be of benefit or detriment to the goals and objectives of the strategy.
▪ Operational Information, which is furnished at implementation level to enable operational managers to effect the necessary tasks of programmes, projects and strategies. At the operational level, the information needs to be highly accurate and detailed in order to enable implementers of the strategy to perform efficiently. A production supervisor in the manufacturing industry for example, has to know exactly what the output is on a weekly or monthly basis.
Table 23 and Figure 20 provide a good depiction of information system, as it will be employed for the Marketing and Investment Strategy of the Waterberg District Municipality.
Table 23: Summary of Categories of Information Usefulness
| |Information Categories |
|Characteristic | |
| |Operational |Tactical |Strategic |
|Management level |Daily implementation supervision|Middle managers and market |Mayoral level and senior |
| | |intelligence |officials |
|Frequency |Regular, repetitive |Mostly regular |Often ad hoc |
|Dependability of results |Expected |Sometimes Surprising |Often Surprising |
|Time period covered |The past |Comparative |Predictive of the future |
|Level of detail |Very detailed |Summaries of data |Summaries of data |
|Source of data |Internal |Internal and external |Mostly external |
|Nature of data |Highly structured |Sometimes unstructured |Highly unstructured |
|Accuracy |High |Sometimes subjective |Highly subjective |
|Typical user |First-line supervisors |Middle managers |Top management |
|Level of the decision |Task-orientated |Control and resource |Long term goal-orientated |
| | |allocation-orientated | |
Figure 20: Summary of Information Requirement by Management Levels
(Compare with O’Brien, 1990:328)[xxii]
Consequently, an information system is paramount for the Marketing and Investment Strategy. In fact, information flow that is well organised is the blood life of the strategy itself. Reliable and scientifically accurate information lead to fruitful results, yet unorganised and inaccurate information can be detrimental to the entire project.
12.7 Implementing the Strategy
In a spirit of delivery-oriented strategies, the Waterberg Municipality will implement the strategy taking into consideration the interests and views of different stakeholders in the entire process. The Implementation Plan lays out budgetary, human resource, institutional and procedural implications of implementing the Marketing and Investment Strategy. It is thus the point of integration of all projects and programs within a Marketing and Investment Strategy. The Action Plan lays out a hierarchy of tasks, responsible parties, realistic time tables, human resource and financial needs, sources of funding, expected impacts and results, performance measures and systems for evaluating progress for each project.
Pertinent questions in an implementation plan comprise:
▪ Who takes responsibility for each program or project?
▪ What are the targets in terms of outputs, timing and funding?
▪ What steps need to be taken to achieve the targets?
▪ What will be the reporting structures and communication strategy (including to stakeholders)?
▪ What are the performance monitoring and evaluation systems and processes?
▪ What has to happen to ensure they are in place and used?
▪ What are the budgetary and human resource requirements for the sustained delivery of the project or program?
The institutional implications of the Marketing and Investment Programmes and projects, including:
▪ Any new internal of the procedures and processes of the local Council;
▪ The new departments/units/people or inter-departmental coordination that are required for the fulfilment of the project;
▪ The effect of this on the capacity of an Investment Function, which until now did not manage implementation; and
▪ The new skills required for the implementation of programs and projects.
Granted the complexity of industrial investment and other related projects, the Waterberg District Municipality will adopt an integrated approach whereby the team of implementers is composed of both internal staff of the District and external stakeholders. However, there are inherent benefits and shortcomings as summarized in Table 24.
