Current Edition >> Archive Section >> Special Features >> 17-31 March 2006
On March 3rd 2006, the quiet village of Makwane Village, Phuthaditjhaba in Qwa Qwa was the scene of the launch of the SA Microfinance Apex Fund (SAMAF), referred to as the Apex Fund. The event was hosted by the Deputy Minister of Trade & Industry, Ms. Elizabeth Thabethe, and the Free State MEC for Economic Development, Mr Neo Masithela. Senior officials of the Dept. of Trade & Industry (the dti), Free State municipal and government officials as well as over 800 community members attended..
As an initiative of the the dti, the Apex Fund has been established to address poverty, unemployment and skills development in the microfinance sector. As such the Fund acts as a wholesaler to partner organizations retailing to clients in their communities. For the Poverty Alleviation Loan Product, the target is households whose sole breadwinner earns less than R1 500 per month, with poverty targeting tool used as for this qualification. The Micro Enterprise Loan Product is for micro entrepreneurs requiring loans of up to R10 000 and who depend on their micro enterprises for their livelihood.
However, the Apex Fund is not only tasked with the provision of finance, but also to build institutional capacity and, through cooperatives, stokvels and burial societies, mobilize savings. In terms of savings mobilization, the real goal is to promote and encourage the creation of financial co-operatives and other indigenous savings establishments for the accumulation of locally owned and invested wealth.
Supporting entire communities
“With community based micro finance institutions often lacking in capacity, the Apex Fund is tapping into communities that are helping themselves to create wealth and assist them in achieving their financial and economic goals, thus improving the lives of not only clients but also entire communities.
“In the Free State, initially working is with three financial co-operatives, viz. Makwane FSC and Tseki FSC in QwaQwa and Thaba Nchu FSC in Thaba Nchu, but the launch must also be seen as a clarion call for other institutions to come forward to work with the Apex Fund in their communities.”, explained the Apex Fund Project Manager, Ntombi Msimang.
Deputy Minister's speech at the launch
Delivering the keynote address at the Free State launch of the Apex Fund on 3 March 2006, Deputy Minister of Trade and Industry, Ms Elizabeth Thabethe said this about the Apex Fund :
“Against this background one of the key mandates of government is for the Apex Fund to contribute significantly to halving unemployment and poverty by the year 2014, as well as stimulate and activate development at a local level. This will be done by providing households usually excluded from the banking sector with access to financial services. In so doing it will create employment, increase incomes and expand economic opportunities.
“The Apex Fund is moreover a targeted vehicle for the Accelerated Shared Growth Strategy for South Africa, which aims at increasing income and employment opportunities to 15-20 million people living in the rural areas or in shack areas outside the big cities. South Africa has a good experience of Self Help Groups and cooperatives and has also different financial institutions for micro finance, but impact on enterprise and job creation has been limited. The vision of the Apex Fund is to be a leader in developmental micro finance outreach and best practice in South Africa.
“To this end, the following three products are offered:
· Institutional and client capacity building including the establishment of good financial systems and strengthening of management teams;
· Savings mobilization through co-operatives and other formations such as burial societies and stokvels; and
· Affordable access to financial services through the Micro Credit Loan Fund, providing loans of up to R10 000 for households and micro entrepreneurs who depend on their micro-enterprises for their livelihood.
“The fund will take two forms: Firstly, micro credit for micro enterprise development and, secondly the poverty alleviation fund for clients with a household income of less than R1 500.
“In order to ensure the widest possible outreach, partnerships are being established with people's structures on the ground and existing infrastructure will be used for distribution. There has been significant progress with regard to operationalising the Fund. To date more than 60 institutions throughout the country have applied and are being considered for partner organization status to the Apex Fund. There are three in the Free State, including Makwane Village Bank. The project team is currently implementing the capacity building programme in preparation for the loan disbursements, which should be in place by June 2006. “Strategic partnerships have also been initiated with the Post bank, MAFISA, IDT and IDC, as well as Provincial Governments and soon the national Department of Social Development.
“The Apex Fund functions in close cooperation with other agencies such as the Small Enterprise Development Agency (SEDA), helping with business plans, technical advice and marketing, as well as information on export support, tenders and incentives, as well as with the Business Partners-Khula Start-Up Fund, currently capitalized at R150 million.
“In August 2005 the State President assented the Co-operative Act, effectively putting in place the first ever-comprehensive co-operative policy in SA. In this regard, I am proud to announce that the implementation of the policy has already started with the launch of a co-operative Start-up Grant of up to R300 000. In accessing this grant, co-ops will be expected to contribute 10%, which can take the form of skills or basic assets,” the Deputy Minister said.
“Increasing the number of people who are meaningfully participating in the economy, however, is not sufficient and growing the economy is equally important. In this regard, significant efforts are being directed towards enhancing the competitiveness within the economy and to increasing levels of investment, such as providing social and economic infrastructure; reducing the cost of doing business; developing priority sectors; strengthening domestic and regional markets; and increasing market access; within the context of a stable, development orientated macro-economic framework.
