FREE STATE PROVINCE: DBSA SUPPORT TO CREATE SUSTIANABLE HUMAN SETTLEMENTS

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FREE STATE PROVINCE DBSA SUPPORT TO CREATE
SUSTIANABLE HUMAN SETTLEMENTS
SMS CONFERENCEFREE STATEAugust 2007Parallel
Session Social and Human Development
Theo van Vuuren Executive Coordinator SA
Operations Division
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Free State Key Considerations
Backlogs water 4, sanitation 29,
electricity 25, housing 33
5 districts, 20 local municipalities current
support R1.2 billion
Households 0.8 million
Backlogs and needs
Social environment
Economic environment
Development observations and challenges
Implications for investment and support
DBSA focus areas for support
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National overview Backlogs and needs

• Below national average in respect of access to
  waste removal

• Below national average in respect of access to
  electricity

Areas of economic strengths
Areas with unemployment higher than nat. average
Housing backlog higher than national average

• Below national average in respect of access to
  sanitation and water

Above Human Resource Development national index
(0.594)

• Below national average in respect of access to
  sanitation

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Free State Number of households without access
to services or housing 2002 and 2006
2002
2006
350,000
305,280
Housing
Sanitation
300,000
38
Number of households 2002 795 000 Number of
households 2006 849 000
Number of households 2002 795 000 Number of
households 2006 849 000
250,000
182,535
200,000
144,330
Number
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154,518
136,740
143,100
150,000
18
118,455
120,045
18
17
17
96,786
15
15
100,000
74,712
11
9
50,000
0
municipality
refuse is not
removed by the
informal dwellings
water in the dwelling
Households living in
Households whose
Households without
have no toilet facility
Households not
mains electricity
bucket toilet or which
connected to the
Households using a
access to piped
or on site
supply
Source Statistics South Africa General
Household Survey 2006
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Social environment Free State Population and
Growth 1991-2006
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Free State Poverty

• Average annual Per Capita income
• 2000 R7 400 to R11 300
• 2006 R12 900 to R 54 900
• Poverty index 105

7
Free State Percentage population growth with
impact of HIV/AIDS
High HIV/AIDS impact SA population growth
negative by 2016. Free State population growth
negative by 2011 Every year 10,000 households
added to population at low scenario.
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Free State Labour Force Composition 2000 2006
1.2m
2006
2000
1.1m
0.59m
0.58m
0.51m
0.40m
42
36
0.12m
0.13m
Total labour
Formal
Informal
Unemployment
force
Employment
Employment
4.1 per annum
1.6 per annum
-0.3 per annum
1.4 per annum
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Free State Formal employment per economic
activity Average annual growth, 2000 - 2006
5.0
4.0
3.1
2.7
2.6
1.6
0.2
0.0
-0.3
-1.9
Average annual growth ()
-2.1
-3.9
-5.0
-6.2
-10.0
Total
Trade
Mining
Finance
Electricity
Transport
Community
Agriculture
services
Households
Private
Construction
Manufacturing
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Free State Labour Force Impact of High and Low
HIV/Aids 1996-2016
1 600 000
1 500 000
1 400 000
Number
1 300 000
1 200 000
1 100 000
1 000 000
1996
2001
2006
2011
2016
High HIV/Aids
Years
Low HIV/Aids
47,5 formally employed (SA 51)
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Average annual growth in real Gross Domestic
Product by kind of economic activity, 2000-2006
()
of economy
48.2 b
Gross Domestic Product at constant prices by kind
of economic activity in billions
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Free State Real GDP 1990 prices Impact of High
and Low HIV/Aids 1991 - 2021
24 000
22 000
20 000
R Million
18 000
16 000
14 000
1991
1996
2001
2006
2011
2016
2021
Year
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Development observations and challenges 1

• The rate of economic development low
• Job losses in the primary industries due to
  global cost drivers
• Traditional economic sectors declining
• Need to growth new sectors in the market-
  Initiatives to beneficiate raw materials
• Recent trends - more emphasis on key economic
  sectors such as tourism, agriculture and
  manufacturing
• Growth in new households will remain significant
• Poverty increasing
• Infrastructure
• Good network, but roads 60 in poor state
• Generally good bulk networks

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Development observations, implications and
challenges 2

• Population trends - place significant pressures
  on future development.
• a population decline in the former homeland areas
  
• Increased migration to areas with potential
• continued urbanisation from farming areas to
  urban areas
• a decrease in the population of the commercial
  farming areas
• evidence of secondary or circular migration
• more profound urbanisation expected in the
  northern Free State
• out-migration to Gauteng
• a large-scale decline in the Free State
  goldfields
• and most migrants represent low-income
  individuals or households
• Impacts of HIV/AIDS on economy can be drastic
• Impact severe on all levels of labour force
• Skills shortages

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Implications for investment and support 1

• Backlogs still priority population growth and
  changing social structures
• Increase in demands for social and health
  services
• Increased investment in training facilities
• Increased expenditure needed on roads as enabler
• Housing needs increasing (those households
  residing in informal dwellings)
• Institutional capacity development priority
• Improve capacity to deliver and maintain services
• Interventions to improve economic base, LED