Table 24: Key Consideration In Managerial Task of Strategy Implementation
|Composition of the Team |Advantages |Disadvantages |
|Using existing executives to implement the |ALREADY KNOW KEY PEOPLE PRACTICES AND |Less adaptable major strategic changes |
|strategy |CONDITIONS |because of knowledge, attitudes and values |
| |Personal qualities better known and |Past commitments may hamper hard decision |
| |understood by associates |required in executing a new strategy |
| |Hove established relationships with peers, |Less ability to become inspired and |
| |subordinates, suppliers, buyers, etc. |credibly convey the need for change |
| |Symbolise organisational commitment to | |
| |individual careers | |
|Brining in outsiders to implement the new |Outsiders may already belive in and have |Often costly, both in terms of compensation|
|strategy |lived the new strategy |and learning-to work-together time |
| |Outsider is unencumbered by internal |Scarcity of suitable candidates to effect |
| |commitment and enthusiasm |change |
| |Bringing in outsiders can send powerful |There is always uncertainty to select the |
| |signals throughout the organisation that |right person for the job |
| |change is expected |The morale goes low with insiders who |
| | |wanted the job |
(See Smit, P.J. and Gronje, GJ de, 1992)[xxiii]
12.8 The Action Plan
The following are important deliberation that the Waterberg District Municipality will consider for the Action Plan of each project:
▪ A hierarchy of tasks;
▪ Responsible parties;
▪ Realistic timetables;
▪ Human resource and financial needs;
▪ Sources of funding;
▪ Expected impacts and results; and,
▪ Performance measures and systems for evaluating progress for each project.
Strategy implementation is never as clear-cut as the strategy development itself. It often takes longer than expected and involves a consistently changing environment. Within each project and programme that is being implemented, strategic thought will occur at every step of the way. This will often focus on how to best advance the project in an often rapidly changing environment.
Implementation Plan acts in the final instance, as a mediator between various projects and their action plans to ensure that these do not inappropriately compete for resources. It also provides information for Monitoring and Evaluation to all parties involved, in particular the Municipal Manager or any who must report to the highest level of the municipal government and to the Waterberg citizens.
12.6 Monitoring and Evaluation Plan
A Monitoring and Evaluation workshop should be conducted following the agreed upon local assessment of investment needs and opportunities. This workshop will set up a plan to monitor progress according to agreed indicators of success and milestones at project level, as well as define a system for learning by doing during the Marketing and Investment Programme.
The Monitoring and Evaluation Plan will, therefore, include a process timetable of meetings, audits, etc. throughout the period pre-planned and budgeted in advance. This also establishes clear timeframes for reporting. Distinctive features of monitoring and evaluation are sketched in Table 25.
Table 25: Comparison Between Monitoring and Evaluation
| |Monitoring |Evaluation |
|What |Monitoring is the process of routinely gathering |Evaluation involves a ‘stepping back’ to gain a deeper |
| |information on all aspects of a project or |perspective on what effects and impacts have been achieved. |
| |program. It is used to inform decision making on |It informs every decision-making. |
| |project implementation. | |
|Purpose |Analyse the current situation |Determine how effective a project or program has been |
| |Identify problems and find solutions |Determine the extent to which goals have been achieved |
| |Discover trends and patterns |Learn how efficiently things are being done |
| |Keep program activities on schedule |Develop ‘lessons learned’ so future programmes and projects |
| |Measure progress towards intermediate goals and |of a similar nature can be improved |
| |revise action in order to achieve these goals | |
| |Formulate key questions | |
| |Make decisions about human, financial | |
| |and material resources | |
|When |MONITORING IS CONTINUOUS (DAILY, MONTHLY, ANNUAL).|Evaluation is conducted periodically: |
| | |At or near the mid-point of implementation |
| |Monitoring activities should be scheduled as part |At the end of a project |
| |of the project’s workplan and be a routine part of|At a point well after a project has been completed (3-8 |
| |project implementation. |years) |