“The Free State government has established a good track record of partnership and we appreciate the efforts that went into the preparations for the launch of this fund and I am confident that you will ensure that the programme launched here today, will be amongst the best.
“The Fund has disbursed more than R10 million in the past eight months on loan funds and operational expenditure of 17 micro finance institutions. It will spend another R20 million on a capacity building and branding exercise with 20-25 partner organizations creating more jobs in the next three to six months.”
Welkom Industrial Controls, based at Welkom but operating nationally, is innovatively engaged in the development, manufacturing and marketing of process control instruments for factories, mines, manufacturing plants, engineering works and other relevant applications.
We install, maintain and upgrade systems that keep workplaces – especially manufacturing and mining environments – safe, comfortable, productive and cost-effective – helping our customers to become more competitive through improved process performance. In this regard we select the best option and do not “force fit” a product just because it's the only one on offer.
Background
Welkom Industrial Controls was founded in 1988 by JS Saunders and bought over by Norman Ehlers in 2003.
Through dedicated service and focusing on customized solutions, as well as by keeping pace with state of the art technological development, the company consistently expanded its operations and customer base. We have invested in time more than R6 million in advanced asset management and tracking development.
How we operate
We are a product and service solution provider with regard to system topology, design, supply of equipment, building of panels, installation of cables and equipment, wiring of panels and commissioning of the complete system.
Our product suite offers advanced asset management capabilities including event logging, information analysis, asset depreciation, financial management, various mediums of communication, bar coding, remote connectivity via the Internet and any wireless device, such as a cellphone or wireless LAN.
To this end, we provide advanced software applications for industrial optimization, sensors, switches, controls systems and instruments for measuring pressure, air flow, temperature, electrical current and more.Components of our business:
· Extensive management experience .
· Manufacturing customized solutions for
· Effective sales and distribution
· Strategic partnerships with established suppliers like Alpret, Schneider, Vega, Temperature Controls, Ascoreg, Siemens, Futuristix, to name but a few.
We also provide to our clients irrespective of location :
· local inventory and quick delivery;
· application and technical support;
· on-site training and
· 24 hour emergency / stand-by service.
Services and products
· Consultancy on all process control applications
· Supply, installation and commissioning of instrumentation
· Supply, installation and commissioning of electrical equipment
· Supply, installation and commissioning of fibre optic backbones (OTN, LAN)
· Panel population and wiring
· PLC programming
· Configuration of reliable and robust Supervisory Control and Data Acquisition (SCADA) systems
· WEB reporting
· Configuration of maintenance software
· WEB page design
· Manufacture of large message displays with connectivity to SCADA
· In-house designed 'tracking system' through GIS.
Staff
Our client-driven approach and dedication stands central to all company activities.
By keeping pace with changing technological developments and client needs, Welkom Industrial Controls is staffed with engineers and technicians with extensive application experience and solid product knowledge.
The top achievers for the 2005 academic year at the School for Entrepreneurship and Business Development and at the School for Accounting of the Faculty of Management Sciences of the Central University of Technology, Free State, were honoured at a glittering Prestiges Evening held on 8 March 2006 in Bloemfontein.
Altogether 25 top achieving students out of a total enrolment of 3 200 in the Schools in 2005 were honoured, with the top award, the Dean's Award for the best Diploma student in the Faculty, going to Mr. S. Pachagadu. The second top award – that for Baccalareus Technologiae - was presented to Ms. MM Phehlane. For these awards, these two students achieved distinctions in all their subjects during their respective 3 and 4 years study terms.
With its 3 200 enrolment, the Schools are the largest School at the CUT, Free State, with its total enrolment of 11 840 students.
Held at the Japie van Lill Auditorium on campus and attended by the winners and their parents and relatives, as well as staff of the two schools, the keynote address was delivered by Prof. Laetus Lategan, Dean : Research & Development at the University. In an inspirational and motivational speech Lategan noted how his own life has been touched and enriched by specific moments and persons and he encouraged the achievers to always strive to enrich and improve the lives of others. He urged them to act as connecting windmills, energizing those around them, instead of building walls around themselves and retract into comfort zones.
Further education essntial
In 'n kort toespraak tydens die Prestige Aand het die Direkteur van die Skool vir Entrepreneurskap en Besigheidsontwikkeling en van Rekeningkunde gesê:
“Die volgehoue tegnologiese veranderings vergroot die behoefte aan goedopgeleide werknemers en bestuurslui om aan hul eie toekoms vorm te gee. Hierdie 25 kandidate, uit 'n totaal van meer as 3 000 leerders wat ek aan u voorhou, het nie teruggedeins vir die uitdaging nie en verdien dus die hoogste lof.
You as a new entrant to the business world will face five critical business challenges, namely Globalization, Profitability, Information Technology (IT), Intellectual capital and Change.
“In order to meet these challenges, you must have the following attributes in order to survive in the world of commerce, industry, finance and service sectors: Eager to grow and learn new skills rapidly and continuously / Commitment to the company's strategies, policies and values / You must possess a sense of ethics, honesty and integrity so that others have complete confidence in your actions / Lastly, without innovative and creative thinking survival is hardly possible.
