3

I NDE X OF TABL E S
Tabl e 1: Wat er Acces s by Hous ehol d f or
Local Muni ci pal i t i es i n Eas t er n Cape and
Amat hol e f or 2001 2006 . . . . . . . . . . . . . . . . . . . 12
Tabl e 2: Type of Sani t at i on by Hous ehol d f or
Local Muni ci pal i t i es i n Amat hol e and
t he Eas t er n Cape f or 2001 2006 . . . . . . . . . . . . . 13
Tabl e 3: Hous ehol ds bel ow RDP St andar ds . . . . . . 14
Tabl e 4: Es t i mat ed Wat er and
Sani t at i on Back l ogs f or Amat hol e . . . . . . . . . . . . . 15
Tabl e 5: MTEF Fundi ng ( MI G) . . . . . . . . . . . . . . . . 15
Ta bl e 6: MTEF Fundi ng ( MI G) . . . . . . . . . . . . . . . . . . 15
Ta bl e 7: Buck et Back l ogs and es t i mat ed
Cos t s by Local Muni ci pal i t y . . . . . . . . . . . . . . . . . . 16
Tabl e 8: MTEF al l ocat i on f or er adi cat i ng
t he buck et s ys t em i n Amat hol e . . . . . . . . . . . . . . . 16
Tabl e 9: Ener gy Sour ces f or Li ght i ng i n
t he Eas t er n Cape and Amat hol e f or 2001 2006 . 17
Tabl e 10: Level of I nf or mal Hous i ng i n Amat hol e
and t he Eas t er n Cape f or 2001 2006 . . . . . . . . . . 19
Tabl e 11: Hous i ng Back l ogs f or Amat hol e 2005 19
Tabl e 12: Hous ehol d acces s t o bas i c s er vi ces . . 20
Tabl e 13: Sani t at i on f aci l i t i es i n s chool s f or
educat i on di s t r i ct s i n Amat hol e . . . . . . . . . . . . . . 21
Tabl e 14: HI V Pr eval ence i n Amat hol e Di s t r i ct . . 22
Tabl e 15: Funct i onal l i t er ac y : age 20+, . . . . . . . . 26
compl et ed gr ade 7 or hi gher . . . . . . . . . . . . . . . . . 26
Tabl e 16: Unempl oyment & HH I ncome
f or t he Eas t er n Cape and Amat hol de Di s t r i ct . . . . 29
Ta bl e 17: Oppor t uni t i es f or
Agr i cul t ur e i n Amat hol e. . . . . . . . . . . . . . . . . . . . . 30
Tabl e 18: Pos s i bl e Hi gh Val ue Cr ops . . . . . . . . . . . 32
Tabl e 19: Cur r ent Empl oyment by Sect or i n
Amat hol e, Es t i mat es of Tar get s and
ant i ci pat ed I nt er vent i ons and
I nves t ment s r equi r ed t o meet Tar get s . . . . . . . . . . 38
Tabl e 20: Amat hol e Tr ans por t Pr oj ect s . . . . . . . . . 42
Tabl e 21: Amat hol e Di s t r i ct
I nf r as t r uct ur e I nves ment s over t he MTEF . . . . . . . 43
Ta bl e 22: Human Devel opment I ndex ( HDI )
f or Amat hol e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Tabl e 23: Pr opor t i on of Peopl e i n Pover t y i n
Amat hol e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Tabl e 24: Whet her Hous ehol d Member
i s r ecei vi ng Soci al Gr ant . . . . . . . . . . . . . . . . . . . . 49
F ORE WORD BY T HE E XE CUT I VE MAYOR . . . . . 4
I NT RODUC T I ON . . . . . . . . . . . . . . . . . . . . . . . . 6
Ai ms of t he Summi t . . . . . . . . . . . . . . . . . . 6
Ai ms of t hi s document . . . . . . . . . . . . . . . . 7
Met hodol ogy . . . . . . . . . . . . . . . . . . . . . . . 7
DI S T RI C T S NAPS HOT . . . . . . . . . . . . . . . . . . . . 8
S PE E D UP DE L I VE RY OF BAS I C S E R VI CE S . . . 12
Wat er . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Sani t at i on . . . . . . . . . . . . . . . . . . . . . . . . . 13
El ect r i ci t y . . . . . . . . . . . . . . . . . . . . . . . . . 17
Hous i ng . . . . . . . . . . . . . . . . . . . . . . . . . . 19
I MPROVE PUBL I C S E R VI CE S . . . . . . . . . . . . . . 20
Access to Clinics, schools,
Roads & Emergency Health Ser vices . . . . . . . . . 20
School Sani t at i on . . . . . . . . . . . . . . . . . . . 21
HI V and Ai ds . . . . . . . . . . . . . . . . . . . . . . . 22
Roads & Tr ans por t . . . . . . . . . . . . . . . . . . 24
Sk i l l s upgr adi ng . . . . . . . . . . . . . . . . . . . . 26
CRE AT E J OBS & L I VE L I HOOD
OPPOR T UNI T I E S . . . . . . . . . . . . . . . . . . . . . . . 28
St r uct ur e of t he Di s t r i ct Economy . . . . . . 28
Unempl oyment &Hous ehol d I ncome . . . . 29
Pr i or i t y Economi c Sect or s i n Amat hol e . . 29
Bus i nes s Devel opment Ser vi ces . . . . . . . . 37
The Chal l enge of J obs Cr eat i on . . . . . . . . 38
BUI L D & MAI NTAI N I NF RAS T RUC T URE . . . . . 40
Pr ovi nci al Depar t ment I nf r as t r uct ur e
expendi t ur e Pl ans . . . . . . . . . . . . . . . . . . . 40
Cr i t i cal Economi c I nf r as t r uct ur e . . . . . . . 44
Kei Devel opment Cor r i dor . . . . . . . . . . . . 46
F I GHT I NG POVE R T Y . . . . . . . . . . . . . . . . . . . . 48
The Human Devel opment I ndex ( HDI ) . . . . 48
Number of Peopl e i n Pover t y . . . . . . . . . . 49
Soci al Gr ant Dependence . . . . . . . . . . . . . 49
CONCLUS I ON . . . . . . . . . . . . . . . . . . . . . . . . . 50
Gr owt h and di ver s i f i cat i on of t he ur ban
economy . . . . . . . . . . . . . . . . . . . . . . . . . . 50
GLOS S ARY . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
GDS AGRE E ME NT . . . . . . . . . . . . . . . . . . . . . . 58
CONTENTS
3
4
The decision to host the Amathole District Municipality
Growth and Development Summit (GDS) arises from the
Provincial Job Summit Agreement held in East London
on 16 February 2006. The provincial summit built on the
1998 Presidential Jobs Summit and the 2003 National
Growth and Development Summits. The purpose of the
national growth and job summits were to develop plans
to achieve Vision 2014. The governing party, the ANC,
in its 2006 local government manifesto, determined that
each district municipality and metropolitan municipality
should hold growth and development summits within
one year of elections in order to create platforms for
dialogue so that all sectors of society have a common
vision in building better communities and to improve the
lives of all. The objectives of 2014 form part of the eight
United Nations Millenium Development Goals, with the
key objective of halving poverty by 2014.
Local government is at the coalface of service delivery
and development. This sector has undergone enormous
transformation since 1996 and great strides have been
made to make local government more democratic and
responsive to the needs of the communities it serves.
This, however, has not been without challenges and
indeed there is enormous pressure to deliver services, to
provide greater access and improve the lives of all.
Shortly after the last local government elections, we
held a strategic planning session in April 2006 to review
national governments targets and the gaps in our
integrated development plan (IDP) and to plot the way
forward for the next five year period. We concluded that
our key strategic focus areas would be:
To reduce unemployment by half;
Poverty eradication;
Investing in sustainable infrastructure development;
Enhancing the economy of the district; and
To reduce the impact of HIV and Aids.
FOREWORD BY
THE EXECUTI VE MAYOR
5
It is therefore critical that we all have a common vision and
purpose within our district across all sectors of society and
that we all play our part and make public our commitments
to make it work. The Amathole Growth and Development
Summit (GDS) which will be held on 8 and 9 March 2007
is therefore vital. The GDS is the platform where all key
stakeholders from all sectors of society in the district
will gather to debate and chart the way forward. This
will assist in the development of the Amathole Regional
Economic Development Strategy which will form part of
the Amatholes Integrated Development Plan. A number
of workshops have been held with diferent sectors in
preparation for the GDS and we are indeed grateful to all
our communities who have participated and who have
played their part in this process.
I have great pleasure in presenting the Amathole District
Municipalitys Economic Profile to you, our reader, and
trust that you will join us in our efforts to achieve our
vision and make Amathole economically competitive on
a global scale.
Yours sincerely

_______________________
CLLR SAKHUMZI SOMYO
EXECUTIVE MAYOR
It is no accident that these goals have resonance with
the Provincial Growth & Development Plan, the National
Spatial Development Framework, and also the millennium
goals of the United Nations.
Thus it is encouraging to note that the Eastern Cape
Provincial Government will be investing some R2,5 billion
in infrastructural development within our district over the
medium term expenditure cycle ending in the 2008/09
financial year.
However, we have a daunting task ahead of us. Current
available statistics indicate that the number of jobs in the
formal sector amount to 194,000 with a further 63,000 in
the informal sector, and there are a further 330,000 people
who are seeking employment. Therefore, to reduce
unemployment by 50% by 2014, requires the creation of
160,000 new jobs. In order to achieve this target, our GGP
would need to be increased by 80% or R13 billion (at 2000
prices). Investment of some R40 billion in production
capacity and probably a similar amount in infrastructure
and human capital would be needed.
In this regard the GDS should seek to address the
following specific questions and issues:
1. The Amathole Districts economic potential and
which sectors of the economy should be promoted
(this would need, where applicable, to be informed
by the IDP, LED and the RIDS);
2. Commitments by government, business, labour and
community sector to ensure investment in each of
the sectors;
3. Actions required by government and each partner to
deal with constraints to such investments, including
dealing with bureaucratic delays, EIA processes and
land use management;
4. Social and economic infrastructure programmes
required to improve investments and provide basic
services to communities;
5. Contribution by each partner to the construction of
such infrastructure, including possibility of PPP;
6. Second Economy interventions (EPWP including
roads & ECD, co-operatives, micro-credit,
procurement, land reform, etc) and the role of each
sector in such interventions;
7. Promoting local procurement what interventions
are required;
8. Improving capacity of local government and
contribution of each social partner: including role of
public sector unions in ensuring efficiency, role of all
in fighting corruption, contribution by private sector
and professionals skills required by the district;
9. Establishing a partnerships and/or regional
growth coalitions which will act as a mechanism
for cooperative action at all levels and a robust
framework for monitoring and evaluating progress.
I NTRODUCTI ON
Building on the results of the National Growth and
Development Summit in June 2003, government
proposed that all district and Metropolitan Municipalities
hold Growth and Development Summits (GDS) in their
area of jurisdiction.
The summits should provide opportunities for building
partnerships with social partners by bringing together
representatives from the broadest sections of society:
labour, business, community sector and government
(local, province and national).
Government has identified district and metropolitan areas
as the pivotal sites on which to build an understanding
of the nature and distribution of regional economic
potential across the country.
Collaborative action between government and
social partners across all the three spheres is vital in
forging a common vision for promoting rising levels of
growth, investment, job creation, and people-centred
development.
AI MS OF THE SUMMI T
The aim of the GDS is to reach broad agreement on:
a development path and programme for the district;
what each social partner (government, business, labour
and community sector) should contribute to the
implementation of the programme;
Strengthening the strategic thrust of the district IDP to
ensure planning and implementation alignment between
the spheres of government, as well as public entities.
6
METHODOLOGY

This profile for Amathole District is based on a number
of documents and information from a range of sources.
These broadly include the following:
ECSECC data, publications and reports;
AEDA data, inputs and reports;
District and local municipal IDPs;
Data from the Rapid Assessment of Services in the Eastern
Cape conducted in 2006);
Various research reports
AI MS OF THI S DOCUMENT
1. To ensure that discussion on the above issues takes
place on an informed basis;
2. To present a coherent picture of the social,
demographic and economic profile and service
levels of the area;
3. To present a picture of the challenges facing local
government, especially in relation to capacity;
4. To suggest the mechanisms & processes for
monitoring progress on the decisions reached and
the governance framework for ongoing dialogue
and feedback among social partners.
The district GDS presents a unique opportunity for
constructing partnerships and harnessing the collective
energies and contributions of a range of actors and role
players with a view to enhancing accelerated and shared
growth.
The district GDS has the potential to unlock the potential
of all localities, and ensure that all sectors of society
identify their role and contribute to the common national
objective to build a better life for all.
8
DI STRI CT SNAPSHOT
The Amathole District stretches from the Indian Ocean
coastline in the south to the Amathole Mountains in the
north, and from the Mbhashe River in the east to the
Great Fish River in the west. It is a land of rivers and fertile
floodplains, undulating grasslands, valley bush, estuaries,
beaches, forests, and waterfalls. The bio-diversity of the
district is often remarked upon, together with possible
implications for future socioeconomic developments
and competitive advantages.
Source: CSIR
9
Sectors that provide formal employment in the district
are public services (75,000 jobs), manufacturing (27,000
jobs), trade (25,000 jobs) and agriculture (17,000 jobs).
Over the last few years the economic growth of the district
has been slightly slower than the national average.