|How |MONITORING CAN BE CARRIED OUT BY STAFF AND |INTERNAL EVALUATIONS CAN BE CARRIED OUT BY THE PROJECT |
| |PARTICIPANTS THROUGH FIELD VISITS, REVIEW OF |MANAGER AND/OR PROJECT STAFF AND PARTICIPANTS. EXTERNAL |
| |SERVICE DELIVERY AND THROUGH A MANAGEMENT |EVALUATIONS ARE GENERALLY CONDUCTED BY EXTERNAL CONSULTANTS, |
| |INFORMATION SYSTEM. |EXTERNAL AGENCIES OR DONORS. |
|WHY |MONITORING PROVIDES MANAGERS WITH INFORMATION |EVALUATION IS THE FORMAL PROCESS OF DOCUMENTING THE FOLLOWING|
| |NEEDED TO ANALYSE THE CURRENT PROJECT SITUATION, |PROJECT ACHIEVEMENTS: |
| |IDENTIFY AND FIND SOLUTIONS, DISCOVER TRENDS AND |Progress in the workplan |
| |PATTERNS, KEEP IN SCHEDULE AND MEASURE PROGRESS |Establishment of systems |
| |TOWARDS EXPECTED OUTCOMES. IT ALLOWS AN |Implementation of planned activities |
| |OPPORTUNITY MAKE DECISIONS REGARDING HUMAN, |Achievement of goals |
| |FINANCIAL AND MATERIAL RESOURCES AND MINIMIZE |Effectiveness of the project |
| |NEEDLESS PROGRAM COSTS. |Impact of the project |
| | |Efficiency or cost-effectiveness |
|Information |MORE EMPHASIS ON QUANTITATIVE DATA BUT SOME |MORE EMPHASIS ON QUALITATIVE DATA BUT QUANTITATIVE DATA IS |
|TYPE |QUALITATIVE DATA IS GATHERED TO CONTEXTUALISE THE |GATHERED IN INDICATORS. QUALITATIVE ANALYSIS OFTEN SUPPORTS |
| |QUANTITATIVE ANALYSIS. |THE QUANTITATIVE ASSESSMENT. |
|INFORMATION |DESCRIPTIVE, ANALYTICAL AND DOCUMENTARY DATA |DESCRIPTIVE, ANALYTICAL AND DOCUMENTARY DATA SHOULD ALL BE |
|CATEGORY |SHOULD ALL BE USED TO OBSERVE THE ‘WHAT’ AND |USED TO OBSERVE AND RECORD THE ‘WHAT’ AND UNDERSTAND THE |
| |UNDERSTAND THE ‘WHY’ OF THE PROJECT ACTIVITIES. |‘WHY’ OF THE PROJECT ACHIEVEMENTS. |
12.13 Funding the Marketing and Investment Strategy
Funding the Marketing and Investment Strategy may become often very intricate. When it comes to budget time, trade and investment are competing for scarce resources with departments at provincial and national level. Sometimes, it is difficult for elected municipal officials to justify spending scarce resources on Marketing and Investment mission because short time horizon responses are often perceived as more important than initiatives that often have longer time horizons, and whose benefits may not be immediately apparent. For this reason, it is important to have political support and commitment to contribute resources by the business community. It is also important that the municipal authorities view the Marketing and Investment Strategy as a mechanism for supporting future sources of revenue growth.
The Marketing and Investment Strategy must have a budget. It may be small at first but with opportunities for follow-up funding it may grow and support may come from various interest groups. In selecting particular programmes and projects, care needs to be taken to ensure that funds are available for the entire length of each activity as projects are likely to span several financial years.
Sources of funding for Marketing and Investment initiatives could include:
▪ Waterberg District Municipality revenue raised from the usual sources including property taxes, fiscal systems, etc.
▪ Sale or leasing out local Municipality-owned industrial or commercial buildings and land;
▪ National and state government intergovernmental transfers;
▪ International donor grants and loans;
▪ Private sector funding such as corporate contributions/investments;
▪ Foundations, especially for environmental improvements, human resource, etc.
▪ Social responsibility grant from local businesses involved in Mining, Agriculture, Tourism, Construction, Finance, etc.
▪ International Investors;
▪ International Development Agencies such as European Union, USAID, UNDP, World Bank, etc.
▪ National Development Agencies such as Development Bank of Southern Africa, etc.
Figure 17: Diagrammatic Summary of the Overall Strategy
13. summary and overall recommendation for implementation
This strategy has provided an overview of the Waterberg District Municipality’s status quo potential in terms of investment opportunities and, its potential market growth, as well as its promising prospects in terms of corporate strategies for industrial recruitment that can benefit the BEE and SMMEs emerging enterprises and potential cluster-chain projects.
The notion of the Value Chain and the Vertical-Horizontal Integration Strategies should be regarded as an alternative analytical and strategic tool to advance the economic empowerment of the disadvantaged communities and the emerging black entrepreneurs.
Important to note, it is the proposed Marketing and Investment Strategy and its Action Plan that will brand and publicize Waterberg products and investment opportunities nationally and internationally.