“Please remember, lifelong learning is the key to continued personal marketability, and without it, upward mobility and career success is unlikely. 50% of what you learn at any point in time will be out of date in the next 5 to 10 years. In order to survive, keep developing and refining the skills and talents the world of work demands.
Therefore, the Central University of Technology, Free State, would welcome you back at any time to continue your studies to become either business or academic leaders.”
At the conclusion of the 2000 – 2005 local governmental term of office, it is apt for the Matjhabeng Local Council to review its track record of achievements and challenges for this period with a view to planning effectively for the five year term of office ahead.
The following is a brief executive summary of the comprehensive report put out by the outgoing Executive Mayor, Cllr. Serake Leeuw.
Forward by Executive Mayor
When Matjhabeng Local Municipality was created as a legal entity on 5 December 2000 with the almalgamation of Welkom, Virginia, Odendaalsrus, Allanridge, Hennenman and Ventersburg, it was mandated to become an agent of change and a service provider for the area.
Matjhabeng in 2000, for all intents and purposes, was a divided region in a financial and institutional crisis. The Goldfields was almost totally dependent on income from the mining industry, with municipal revenue totalling millions per year. When that money fell away, the same standard of services could not be maintained with the drastically reduced income.
Despite all these challenges, Council has managed to keep this Municipality going through ensuring that basic services are provided to all our communities – to the extent that our economy is starting to show upward movement. We have seen many entrepreneurs emerging and a recommitment from business to expand existing enterprises.
In the past year, we have set the direction of economic and community development with the key phrase: "Matjhabeng, a region rediscovering itself". Economically the emphasis is on establishing a more diversified economy to lessen the local economy's vulnerability and dependency with regards to the mining industry. Basic services like water, electricity and sanitation are now readily accessible to the majority of communities. Project Consolidate is contributing immensely to solving our billing problems, but much still needs to be done. All our decisions and actions will be directed towards achieving a sustainable Municipality capable of undertaking development whilst providing basic services to all residents.
The past five years have brought many operational teething problems, internal and external. However, they have been identified and are currently being rectified through a number of processes. Indeed, if we look at the scorecard we can say: This Council, despite challenges and constraints, has laid a firm foundation to build on.
Matjhabeng Council has shown remarkable political maturity the past five years, with open dialogue the chosen and preferred option.
Governance status
Matjhabeng Local Municipality is a Category B Municipality consisting of the Executive Mayor, the Speaker, 36 proportional representative councillors and 36 ward councillors. There are 8 members of the Mayoral Committee (MMC's), who are full time, assigned to each of the eight administrative departments and chairing the Portfolio Committees.
Key features / Developmental challenges
Matjhabeng Local Municipality consists of Welkom, Riebeeckstad, Thabong, Bronville, Chris Hani Park, Virginia, Meloding, Odendaalsrus, Kutlwanong, Allanridge, Nyakallong, Hennenman, Phomolong, Whites, Ventersburg and Mmamahabane.
The decline in the mining industry and subsequent retrenchments and closure of a number of businesses, as well as foreign workers staying behind in the hope to find other employment, are resulting in informal settlements in all six units continuously expanding. The region is also particularly vulnerable to ebb and flow in the agricultural environment.
Estimated population ± 408 170 — 750 000 (including 2 500 farms). Number of households: ± 108 000 - 120 000, of which number of indigent households is 18 000. Municipal area of jurisdiction: 5174,75 km². The main languages spoken are English, Afrikaans, Sesotho, iXhosa. Total number of municipal employees : 2 050. Unemployment rate: ± 40%
Special challenges are being posed by the continuous influx of people needing service delivery in terms of Free Basic Services, the need to keep an updated indigent register and the need for an updated register of households and population profile.
Strategic objectives
The Municipality has adopted the following four themes to achieve its strategic objectives in terms of its Integrated Development Plan : Municipal services to all residents / Sustainable growth and improved quality of life / Accessible, accountable and responsive municipality / Resourceful and developmental municipality.
Matjhabeng Local Municipality is committed to ensuring that every household has access to Water / Electricity / Sanitation services / Refuse removal / Road access to property / A safe and secure environment / Sport and recreation facilities / Social and housing services / Sites and municipal services.
Goals and priorities are : Refuse removal / Water conservation / Financial sustainability / Serviced sites / Ageing infrastructure / Transformation of the institution / Roads maintenance and reconstruction.
Matjhabeng's water losses is an unacceptable 44% or estimated R58 million per year. The loss is mainly due to the collapsing infrastructure built to last no longer than 50 years, with the result that water lines and sewerage lines are prone to bursts and leaks.
A Water Demand Strategy to reduce water losses includes a Water Service Development Plan (WSDP) - the first municipality in the Free State to adopt a WSPD as far as could be ascertained.
The increase in consumers will necessitate the expansion of existing sewerage networks, especially as they are also in various stages of decay.