The district has eight local municipalities, each containing
at least one urban service centre: Mbhashe (Dutywa),
Mnquma (Butterworth), Great Kei (Komga), Amahlathi
(Stutterheim), Ngqushwa (Peddie), Nkonkobe (Alice, Fort
Beaufort), and Nxuba (Adelaide, Bedford).
The district lies at the heart of the Eastern Cape Province
and is presently home to about 1.7 million people. The
economy of the district is dominated by Buffalo City,
which comprises the coastal city of East London, historical
King Williams Town, and the provincial administrative
capital of Bhisho.
Buffalo City accounts for 42% of the districts population,
83% of the districts economic output, and 72% of the
districts formal employment. The city is clearly important
to the growth and development fortunes of the district
and critical to realising an integrated district growth and
development agenda.
Since 2003/04 the capex budget of Buffalo City has
increased by nearly 30%, much more than the provincial
average, and in marked contrast to the Nelson Mandela
Metropolitan Municipality. The Citys operating budget
increased slightly faster than the provincial average.
The overwhelming dominance of Buffalo City in the district
economy points to the importance of strengthening the
citys growth, and in particular the success of the IDZ
in attracting new manufacturing investment, and the
Buffalo City Development Agency, in promoting PPPs
around iconic property developments.
Efforts to upgrade East Londons harbour are critical with
regard to the future competitiveness of the manufacturing
industry (private enterprises and co-operatives).
AsgiSA initiatives around, for example, biofuels, forestry
and BPO (call centres) also hold promise for the district.
The tourism sector is already showing good (more than
average) growth, linked to the various attractions: Wild
Coast and Sunshine Coast, mountains and small towns,
the rich heritage of frontier wars, crucibles of struggle
against apartheid; and the close proximity of all these
attractions to each other (a tourism cluster).
Two-thirds of the district previously fell under the
two former homelands of Transkei and Ciskei. This
is where basic services backlogs, such as domestic
water, sanitation, mud schools, poor access roads and
unavailable electricity, are most acute.
There is evidence that poverty has been increasing in the
district over the last few years, although there have been
some gains in the Human Development Index. The district
HIV-prevalence rate is similar to the provincial rate. The
problem of informal dwellings (shacks) is most acute in
Bufalo City, due to inward migration from the hinterland.
Total budgeted capital expenditure (capex) for the nine
Amathole municipalities was R787 million in 2005/06,
equivalent to R472 per capita (slightly above the provincial
average). Buffalo City accounts for 58% of this budgeted
capex. The district Municipality accounts for a further 29%,
and the remaining seven municipalities account for just
13%. Municipal capex outside Buffalo City is about R340
per capita, significantly less than the provincial average.
Four municipalities have budgeted capex of less than
R10 million. Grants and subsidies finance 65% budgeted
capex (about average). The total operating budget for the
Amathole municipalities is over R2 billion in 2005/06, or
about R1200 per capita (below average). Funding sources
follow provincial patterns, as does wages and salaries as a
proportion of total budgeted operating expenditure.
10
To address Provincial development challenges and
opportunities, the Provincial Growth and Development
Plan (PGDP) was launched in 2004, and the PGDP finds
expression in all the districts IDPs. More recently, AsgiSA
has been launched to accelerate economic growth
throughout South Africa. The present document aims to
outline the elements of a development strategy for the
Amathole district. Specifically, this document considers
how to:
Speed up delivery of basic services;
Improve public services (schools, clinics etc);
Create jobs and livelihood opportunities;
Build and maintain infrastructure;
Fight poverty;
Augment municipal capacities and co-operation.
12
for household water access some 24% of Amathole
households access water from natural water sources
including dams with the provincial average slightly
higher at 28%.
Despite a general improvement over the period 2001
2006 the former homeland areas of Mbhashe and
Mnquma in particular face significant challenges as far
as extending basic water infrastructure with almost two
thirds and more of households in Mnquma (64%) and
Mbhashe (72%) still reliant on natural water sources to
meet household water needs.
SPEED UP DELI VERY OF BASI C SERVI CES
This section briefly outlines service delivery with respect
to water, sanitation, electricity and housing, drawing
mainly on a provincial household survey conducted
in 2006 (RSS). These trends are evaluated against the
benchmark of the 2001 census.

WATER
Significant inroads have been made in terms of extending
household water access in Amathole. The district as
a whole fairs slightly better than the provincial norm
TABLE 1: WATER ACCESS BY HOUSEHOLD FOR LOCAL MUNICIPALITIES IN EASTERN CAPE AND AMATHOLE FOR 2001 2006
Water on Site Borehole/Tank Community Stand Natural water/dam Water Vendor/other
Census 2001 RSS 2006 Census 2001 RSS 2006 Census 2001 RSS 2006 Census 2001 RSS 2006 Census 2001 RSS 2006
% % % % % % % % % %
Eastern Cape 37.4 41.8 4.0 3.8 25.3 25.1 31.4 28.0 1.9 1.4
Amathole 36.8 42.2 4.4 3.4 32.6 30.4 24.2 23.5 2.0 0.6
Mbhashe 5.4 1.5 11.0 7.5 6.7 18.7 75.1 71.6 1.8 0.8
Mnquma 14.9 10.4 9.0 8.6 22.6 16.6 52.2 64.3 1.3 0.2
Great Kei 31.0 43.0 2.6 0.0 52.8 51.1 11.6 1.7 1.9 4.2
Amahlathi 22.3 37.4 5.0 1.0 45.4 48.2 26.1 13.2 1.3 0.2
Buffalo City 59.2 78.8 0.9 0.0 34.5 20.7 3.0 0.1 2.4 0.4
Ngqushwa 9.7 44.6 6.4 4.6 65.0 46.4 17.2 3.2 1.8 1.1
Nkonkobe 29.9 33.4 4.1 1.4 43.3 65.0 20.2 0.0 2.5 0.2
Nxuba 65.0 91.8 0.8 1.8 29.0 6.4 3.8 0.0 1.4 0.0
Source: StatsSA, 2001 and RSS, 2006
13
recording an appallingly high rate of households with no
sanitation that are two and three times the district and
provincial norm (22%) respectively.
The eradication of the bucket system is also a clear priority
in a number of local municipal areas of Amathole with the
highest levels of households which currently still use the
bucket system reported in Great Kei (36%), Nxuba (27%)
and Nkonkobe (15%) - levels which are between three
and nine times the district and provincial norm of 4%.
SANI TATI ON
Despite some improvements in household sanitation
there are significant challenges as far as sanitation in
Amathole is concerned. Great strides have for example
been made in Great Kei which extended household
access to sanitation by some 50% between 2001 - 2006
and in Nxuba where households with no access to
sanitation have virtually been eliminated.
The greatest challenges are however again in the former
homeland areas with Mbhashe (72%) and Mnquma (47%)
TABLE 2: TYPE OF SANITATION BY HOUSEHOLD FOR LOCAL MUNICIPALITIES IN AMATHOLE AND THE EASTERN CAPE FOR 2001 2006
Flush Toilet
(connected to sewerage system)
Flush Toilet
(septic tank)
Chemical Toilet
Pit Latrine
(with ventilation)
Pit Latrine
(without ventilation)
Bucket Latrine None
Census 2001 RSS 2006 Census 2001 RSS 2006 Census 2001 RSS 2006 Census 2001 RSS 2006 Census 2001 RSS 2006 Census 2001 RSS 2006 Census 2001 RSS 2006
% % % % % % % % % %
Eastern Cape 30.9 31.1 2.2 1.3 2.0 0.6 5.6 7.2 23.1 33.9 5.6 4.0 30.6 21.8
Amathole 35.2 29.4 2.1 1.5 1.8 1.6 6.0 3.7 23.7 37.4 2.7 4.1 28.6 22.3
Mbhashe 3.8 0.6 0.7 0.2 2.5 0.4 5.8 5.4 12.6 21.3 1.1 0.0 73.5 72.0
Mnquma 12.3 5.7 0.9 0.6 2.8 0.0 6.5 0.2 23.0 46.5 0.8 0.0 53.6 47.0
Great Kei 8.8 9.9 10.5 1.7 2.5 0.0 4.0 4.3 6.9 43.5 8.9 35.5 58.4 5.1
Amahlathi 15.6 19.7 2.7 2.0 1.9 0.0 8.2 19.9 53.3 43.7 0.5 1.5 17.8 13.2
Buffalo City 64.2 69.0 2.5 3.1 1.1 2.6 3.5 0.3 15.1 19.0 1.4 1.4 12.3 4.7
Ngqushwa 3.1 1.4 1.6 1.4 2.6 1.1 15.6 0.7 63.0 90.0 0.9 0.4 13.1 5.0
Nkonkobe 15.8 17.2 1.6 0.0 1.2 6.0 12.7 2.8 44.6 57.3 9.7 14.6 14.3 2.1
Nxuba 29.9 66.9 2.1 2.0 0.0 0.0 4.1 0.0 5.3 4.4 39.9 26.7 18.7 0.0
Source: StatsSA, 2001 and RSS, 2006
14
TABLE 3: HOUSEHOLDS BELOW RDP STANDARDS
RSS 2006#
Eastern Cape 59.7 %
Amathole 63.8 %
Amahlathi 58.4 %
Buffalo City 25.1 %
Great Kei 84.1 %
Mbhashe 93.4 %
Mnquma 93.5 %
Ngqushwa 95.3 %
Nkonkobe 74.0 %
Nxuba 31.1 %
Source: RSS, 2006
Households sanitation backlogs
Based on the RSS (2006) data the proportion of households
who fall below the RDP standard (household access to
on-site sanitation with at least a ventilated pit latrine) is
extremely high and generally above the provincial norm.
Buffalo City (25%), Nxuba (31%) and Amahlathi (58%)
are the only areas reporting levels below the provincial
average (60%), with households in Nkonkobe (74%), Great
Kei (84%), Mbhashe (93%), Mnquma (94%) and Ngqushwa
(95%) recording levels higher than the average for the
district (64%).
Source: CSIR
15
Clearing the Backlog
The current MIG allocation to the district over the
medium term is approximately R956.8 million which is
below funding requirement to meet the targets set up by
Government to eradicate social service backlogs.
TABLE 5: MTEF FUNDING (MIG)
R
Current MTEF Funding 956 800 000
Funding Requirements 1 589 000 000
Short Fall 632 200 000
Source: DORA & WSDP, 2006
There is definitely a need to lobby for more MIG funding
to achieve provincial (2014) targets, as well as national
targets;
The eradication of water and sanitation backlogs can be
used to boost employment and training under EPWP,
and is a significant platform for strengthening the
construction and services industries in the district.
In order to meet national targets for water to all by 2008
and sanitation to all by 2010, the approximate cost to
eradicate the backlog is as follows;
TABLE 6: MTEF FUNDING (MIG)
R
Current MTEF Funding 450 000 000 (up to 2010)
Funding Requirements 1 589 000 000
Short Fall 1 139 000 000
Source: Amathole District Municipality, 2007
The Costs of Eliminating Water
and Sanitation backlogs
Estimates of the cost of eliminating water and sanitation
backlogs in Amathole are R602 million and R987 million
respectively. The backlogs in the rural areas (92% of
water and 87% of sanitation) overshadow the water and
sanitation challenges in the urban areas (8% water and 13%
sanitation). Mbhashe and Mnquma are clearly priorities
accounting for almost two thirds of the Amathole District
water and sanitation backlogs (64% of district water
backlogs and 65% of district sanitation backlogs)
TABLE 4: ESTIMATED WATER AND SANITATION BACKLOGS FOR AMATHOLE
Category Water Sanitation
R % R %
Mbhashe
Urban 5,362,650 3,412,620
Rural 199,714,050 224,975,700
Total 205,076,700 34.1 228,388,320 26.7
Mnquma Urban 5,759,600 41,650,050
Rural 174,041,350 286,583,625
Total 179,800,950 29.9 328,233,675 38.4
Great kei Urban 852,750 2,422,650
Rural 5,482,350 19,814,625
Total 6,335,100 1.1 22,237,275 2.6
Amahlathi Urban 9,870,300 20,131,275
Rural 58,211,700 126,765,000
Total 68,082,000 11.3 146,896,275 17.2
Ngqushwa Urban 2,571,100 6,512,325
Rural 61,963,300 90,968,625
Total 64,534,400 10.7 97,480,950 11.4
Nkonkobe Urban 12,881,000 21,732,000
Rural 54,379,050 104,601,375
Total 67,260,050 11.2 126,333,375 14.8
Nxuba Urban 9,681,300 35,902,650
Rural 429,550 1,905,750
Total 10,110,850 1.7 37,808,400 4.4
Amathole Total 601,200,050 987,378,270
Rural (tl) 554,221,350 92.2 855,614,700 86.7
Urban (tl) 46,978,700 7.8 131,763,570 13.3
Source: DHLGTA and DWAF
TABLE 7: BUCKET BACKLOGS AND ESTIMATED COSTS
BY LOCAL MUNICIPALITY
Municipality Backlogs per municipality Funding
# R million
BCM 953 8,581 m
Nkonkobe 860: 77,397 m
Great Kei 1 280 11,520m
Mnquma 963 8,664m
Nxuba 2873 25,860m
Amathole 14 583 131,243m
Source: DGLGTA and Amathole District Municipality, 2006
TABLE 8: MTEF ALLOCATION FOR ERADICATING
THE BUCKET SYSTEM IN AMATHOLE
2006/2007 2007/2008 2008/2009
5million 10 million 12 million
Eradicating the bucket system
According to the provincial Department of Housing, Local
Government and Traditional Affairs the total amount
required to eliminate the bucket system in the Amathole
District amounts to R71 million, yet the MTEF allocation
amounts to only R27 million.