Motivating the whole process of this strategy is the quest for economic and market growth in Waterberg. The potential for this is found in the regions product portfolio with specific reference to Agriculture, Mining and tourism sectors.
The challenge, however, is to ensure that the present strategy is effectively implemented, through appropriate monitoring and evaluation mechanisms. In this regard, it is proposed that the “District Investment Council” should be established in order to boost and attract investment in the region. The Council should be consisted of champions of different strategic sectors in Waterberg District Municipality who would advise on issues of strategic investment potentials to the municipality.
For strategic reasons, it would be appropriate that the District’s Executive Mayor’s office takes a lead in the establishment of the proposed council, in order to offer strategic direction on investment opportunities and related issues.
In addition, the there would be a need to appoint an “Operations Manager” of the Council, who will be responsible for driving and implementing decisions.
The Council should incorporate all strategic partners of the Waterberg District Municipality. Starting with its six local municipalities, the Council should ensure an effective partnership between public and private sector to help steer the Waterberg District Municipality’s strategies, policies and programmes regarding Marketing and Investment. In this regard, the council will represent the public and private sectors that will collaborate to establish priorities for investment. Private-sector involvement will generate a quicker turnaround time on investment issues.
Moreover, the Council should seek ways of attracting and expanding investment to the Waterberg region. It should also ensure that appropriate resources are mobilised to establish priorities for investment. Its efficiency level should match international standards, in order not to compete for domestic investment, but also for international capital.
The “District Investment Council” needs to be creative if it is to compete with best in the world and attract investment so that Waterberg becomes the preferred investment destination of choice. Investors require an efficient and well-formulated response prior to making an investment decision otherwise they go elsewhere. For instance, investors are choosing other countries over South Africa because of the tax breaks they get.
The “District Investment Council” should develop aggressive strategies to attract investment to the region. This can be done by increasing the role of small business in the economy, retaining already existing local businesses and establishment of Broad Based Black Economic Empowerment Co-operatives.
The District is a hive of economic activity and obviously, it cannot implement this strategy alone. There would a need to co-ordinate through the “District Investment Council” other line government departments and development agencies that can add value to the effective marketing of the District investment potentials.
References
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[i] LOCAL GOVERNMENT WHITE PAPER, 1998 PP25, 30.
[ii] See Section 152 of The Constitution of the Republic of South Africa.
[iii]The White Paper on Local Government. 1998, p17.
[iv] The Municipal Structures Act No 117 of 1998
[v] The Municipal Systems Act of 2000
[vi] Limpopo Provincial Government (2004). Growth and Development Strategy. Polokwane.
[vii] BEE COM (2000). Economic Empowerment: A National Growth Imperative.
[viii] PPP Unit (2003) Code of Good Practice for Black Economic Empowerment in Public-Private Partnership. Pretoria: National treasury.
[ix] The Constitution of the Republic of South Africa, Act 108 of 1996, section 217(2))
[x] Treasury Regulation 16.5.3 (b)), issued in terms of Public Finance Management Act.
[xi] BEE Commission (2001). Black Economic Empowerment Commission Report. Johannesburg: Skotaville Press, p.1.
[xii] See Letsema Consulting (2002). “South African Tourism Industry Empowerment and Transformation”. Annual Review. Pp 11-15. Funded by the Tourism Business Council of South Africa.
[xiii] Tourism Business Council of South Africa (2004). Tourism Charter and Scorecard: Steering Committee Recommendations.
[xiv] South Africa’s Economic Transformation: A Strategy for Broad Based Black Economic Empowerment.
[xv] National Treasury (2003). Code of Good Practice for Black Economic Empowerment in Public Private Partnerships. PPP Unit: Pretoria.
[xvi] Ibid, p.12.
[xvii] Ibid, p.2. See also South Africa’s Economic Transformation: A Strategy for Broad Based Black Economic Empowerment, p.14.
[xviii] See South African Mining Charter.
[xix] Tourism Business Council of South Africa (2004). Tourism Charter and Scorecard: Steering Committee Recommendations, p.3.
[xx] See RDP Audit; White Paper on South African Land Policy.
[xxi] Waterberg District Municipality (2004). Local Economic Development Plan (LED) and Socio-Economic Statuts Quo Report. Waterberg: Thabametse Development Cosortium.