Achievements making a difference
•Electricity, water and sanitation
The Municipality supplies electricity, water and sanitation to the community. Bulk water is provided by Sedibeng Water, while bulk electricity is provided by ESKOM.
Housing is a Provincial competency, although Matjhabeng Local Municipality develops the infrastructure for new developments (water, waterborne sewerage systems, storm water drainage etc).
The total number of serviced sites in Matjhabeng, including the industrial sites, are approximately 89 000.
As for sanitation, the eradication of the bucket system remains a primary goal, especially in Phomolong (Hennenman), Meloding (Virginia) and Kutlwanong (Odendaalsrus). The total backlog, including new areas, is 23 765. All new developments have an in-house toilet structure.
A major service delivery challenge is to ensure that sewerage plants have the capacity to carry the additional development, which means some of the plants will have to be expanded. A large number of projects concerning sewerage reticulation and/or upgrading of networks are either currently running in Matjhabeng or has recently been completed.
• Roads
Matjhabeng Local Municipality has as a Pavement Management System in place. The majority of main streets is still in good condition, but some suburban streets need urgent attention. Some roads resort under the province, which enters into partnerships for maintenance or construction.
A ring road in Mmamahabane (R3 million) and the construction of a 200 metre road in Thabong (R1,29 million) is currently on the table. Resurfacing of roads in all units was done at R15 million.
Other milestones include: A taxi rank at Nyakallong / A distributor and bus route in Phomolong / Built Ndaki Road, Buthelezi Road and a bus road in Meloding / Calabria main access road in progress / Road 200 in Thabong in progress / Taxi and bus routes in Mmahabane, Thabong and Nyakallong in progress.
• Free basic services
All registered indigent residents receive 6 kiloliters of water and 50kW electricity. All other services are subsidized. The subsidy has been raised to R110 per month.
• Housing
A total of 15 000 houses were built since 2001, with the Municipality providing the infrastructure.
The development of low and middle income housing by developing non-racial sustainable human settlements was achieved. The following community based development projects resulted in houses being built: Goldfields 300, Meloding 200, 100 Women Project, Nyakallong 239, Meloding 419, Baruch 152 and Siyakha 100.
Of highly notable importance is that Hani Park, an informal settlement, will be the first area to be developed fully as a residential area by this Municipality since 2000. Work has already begun and town planning is completed. Approximately 1 100 households residing in Hani Park have been relocated to new stands in Extension 19 as part of Phase 1.
Local economic development
• Context
The once dominant position of the Matjhabeng region in 1996, contributing 38% to the GGP in the Free State, shrunk to a mere 14,8% in 2003 and many enterprises closed down as demand for their services dwindled. The decline in the mining activity required a diversification to other areas of the economy and Council has embraced this reality since 2001, resulting in a positive growth from –6% in 2002/3 to -1,3% currently.
• Youth focus
The Office of the Executive Mayor serves as patron for a bursary scheme for students since 2005 covering the cost of registration fees.
In August 2005, the Department of Social Development and Community Services launched the Matjhabeng Youth Trust, focusing on the development of the youth in all six units in partnership with Belgium.
Matjhabeng Local Municipality is currently host employer to interns and learners in respectively the Finance Department and Electrical Engineering Department. Goldfields FET College is the training provider for the electrical learnership under the auspices of the relevant SETA.
Business initiatives
Since the implementation of business outreach programme by the Executive Mayor to potential businesses, Matjhabeng has seen a dramatic rise in investments with investors having an open door to political leadership. A Mayoral Economic Development Advisory Forum representative of all communities and all economic sectors has been established to assist with a blueprint for economic opportunity and progress. It's mandate is finding solutions to economic challenges that will contribute to sustainable growth and to serve as a vehicle to strengthen co-operation among economic partners – local government, business, trade unions and community organizations.
The Matjhabeng Marketing and Investment Company (MMIC) has been established to assist Council with marketing and exploring business opportunities for Matjhabeng. The Board of Directors, under the chairship of Adv. Brenda Madumise, is all distinguished experts in their respective fields. Being autonomous from Council, the entity can function on economic principles with little political intervention. The Board is liaising with Harmony Gold about starting up a Business Support Centre for the training and financing of SMME businesses. The Flemish Government and Office of the Premier are also involved.
Matjhabeng Local Municipality has put an Investors Incentive Scheme in place, with benefits ranging from special service tariffs in the establishing to flexible repayment arrangements for municipal land. The Incentive Scheme also encourages employment of local labour, training and skills development.
Currently the following development projects are amongst others in progress or running in Matjhabeng, creating employment for local residents:
Two residential developments of respecively R152 million and of R165 million in Welkom
Extension of a shopping mall in Welkom at R100 million
A new residential development at R250 million at Virginia
A new production plant and factory worth R26 million for Sparta Beef in Welkom
Revamping of a dilapidated hotel into a shopping mall at R2 million in CBD, Welkom
Two nurseries, Waterfall Nursery (new development – R5 million) and Alma Nursery (expansion – R2 million)
A number of national franchises relocated their outlets, stimulating the building industry
Several renovations and extensions to other existing businesses, some worth more than R2 million
Ligia Paper Factory: R60 million development expansion
The establishment of a BEE owned commercial radio station in Welkom
The development of a BEE owned shopping mall in Thabong
Extension to Goldfields Casino worth R27 million
A light industrial area in Thabong has been proclaimed and a community forum established, while a business area in Bronville has been approved by Council.