The ADM reports that interventions during the fnancial
year 2006/07 have increased the amounts required to meet
the targets for eradicating the bucket system by 2008.
Mbhashe and Mnquma scored well below the provincial
and district averages with more than half of households
in Mbhashe (54%) and only slightly fewer in Mnquma
(47%) connected to the grid. These are clearly the priority
areas for targeted access to the electricity grid which
need to be taken up with Eskom
ELECTRI CI T Y
Some 20% of households in Amathole have been linked
to the electricity grid between 2001-2006 with 80% and
more of households in all areas other than Mbhashe and
Mnquma now using electricity at least for household
lighting.
TABLE 9: ENERGY SOURCES FOR LIGHTING IN THE EASTERN CAPE AND AMATHOLE FOR 2001 2006
Electricity Gas Paraffin Candles Solar & Other
Census 2001 RSS 2006 Census 2001 RSS 2006 Census 2001 RSS 2006 Census 2001 RSS 2006 Census 2001 RSS 2006
% % % % % % % % % %
Eastern Cape 49.7 67.1 0.3 0.4 23.3 14.0 25.39 18.3 0.8 0.2
Amathole 54.8 74.3 0.4 0.4 37.3 19.1 7.1 6.1 0.5 0.1
Mbhashe 15.6 53.9 0.5 0.0 55.0 25.4 27.7 20.2 1.2 0.4
Mnquma 33.5 47.1 0.4 0.0 54.6 38.3 10.6 14.4 0.9 0.2
Great Kei 71.3 79.1 0.3 0.8 23.8 20.1 4.3 0.0 0.4 0.0
Amahlathi 67.2 81.8 0.3 1.9 26.5 15.1 5.5 1.2 0.5 0.0
Buffalo City 63.3 84.2 0.5 0.3 347.0 14.9 1.9 0.5 0.3 0.0
Ngqushwa 69.1 88.5 0.2 0.7 27.6 10.4 2.7 0.4 0.4 0.0
Nkonkobe 76.7 86.1 0.2 0.2 19.9 9.1 3.0 4.6 0.3 0.0
Nxuba 80.0 91.4 0.2 0.4 15.2 5.3 3.9 2.9 0.6 0.0
Source: StatsSA, 2001 and RSS, 2006
17
Eskom Infrastructure projects for the Eastern Cape being
planned or already underway include the following:
400 kV power line being constructed from Beta substation
just outside Bloemfontein to Delphi substation just
outside of Queenstown.
3rd 132 kV power line being constructed between
Grassridge substation and Chatty substation near Port
Elizabeth
400 kV power line and substation being planned between
Posiedon substation and Dediza in the Coega IDZ
3 x new substations being constructed in the Cofimvaba
and Ngcobo areas which will assist in making more
capacity available for the Butterworth area.
4 x new substations being planned in the former Transkei
area close to the towns of Elliotdale, Willowvale, Centane
and Tsomo
The construction of a new Open Cycle Gas Turbine
(OCGT) at Coega
400 kV power line being planned between Eros substation
near Harding in KZN to Neptune just outside of East
London and further to Grassridge
Various refurbishment projects focusing on renewing
aged infrastructure are also under construction or being
planned for the future.
Nationally, Eskom is prioritizing developing increased
electricity capacity through a number of programmes.
These include:
The return to service programme (de-mothballing old
power stations)
Construction of gas turbines
Development of the Pebble Bed Modular Reactor
(PBMR)
These dont seem to have much of a bearing on the
Eastern Cape or the Amathole district in particular.
Eskoms Plans for Electrification in Amathole
According to Eskom (submission to the GDS process, 2007)
it will reach the target of universal access to electricity by
2012. It plans to electrify an additional 233,000 households
in the Eastern Cape in order to achieve this. This includes
53,700 households in Amathole at an estimated cost of
R408 million. No concrete time frames, targets and plans
have however been received.
18
Housing backlogs are currently being recalculated by the
provincial Department of Housing, Local government
and Traditional Affairs. The existing data on backlogs
given in the table below suggests that there is currently
a backlog of some 182,439 units of which the bulk are in
Buffalo City (41%). Nxuba has virtually no backlogs (0.5%)
while the remaining local municipalities have backlogs of
between 7%-13% of the district total.
TABLE 11: HOUSING BACKLOGS FOR AMATHOLE 2005
# %
Amahlathi 14662 8.0
Buffalo City 75000 41.1
Great Kei 15491 8.5
Mbhashe 21099 11.6
Mnquma 22743 12.5
Ngqushwa 19380 10.6
Nkonkobe 13064 7.2
Nxuba 1000 0.5
Total 182439 100
Source: DHLGTA, 2005
There is clearly a need to urgently finalise the process
of assessing the backlogs in each local municipality
in the district and to prepare Housing Sector Plans for
eradicating this backlog;
The eradication of current housing backlogs in the
district will have a significant impact on the construction
industry and the creation of jobs. It is thus critical that
housing sector plans are linked to strategies for ensuring
greater local content and the development of local small
businesses/contractors in this sector.
HOUSI NG
Shifts in the level of informal housing between 2001
2006 provide an indication of the extent to which the
plight of the most vulnerable has been addressed in
terms of their housing needs. Despite an overall decline
in the number of informal houses in Amathole between
2001 2006 (16.1% down to 7.3%) there are a number
of local municipalities where there has actually been
an increase in the number of informal houses. Great Kei
saw a significant increase in informal housing between
2001 2006 (8.7% to 10%) with a slight increase in
Mnquma during this period. Buffalo city still recorded the
highest level of informal housing in 2006 (16%) despite a
significant decline from 28% in 2001.
TABLE 10: LEVEL OF INFORMAL HOUSING IN AMATHOLE
AND THE EASTERN CAPE FOR 2001 2006
Informal Housing
Census 2001 RSS 2006
% %
Eastern Cape 10.9 5.7
Amathole 16.1 7.3
Mbhashe 2.3 1.4
Mnquma 9.6 9.7
Great Kei 8.7 10.1
Amahlathi 5.7 1.2
Buffalo City 28.1 16.1
Ngqushwa 3.5 2.5
Nkonkobe 3.7 0.9
Nxuba 14.9 8.4
Source: StatsSA, 2001 and RSS, 2006
19
20
TABLE 12: HOUSEHOLD ACCESS TO BASIC SERVICES
Access to
clinics
Access to
primary
schools
Access
to roads
in good
condition
Access to
ambulance
service
% % % %
Mbhashe 79.1 78.9 77.1 20.9
Mnquma 53.2 85.6 51.4 39.9
Great Kei 65 90.1 0.8 12.4
Amahlati 84.2 93.5 2.5 31.8
Buffalo City 80.3 82.3 46.3 45.1
Ngqushwa 43.6 82.9 5.7 5.4
Nkonkobe 65 80.5 6.4 21.3
Nxuba 99.1 84.2 29.9 82
Source: RSS 2006
I MPROVE PUBLI C SERVI CES
ACCESS TO CLI NI CS, SCHOOLS, ROADS
& EMERGENCY HEALTH SERVI CES
Despite low levels of household access to basic water,
sanitation and energy in the former homeland areas
of Mbhashe and Mnquma, the levels of access to other
services appears to be somewhat better;
Only Nqushwa (44%) and Mnquma (53%) reported
signifcantly less than two thirds of households with
access to clinics;
Access to primary schools was generally reported by
four ffths (80%) and more of households suggesting
widespread access in Amathole;
The levels of access to emergency health services
(ambulance) is appallingly low throughout the district
with even less that half (45%) of Bufalo City residents
reporting access to ambulance services. For the remaining
local municipalities the levels are one third and less of
households accessing ambulance services.
Source: RSS, 2006
21
These should be targeted for immediate investments in
sanitation infrastructure. Overall 50% and more of schools
in the district do not conform to basic RDP standards and
this clearly requires an immediate plan and resourcing
arrangements to address this.
SCHOOL SANI TATI ON
There are still a significant percentage of schools within
the district that have no sanitation, with the Butterworth
education district recording the largest proportion
(13%), the remaining schools in this education district
recorded between 3% - 8% of schools with no sanitation.
Source: RSS, 2006 Source: RSS, 2006
TABLE 13: SANITATION FACILITIES IN SCHOOLS FOR EDUCATION DISTRICTS IN AMATHOLE
Flush to main
sewer
Flush to septic
tank
Ventilated pit Pit Latrine Bucket System No Sanitation
% % % % % %
Butterworth 5 1 17 63 2 13
Dutywa 1 1 23 64 2 8
East London 50 13 11 19 3 3
Fort Beaufort 9 5 31 47 3 6
King Williams Town 16 4 27 45 1 7
Amathole 16 5 22 48 2 7
Eastern Cape 16 5 21 47 2 10
Source: EMIS 2005
22
According to the HSRC 2003 household survey, HIV
prevalence is generally higher in urban informal and
urban formal settlements and lower in farm and tribal
settlements. There is not a significant difference in HIV
prevalence among those working and those unemployed.
Unlike the results for South Africa as a whole, the Eastern
Cape survey shows an increasing HIV prevalence with
increasing education up to matric. The epidemic in the
province is expected to reach a peak by 2010, at about
16% of the population, before the number of new
infections even out (ECAC, 2004).
The Department of Health has embarked on a range
of prevention, care and treatment interventions. In
Amathole 10 service points are accredited for dispensing
anti-retroviral treatment, treating a total of 4168 patients
in November 2006. However, there is still a need to
accredit additional points and increase the number of
people on treatment. Increasing number of people on TB
treatment and partner treatment for people with STIs is
also a challenge.
72.3% of scholars in the province reported that they had
received HIV education, however 54% had 2 or more
partners and only 28.8% reported using condoms during
sexual intercourse (ECAC, 2004). This highlights the
importance of information, however it also highlights
how information, experiences and knowledge does not
necessarily translate into less risky behaviour on the part
of the individual.
HI V AND AI DS
Amathole District is made up of urban, peri-urban and
rural areas resulting in pockets of vulnerable groups with
high prevalence rates. Amathole District had an antenatal
prevalence rate
1
of 27.4% in 2004, up from 21.7% in 2002,
which is similar to the average for the Eastern Cape
(28.03% in 2004).
Current data on HIV is unreliable. It is however estimated
that 10% of the Eastern Cape population is HIV positive,
and 19.2% of adults (20-64 years) (ASSA 2003 Model). Very
little data exists on HIV and AIDs specifc to local and district
municipal areas. In the Eastern Cape those at greatest risk
are women who have higher HIV prevalence rates than men,
the African population is at greatest risk, and the epidemic
is growing fastest among youth (15-25 years). Young African
women are thus clearly the most vulnerable.
TABLE 14: HIV PREVALENCE IN AMATHOLE DISTRICT
2002 2003 2004
Amathole 21.7 27.1 27.4
Eastern Cape 23.6 27.1 28.03
Source: Dept of Health antenatal survey, 2004
1 Antenatal prevalence refers to the percentage of pregnant women attending public clinics who test positive for HIV.
Data is only available per district, and it is difficult to extrapolate this data for the entire population.
23
In the 2006/2007 financial year ADM has a budget for
HIV and Aids totalling R 1.2 Million. The budget has
been planned for the following programmes aimed at
enhancing coordination, information dissemination,
awareness raising and communication:
District Aids Council coordination;
HIV and Aids Magazine publication;
Capacity Building for Traditional Health Practitioners;
Supply and Distribution of Home Based Care Kits;
Health Promotion and Awareness Campaign;
Strengthening HIV and Aids Community Initiatives.
The province is developing a multisectoral plan for
scaling up and intensifying the response to HIV and
Aids. The plan will outline a set of measurable targets
for all spheres of government and other stakeholders.
The district and local municipalities should participate
in the development of this plan and integrate the goals,
objectives and targets of this plan into their IDPs from
2007. These should also include dedicated budgets. A
multi-sector response to HIV/Aids is critical, given the
currently limited impact which government programmes
are having on the epidemic.
Two major workplace surveys have been conducted in
the district. A survey by one of the automotive companies
reported a HIV prevalence rate of 9%. A random sample
of 20% of the workforce in Buffalo City reported 10.3%
prevalence rate (ECAC, 2004). In general HIV affects
large companies greater than medium and smaller ones.
Hence larger companies have been more responsive
than smaller companies.
The ADM has also undertaken two workplace surveys
amongst its staff. The first survey in June 2003 indicated
an HIV prevalence of 12%. The results of the second survey
undertaken in November 2006 have not been released
as yet. The ADM has an HIV policy for staff and an active
workplace programme, including a wellness centre and
an Employee Assistance Practitioner. Peer educators have
been trained in all departments.
Some companies like Daimler Chrysler and Johnson and
Johnson are also extending their workplace programmes
to family and community members. However sectors like
construction which are likely to contribute significantly
to economic growth in the next few years do not have
any coordinated initiatives in response to the impact of
the pandemic.
Furthermore, the road transport network does not favour
smooth flow of goods and people between neighboring
centres. An example of this is the linkage between East
London industrial heartland on the West Bank and the N2,
which winds through East London, thus mixing commuter,
tourist, freight, taxis and pedestrian traffic. Many other
examples of a poor hierarchical road system, and a
system that does not provide appropriate connections
between current users and their destinations, can be
quoted. This leads to increased travel time and costs,
increased deterioration of roads, and increased accident
risk. The solution lies in a demand management, land-use
planning including a regional transport infrastructure
framework. A significant increase in capital investment
and operational budget is required to improve the
economic and social linkages within the district.
