MAKING LED WORK FOR RURAL COMMUNITIES:
THE ILEMBE CASE STUDY
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REGIONAL AND LOCAL ECONOMIC DEVELOPMENT
SUMMIT – 2012
BASIL SIKHAKHANE: MD- ENHANCE STRATEGIES INTERNATIONAL AND CHAIRPERSON, KZN
COMMISSION ON TRADITIONAL LEADERSHIP DISPUTES AND CLAIMS (CTLDC )
LOCAL ECONOMIC
DEVELOPMENT IN RURAL AREAS
Key Focus Is On Land
 Productive use
 Ease of Access to land
 Commercially viable tenure system(s)
 Improved value through infrastructure
 Empowerment of women and children
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 Access to Agri-logistics
NATURE OF RURAL
COMMUNITIES IN KZN
 Rural (small) town areas
 Large-scale commercial farms
 Small-scale farms
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 Rural traditional community areas
 Excludes small towns
 Excludes large and small scale commercial farms
 Carries the bulk of the development and service delivery
backlog
 Vicious cycle of deprivation
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 Looks up to LED for relief
RURAL COMMUNITIES IN
KWAZULU-NATAL
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LAND AS KEY A FACTOR OF PRODUCTION:
LED CHALLENGES IN RURAL AREAS
(AGRICULTURAL CONTEXT)
THE AGRI-LOGISTICAL DIVIDE
Rural Areas
Rural Areas (Traditional Communities)
- Farming communities
- Generally unsuitable land
(commercial & small
- Lack of skills
scale)
- Limited to no access to agri-logistics
- Access to agri-logistics
- No access to markets
- Processing & packaging
- Increased market- gardening as
opposed to commercial farming
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- Access to markets
STRUCTURAL CHALLENGES
(DISTRICTS)
o The “duality” challenge
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Different economies
Different communities
Differentiated legacies
Marginalisation/ expansion
o The pressure to address “marginalisation” issues
o The need facilitate growth and expansion outside
traditional community areas
o The need to maximise effort in current opportunities
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o The creation of ladders between the two economies
DISTORTIONS
 Global trend:
 60% small-scale farmers contribution- agricultural
production
 40% large-scale farmers contribution
 Bulk support and funding to small scale
 RSA trends:
95% large-scale contribution
5% small-scale contribution
5% small-scale not necessarily “rural”
Bulk support and funding for large-scale
Funding/ tenure mismatch
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ILEMBE DISTRICT
CASE STUDY
 Challenging realities
 Spatial inequality
 Dual economy
 Cycle of deprivation in free-fall mode in rural areas
• General development backlog
• Service delivery backlog
• Poor productivity
Shortage of skills
Unemployment
Poverty
Vulnerability
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ILEMBE APPROACH &
PRINCIPLES
 Acknowledgement of the spatial context of the district
 Collective/ regional response
 Family of municipalities as opposed to competing
enclaves
 Acknowledgement of different strengths
 Capitalizing on the diversified strengths
 One district one economy
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 Elimination of duality
ALIGNMENT
 Regional alignment
 Provincial alignment
 Sector alignment
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Alignment of regional (district) processes
within provincial strategic objectives
OPTIONS
 Local municipality driven LED
 Local focus
 Local view
 Competition
 Missing out on complimenting advantages
 Compliance challenges
 District municipality driven LED
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 Diluted local focus
 Competency challenges
 Legislative/ compliance challenges
THE DEVELOPMENT
AGENCY OPTION
 Legislative framework
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Municipal entity
Opportunities in addition to PFMA and MFMA
Access to different sources of funds
Ability to pilot
District wide coordination
Alignment with IGR framework
Shared destiny (regional vision)
Coordination of public and private sector efforts
Inline with Provincial Growth and Development Plan as a
regional planning forum
 Enhanced accountability measures
ILEMBE DISTRICT
CASE STUDY
The LED Governance & Implementation Model
The DM supported by COGTA established a regional Development Agency (Enterprise ILembe)
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
OBJECTIVES OF
ENTERPRISE ILEMBE
 To optimise on the regional competitive advantages of Tourism,
Agriculture & Low Impact Manufacturing;
 To develop creative mechanisms to rapidly achieve BEE
targets;
 To design an organisational vehicle to leverage catalytic
economic opportunities;
 To involve Business In functional regional economic decisionmaking;
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 To leverage all possible resources to the benefit of the ILembe
region.