Five sector strategy
Driven by the Department of Economic Development and Spatial Planning, a Five Sector Strategy is focusing on diversifying the local economy. The five economic sectors involved are:
· A distribution hub for Southern Africa, which includes an international cargo airport, the redirected N1 road to pass through Matjhabeng and improved rail connections.
· Alternative agricultural products that will be processed before being exported to world markets and after being grown through intensive methodologies.
· A gold jewellery hub to add value to gold, precious and semi-precious stones.
· An unique brand of tourism applications, including events tourism, mining-orientated tourism, game farms/zoological gardens and tourism routes.
· Development of training and support structures customized to meet local needs.
A whole range of developments have already ensued at a pace from this Five Sector Strategy, many of which are being dealt with under the auspices of the MMIC.
One of the main developments flowing from the Five Sector Strategy needed to be highlighted here, is the development of agriculture according to three different categories :
· Urban farming into commercially viable projects to train and assist emerging farmers. In this regard the flagship project is the paprika net house farming project at Bronville - with a Spanish investor on board, produces also tomatoes and cabbage. The existing infrastructure of 4 ha is to be doubled to 8 ha, while a Centre of Excellence for the training of emergent farmers in the Free State will also be instituted. To realize this, approximately R7 million will be needed in addition to the R3, 5 million already invested.
· Commercial farmers are to produce intensively alternative products for export purposes.
· Commonage farms for emerging farmers under management of Commonage Management Committee. Currently commonages are involved in poultry and piggeries at Virginia, Hennenman and Allanridge.
Freedom of Matjhabeng to SAAF Bloemspruit
The conferral of the Freedom of Matjhabeng to the Air Force Base Bloemspruit and the ensuing Matjhabeng/Harmony Wings, Wheels and Water Festival, provided an opportunity for Matjhabeng to showcase itself to potential business investors. Thousands of people flocked in November 2005 to the military parade and events at venues in Odendaalsrus (Phakisa), Virginia and Welkom (Airport). It included a food-drive for the needy. The festival was co-organized by private business in a partnership as the first of its kind, resulting in a much needed injection for the local economy.
Municipal financial viability
•Capital projects
The current consumer collection rate is within the region of 50%-60%, which makes the current level of services unsustainable. Since the establishment of Matjhabeng Local Municipality, the following capital projects category has been implemented in conjunction with the Lejweleputswa District Municipality:
Roads and storm water: R34 107 909
Upgrading of cemeteries: R788 560
Upgrading of sport facilities: R2 071 130
Sewer network / reticulation / pump stations / works:
R25 629 908
Electricity network and high masts light: R6 935 876
Water lines / supply / reticulation: R5 505 039
Our most conservative estimate of funds available for projects, has led to the development of a R112 400 000 Capital Budget for the 2005/06 financial year. The following can be reported:
R47 million has been spent on various capital projects throughout Matjhabeng
R13.4 million has been spent on roads and storm-water upgrades in Kutlwanong, Meloding, Mmamahabane, Thabong and Welkom
R12.4 million has been spent on housing development and upgrades in Thabong
R9.9 million has been spent on sewerage upgrades in Meloding, Nyakallong, Odendaalsrus, Phomolong, Saaiplaas and Welkom
R1.6 million has been spent on water reticulation in Geneva, Odendaalsrus, Thabong
R790 000 has been spent on cemetery upgrades in Kutlwanong, Phomolong, Virginia and Ventersburg
R680 000 has been spent on upgrading of sport facilities in Kutlwanong, Mmamahabane, Nyakallong, and Welkom
R8.2 million has been spent on other projects such as the paprika project, ring fencing of electricity, high mast lights, storm-water dams and many others
• Mayoral Audit Task Team
An Audit Task Team consisting of Councillors of all political parties and municipal officials was established with the mandate to review internal controls in relation with financial management related to the audit report.
• Transparent processes
A number of policies to streamline processes and to enhance transparent governance, have been either adopted by Council, or approved as working documents. These include policies on Cash Management, Anti-corruption, Supply Chain Management and Preferential Procurement, Credit and Payment Management and Debt Settlement Offers.
Tender procedures, including procedures applicable to the adjudication process, have been established.
• Contract data base
A contract data base was established to compile information of all contracts with the Municipality, including those before 1994. The aim is, amongst others, to establish compliance to contractual obligations towards the Municipality. This assists considerably with revenue collection.
• Payment made easy
Lay-out of the payment and enquiries section in all units to be user friendly has been completed. Payment by Internet banking has been introduced, as well as Speed point Pay points at approved outlets.
• Valuation roll
A new valuation roll is being addressed, with a Municipal Rates Policy adopted as a working document. Workshops with residents are scheduled to ensure public participation and the dissemination of information. The envisaged implementation date for the new valuation roll is 2007.