There is a desperate need for flexible, low cost, safe and
regular public transport within municipal areas and
between the towns in the district. The poor are particularly
affected by time-consuming and costly trips, and are also
the most affected by failure of mass-transport systems
(eg: breakdowns, accidents).
ROADS & TRANSPORT
Transportation in Amathole is constrained both by
infrastructural issues and by limited access to public
transport. Despite significant investments in new roads
in the district many local communities remain trapped
in isolated and disconnected local communities often
with very poor road infrastructure. This disconnection
has significant consequences in terms of local economic
development, social development and services delivery,
most evident from the accessibility to emergency
ambulance services. Those communities reporting the
poorest road infrastructure (Butterworth and Dutywa)
also suffer the worst access to emergency services.
Although the district has an extensive network of roads,
the bulk of these roads are in poor condition some
due to increases in road freight volumes, many due to
inadequate maintenance budgets.
Currently the process of maintenance and upgrade is
severely hampered by the lack of clarity with regards
to roles and responsibilities between various roads role
players as well as the lack of dedicated funding to deal
with backlogs. The process is currently under discussion
at all levels, thus providing some hope for a resolution in
the near future.
24
6. Non-availability of traffic lights, let alone at major
intersections;
7. Unavailability of adequate public transport facilities
especially for the disabled;
8. Limited albeit improving cooperation between
public transport operators and the municipal
authorities;
9. Lack of institutional capacity at Local and district
Municipal level to manage transport planning and
implementation ;
10. Insufficient supply of taxi related infrastructure;
11. Outdated information at the taxi registrar;
12. Lack of pedestrian and non-motorised transport
facilities;,
13. More than 50% of the public transport fleet in the
district comprises of bakkies (light delivery vehicles)
which perform a major feeder role to minibus taxis,
especially in rural areas where road conditions are
poor.
14. The cost of public transport is very high for low
income earners, especially for the unemployed. A
user subsidy should be considered.
Walking is a major mode of transport in Amathole
particularly in CBD areas. However, little provision is made
for pedestrian and cycle traffic. As a result, pedestrians
face many problems due to the limited availability
of pedestrian facilities e.g. pavements, pedestrian
crossings and hawker stall which block pavements and
hamper pedestrian flow. Lack of street lighting and non
pedestrian transport utilizing pavements as dropping
and loading zones add to pedestrian problems. Lack
of pedestrian facilities, coupled with a total absence of
pedestrian behaviour education, results in a congestion
and increased risk of pedestrian injury.
Transport, whether motorised or non-motorised,
experiences many problems within the Amathole District.
These can be summarised as follows:
1. Poor conditions of roads especially rural roads and
those within urban townships result in inaccessibility
and inadequate linkages between settlements;
2. Stray animals;
3. Inadequate pedestrian signs and markings and off
loading areas especially within CBD areas;
4. Limited traffic calming measures within areas of high
accidents;
5. Low visibility of traffic officials and law enforcement;
25
There is a concentration of academic institutions in the
district, including University of Fort Hare, Walter Sisulu
University, Lovedale college, Fort Cox college, the FET
college, and a number of excellent high schools. Despite
this the skills deficit in the district mirrors the skills deficit
throughout the province.
The primary challenges facing the tertiary institutions,
many of which were previously homeland institutions,
include the following:
Institutional transformation and the integration of
multiple institutions;
Curriculum transformation through diversification and
upgrading of course offerings;
Question of access and equity;
Improvement of standards.
Despite mixed reports, processes of institutional and
curriculum transformation particularly for the universities
seem to be largely on track. However questions of access
and standards are understandably more difficult to achieve
in the short term since they include the transformation of
a broader range of factors such as income levels of poor
households, bursary access and the transformation of
secondary education.
Institutions are further challenged by the inability of students
to pay for tertiary education, as catchment areas are mainly
poor and sufer from high unemployment rates. Poor sec-
ondary education standards and language challenges also
impact on the institutions. University of Fort Hare has em-
barked on the innovative Incoko programme to re-imagine
the university and its place in the province. The programme
is looking at curriculum renewal, language education, peda-
gogy and improved relationships between academic staf,
students and the community around the university.
SKI LLS UPGRADI NG
Most working people (29 %), in the Amathole District
have either elementary skills or are unskilled workers
(Amathole District Report, 2006). According to this
report, only 4 % of Amatholes working people fall into
the skilled category. Craft and trade (14%) are significant
fields of occupation in the Amathole District, followed by
a proportion of technical skills and professionals and a
significant number of people in service oriented areas
of work. However, these figures do not include people
who are experienced in specific areas, such as farming or
artisan skills
The literacy rate in Amathole is higher than that for the
province and has improved between 1996 - 2005. The
highest levels of literacy are found in Buffalo City (77%)
with the other areas significantly lower. The lowest literacy
levels in the district are recorded in Mbhashe (48%) and
Great Kei (50%).
TABLE 15: FUNCTIONAL LITERACY: AGE 20+,
COMPLETED GRADE 7 OR HIGHER
1996 2005
% %
Eastern Cape 57.40 65.80
Amathole 60.60 69.00
Mbhashe 38.30 47.60
Mnquma 56.90 66.10
Great Kei 40.90 49.60
Amahlathi 53.50 63.10
Buffalo City 69.50 76.60
Ngqushwa 48.20 58.30
Nkonkobe 58.40 67.90
Nxuba 54.70 63.70
Source: Global Insight, 2006
26
Innovative initiatives by the universities include the
planned Technopark in East London, where Fort Hare
and Walter Sisulu Universities are planning to establish a
Technopark linked to the East London IDZ for engineering
etc. The Agri- park at Fort Hare together with the Nguni
cattle project need to be developed into models which
can be replicated and which can maximize access.
The ADM itself lacks sufficient and requisite skills to
achieve its targets which can be addressed through
partnership initiatives with amongst others DPLG,
DBSA, ADM and provincial government. There is a need
to develop a District Skills Plan that is premised on the
basis of universal access to quality education at all levels
from pre-primary to primary, to secondary and tertiary
education.
Development and the ability of the economy to
provide job opportunities is strongly correlated to the
availability of suitably educated and skilled workforce,
hence it is critical that the local educational institutions
should deliver appropriate and high quality education.
There is therefore a need for a rigorous and collective
implementation of the provincial skills development plan.
The plan needs to be championed and implemented
with the highest possible political buy-in, and must be
supported by appropriate budgets. There should be
enhanced interaction among SETAs, Department of
Labour, academic institutions, FETs etc to strengthen
synergies that arise with respect to training provision,
learnerships, apprenticeships, and internships, and
ongoing facilitation by provincial government is crucial.
There should also be mechanisms for monitoring and
assessment of interventions so as to constantly keep up
with demands of industry, to discard initiatives that are
not working and implement new ones, and to ensure
that government and public entity training budgets are
fully spent, and are spent according to priorities identified
in the provincial skills development plan. However,
attention must also be paid to methodology, pedagogy
and content of courses, as millions of rands have been
spent on training that have yielded little result.
There is a clear need to forge a consensus between all
key stakeholders to address skills deficiencies, as even
some of the most basic skills are lacking in the district. It
is also important to investigate intra-district geographical
mismatches between the supply and demand for
skills. The involvement of the private sector in course
development and skills development planning is critical
to address the mismatch between the type of graduates
produced and those required, and also to establish the
quality and performance requirements to be met.
27
28
CREATE J OBS &
LI VELI HOOD OPPORTUNI TI ES
STRUCTURE OF THE
DI STRI CT ECONOMY
From the graph below, it can be seen that the Amathole
District economy is dominated by the community
services sector with manufacturing only marginally larger
than the trade and finance sectors. The structure of the
economy has remained static between the period 1996-
2005, although the trade and finance sectors reported
the largest individual growth rates over this period.
0
1 000 000
2 000 000
3 000 000
4 000 000
5 000 000
Agriculture
446 038
405 942
Mining
52 262
31 488
Manufacturing
2 920 919
2 785 581
Electricity
160 823
172 356
Construction
522 152
415 575
Trade
2 847 863
2 198 667
Transport
1 356 953
932 239
Finance
2 676 057
1 897 066
Community
Services
5 665 146
5 220 237
Year
2005
1996
G VA - R F O R AMAT HO L E 1 9 9 6 - 2 0 0 5 ( C O NS TA NT P R I C E S )
Source: Global Insight, 2006
29
PRI ORI T Y ECONOMI C
SECTORS I N AMATHOLE
In the context of the very high unemployment and
poverty rates mentioned above, there is clearly an urgent
need for new investments to create jobs and improve
livelihoods in the Amathole District. Based on existing
economic activity, market opportunities and present
resource/assets/skill bases the particular industries
offering potential include:
Livestock farming;
Irrigated horticulture;
Forestry;
Manufacturing;
Construction;
Trade and Business Services/ICT;
Tourism.
Each of these industries requires a detailed Action Plan,
specifying investments to be packaged, timelines and
milestones, stakeholders and responsibilities. Preparatory
work has already taken place for all these industries in the
Amathole District, and the main challenge is to galvanise
industry role-players to ensure accelerated and shared
growth, and good quality investments.
It is notable that only 16% of the districts working age
population have matric or above. This points to the
critical importance of education and training to future
employment growth.
Each of the seven industries listed above is briefly profiled
in the following sections:
UNEMPLOYMENT &
HOUSEHOLD I NCOME
With no official data on employment at the sub provincial
levels, the approximations used by Global Insight (2006)
are presented below. The RSS 2006 survey gives an
indication of the proportion of households earning an
income of less than R1500 per month.
According to Global Insight, unemployment has increased
between 1996 2005 in all areas. Buffalo city has the
lowest level of unemployment (45%) while Ngqushwa
(77%), Mbhashe (76%), Nkonkobe (66%) and Mnquma
(65%) report the highest levels. Apart from Buffalo City
(55%) and Nxuba (62%) the remaining areas report two
thirds and more of households who earn less than R1500
per month. This is a clear reflection of the currently
limited local economic activities and livelihood options
within these areas.
TABLE 16: UNEMPLOYMENT & HH INCOME
FOR THE EASTERN CAPE AND AMATHOLDE DISTRICT
Unemployment Rate
(expanded definition)
HH Income
less than
R1 500/month 1996 2005
% % %
Eastern Cape 48.4 53.5 65.2
Amathole 47.8 52.7 67.0
Mbhashe 72.9 75.8 71.6
Mnquma 61.2 65.4 76.0
Great Kei 287.7 38.2 76.0
Amahlathi 50.8 59.4 73.5
Buffalo City 39.9 44.8 55.0
Ngqushwa 70.0 76.5 66.8
Nkonkobe 62.1 65.9 77.8
Nxuba 44.1 57.4 61.8
Source: Global Insight, 2006
30
Agricultures competitive advantage in the district is
enhanced by:
Proximity to markets;
Product diversity (across agro-ecological zones);
Business services/ICT/logistics network.
Livestock farming
Animals and animal products are the dominant farming
activity in the District, accounting for 72% of agriculture
value added. There is potential to improve livelihoods
from livestock in the former Bantustans through livestock
improvement programmes (marketing, branding,
genetic improvement etc). There is scope for improved
co-operation between communal livestock farmers,
commercial farmers, Provincial Department of Agriculture
and Municipalities in this regard.
TABLE 17: OPPORTUNITIES FOR AGRICULTURE IN AMATHOLE
Enterprise Product Potential Exists In Local
Municipal.
Management
& Technical
Enterprise
Employment
Creation
(Jobs)
Processing
Infrastructure
Required
Markets Market Potential
Sheep (Extensive) Mutton Wool Nxuba,Nkonkobe,Amahlathi,
Mbhashe Mnquma
Medium 1/100ha Existing agents &
Abattoirs
Local (mutton)
Export (wool)
Good
Beef (Extensive) Beef Mbhashe, Mnquma, Great Kei,
Buffalo City, Nkonkobe, Nxuba,
Amahlati, Ngqushwa
Medium 0.8/100ha Existing agents &
Abattoirs
Local Good
Dairy (Irrigated) Fresh Milk Buffalo City, Great Kei, Ngqushwa High 1/35 cows No Local Good (seasonal surpluses)
Boergoats
(Extensive)
Meat Nxuba, Nkonkobe Low 1.2/100ha Existing agents &
Abattoirs
Local Good
Game Hunting, Live
game, Tourism
Nxuba, G. Kei, Nkonkobe,
Ngqushwa, Amahlati
Medium 0.3/100ha No National Export Good (Forex related)
Poultry Broilers Buffalo City, Amahlathi, Great
Kei, Mnquma, Mbhashe
Very High 1/2000 birds Abattoir Local Good
Poultry Eggs Buffalo City, Amahlathi, Great
Kei, Mnquma, Mbhashe
High 1/5000 birds Packaging Local Good
Field Crop Maize Grain Mnquma,Mbhashe Amahlati Low 8/100ha Existing Milling Local Good
Field Crop Dry Bean Dry Sugar
Beans
Mnquma,Mbhashe Amahlati Low 8/100ha Packaging Local Good
Vegetables
(Open irrigated)
Vegetables All (Isolated areas) Medium 2/ha No Local Good (Limited & seasonal
Hydroponic
Production(Tunnels)
Tomatoes Buffalo City, Great Kei,
Mbhashe,Mnquma Ngqushwa
Very High 12/ha Packaging
Existing (EL)
Local
National
Good (Limited Local)
Citrus Fresh fruit Nkonkobe, Ngqushwa, Great Kei,
Amahlati
High 0.8/ha Pack shed Local
Export
Medium
(Quality & Forex related)
Pineapples Fruit for
canning
Buffalo City, Ngqushwa, Great
Kei, Mnquma
Medium Existing
(East London)
Export Medium (Forex related)
Source: ADM Agricultural Materplan
31
than for dryland cropping as irrigated horticulture is
both capital and skills intensive. The growth of the sub
sector will clearly require bankable projects, experienced
management and thorough training. The profitability
and marketability of this sub sector is demonstrated by
the very rapid expansion of tomato tunnels in Buffalo
City in recent years. The district contains nine irrigation
schemes of the former Bantustan governments (including
Keiskammahoek, Tyefu and Kat River Irrigation Schemes).