FUNCTIONS OF
ENTERPRISE ILEMBE
Developing and strengthening the local economic development strategy on behalf of the district and local
municipalities;
 Championing a wide range of activities which emerge as important from the LED strategy;
 Fundraising for specific projects, and potentially project managing some of these;
 Funding certain services to be applied across the area, eg specialist business advice;
 Coordinating activities to ensure that an integrated service is provided across providers, eg for business
advice;
 Monitoring and quality control of services available in the area;
 Directly undertaking certain functions, eg regional marketing;
 Promoting regional activities, eg collective marketing, regional food brands etc.
 Facilitating the identification, packaging and implementation of catalytic projects.
 Provide a professional and multi-skilled support and networking service to major investors who wish to
invest in the region by: Working with local government to improve the business enabling environment ;
 Establishing a research unit to develop and maintain a regional socio – economic and investor database
 Facilitating the establishment of a Destination Management Office (DMO) in Ilembe.
 Provide a “turn-key” service to investors who wish to relocate to Ilembe
 Implement an aggressive business retention and expansion (BR&E) programme coupled with a business
development and support (BDS).Priority will be given to those businesses committed to black economic
empowerment (BEE) partnerships.
 Build twinning relationships with developed regions internationally.
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OPERATIONAL
PRINCIPLES
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The Council and Board of Directors of Enterprise ILembe have set out the
following operational principles for the organisation :
 Bring the poor and previously disadvantaged to the centre of development
 Build a synergistic relationship between Local Economic Development and
Social Upliftment.
 Build Linkages between the established coastal economies and historically
marginalised rural areas.
 Build a culture of Social, Economic & Environmental interdependency as the
first test when evaluating opportunities. (i.e. triple bottom line)
 Focus LED around realistic catalytic initiatives natural to the region and
wherever possible building on the uniqueness of local competitive advantage
and market differentiation.
 Building a capacity to nurture effective and mutually beneficial partnerships
based on fair and equitable business principles.
 Ability to leverage Black Economic Empowerment (BEE) as measured by
direct or potential equity and not only new jobs created.
GOVERNANCE
STRUCTURE
Board of
Directors
Internal Audit
Committee
External Audit
Committee
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Audit and
Risk
Committee
OPERATIONAL
STRUCTURE
CEO
CFO
COO
Manager: Trade &
Investment Promotions
LED Officer:
Manufacturing
Admin. Support
Head: Project
Management Unit
Admin. Support
LED Officer: Arts & Crafts
LED Officer: Agric.
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LED Officer: Tourism
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DISTRICT FOOTPRINT
FUNDING
To date the agency has had two core funders of its
operational costs, these being the District Municipality
(which provides a grant of about R2m) and the Industrial
Development Corporation (IDC), (which provides a grant of
R3.5m for operational costs). Both these funders have
required that the agency progressively develop financial
self-sustainability strategies.
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As regards project funding, the agency presently manages
about R15m of project funds from the Provincial Corridor
Development Fund (managed by the KZN Dept of
Cooperative Governance and Traditional Affairs), and the
IDC.
ALIGNMENT OF PROJECTS WITH
STRATEGIC OBJECTIVES
Strategic Objectives:
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 Job Creation
 Human Resource
Development
 Human & Community
Development
 Strategic Infrastructure
 Environmental
Sustainability
 Governance And Policy
 Spatial Equity
 Job Creation (100%)
 Human Resource
Development (100%)
 Human & Community
Development (100%)
 Strategic
Infrastructure (100%)
 Environmental
Sustainability (100%)
 Governance And
Policy (100%)
 Spatial Equity (100%)
JOB CREATION
 Unleashing the agricultural sector
 Enhance industrial development through trade, investment & exports
 Expansion of government- LED creation programmes
 Promoting SMME, Entrepreneurial and youth development
 Enhance the knowledge economy
HUMAN RESOURCE DEVELOPMENT
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Early Childhood Development, Primary and Secondary Education
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Skills alignment to Economic Growth
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Youth Skills Development & Life-Long Learning
HUMAN & COMMUNITY DEVELOPMENT
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Poverty Alleviation & Social Welfare
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Enhancing Health of Communities and Citizens
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Enhance Sustainable Household Food Security
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Promote Sustainable Human Settlements
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Advance Social Capital
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Enhance Safety & Security
STRATEGIC INFRASTRUCTURE
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Develop-ment of Harbours
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Development of Ports
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Development of Road & Rail Networks
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Development of ICT Infrastructure
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Improve Water Resource Management & Supply
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Develop Energy Production and Supply
ENVIRONMENTAL SUSTAINABILITY
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Increase Productive Use of Land
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Advance Alternative Energy Generation
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Manage pressures on Biodiversity
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Adaptation to Climate Change
GOVERNANCE AND POLICY
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Strengthen Policy and Strategy Co-ordination & IGR
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Building Government Capacity
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Eradicating Fraud & Corruption
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Promote Participative, Facilitative & Accountable Governance
SPATIAL EQUITY:
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Actively Promoting Spatial Concentration
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Facilitate Integrated Land Management & Spatial Planning
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EXTENT OF LINK WITH
STRATEGIC OBJECTIVES
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LEAD SECTORS
KEY TRANSFORMATION
OUTCOMES (IN PROJECTS)
Ownership Operations
 Joint ownership of factors of production by local co-ops and
technical partners
 Programme joint ownership of agri-logistics
 Access to agri-logistics
 Compliance
 Access to commercial markets
 Improved land value
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 Empowerment of women and the youth.