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Implications for investment and support 2

• Focus on areas of concentration and growth
• Development potential mostly located in
  Bloemfontein (Mangaung), Sasolburg (Metsimaholo),
  Welkom (Matjhabeng)
• The NSDP in terms of economic growth areas with
  development potential should be targeted
• Welkom negatively influenced by declining mining
  industry
• Mangaung 9th biggest city in SA, 22 of
  provincial population
• Nearly 50 of the housing backlog in the Free
  State is found in Mangaung and Matjhabeng
• Investment in areas with limited potential
  creating sustainable communities
• Need investment in their people (skills
  development, education, social services, social
  security, etc).
• 40 of municipalities classified as m3, limited
  income growth
• Interventions in the economy
• Role of government- Province becoming
  increasingly public sector investment driven
• Diversification needed
• Good infrastructure/ healthy economic base with
  opportunities in tourism, agro-processing and
  mining
• Focus on economic drivers of the economy include
  manufacturing, agriculture, transport and tourism
• Needs to be supported by economic infrastructure
  which will serve as an enabler
• Mobilising private sector in expanding economic
  growth areas needed
• Need training and attention to skills base

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DBSAs supporting role to the Free State

• Priority an accelerating economic growth rate to
  meet the demand for employment and attending to
  backlogs as well as enabling infrastructure.
• DBSAs Single Over-arching Goal is
• To Improve the quality of life of the people of
  the region through
• expanding access to development finance and
  effectively
• integrating and implementing sustainable
  solutions.
• This is done by focusing on
• Co-deliver social economic infrastructure
  (Providing and facilitating sustainable
  infrastructure development) (Enhancing
  sustainable communities)
• Build human institutional capacity
• (Institutional and human
  capacity-building)
• Promote broad-based economic growth, job creation
• (Enhancing economic development and
  job creation)
• Cooperation, integration prosperity
• Serve as a centre of excellence from development
• (Promoting knowledge management
  partnerships)

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Free State Going Forward Key Focus Area 1

• Support the province in the implementation of the
  PGDS
• Strengthening stakeholder relationships and
  establishing new partnerships
• Bringing on board additional role players in
  promoting local economic growth
• Increase capacity to source funds from both
  public and private sector to address service
  backlogs
• Partner, financier, advisor
• in implementation of key initiatives and
  infrastructure development plans focusing on
  sanitation, water, GDS anchor projects etc.
• Expand support to Market 3 municipalities
• Technical assistance, Targeted Infrastructure
  Programme
• Eradication of the bucket system
• Provide supporting infrastructure re 2010 Soccer
  World Cup
• R100 million facility being appraised

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Free State Going Forward Key Focus Area 2

• Technical assistance
• Capacitate local government to delivery on the
  goals and objectives in support of NSDP and other
  planning frameworks
• Capacity for project development/ implementation
  at municipalities - Siyenza Manje programme
• Increase economic growth/job creation
• LED, Sector diversification, enabling
  infrastructure
• Integrated approaches to building sustainable
  communities
• Main instruments
• Targeted Infrastructure Programme
• Technical assistance programme
• Access to information and expertise, including
  best practice guidelines
• Siyenza Manje deployees

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Free State Current support programme

• Investment programme R1.2 billion
• Technical Assistance Grants R50 million
• 23 of 25 municipalities investment clients
• Technical support through Siyenza Manje
  programme 6 municipalities
• Agency function on 2010 stadium
• Sustainable communities

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Free State Examples of Recent Projects

• Investment projects
• Bloem Water Infrastructure Programme R14,2
  million
• Municipal Nketoana Office Building, Dihlabeng
  Infrastructure Programme
• Entrepreneurial support Bethlehem Hydro,
  Bethlehem Apples
• Education e.g.-Goldfield FET, St Dominics
  College, Maluti FET College
• Technical assistance projects
• Phumelela Capacity Programme
• Review and write-up of Free State PGDS
• Thabo Mofutsanyana Fresh Produce Study
• FDC IT System
• Hydrosa
• Setsoto Integrated Waste Management
• Nketoana Integrated Waste Management

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Free State Siyenza Manje Capacity Deployment
Programme

• The DBSA has deployed Technical and Financial
  Expertise
• Department of Local Government and Housing
• Setsoto Local Municipality
• Nala Local Municipality
• Masilonyana Local Municipality
• Matjhabeng Local Municipality
• Kopanong Local Municipality, and
• Tokologo Local Municipality.

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DBSA Contact Details

• Bethuel Netshiswinzhe
• Regional Manager Gauteng, North West and Free
  State Provinces
• Tel [phone] bethueln_at_dbsa.org
• Theo van Vuuren
• Executive Coordinator South Africa Operations
• Tel [phone] theov_at_dbsa.org
• Development Bank of Southern Africa
• PO Box 1234
• Halfway House
• 1685

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Thank You Questions?