These schemes are being rehabilitated and cover 2215
hectares, and 1000 smallholders (2.2 ha per smallholder).
In addition there are 276 private irrigation schemes with
21ha per farmer.
Irrigated horticulture and field crops
Horticulture accounts for 21% of the value added of
the districts agricultural sector, and is the second
most important agricultural subsector (after livestock).
Horticulture is concentrated in the well-watered coastal
belt and in the valleys of the districts many rivers.
Important crops include vegetables (tomatoes and
cabbages), citrus, pineapples and subtropical fruits. Other
possible high-value crops are listed in the table below.
Income from horticulture in 2002, per hectare, was
twelve times that of field crops, even though the areas
under field and hortcultural crops were very similar.
However, costs for horticulture are also much higher
Source: DoA
Broadscale Agricultural Potential
32
increase food production from homestead and other
(schools, clinics etc) gardens. Municpalities need to work
with the Provincial Department and commercial farmers
to increase the impact of these programmes.
The district should also participate in the AsgiSA driven
bio-fuels programme which offers significant potential
for including marginal and underdeveloped areas and
communities into the agriculture and agro-processing
sectors.
Field cropping potential in the district is limited due to
shallow and erodible soils and low rainfalls in the inland
areas in the western half of the district. 1999 estimates
were that 50% of the area suitable for field crops was
under cultivation. Dryland field crops (mainly maize)
accounts for only 5.3% of the districts agriculture value
added. This is being supported in the communal areas
by PGDPs Massive Food Programme, driven by the
Provincial Department of Agriculture. In addition the
Department is driving the Siyazondla Programme to
TABLE 18: POSSIBLE HIGH VALUE CROPS
Local Municipality Area Limitations Possible High Value Enterprises
According to Agro-ecological Climates
Nqgushwa, Buffalo City, Great Kei, Mnquma, Mbhashe Coastal Areas Soils are poor other than dolerite outcrops Avocado, Chicory, Coffee Arabica
Garlic, Macadamia Nuts, Peppers
Nkonkobe, Ngqushwa, Buffalo City, Great Kei
Mnquma, Mbhashe, Amahlati
Valley bushveld Steep slopes, limited areas along the river
access to Eskom & sufficient Water
irrigation
Chicory, Citrus Coffee Arabica, Paprika
Nkonkobe, Ngqushwa, Buffalo City
Great Kei, Mnquma, Mbhashe, Amahlati
Thornveld areas Veld, poor, water irrigation Chicory, Coffee Arabica, Garlic
Amahlati, Nxuba High lying high rainfall areas Harsh winters Apples, Cherries, Walnuts
Amahlati, Mnquma, Mbhashe Sourveld Poor soils except dolerite outcrops Chicory, Garlic,
Pyrethrum as cut flowers & essential oils
Source: ADM Agricultural Masterplan Analysis Report
Source: ARC, 2004
33
exploited in a very small way in furniture manufacturing in
Nxuba) and pine for construction, mass market furniture,
and processed wood products such as chipboard from
commercial forests.
Where forests are not suitable for commercial exploitation,
they have huge potential benefit in resources for
traditional and alternative medicines, and for tourism.
This sub sector will be supported by an AsgiSA Forestry
intervention programme.
Forestry
Forestry activity in the district presently exists in three
local municipal areas which include Amahlathi, Mnquma
and Mbhashe (refer to the map). Although the forestry
areas are limited, there is neverthless scope to increase
the areas under forestry, particularly in communal areas.
The nature fo the forests in the Amathole mountain areas,
includeboth commercial pine and indigenous forests.
Constraints to the development of this sector lie in the
slow pace of land and forestry sector reform processes,
the limited size of the available resource, and the lack
of skills and investment for beneficiation. Nevertheless,
there may be opportunities for low volume, high end
furniture production from indigenous forest already
Source: NSBA, 2004
34
telecommunications infrastructure capacity and
technology upgrade to allow for a wi-fi network in
East London (at least);
electricity supply stabilization, possibly through
development of local generation capacity using
alternative energy technologies.
The IDZ must succeed in its mandate to attract
manufacturing investment. The activities of the IDZ must
be supported and complemented by other agencies,
such as the Municipality, ECDC, SEDA etc;
Improvement of communication, feedback and
monitoring between enterprise and government
such that there is effective problem-identification and
problem-solving by all stakeholders in manufacturing
industry expansion (and also in all other job creating
sectors and sub sectors);
Improvement in the investment climate through the
reduction of red tape, improved marketing, reduction
in the cost of doing business and other issues which
increase the cost and complexity fo dong business;
Support to manufacturing in development and
implementation of BBBEE models
Employment-related education and training alignment
with the needs of local industry addressed at City/district
level (with all SETAs).
Manufacturing
The manufacturing sector is the second most important
sector of the district economy in terms of employment.
Ninety per cent of the district manufacturing employment
is located in Buffalo City. While all manufacturing sub
sectors are present, the leading subsectors are automotive,
food processing and clothing, with automotive being
the growth sector, on the basis of the expansion of
DaimlerChrysler and its suppliers and the MIDP.
The sector has been through a period of consolidation
following the withdrawal of subsidies to the former
homeland industries. The sector is particularly sensitive to
the type of exchange fluctuation that took place from 2001
to 2003. However, the resulting decline in employment
and size of the sector should not be interpreted as a sign
of a sector that cannot be grown. On the contrary, there
is potential to become a net jobs creator and to become
the economic engine of the district. The requirements for
increasing the competitiveness of this sector include:
Infrastructure investment including
local infrastructure that impacts on production and
distribution of goods;
Infrastructure connecting the city to the rest of the
world, particularly the upgrading of the Port of East
London (see section on infrastructure below);
infrastructure linking the city to the national
economy, including the upgrading of the rail to
Gauteng to allow the transportation of vehicles,
the upgrading of the R72 to cope with high freight
volumes and the development of a high-speed
freight link to the Port of Durban;
35
the competitive advantage of the city and the district,
namely the lifestyle and environment;
the future cost of running the city services.
Trade and Business Services/ICT
In the modern world linkages are not only a function
of good transport infrastructure, but of high speed, low
cost and latest technology telecommunications and
e-communications. Ensuring e-connectivity for the
district, including rural areas, will open up opportunities
for commercial information flows, non-cash banking and
commerce, co-ordination and targeting of tertiary service
provision (including health, education and government
services), logistics improvement, improvement in rural
security, and a multitude of other issues which increase
competitiveness. Amathole has an advantage in its
service backlog because new infrastructure can be of
the latest technologies, without requiring write-off of
obsolete technologies.
Improved transport and telecoms / e-communication
infrastructure will increase the viability of decentralized
production (eg: agriculture and agro-processing),
promoting spatial development and economic integration
between the rural areas, small towns and the city.
Employment in this sector could also be boosted by new
investment in Business Process Outsourcing and call
centres. District agencies need to work with AsgiSA to
ensure that this takes place. ICT services support profitable
business/co-operative growth in all other sectors. The
primary challenge for the tertiary sector in the district is
the current lack of suitably located land for development
of service areas, lack of business accommodation and
telecoms / IT support.
Construction
Formal sector employment in the district is low, accounting
for only 3.4% of all formal/regular jobs. Contract
employment can boost this fgure signifcantly. This
sector is likely to become a net jobs creator on the basis of
both increasing fscal allocations for public infrastructure
investment (water, sanitation, housing, roads, schools
etc) and increased private property development (retail,
residential, tourism and industrial developments etc). The
primary challenges for this sector are:
the availability of sufficient capacity and competence
locally to absorb government tenders and the dramatic
increase in home building activities;
The shortage of suitable construction materials.
The focus for this sector must therefore be local capacity
building initiatives, and support to resource investigation
at a regional level.
The employment impact of increasing public
infrastructure spending will be optimized by the
thorough implementation of EPWP. A district-level EPWP
plan (together with monitoring and evaluation capacity)
is required.
New property development is presently most buoyant
in Buffalo City. However the City could perhaps be more
proactive in developing and catalyzing a major property
development project pipeline, and a (financially-enabled)
construction sector boom. There may be some lessons
from the NMMM whch the Buffalo City Development
Agency could explore. Proper land-use planning, release
of unutilized government land and setting of appropriate
standards for development are critical to ensure an
enabling environment and to minimize developments
that have a negative impact on:
Municipalities can play an important role in tourism
development through, for example, supporting local
tourism organizations, improving signage, upgrading
access/information to important heritage sites and town
beautification.
Currently most IDPs in the district identify the tourism
sector as one with significant potential. However,
projects are often not optimally planned, co-coordinated
nor given sufficient priority in budget allocations. One of
the reasons for this is the absence of strategic planning
in tourism, particularly at the local municipal level.
The development of a District Tourism Master Plan is
critical to ensure that local municipalities can link into
a coordinated vision and action agenda for the tourism
sector in the /district. Such a master plan will also provide
the basis for ensuring district co-ordination of:
Branding and marketing;
Accommodation supply;
Spatial clustering of tourism initiatives based on district
nodes (defined according to assessment of tourism
experiences, local competitive advantages and tourism
infrastructure).
Critical to expanding the tourism sector in the district will
be to ensure greater air transport access particularly for
foreign tourists. The R64.3 million that has been allocated
to upgrading the Bhisho airport is critical in this regard.
Tourism
In the absence of reliable statistics, it is nonetheless
evident that tourism in the district has grown considerably
over the last decade and now accounts for a significant
portion of district value-added and employment, perhaps
as much as 10% district value-added and 20,000 existing
jobs/incomes.
New tourist facilities, such as B&Bs, backpackers and
game farms have sprung up in many parts of the district.
The district is fortunate in having a diversity of attractions
in relatively close proximity to each other, that bring back
tourists, time & again:
Wild Coast;
East London/Buffalo City
(vibey small city, full of contrasts);
Sunshine Coast;
Heritage sites (all over; interesting for enthusiasts);
Amathole Mountains Escape Route;
Friendly N6;
Nature reserves, some of which have potential for
increased commcercialisation. These include Doubledrift,
Dwesa-Cwebe, Mpofu and Fort Fordyce.
Access to the district is provided by East London Airport
and the N2 and N6, & the attractions are all-season
traveling, close-by each other. This is an added advantage
for local tourism in terms of safety and transport costs
as well as being conducive for promoting the districts
infant film industry.
The PGDP project, the Wild Coast Meander, should
become a major attraction, with consequent livelihood
opportunities.
36
In addition, there are BDS facilitators who support BDS
providers by, for example, developing new services,
promoting good practice, building service capacity and
building market awareness amongst small enterprises.
BDS facilitators are development-oriented institutions
whose objective is BDS market development and typically
include non-government organisations, industry and
employer associations, local government agencies and
others.
The ADM needs to strengthen its involvement in
supporting the BDS market, facilitating greater
entrepreneurship growth and development. The ADM
should provide funding and can play a role in facilitating
and strengthening BDS. In the case of local government
the key additional role is to provide the enabling policy,
legal and regulatory environment within which BDS
markets can flourish.
BUSI NESS DEVELOPMENT SERVI CES
The Amathole District Municipality should strengthen
partnerships with the Small Enterprise Development
Agency (SEDA), the ECDC and with other development
agencies in the delivery of non-financial support to
SMMEs. A well-advertised and adequately resourced
one-stop business development centre should be
established in each major centre of the district to promote
entrepreneurship. As a minimum, the following products
and services should be offered at these centres:
Information, advice and referrals;
Business registration;
Business plans;
Tender Information and advice;
Import and Export training;
Trade Information;
Business assessment and technical support;
Business mentoring; and
Market access and business linkages.
Small enterprises constitute the demand side of the
market for BDS. They include micro, small and medium
enterprises that are primarily profit-oriented. BDS
providers constitute the supply side of the BDS market.
They are individuals, private commercial firms, and other
agencies providing services to small enterprises.

38
the requisite jobs needed to halve unemployment by
2014. The current number of formal sector jobs in the
district is approximately 194,000 (75% of employment),
with a further estimated 63,000 (25% of employment)
informal jobs. According to the expanded definition of
unemployment, a further 330,000 people would like to
be employed. To reduce unemployment by 50% by 2014
therefore requires 160,000 new jobs.
To assess the potential for specifc sectors to contribute
to job creation requires an assessment of the existing
sectoral contribution to jobs, the cost of creating jobs in
the sector and the potential for development of the sector.
The table below shows the current and potential areas of
job creation, with a short summary of the interventions
and investments required to achieve these targets.
THE CHALLENGE OF JOBS CREATI ON
The estimates for Job creation targets in this section
are based on AEDA projections using mainly Global
Insight (2005) data. It must be noted that the Global
Insight data is based on projections and estimates of
formal and informal sector employment. As such the
overall projections presented below must be viewed
with caution since they are extremely rough estimates.
There is currently no official employment data for the
sub-provincial level (district and local municipalities)
forcing economic planners to use sources such as Global
Insight.