PROJECT
1.
Agri-Hubs
STATUS/PROGRESS
This project involves the establishment of four hydroponic (tunnel) farms in the four local
municipalities, as well as two nurseries to supply the tunnel farms. Total Budget is R11m.
2. Ilembe Vineyards
This project involved the growing of about 12 hectares of vines in 3 local areas of the District – with a
view to building a new wine industry on the north coast. Total Budget of R8m has been approved by
KZN Corridor Devpt Fund, (R30m was requested).
3. Ilembe Industrial
Development Strategy
This project involves the development of a District wide plan for the release and development of
priority sites for industrial expansion and development. The plan will guide future infrastructure,
industrial and related developments. About 6 priority areas have been identified and high-level
feasibility for developing these has been done. The project budget of R1.3m was funded by the
Provincial Corridor Fund.
4. Ilembe Broadband Project
This project involves developing a detailed business plan for the roll-out of affordable (if not free)
broadband to both urban nodes and rural areas in the District. A pilot project delivering such cablebased and wireless broadband capacity is also planned. A budget of R3m has been approved for the
project. A total of about R30m is required for full broadband roll-out in the District.
5. Ilembe Biodiesel Refinery
This project aims to establish a biodiesel processing plant, delivering vehicle-grade diesel from used
oil (initially) and ultimately from moringa seed. A budget of R6m has been approved from the KZN
Corridor Fund for this project.
6. Mambulu Titanium
This project is a feasibility study into the potential for the commercial mining of titanium deposits in the
Mambulu area of Maphumulo Local Municipality. A budget of R400 000 is committed to the project.
Through this project, Enterprise Ilembe is able to provide the technical support to the process of
exploring a viable stakeholder approved solution to the development proposal/s for Macambini. This
involves providing research, legal, planning, design, engineering, social facilitation services to the
Provincial Team tasked with developing solutions and managing the process.
This project proposes the development of a general aviation airport near Darnall. No further progress
has been made since the finalisation of the high-level feasibility study which suggested that the
closure of Virgina airport was key to the success of a new airport at Darnall.
7. Macambini Project
Secretariat
8. Darnall Airport
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PROJECTS (FUNDED)
PROJECTS (UNFUNDED)
9. Sports Legacy Parks
10. Ilembe Blueberries Project
11. Choice Water Bottling
12. Thussong Centre at Shakashead
13. KZN Artspaces
14. Ilembe Mountain Bike Race Hosting
proposal
15. Ilembe ICT Programme Management
16. Ilembe BEE Strategy Formulation
17. Aquaculture Project
18. Wind Farming Project
19. Nonoti Master-planning process
20. Cooperatives Strategy implementation
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In addition to the funded
projects above, the
Project Management Unit
pursues other
opportunities for projects
which have some level of
feasibility, but do not yet
have funds for
implementation or for
piloting. Some of these
include :
CURRENT/ FUTURE
MILESTONES
Contractual finalisation(s) of ownership
model
Pilot results assessment on operational
practices
Setting up of regional structure to monitor
progress
Documentation of lessons learnt
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Sharing
SUCCESS FACTORS FOR LED
(RURAL COMMUNITIES): WHAT
HAVE WE LEARNT
 District approach
 Complimenting against competing
 Diverse strengths against diverse weaknesses
 Integration (Ownership & Operations)
 Land-value through productivity
 Bridging of the agri-logistical divide
 Skills development
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 Access to commercial markets
CRITICAL IMMEDIATE/ FUTURE
REQUIREMENTS FOR ILEMBE
 More pilot projects (in all sectors)
 Additional funding
 Training (for co-operatives & other
structures)
 Establishment of Regional Support
structure
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 Monitoring
ELIMINATION OF DUALITY
(CONCLUSION)
 Addressing the marginalization factors of rural
communities
 Implementing the “one district” approach
 Traditional rural communities accessing the
developed rural area infrastructure
 Ownership partnerships across the Agri-logistical
divide
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 Robust and competent regional structure to support
the partnerships
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THANK YOU