• Project Consolidate
Matjhabeng Local Municipality has been identified as one of the municipalities requiring assistance, in particular on the Billing System which is a pilot project within Project Consolidate.
The implementation of the action plan has begun, starting with debtor data cleansing through physical verification of information, updating the database, verifying the meter readings and implementing professional credit control on consumers with arrears.
• Geographic Information System
Initiatives that will support the implementation of the IDP, is the Geographic Information System (GIS), named Project Vula-masango, a computer and satellite technology for capturing and processing data about the earth that is spatially referenced. It provides for a map of Matjhabeng, a map of each unit, a map for each ward, and can zoom into stand level. It is also able to retrieve information of stands, such as the pay rate, etc. GIS feeds from data relating to title deeds, finance records, engineering, valuation and planning. The development of the programme (R800 000) is funded by the Development Bank of South Africa.
• E-Government
The Information Communication Technology department is a showcase for Matjhabeng Local Municipality. It serves as the gateway to the daily running and integration of all the departments and other administrative processes at the Municipality.
According to experts not even the big metro's can compare to the levels of service delivery and system integration experienced locally. The ICT Service Desk in use has also proved itself as instrumental at managing service requests and work performance.
Matjhabeng is a reference site for three of the biggest IT companies in South Africa, among them Microsoft Business Connection.
Matjhabeng changed from a non-integrated billing system to an integrated billing system which allows municipal operations such as billing, graphic information system, business intelligence (also known as data mining).
• Training of Councillors
Councillors were subjected to a host of opportunities to better their qualifications or to capacitate themselves for their task such as Financial Performance Management and Control, an advance course in Labour Law, Project Management and Contract Management, Housing Dispute Resolution, Infrastructure Awareness Training, Batho Pele Service Delivery, etc. Meanwhile SALGA has presented a number of courses in Municipal Legislation, Managerial Responsibilities, Integrated Development Planning, etc.
• Corruption
Corruption has a thousand faces and even more tentacles. It is at times almost impossible to unlock the layers and layers of carefully and skillfully woven deceptions. Government, and specifically local government, is seen as a reservoir of easy money. Honest employees and Councillors are tired of being branded as corrupt, merely because they are part of the Municipality.
A Zero Tolerance Campaign against corruption has been declared and Council has adopted a number of specific and effective policies, among them the Anti-Corruption Policy enhancing sound financial management and/or control mechanisms.
The Executive Mayor commissioned the following forensic audit investigations and reports:
KPMG Report on alleged irregularities in the Municipality
PricewaterhouseCoopers Report concerning alleged irregularities in the Engineering Department
Conclusion
It is an inescapable fact that the Matjhabeng Local Council had in many ways since 2000 to build from scratch and had to chart a new course under new circumstances with new challenges.
In doing so, Council was bound to deliver to its citizens according to their widely ranging expectations – from basic services to new business investments.
We wish to thank our partners and stakeholders, including our residents and business for your cooperation and synergy. We trust we can rely further on you – in unity lies our strength.
So much remains to be done, but an advantage is that what has been achieved the past five years constitutes a sound foundation to be built on for the term of office ahead of the newly elected Municipal Council.
May the Matjhabeng Local Municipal area realises its potential as the most promising local municipality not only in our province, but also in the Free State.
Serake Leeuw
Executive Mayor
The success of the Mangaung SMME Service Centre established in August 2005 at Sanlam Plaza, Bloemfontein, led to the Centre being approved for conversion into the Mangaung branch of the national roll-out of the seda programme.
This was done under the guidance of a steering committee consisting of MLM Economic Development, UFS Centre for Business Dynamics, CUT Entrepreneurs School, the Bloemfontein Chamber of Commerce & Industry, FS Dept. Of Tourism, Environmental & Economic Affairs, the FDC, the Mangaung Youth Chamber of Commerce, Botshabelo Creations, the Dept. Of Labour, Eskom, ABSA and COMSEC.
seda Mangaung, being a partnership between the Small Enterprise Development Agency (seda) and the Mangaung Local Municipality (MLM), was officially launched on Friday, 24 February 2006, at Bloemfontein.
On the day, the actual launch was preceded by a seda Mangaung workshop held in the Bloemfontein City Hall, where representatives of seda, MLM and other stakeholders delivered addresses. This was followed by the signing of a Memorandum of Understanding between MLM and seda. Proceedings then moved to the newly equipped premises of seda Mangaung at Sanlam Plaza, Charles Street, where the ceremonial ribbon was cut amongst great excitement and interest.
At seda Mangaung, local as well as entrepreneurs from the province are able to receive assistance with business planning, technical support, access to procurement opportunities, co-operative enterprise development, import and export training, company performance assessments, business coaching and mentoring as well as market access and business linkages. The opening of the branch forms part of the national roll-out plan for seda to be accessible, share information, assist small enterprises with developing business plans and promote the culture of entrepreneurship amongst entrepreneurs.