The diversity of the Amathole economy and the range
and depth of the socio-economic challenges in the
district, mean that there is no single sector of focus, no
magic bullet that can transform the economy and create
TABLE 19: CURRENT EMPLOYMENT BY SECTOR IN AMATHOLE, ESTIMATES OF TARGETS
AND ANTICIPATED INTERVENTIONS AND INVESTMENTS REQUIRED TO MEET TARGETS
Sector Current job numbers Possible target Required interventions and investments
Manufacturing 29,400 (15%) 14700 (50% increase, 9% of
required increase)
Port expansion, upgrading of rail link to Gauteng, upgrading of R72 and R63,
High speed rail link to Mthatha, High speed e-connectivity, Improved technical
skills, Stable electricity supply, Reduced red tape, Improvement of human
capital/social conditions.
Agriculture and agro-processing 14,500 (7.5%) 14,500 (100% increase, 9% of
required increase)
Improved road and rail linkages (R63, R72, N2), Commercial production on
communal land, Settling of land claims such that production is maintained,
Investment capital, Skills development and retention, Security improvement,
Improvement in competitiveness and linkages to markets, Investment in agro-
processing facilities
Tourism 6,800 (estimated direct
employment 3,5% of district
employment)
6,800 (100% increase, 4% of
required increase)
Investment in locality development and tourist facilities, Packaging of
tourist products, Reduction in travel and accommodation costs, Increase in
competitiveness with KZN, overseas localities, Increase in foreign and leisure
tourists, Quality and service improvements, Sector collaboration and co-
ordination, Investment in facilities and systems for sports tourism.
Tertiary and service sector
(excluding government)
45,800 9,000 (20% increase, 5,6% of
target)
Land release for development of commercial property, Improved telecoms
and e-commerce facilities, Improved distribution infrastructure and logistics,
Improved service and product range.
39
It should be noted that the table above does not include
all indirect and induced labour creation effects. These
are the multiplier effects that are derived because more
people in the economy are able to purchase housing,
vehicles, other goods and services. This multiplier, which
varies from sector to sector, can have a significant effect
on creating additional growth and employment. While
no modelling has been done for Amathole specifically,
models of the national economy indicate that an
estimate of 120,000 jobs can be derived from investment
in production of this order.
In short, while positioning the district for jobs creation
requires massive investments, the resultant impact could
be significant in terms of employment creation.
From the table above it is clear that job creation in
the district will require extensive public investment in
people and infrastructure, as well as improved private
sector competitiveness. The latter is crucial to growth, as
improvement in the locality and the human capital, while
necessary, is not a sufficient condition for growth.
From the target of 160,000 jobs by 2014, and the current
194,000 jobs in the district, it is clear that GGP for the
district would need to be increased by 80%, or R13 billion
(at constant 2000 prices), to create these jobs. This would
imply an investment of close on R40 billion in production
capacity, and probably a similar amount in infrastructure
and human capital. Even assuming that this massive
public and private investment can be achieved then, the
number of direct jobs which can reasonably be created is
insufficient to meet the target of halving unemployment
by 2014.
Sector Current job numbers Possible target Required interventions and investments
Health 17,600 3,500 (20% increase, 2% of
target)
Additional healthcare facilities, Improved range and cost of products, Attraction
and retention of skills, Increased efficiency of government health programmes.
Education 30,700 6,000 (20% increase, 3,8% of
target)
Expansion of range of courses, Quality improvement, Improved student non-
academic facilities.
General government 20,900 No increase
Other sectors 7,300 1,400 (20% increase, 0,8% of
target)
Improved service standards, Improvement in infrastructure, Skills improvement,
Security increase, Improved e-commerce facilities.
Household (Note: this sector
is not a priority sector, but is
included due to the significant
employment it represents.
Increases are anticipated
growth and interventions are
defensive measures in a sector
where employment is extremely
vulnerable)
21,000 2,000 (10% anticipated increase,
1,2% of total)
Improvement in status of domestic service providers, Increased
commercialisation/co-operative development of domestic services,
Improvement in quality, range, convenience and cost of domestic services,
Linking of domestic service to skills improvement programmes (as in EPWP).
Totals 194,000 57,900 (3% increase in jobs,
36% of target)
Source: AEDA projections based on Global Insight, 2005
40
BUI LD & MAI NTAI N I NFRASTRUCTURE
Provincial Department of Education
Education is a key element of social and economic
development. The Provincial Department of Education
has planned and budgeted close to R765m on education
infrastructure in the Amathole District over the current
medium term expenditure cycle (06/07 08/09);
The Provincial Department is spending R165m in 06/07,
R250m in 07/08 and over R349m in 08/09, representing
slightly above 27% of total departmental education
infrastructure investment over the current medium term
cycle;
The bulk of the spending is targeted at rehabilitation
and upgrading (R430m), with recurrent maintenance
budgeted at R113m, emphasizing a focus on improving
the quality of the education infrastructure. Up to 217
schools and FET institutions have been targeted in the
district for this upgrade through provincial government
funding, involving the eradication of mud-structures
and general routine maintenance of existing concrete-
structures. Therefore a shift towards quality as opposed
to quantity (quantity has been the norm for previous
medium term expenditure cycles);
These upgrading and maintenance amounts are crucial
in two respects, 1) by maintaining and protecting
existing assets thereby ensuring returns well into the
future, and 2) direct and indirect cash injections boost
local economies, as routine maintenance activities are
generally labour-intensive;
A total of approximately R222m over the medium term
is budgeted for New Construction of two public special
schools in King Williams Town Fundisa Special School
and Special Youth Reform Centre;
Provincial government education infrastructure spending
per capita in the Amathole District over the three year
period, in total, is R402 per person.
Infrastructure development is clearly a critical factor in a
localitys economic competitiveness as well as the quality
of life of residents of that area. As such infrastructure and
infrastructure-related services need to be prioritized in
any growth and development strategy for Amathole. This
section of the district profile attempts to summarise the
physical infrastructure development plans that have been
planned and/or budgeted for over the medium term that
are likely to contribute to a more enabling social and
economic environment in the Amathole District.
Like all other regions in the province, Amathole District
suffers from acute backlogs in social and economic
infrastructure. The vast natural resources that exist within
the district, if linked with the development of appropriate
social and economic infrastructure could clearly provide
the basis unlocking the growth and development
potential of the district. These infrastructure programmes
must however be well-planned, prioritized, strategic and
be accompanied by appropriate investments if these
development goals are to be realized.
PROVI NCI AL DEPARTMENT
I NFRASTRUCTURE EXPENDI TURE
PLANS FROM 06/07 08/09 I N THE
AMATHOLE DI STRI CT MUNI CI PALI T Y
The total infrastructure spend directed towards the
Amathole District by the Eastern Cape provincial
government departments amounts to a whopping total
of approximately R2.5bn over the current medium term
expenditure cycle. This represents significant public
sector infrastructure investment that will hopefully crowd
in private investment.
41
Over the current medium term period (06/07 08/09),
the Provincial Department of Agriculture will spend
approximately R52m on infrastructure in the Amathole
District, representing 26% of the total infrastructure
spend (R200m over the medium term) by the provincial
department in the district;
The allocation rises from R16m in 06/07 to R18.5m in
07/08 and then down to R17.5m in 08/09 and is targeted
largely at irrigation systems (R38m), and then fencing,
storage and shearing sheds, tunnels, dip-tanks, and soil
conservation works (R14m) over the three year cycle;
The Provincial Agriculture infrastructure spend per
capita amounts to approximately R27 per person in the
Amathole District.
Provincial Department of Public Works
The Amathole District is set to receive up to R75m from
the Provincial Department of Public Works;
This amount represents about 17% of the total provincial
allocation to all districts and the Metro;
The per capita spending on public works amounts to R39
per person;
It is not clear what projects the budgeted money will be
spend on.
Provincial Department of Health
The provincial health department has planned and
budgeted for a total health infrastructure spending of
R440m in the current medium term expenditure cycle
for the Amathole District rising from R100m in 06/07 to
R155m in 07/08, and further rising to R185m in 08/09;
This provincial health infrastructure expenditure in
Amathole amounts to approximately 20% of total health
infrastructure spending by the provincial government
over the medium term cycle;
The allocation to the district is divided into new
construction (R90m) for the revitalization of 20 clinics and
3 hospitals, rehabilitation and upgrading (R257m), and
routine and recurrent maintenance (R93m). Rehabilitation
and upgrading will involve 16 clinic revamps and 6
hospital revitalizations within the district;
The allocation for new construction will target 18 clinics
and 6 hospitals. These large allocations to relatively few
health institutions in the district suggests a strategic shift
to focus more on improving the quality of health services,
as opposed to improving access to health services. So the
issue is one of quality, not necessarily access;
The provincial health infrastructure spending per capita
in the Amathole District over the medium term amounts
to an approximate R232 per person.
Provincial Department of Agriculture
The Amathole District has quite significant untapped
agriculture, forestry and water resources, and these
resources are at the heart of any sustainable growth
potential and economic activity in the district;
Given this existing natural resource base, the Provincial
Department of Agriculture plays an important catalyst
role in promoting subsistence farming (food security)
and small and large scale commercial agriculture;
42
Peddie to Bira Amathole
Municipalities
Ngqushwa
Municipality
Surfaced road
25 km
Cintsa East Bridge Buffalo City
Municipality
Buffalo City Bridge
East Coast Resorts Buffalo City
Municipality
Buffalo City Surfaced road
25 km
Source: Department of Roads & Transport
Some of the other spending on road infrastructure
in Amathole by the Provincial Department will be
on recurrent and routine maintenance (including
the Vukuzakhe labour-intensive road maintenance
programme) of R288m.
Provincial Department of Sport,
Recreation, Arts and Culture
The total Provincial Department allocation to Amathole
amounts to just under R33m over the current medium
term expenditure cycle;
The Amathole District is set to receive R7.3m in the 06/07
financial year for 1) Butterworth Library (R1.3m), 2) Bhisho
stadium (R1m), and 3) a Sports Academy in Buffalo City
(R5m). An amount of R11.5m is allocated for 07/08 for the
continuation of the Bhisho Stadium renovations (R2m),
the continuation of the Buffalo City Sports Academy
(R5m), as well as an allocation of R2.5m and R2m for
the Keiskammhoek Cultural Centre and the Butterworth
Swimming pool, respectively. Finally, in 08/09, an amount
of R14m is allocated for the completion of the Buffalo
City Sports Academy (R10m), and R4m for the Umtiza
Campsite in Buffalo City;
The Amathole allocation of the Departments infrastructure
budget represents 42% of total departmental infrastructure
spending throughout the province;
The infrastructure per capita spending for the
department in the district amounts to R18 per person of
the infrastructure spend.
Provincial Department of Roads and Transport
Another key element of required infrastructure
development in the district is the road network. The
Amathole District suffers from quite significant road and
rail infrastructure backlogs given the rural character of
large parts of the district;
In light of these backlogs, and recognising the key
enabling role that transport infrastructure has for
economic and social development, the provincial roads
and transport department has allocated approximately
R1.1bn to road and rail infrastructure in the Amathole
District area, declining from over R400m in 06/07 to
R392m in 07/08 and then a drop to just under R352m in
08/09;
This total allocation over the medium term represents
approximately 22% of the total provincial allocation
towards road infrastructure, and represents a per capita
spend of R579 per person in total over the medium term
expenditure framework;
The Kei Rail project accounts for R334m this amount
is spent jointly between OR Tambo and Amathole; The
major transport projects envisaged in Amathole, besides
the Kei Rail, are listed below (R485m):
TABLE 20: AMATHOLE TRANSPORT PROJECTS
Mdantsane Urban Renewal
Programme: Uprading of
internal streets
Amathole
Municipalities
Buffalo City Upgrading of
existing gravel roads
to surfaced standard
N2 To Kei Mouth Road Amathole
Municipalities
Great Kei Surfaced road
43 km
Adelaide to Fort Beaufort Amathole
Municipalities
Nkonkobe Surfaced road
36 km
Idutywa to Engcobo
(Section 1-Gibb)
Amathole
Municipalities
Mbhashe Surfaced road
30 km
Middledrift to Alice Amathole
Municipalities
Nkonkobe Surfaced road
23 km
Alice to Fort Beaufort Amathole
Municipalities
Nkonkobe Surfaced road
25 km
Dimbaza to Middledrift Amathole
Municipalities
Nkonkobe Surfaced road
23 km
43
It is necessary, but not sufficient, to just build new
infrastructure. Maintenance of existing infrastructure
needs to also be prioritised. Currently, maintenance of
the Departments immoveable assets is poor inevitably
leading to rapid deterioration of buildings and other
assets. Maintenance funds have always been, and may
probably remain limited. Much of the limitations with
respect to maintenance can be attributed to poor
levels of definition with respect to the responsibility for
maintenance budgeting;
The distinction between levels of responsibility between
Public Works and User departments as reflected by
the infrastructure plans will go a long way towards
regularizing maintenance planning;
Finally, it is commendable that a paradigm shift is evident
through the infrastructure allocations, with the focus on
the quality of infrastructure and services, as opposed
simply to the quantity, especially in education and health.
The District Infrastructure Plans
The Amathole Infrastructure budget over the MTEF
amounts to R71.6m.
TABLE 21: AMATHOLE DISTRICT
INFRASTRUCTURE INVESMENTS OVER THE MTEF
2006/2007 2007/2008 2008/2009
14 717 000 33 975 000 22 950 000
Source: Amathole District Municipality, 2006
Provincial Department of Social Development
The provincial department has allocated almost R19m in
infrastructure spending over the current medium term
expenditure cycle to the Amathole District.