[xxii] O’Brien, J.A. 1990. Management Information Systems: A Managerial End User Perspective. Homewood, Illinois: Irwin.
[xxiii] Smit, PJ & GJ de J Cronje (1992). Management Principles: A Contemporary South African Edition. Cape Town: Juta & Co, Ltd.
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[pic]
Waterberg Tourism Value Chain Cluster
Distribution
Final
Product
Conversion
Processing
Raw
Material
Supply Chain
Supply Chain
Demand Value Chain:
a. Tracks the flow of demand
b. Values flows from the source of demand back through the chain
c. Identifies which players control the flow of demand back through the chain
Design
Procure
Produce
Educate
Deliver
Service
Waterberg District Municipality
Tourism products and services:
Hotels
Game Reserves
Conference Centres
Hiking Facilities, etc.
Clientele:
Tourists and Investors
Waterberg District Municipality
Product Development
Afrocentric-value Encoding
Process
International-value Encoding
Process
Marketing and
Advertising
Appeal to African Clientele & Investors
Appeal to International Clientele & Investors
| Utility + Access + Experience - Cost |
| | | | |
|Performance |Availability |Service |Price |
|Features/Functions |Reliability of supply |Solutions |Total cost of ownership |
|Technical Innovation |Distribution Channels |Impact on clientele/investor |Process cost |
| | |Brand |Payment terms |
The municipalities deliver value to clientele and investors
ACROSS EACH OF THE DIMENSIONS OF THE RELATIONSHIP
| | | |
|Utility |Access | |
|User-friendly |Information | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
|Cost |Experience | |
|Justification |Satisfactions | |
Value quantification requires the municipality to follow a disciplined process
Market
Validation
Value
Quantification
Value Driver
Discovery
Clientele/
Investor
INVESTORS
PRODUCERS
PROCESSORS
DISTRIBUTORS
RETAILERS
CONSUMERS
Agricultural Media
OTHER INSTITUTIONS
AGRICULTURAL COLLEGES
SPHERES OF GOVERNMENT
GOVERNMENT REGULATORS
AGRICULTURAL CONSULTANTS
AGRICULTURAL ORGANISATIONS
EQUIPPERS BUILDERS
FINANCIAL INSTITUTIONS
SUPPLIERS AND TRANSPORTERS
LABOUR SUPPLY
RAW MATERIAL SUPPLY
INBOUND LOGISTICS
OPERATIONS
OUTBOUND LOGISTICS
MARKETING
PRODUCT DEVELOPMENT:
IMPROVED QUALITY
INCREASED FLEXIBILITY
JUST IN TIME
SHAFTS
Extraction
PROCESSING
RETAILERS
END-USER
INFRASTRUCTURE
MONETARY
HUMAN RESOURCES
RAW MATERIAL
ETC.
INPUTS
RAW MATERIALS
INVESTMENTS
PRODUCT DESIGN:
Strategy and Planning
Product Development:
Holiday resorts
Nature reserve
Game reserves
Guest houses
Hotels
Hiking clubs, etc.
Marketing:
Advertising
Pamphlets
Magazines
Electronic Media
Billboards, etc.
Consumption & Recycling:
Input:
Skills & Capital
Job
Creation
Waterberg Publicity and Branding
State Revenue
Feedback mechanisms:
HR DEVELOPMENT
Poverty Reduction
Investor Attraction
Infrastructure & LED
CONTINUUM
ONSHORE DISTRIBUTION SYSTEM
Tour Operators, Travel Agencies, etc
Offshore Distribution System
HARD INFRASTRUCTURE
Soft Infrastructure
Economic Foundations
Utilities
Telecommunications
Rail
Roads
Banks and Financial Service
Industry Associations
Police & Security Companies
Training centers, Schools, etc
Communities
Bela-Bela
Thabazimbi
Mookgophong
Mogalakwena
Modimolle
Lephalale
Waterberg District Municipality
Limpopo Government
National
Government
Suppliers
▪ Transport companies
▪ Travel agencies
▪ Hotels & Guesthouses
▪ Care hire companies
▪ Medical & insurance agencies
▪ Construction industries
Visitors/Tourists
▪ International ,
▪ Dometic/Local,
▪ Individuals, families,
▪ Excursions, sports clubs,
▪ Conferences, etc.