Remarking on the event, the CEO of seda, Ms. Wawa Damane, said : “For many years, entrepreneurs within the Free State province were deprived the opportunity to have a dedicated agency that looks after the interests of small enterprises in that region. The launch of seda Mangaung is in line with government plans to accelerate service delivery and to bring small enterprise support services closer to the people and ensure that they participate in the mainstream of the economy”.
The Provincial Manager of seda Mangaung is Ms. Jackie Ntshingila, who says that she and her staff stand ready to serve both existing and prospective entrepreneurs with an array of services, products and tools hitherto not available in the Free State. Representatives of inter alia the FDC and the Umsobomvu Youth Fund also form part of the servicing team.
Ms. Diane Abrahams, General Manager Economic Development of MLM noted that "the partnership between MLM and seda will insure that SMME's in Mangaung and indeed in the province will receive quality business development support".
South Africa public expenditure management has undergone substantial reform since the mid 1990’s. Key to such reforms were the complete overhaul of the system of budget planning, implementation and management. Initially, it focused on supporting the attainment of macroeconomic stability and strengthening public spending, but later the focus shifted towards a more focused emphasis on the effectiveness of resource allocation and the efficiency with which public goods and services are delivered.
These and other reforms, such as the institution of multi-year budgets under the Medium-Term Expenditure Framework (MTEF), enabled more effective intergovernmental fiscal arrangements, through a system that allowed for more effective political oversight and a stronger focus on policy priorities as the ultimate driver of resource allocation. Such policy setting was further supported by budget stability and predictability that a transparent, yet disciplined, budget planning process, made possible.
Therefore today we find ourselves in a position where it is possible with the provincial budget to shift focus to the allocation of available resources to real service delivery plans, as opposed to the funding of item-by-item costs, based on historical item expenditure.
It is thus important to appreciate that the 2006/07-2008/09 provincial MTEF budget constitutes a deliberate attempt to direct provincial expenditure to those areas of operation that ultimately support the attainment of the goals and objectives of the Free State Growth and Development Strategy launched on 20 May 2005 and, in that way, have a meaningful impact on the lives of ordinary citizens of the Free State Province.
HIGHLIGHTS ON ECONOMIC GROWTH
The provincial economy had a 3,9% growth in real terms from 2004 and contributed 5,5 % to the country's Gross Domestic Product (GDP). The primary industries (agriculture, forestry and fishing & mining and quarrying) contributed 15,5% and the main contributor being mining at 11%. The contribution of agriculture, forestry and fishing has decreased from 5,1% in 2002 to 4,3% in 2004. The secondary industries contributed 17, 6 % and the main contributor being manufacturing at 12, 5%.
2006 BUDGET
What is a budget?
Budget is a reflection of a government policy, priorities, planning and implementation processes for delivery of goods and services. It is also an instrument that the Provincial Government uses to balance competing demands for scares resources. Free State Province's budget is driven by and aligned to the Provincial Growth and Development Strategy priorities in order to improve the lives of our people.
Where do we get our money?
• National Allocation:
Equitable share = R 9,595 billion
Conditional Grants = R 1,687 billion
• Provincial Own Revenue: R395 million
Total Revenue R 11,677 billion
1) Equitable Share is the portion of nationally raised revenue that is allocated to the province through the equitable share formula
2) Conditional Grants are funds allocated to the province from the national government's budget with conditions attached
3) Provincial Own Revenue is own sources of revenue collected by the province for example, patient fees, motor vehicle licences, gambling and liquor licences.
ALIGNMENT OF PROVINCIAL BUDGET TO THE FSGDS
In order to stimulate the provincial economy and job creation, the 2006/07 Medium Term Expenditure Framework (MTEF) budget has in line with the FSGDS the following primary developmental objectives:
• Economic growth, development and employment • Social and human development
• Justice, crime prevention and security
• Effective and efficient governance and administration
Cognizant of the last mentioned key priority areas, necessary adjustments were made to the 2006/07 - 2008/09 MTEF in order to align the provincial budget with the FSGDS.
During the 2006 budget process, the cluster approach was introduced to enhance the budget allocation and ensure alignment of departmental strategies to the FSGDS. This approach resulted in the funding of key priority areas through departmental allocations acording to the cluster system.
FUNDING OF FSGDS PRIORITIES THROUGH DEPARTMENTAL ALLOCATIONS
Priority 1 - Economic Development and Employment Creation
1) Agriculture - (R223 million)
2) Public Works, Roads & Transport less Traffic Management - (R936 million)
3) Tourism, Environmental & Economic Affairs - (R230 million)
TOTAL = R1, 389 BILLION
• Achieve economic growth rate at least equal to the national average growth rate Reduction of unemployment from 38.9% to 20%
• Provide adequate infrastructure for economic growth and development
• Reduce the number of households living in poverty by 5% per annum
Restructuring of FDC with special focus on SMME development, Investment Agency, Upgrading of tourism facilities, Harrismith Logistical Hub, Marketing the province as tourist destination through Tourism Marketing Authority, Establishment of an office at the Vredefort Dome, New roads construction [E.g -Vaalpark Interchange, Access to Koppies Dam, Springfontein - Bethulie], Rehabilitation and upgrading of road network (E.g Parys to N1, Sasolburg to N1, Dealesville Road), Implementation of the Expanded Public Works Programme (EPWP), Farmer support funded through the Comprehensive Agricultural Support Programme (CASP), Maintenance of government property, Implementation of Land Care projects.