The expenditure is targeted at, 1) the Bedford Service
Centre (R2m), 2) Peddie Community Development Centre
(R1.2m), 3) the Dutywa Multi-purpose Centre (R4.5m), 4)
Butterworth Old Age Home (R6.6m), and 5) Service Offices
in Middledrift, Butterworth, Alice, and Khalethemba at a
total cost of R4.1m.
A further R0.3m is allocated for maintenance and upgrade
of parkhomes, and routine maintenance of existing social
development infrastructure.
The total infrastructure spending in Amathole represents
30% of total Social Development infrastructure spending
in the province.
The social development infrastructure per capita
spending over the medium term is approximately R10
per person.
Provincial Government Infrastructure
Expenditures: Conclusions
These significant provincial infrastructure expenditure
plans in the ADM will provide a meaningful platform
for social and economic development given the
opportunities such spending opens up in both the first
and second economies;
Relative to other districts and the Metro in the Eastern
Cape, ADM, in total provincial infrastructure spend, will
receive approximately 19%, second only to OR Tambo
District (22%);
It is important for social and economic infrastructure to
complement each other, thereby mutually reinforcing
the sum total of benefits derived from the infrastructure
expenditure and its economy-wide linkages;
The absence of an Industrial Strategy
National
Regional
IDZ support infra-structure:
Port
Airport
Road
Rail Link
With the achievements over the 2006/07 period the
ELIDZ can now boast the following:
The IDZs internal bulk infrastructure has been
completed;
CRI TI CAL ECONOMI C
I NFRASTRUCTURE
East London IDZ
At the heart of industrial development in ADM, and
indeed beyond, is the growth and success of the East
London IDZ. The concept of the ELIDZ was introduced
to establish a defined industrial zone in which unique
support measures would apply, is associated with a
major harbour and/or airports, and where manufacturing
would be encouraged to respond to, and meet the needs
of, the growing international market.

An amount of close to R300m has already been invested
in infrastructure in the ELIDZ including logistics
infrastructure, industrial space, and social infrastructure.
These funds have largely been sourced from the provincial
government through the ECDC.
In addition, there are current infrastructure initiatives that
are underway or have been completed, and include;
Construction of the Automotive Supplier Park
Construction of nursery
Construction of a waste transfer & sorting station
Feasibility studies for Business Support Centre
Feasibility studies for SMME & Skills incubator
Pursue Investor pipeline in
Bio-fuels
Pharmaceutical sector
Develop and operationalise One-stop Shop Government
Services Window
Critical constraints faced by ELIDZ include the following:
Absence of IDZ Specific Incentives
Complex Institutional framework and lack of clarity on
IDZ Regulation
Financing
44
The East London Port Expansion Initiative
The East London harbour expansion is critical to the
regional economy of the Eastern Cape Province as well
as the Amathole region. An investment of at least R5bn
is required to stimulate economic activity, but more
importantly, to protect the existing economic base. The
port expansion would provide the strategic infrastructure
needed to secure the future of existing economic sectors
(particularly the automobile sector) as well as providing
the basis for unlocking new priority sectors such as agro-
processing, tourism, forestry and timber.
There are already significant investments in sectors which
will rely on the capacity of the East London harbour.
The potential of any of these initiatives in the former
homeland areas (second economy) of the province will
rely on the East London harbour as their link to the global
economy.
The potential economic impact of the expansion of
the East London Port
What follows below is an idea of some of the projects
and sectors which would rely on the East London Port
expansion:
Auto sector
The Current OEM, DCSA and the lifeblood of the East
London economy is likely to downscale its operations
reverting back to producing only for the domestic
market. The competitiveness of DCSA in relation to sister
companies internationally competing for models would
be eroded and the existing skills base built up through
years of investment in skills development would be
wasted. Some R500 million in wages would be lost to the
local economy and the impact on associated suppliers
would be disastrous. In short the East London economy
would be decimated;
The first cluster in the zone, the Automotive Supplier Park
was completed within six months ensuring that suppliers
could meet Daimler Chrysler requirements for their W204
model;
7 component manufacturers have invested in the zone,
all of which are already occupying their premises;
The total number of investors in the IDZ now stand at
11 representing a total investment of R755 million more
than double the investment of R300 million;
These investors will together result in the creation of
1180 jobs with some 2000 jobs already created through
the construction.
45
46
container volumes currently destined for East London are
handled by other ports
East London Port Expansion: Conclusions
Ultimately the question emerges as to why the expansion
of the East London port has not been identified as a
strategic investment to promote economic growth and
job creation?
It is aligned to national, provincial and local development
priorities, it is clearly an important staircase between the
first and second economies, there is significant private
sector interest in investing in and around the port in
priority sectors and there is significant potential that can
be unlocked through upgrading the port.
The sad truth is that the failure to include the East London
harbour as a key priority investment will actively erode
the existing economic base of East London and lead to
economic stagnation in the region.
Transnet alone will not be able to finance such a mega-
project and therefore strategic partnerships, structured
finance and lobbying is required.
KEI DEVELOPMENT CORRI DOR
Kei Rail, an Eastern Cape provincial flagship project,
represents an integrated development plan to stimulate
and sustain socio-economic growth and development
of the corridor between East London and Mthatha and
beyond. The long-term vision is to develop a high speed
modern and proven state of the art railway line in this
Kei Development Corridor, fully integrated with other
PGDP and mega projects of scale and impact, to facilitate
a demand responsive and cost effective alternative mode
of transport in regard to freight and passenger services
between East London and Mthatha and beyond.
A second Asian OEM has already decided against setting
up a production plant due to the harbour constraints;
Given the expansion, other Gauteng automotive
manufacturers may well utilise the port, given the limits
to expansion and current delays at the Durban port.
Biofuels
Biofuels is a new ASGISA priority sector and one which
has been identified as having significant potential for
the Eastern Cape, particularly in the former homeland
(second economy) areas of the province. A number of
Biofuels initiatives are currently being planned in the
province. The East London Industrial Development Zone
(ELIDZ) has reserved a site for a biofuels mill and refinery.
This could induce investment in farming infrastructure
required to produce feedstock. The project will result in
100,000 tons of oil, in the first module, being exported
and a potential job creation of between 10,000 and
15,000 workers.
Forestry, wood and furniture
The current investment by Steinhoff in Ugie has potential
linkages to the port expansion. In addition the Forestry
icon project, one of the ASGISA priority projects will see
some 100,000 - 250,000 hectares of forest planted and
harvested within the next ten years. The forest areas will
include a combination of Eucalyptus (harvestable within
ten years) and pine (which would take somewhat longer).
The potential for Amathole is about 10, 000 hectares of
new commercial afforestation. The port and Kei Rail will
play a critical role in this sector.
Other Port Opportunities Currently in the balance
due to the constraint of the harbour
The current port has deterred a number of investors from
the ELIDZ and is likely to continue unless the capacity of
the port is improved
47
Economic Diversification through Key Infrastructure
Investments
Assuming that the necessary linkage infrastructure can
be established, a number of initiatives are proposed to
diversify the economy spatially. The benefits of this are
reduced congestion and competition for livelihoods,
education, housing and facilities in the urban area, linked
to increased utilization of existing facilities in small towns.
The initiatives include:
1. The R63 tourism corridor based on a wide range
of possible tourist experience, including struggle
history, frontier history, pre-history, adventure
tourism, agro-tourism and health tourism;
2. The Kat River / Nkonkobe / Keiskammahoek
horticultural and livestock development node;
3. The Peddie / R72 horticulture and dairy
development node;
4. R72 holiday resorts promotion and development;
5. The Wild Coast Meander;
6. The Great Kei / Stutterheim urban markets
agricultural corridor;
7. The Mnquma and Mbhashe livestock and field crop
commercialization initiative.
Common elements in all the above initiatives include
public-private partnerships and collaboration, local level
co-ordination of the cooperation of national, provincial
and local government, government investment in pubic
infrastructure and skills development, resolution of land
claims, commercialization of agriculture in communal
areas, investment in agro-processing, and most
importantly, support for development of and access to
markets.
Kei Rail addresses rail traffic and feeder roads, and pursues
an integrated freight and public transport dispensation in
this transport corridor. Initially, emphasis is placed on rail
freight services, which is regarded as very important in
the context of socio-economic development. Kei Rail has
as its focus the sustainable development of the resources
of the former Transkei and Ciskei in the interest of the
people of that region.
Objectives of Kei Development Corridor
1. To integrate the strategic development and
rehabilitation of the infrastructure in the corridor;
2. To alleviate poverty through targeted sector
development, specifically focusing on the
agriculture, tourism, manufacturing and transport
industries in the region and as a result
increase employment opportunities;
3. To provide equitable access to markets for the local
entrepreneurs;
4. To increase the access to social amenities and
economic opportunities by diversification and value
adding to the productive base;
5. To utilise natural resources on a sustainable basis
and consolidation of local land use development;
6. To identify and design strategic projects in priority
sectors;
7. To promote spatial economic linkages at local level;
8. To integrate the regional economy with the main
economic base of the Eastern Cape.
The conservation and ef cient utilization of Kei Rail can
only succeed as a partnership between local communities,
government and the private sector. Growth and
development in the East London to Mthatha corridor will
succeed if it is government driven, private sector funded,
labour conscious, community based and environmentally
friendly.
TABLE 22: HUMAN DEVELOPMENT INDEX (HDI)
FOR AMATHOLE
1996 2005
Mbhashe 0.37 0.42
Mnquma 0.46 0.50
Great Kei 0.42 0.44
Amahlathi 0.46 0.50
Buffalo City 0.56 0.59
Ngqushwa 0.41 0.46
Nkonkobe 0.45 0.49
Nxuba 0.46 0.50
Source: Global Insight, 2006
THE HUMAN DEVELOPMENT I NDEX (HDI )
The HDI Development index is a measure of development
which includes life expectancy, literacy and income. It thus
provides a composite index of development presenting
these three dimensions in one indicator. Overall the HDI
for the Amathole District suggests that there have been
some improvements in the quality of life of residents
within the district between the period 1996-2005 with
increases recorded in all local municipalities. The urban
centre of Buffalo city indicates the highest score in terms
of the HDI while the poorer (former homeland) areas of
Mbhashe and Great Kei, in particular, report the lowest
scores. This suggests that the historical inequalities
between the local areas in the district continue to be
reproduced and the challenges of uneven development
largely remain, requiring interventions targeted at the
most vulnerable and poor.
FI GHTI NG POVERTY
SOCI AL GRANT DEPENDENCE

Household grant dependence is higher in Amathole
(66%) than the average for the Eastern Cape (64%) as
a whole. Only Buffalo City (53%) and Nxuba (59%) fall
below the district and provincial averages with remaining
local municipalities recording two thirds and more of
households which depend on at least one social grant.
TABLE 24: WHETHER HOUSEHOLD MEMBER
IS RECEIVING SOCIAL GRANT
Yes No
% of HH
Members
% of HH
Members
Eastern Cape 63.6 36.4
Amathole DC 66.1 33.9
Mbhashe Local Municipality 78.1 21.9
Mnquma Local Municipality 66.2 33.8
Great Kei Local Municipality 75.7 24.3
Amahlati Local Municipality 80.2 19.8
Buffalo City Local Municipality 52.9 47.1
Ngqushwa Local Municipality 72.5 27.5
Nkonkobe Local Municipality 73.8 26.2
Nxuba Local Municipality 58.7 41.3
Source: RSS, 2006
NUMBER OF PEOPLE I N POVERT Y
The number of people in poverty is an indicator of
household members who reside in households whose total
income falls below a particular level. The level used here
is based on Global Insight data which uses the Bureau for
Market Research (BMR) Minimum Living Level (MLL) that
ranges from R893 for a single person household to R3314
for an eight person household. Based on this measure,
the levels of poverty (an economic measure of household
income) in Amathole have actually increased signifcantly
between 1996 -2005. Bufalo City again recorded the
lowest percentage of people in poverty (50%) with the
remaining local municipalities recording two thirds and
more of household members living in poverty.
TABLE 23: PROPORTION OF PEOPLE IN POVERTY IN AMATHOLE
1996 2005
Mbhashe 68.6% 77.9%
Mnquma 62.3% 75.0%
Great Kei 56.1% 79.5%
Amahlathi 59.0% 75.3%
Buffalo City 41.5% 50.1%
Ngqushwa 64.1% 80.2%
Nkonkobe 55.9% 69.2%
Nxuba 56.6% 80.3%
Source: Global Insight, 2006
49
50
GROWTH AND DI VERSI FI CATI ON OF
THE URBAN ECONOMY
The auto sector continues to be the core of the
economy of Buffalo City. The auto sector represents
an important platform for further diversification and
growth. The ELIDZ is already beginning to realise this
through the establishment of an auto-cluster. Significant
potential exists for further development of component
manufacturing as well as luring new OEMs to the city.
The ELIDZ is not only critical for the auto-sector but
also a critical vehicle for diversification and building
new sectors. The ELIDZ has already been identified as a
strategic site for biofuels for example.
The need to diversify the economy beyond its current
concentration on the automotive sector and government
includes support initiatives to stimulate new economic
sectors. These include:
Creative arts - design, popular literature, music, drama
and dance, film and made for TV productions;
Hi-tech, low material use industries;
Innovation sectors - technical and product design;
Marine and aqua-culture.
The programme of support would include dissemination
of information on long-term global economic trends,
incubators, support to research capacity, promotion
of innovative products, partnership with business and
research institutes to develop capacity.