Attractions
▪ Holiday resorts,
▪ Nature reserves,
▪ Cultural villages,
▪ Game parks,
▪ Flea markets, etc.
Regional Socio-political context:
Positive or negative perceptions
Local Socio-Political Context:
Reputation about people and government
Acquisition or merger of suppliers of competing businesses are horizontal integration
Acquisition or merger of suppliers or customer business are vertical integration
Policy Environment:
▪ BBBEE Act
▪ Mining Charter
▪ Tourism Charter
▪ SA Agricultural Charter
▪ National Treasury PPP Unit
Mining
Tourism
Agriculture
Retailers
DISTRIBUTORS
PRODUCERS
PROCESSORS
SOURCES RAW MATERIAL
HOSTILE
Environment
Favourable Circumstances
Waterberg Context:
AS PRODUCT AND PREFERED DESTINATION
Branding
▪ ADVERTISING
▪ Investment Exhibitions
▪ Investment Seminars
▪ District Website
▪ Digital Distribution
▪ Reputation Management
▪ Informal Modes of Communication, etc
MONETARY
SUPPORT:
▪ NATIONAL GOVERNMENT;
▪ Provincial Government;
▪ Private Sector;
▪ Local government Revenue, etc.
POLICY
ENVIRONMENT:
▪ INTER-GOVERNMENTAL RELATIONS ACT
▪ Integrated Rural Development Programme
▪ BBBEE Act
▪ Poverty Reduction Programme
APPROACH:
IMPLEMENTATION
Plan
GOALS:
AIMS
Objective
STRATEGY SETTING:
VISION
Mission
Use of Principal Media
▪ LOCAL PRINT MEDIA
▪ Local Electronic Media
▪ International Print Media
▪ International Electronic Media
▪ Billboards, Pamphlets,
▪ Travel Agency Magazines
▪ Airliners on board magazines, etc.
Intervention Strategies
▪ INVESTOR IDENTIFICATION
▪ Corporate Liaison
▪ Strategic Alliances
▪ Free Trade Agreements
▪ Branding & Positioning
▪ Investor Facilitation
▪ Follow-up Processes
Outward/Inward
MISSIONS
▪ TRADE TRIPS
▪ Product Exhibitions
▪ Conferences Abroad
▪ Conferences Locally
▪ Information Exchange
▪ Treaties & Memoranda of Understanding
▪ Staff exchange programmes
MONOTORING AND EVALUATION
Scheduled, Detailed Frequent
Task-Oriented, Narrow Focus
Structured
Structured
[pic]
[pic]
[pic]
Unstructured
Unscheduled, Summarised Infrequent
Goal-Oriented, Wide Scope
Decision
Structure
Information
Traits
Operational
Management
Tactical
Management
Strategic
Management
FEEDBACK MECHANISMS
FEEDBACK MECHANISMS
INFORMATION DELIVERY STRUCTURE
NATURE OF ACTIVITIES:
▪ FINISHED INFORMATION FOR CONSUMPTION
▪ Information Delivery
▪ Distributing
▪ Multiplying
Nature of Activities:
▪ TRANSFORMING
▪ Gate-keeping
▪ Communicating
▪ Knowledge Making
Nature of Activities:
▪ PLANNING
▪ Organising
▪ Leading
▪ Controlling
OUTPUT
PROCESSING
INPUT
DELIVERY AND PRODUCTION & DISTRIBUTION PROCESS
INTERMEDIATE DECISION-MAKING PROCESS
HIGH LEVEL OF DECISION-MAKING PROCESS
SYSTEM
INFORMATION
MANAGEMENT
OVERALL INFORMATION PRINCIPLE FOR INVESTMENT STRATEGY
DEVELOP BUSINESS RETENTION PROGRAMMES
Develop Expansion
Programmes
Corporate Liaison & Meeting Investors
Strategic Alliances
Investment Facilitation & Free Trade Agreements
Establish Backward & Forward Vertical Unit
SMMEs Exposure to Import& Export Trade
Feedback
Mechanisms
................
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