Initiatives to diversify the district economy must be
accompanied by ensuring the retention and strengthening
of existing sectors. Interventions needed for retention and
strengthening of existing sectors could include:
Land release for commercial development;
Development of infrastructure;
Removal of red-tape blockages to growth;
The growth and development challenges facing Amathole
are a microcosm of the challenges facing the Eastern
Cape as a whole. The industrial heartland of the district
- Bufalo City - is heavily dependent on three sectors - the
auto sector, food processing and clothing. The auto sector
is dominant in the local economy with the clothing sector
increasingly under threat from international competition.
The rest of the district is rural and underdeveloped.
This rural hinterland itself refects the divide between
commercial private farmlands to the west, focused on
commercial livestock farming and high-value horticulture,
contrasted with communal subsistence farming, focused
on traditional livestock farming and feld crops, to the
east. Services delivery, infrastructure challenges and
human underdevelopment continue to refect the
historical spatial, development and investment policies,
as do the challenges of urbanisation and urban renewal.
In short the two economies are nowhere more markedly
contrasted than in Amathole.
In order to ensure that the two economies collectively
overcome the challenges of uneven development, will
necessitate an integrated district strategy for growth and
development which ensures that the industrial economy
does not become disembedded from the fortunes of the
rural hinterland. In fact Buffalo City needs to be seen as a
critical artery which extends even beyond the borders of
the district the Kei Rail initiative is one critical example
of this, as is the import and export of grain to Gauteng /
Zimbabwe and the Free State respectively.
Conceivably elements of such an integrated vision for
growth and development include the following:
1. Growth and diversification of the urban economy
2. Development of the rural economy and strengthening
of linkages between the urban and rural economies
3. Services delivery
4. Building Municipal Capacity and Co-operation
CONCLUSION: TOWARDS AN I NTEGRATED
DI STRICT GROWTH & DEVELOPMENT STRATEGY
51
for energising the underdeveloped agricultural sector and
for entering the emerging biofuels sector. The potential
for livestock production, which already accounts for
almost three quarters of district farming activity, is
significant and if coupled with small farmer support
programmes such as the Nguni cattle programme could
result in even further expansion. In fact, a major spin off
from the biofuels sector would be the oil cake which can
be used for cattle feed. There are thus significant linkages
within the sector that need to be exploited as well as
ensuring that the rural and urban economies become
integrally interlinked.
Linkages between Buffalo City, the heart of the district
economy, and the smaller towns are critical to ensure
circulation of economic opportunities and benefits
throughout the district. Furthermore, the citys status
as one of only two large industrial urban centres in the
province means it impacts well beyond the boundaries
of Amathole district. Linkages between the city and the
national and international markets are an important
stimulus to the whole eastern half of the Eastern Cape.
Some of the critical economic and linkage infrastructure
projects discussed above will.
The revitalisation of many dying rural towns will
be greatly enhanced through the development of
agriculture, tourism and other associated activities, such
as milling and other secondary processing of agricultural
produce. The tourism sector within the rural hinterland
offers significant potential particularly when linked to
infrastructure initiatives such as the Wild Coast Meander.
Improved transport and telecoms/e-communication
infrastructure will increase the viability of decentralized,
promoting spatial development and economic integration
between the rural areas, small towns and the city.
Reduction of compliance requirements;
Responsiveness to expressed support needs;
Marketing of products from the district; and
Attraction of similar industries to promote economies
of scale.
Critical to consolidating and diversifying the Buffalo City
economy, as mentioned above, are a number of critical
infrastructure initiatives. These include the following:
The Buffalo City Port expansion;
The East London - Gauteng rail link;
The Kei development corridor;
The East London Nelson Mandela Bay rail link.
The port expansion is particularly important since it will
ensure the survival and diversification of existing sectors
such as the auto sector but also provides the basis for
new developments such as the proposed water front, the
recent proposal for a yacht basin as well as enhancing the
tourism potential for the district.
Development of the rural economy and
strengthening of linkages between the urban
and rural economies
The underdeveloped rural hinterland in the district has
significant potential for the development of agriculture,
agro-processing and tourism. Critical to ensuring that
development within these sectors is accelerated and
shared will require a concerted effort to deal with land
issues in the district - finalizing land claims, implementing
the Communal Land rights Act and supporting
community trusts. This must be accompanied by a
strategy which ensures that the linkages between rural
and urban economies are encouraged.
A number of irrigation schemes and underutilised dams
such as the Sandile dam in Keiskamma provide the basis
Building Municipal Capacity and Co-operation
IDP Alignment
Amathole District Municipality has a functional IGR
System in place. This, coupled with a Municipal
Support Programme makes it possible for it to have a
comprehensive programme for capacitating constituent
local municipalities. However, specific municipalities
under Amathole are still faced with capacity challenges.
For the successful implementation of GDS outcomes and
resolutions, targeted support programmes will have to
be developed and rolled out accordingly.
During the 2005 IDP Hearings, specific actions were
recommended to Amathole aimed at enhancing its
support to local municipalities. In preparation for the
GDS, an evaluation of progress was made regarding
those actions which would be useful in establishing gaps
that may hamper implementation of GDS outcomes and
resolutions.
Specific areas could be:
Attraction and retention of identified scarce skills at local
municipalities;
Improvement as a result of Project Consolidate
(Siyenzamanje) at the three targeted local municipalities;
State of readiness of the local municipalities with regards
to the implementation / roll out of the National LED
Framework.
Services Delivery
The challenge for services delivery in the district is
immense. Existing backlogs and targets for eradicating
backlogs will in many instances not be met unless
significant additional resources are invested and
directed to areas of greatest need. At the same time
the job creation potential, of particularly infrastructure
development, needs to be maximised.
The district is ideally placed to leap-frog over obsolete
technologies in its quest to meet its development
targets. Examples of areas of potential development
include modern or alternative:
energy sources for domestic and business use;
water supply, sanitation and housing technologies;
settlement layouts to reduce transportation costs, health
costs, service costs and negative social impacts of high-
density developments;
automotive / transport technologies.
The district, in partnership with business and scientific
institutions, will need to embark on a long-term process
of identifying, piloting, promoting new and alternative
technologies. This will require a process of change
management with appropriate information, education
and provision of incentives.
52
Supply chain management policy does not create
a conducive environment for business (e.g. surety),
and is hampered by long periods to wait before bids
are awarded, a lack of understanding of statutory
requirements for procurement, and a perception of the
lack of transparency in the awarding of bids/tenders.
Municipal-provincial Department/
Agencies co-operation
Among the key issues raised at the Amathole IDP
Engagement workshop on 15 January 2007 is the
limited participation of provincial government in the IDP
planning processes. The exceptions are the Department
of Agriculture and the Department of Sports, Recreations
Arts and Culture. Efforts to build participatory
intergovernmental relations at the local level are seen
to be undermined by the province often sending
junior officials with limited decision making powers to
meetings. The district expressed concern about the role
of the Department of Housing, Local Government and
Traditional Affairs. This revolves around the department
not providing adequate support and guidance to
municipalities.
Other key issues that emerged were the provincial
governments inability to plan spatially (DMs and LMs)
and the absence of alignment with respect to planning,
budgeting and implementation between the two
spheres. These need to be addressed urgently since they
constrain the ability to accelerate service delivery.
With regards to the implementation of the five-year local
government strategic agenda, ADM will have to develop
a plan together with OTP, DHLGTA and SALGA-EC. The
agenda aims at:
Mainstreaming hands-on support to local government
to improve municipal governance, performance and
accountability;
Addressing the structure and governance arrangements
of the State in order to better strengthen, support and
monitor local government;
Refining and strengthening the policy, regulatory and
fiscal environment for local government and giving
greater attention to the enforcement measures; and
The development, implementation and monitoring of
this plan (especially for the KPA on LED) will complement
the GDS and its expected outcomes.
Municipal-Business Co-operation
Some of the key issues that have emerged are:
Lack of communication between business and local
government which impedes access to information to
existing business opportunities. There is a clear need
for a business-local government-labour forum to share
in a joint vision and strategy to tackle the growth and
development challenges in the district;
Insufficient basic infrastructure e.g. roads, public toilets,
cleanliness;
Lack of a clear and simple incentive strategy for new
businesses, and support for informal traders;
Avoidable delays in land servicing and preparation for
housing development, and uncertainty around land
claims and land use;
Lack of effective policing, and a lack of coordinated
strategy towards combating crime;
53
54
Conclusion
The Amathole District Municipality is clearly grappling
with very entrenched problems of poverty and
unemployment, and progress seems to have been quite
slow so far in addressing these problems. While public and
private sector investments are clearly increasing, these
levels are currently insufficient to address the growth and
development challenges faced by the district.
The Summit is potentially very important for setting in
motion processes to improve municipal planning and
management capacities, particularly with respect to
co-operation with other arms of Government, and with
Business. The private sector, business-support agencies
and the municipalities need to work together to develop
detailed priority industry action plans.
The outcome of the Summit should be the development
of a Framework Agreement that outlines institutional
roles and responsibilities to accelerate growth and
development in the district. This agreement should also
suggest the mechanisms and processes for monitoring
progress on the decisions reached and the governance
framework for ongoing dialogue and feedback among
the social partners.
The district GDS presents a unique opportunity for
constructing partnerships and harnessing the collective
energies and contributions of a range of actors and role
players with a view to enhancing accelerated and shared
growth.
The district GDS provides us wit an opportunity to unlock
the potential of all localities, and ensure that all sectors of
society identify their role and contribute to the common
national objective to build a better life for all.
The close cooperation between spheres of government
remains critical since the delivery of social services is
not an exclusive local government competence but
depends on the performance of other spheres. The
current Provincial IDP Engagement process is clearly a
step in the right direction. However, the challenge will
be to factor the outcomes of the district GDSs and IDP
engagements into the planning and review of both IDPs
and the PGDP.
Municipal-National Departments/
SOEs Co-operation
In the case of Amathole District, the Department of Land
Affairs, Department of Housing, Department of Labour,
Department of Roads, Department of Agriculture and
the Department of Trade and Industry are key national
departments that the district needs to work with.
Although the Department of Water Affairs and Forestry
has by and large participated at local government level,
the scale and pace of eradicating water and sanitation
backlogs in the district leaves a lot to be desired.
In order to address the huge electrification and telephone
backlogs particularly in the former homeland areas, close
cooperation with Eskom and Telkom remains critical.
55
DPLG Department of Provincial and Local
Government
DWAF Department of Water Affairs and Forestry
ECAC Eastern Cape Aids Council
ECDC Eastern Cape Development Corporation
ECD Early Childhood Development
ECSECC Eastern Cape Socio Economic Consultative
Council
EIA Environmental Impact Assessment
ELIDZ East London Industrial Development Zone
EMIS Education Management Information System
EPWP Expanded Public Works Programme
FET Further Education and Training
GDS Growth and Development Summits
HDI Human Development Index
HH Household
HIV Human Immunodeficiency Virus
HSRC Human Science Research Council
ICT Information and Communication Technology
IDP Integrated Development Plan
IDZ Industrial Development Zone
IGR Inter Governmental Relations
LED Local Economic Development
LM Local Municipality
MIDP Motor Industries Development Programme
MIG Municipal Infrastructure Grant
MLL Minimum Living Level
ABET Adult Basic Education and Training
AEDA Amathole Economic Development Agency
ADM Amathole District Municipality
ARC Agricultural Research Council
AsgiSA Accelerated and Shared Growth Initiative for
South Africa
ASSA Actuarial Society of South Africa
B&B Bed and Breakfast
BBBEE Broad Based Black Economic Empowerment
BDS Business Development Services
BPO Business Process Outsourcing
Capex Capital Expenditure
CASP Critical Agriculture Support Programme
CSIR Council For Scientific and Industrial Research
CBD Central Business District
DBSA Development Bank of Southern Africa
DCSA Daimler Chrysler South Africa
DEAT Department of Environment and Tourism
DHLGTA Department of Housing Local Government
and Traditional Affairs
DM District Municipality
DME Department of Minerals and Energy
DoA Department of Agriculture
DoE Department of Education
DoH Department of Health
DoL Department of Labour
DORA Division of Revenue Act
GLOSSARY
56
SALGA-EC South African Local Government Association
Eastern Cape
SEDA Small Enterprise Development Agency
SETA Sector Education and Training Authorities
SMME Small Medium and Micro Enterprises
SOE State Owned Enterprises
StatsSA Statistics South Africa
STI Sexually Transmitted Infections
TB Tuberculosis
VIP Ventilated Pit Latrine
WSDP Water Services Development Plan
MTEF Medium Term Expenditure Framework
NSBA National Spatial Biodiversity Assessment
NGDS National Growth and Development Summits
NGO Non Governmental Organistions
OEM Original Equipment Manufacturers
OTP Office of the Premier
PGDP Provincial Growth and Development Plan
PPP Public Private Partnerships
RDP Reconstruction and Development
Programme
RIDS Regional Industrial Development Strategy
RSS Rapid Services Survey conducted by FISER
(Fort Hare Institute For Socio-economic
Research) for the Office of the Premier
57
GDS SUMMI T AGREEMENT
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NOTES
74
NOTES
Amathole District Municipality,
40 Cambridge Street, P O Box 320, East London, South Africa.
Tel: +27 (0) 43 701 4000 | Fax: +27 (0)43 742 0337
email: info@amathole.gov.za | website: www.amathole.gov.za
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Eastern Cape Socio-Economic Consultative Council
1st Floor, Global Life Bldng, Cnr Phalo Ave & Circular Drive, Bhisho
Tel.: +27 (0)40 635 1590 | Fax: +27 (0)40 635 1571
E-Mail: info@ecsecc.org | Internet: www.ecsecc.org