Priority 2 - Social and Human Development
1) Education - (R5, 272 billion),
2) Health - (R3, 249 billion)
3) Social Development - (R418 million),
4) Sport, Arts, Culture, Sc & Tech - (R131million)
5) Local Government & Housing - (R718 million)
TOTAL = R9, 788 BILLION
• Improve the functional literacy rate from 69,2% to 85%
• Provision of shelter for all the people of the province
• Stabilize the prevalence of HIV and Aids and reverse their spread
• Reduce the number of households living in poverty by 5% per annum
• Reduce the mortality for children under five years to 65 per 1000 live births
• Reduce the obstetrical maternal rate from 65, 5 to 20,06 per 100,000 woman in reproductive age group
• Provision of basic services to all households
v
Implementation of no fee policy, Expansion of Grade R, Implementation of National Curriculum Statement, Recapitalization of Further Education Training Colleges, Expansion of Education Management Information System (EMIS), Provision of Learner Teacher Support Material, Expansion of Adult Basic Education and Training, Expansion of Nutrition Scheme, Improvement of Human Resource Management System, Forensic Pathology Services, Expansion of Primary Health Care Services, Implementation of the Provincial Emergency Medical Services Model, Increase training of nurses, Implementation of new legislation (Children's, Older Persons, and Child Justice Bill), Expansion of Social Welfare Services, Implementation of Mass Sport Participation Programme, Support the Provincial Arts & Culture Council, Adoption of the new National Housing Strategy (Housing Fund), Local Government Support, Provisioning of social infrastructure (schools and clinics).
v
Priority 3 - Justice, Crime Prevention and Security
1) Public Safety, Security & Liaison - (R32 million)
2) Traffic Management From Public Works, Roads &Transport - R131 million
TOTAL = R163 MILLION
To reduce the crime rate by at least 7% per annum (with the involvement of SAPS & DJC)
Promotion of community participation, Combating of Corruption in SAPS, Implementation of Safety Programme at all Institutions, Development and Implementation of Integrated Crime Prevention Programme, Victim Empowerment and Effective Traffic Management.
Priority 4 - Effective Governance and Administration
1) Provincial Treasury - (R120 million)
2) Premier - (R92 million)
3) Legislature- (R74 million)
TOTAL = R286 MILLION
All objectives that have been mentioned under the previous key priorities remain appropriate in respect of this key priority.
Monitor the implementation of FSGDS, Enforce integrated planning processes at local authorities and provincial government, Monitoring implementation of MFMA, Develop and rollout the Supply Chain Management System, Ensure alignment of budget to Provincial Growth Strategy, Implementation of the Provincial Suppliers Management Information System, Provide strategic leadership in Infrastructure Delivery models, Upgrade of ICT infrastructure, Improve the service delivery levels of the Free State Development and Training Institute, Conduct quality legislative oversight.
TOTAL FUNDING OF 4 KEY PRIORITY AREAS
% SHARE OF PROVINCIAL BUDGET IN TERMS OF 4 PRIORITIES
HOW WILL THE R11, 626 BILLION BE USED BY THE DEPARTMENTS IN LINE WITH KEY PROVINCIAL PRIORITIES
Priority 1 (R1, 389 billion) - Economic Development and Employment Creation
Tourism, Environmental and Economic Affairs
The department's budget is R 230 million and will provide for an economic and environmental governance system.
Agriculture
The department's allocation is R223 million and is intended for the provision of agricultural development and support to the people of the Free State.
Public Works, Roads and Transport
The department is allocated R936 million (excluding Traffic Management) for the provision, promotion and sound management of assets, transportation and infrastructure systems.
Priority 2 (R9, 788 billion) - Social and Human Development
Education
The department's allocation is R5,3 billion for provision of lifelong education and training.
Health
The allocation of the department is R3, 2 billion for providing comprehensive health services.
Social Development
Social Development receives R418 million for rendering inter-sectoral and integrated developmental social services.
Local Government and Housing
The total allocation is R 718 million of the provincial budget. This includes R522, 601 million of Integrated Housing and Human Settlement Development Grant for housing delivery in the Province.
Sport, Arts, Culture, Science and Technology
The department's allocation is R131 million for enhancing quality of life through sport, arts, culture, science and technology
Priority 3 (R163 million) - Justice, Crime Prevention and Security
Public Safety, Security and Liaison
The Department receives an allocation of R32 million to monitor, oversee and assess police service delivery.
Traffic Management from Public Works, Roads and Transport
The allocation is R131 million to ensure that all privately and government owned vehicles registered in the province are licensed and all drivers are appropriately authorised to drive.
Priority 4 (R286 million) - Effective Governance and Administration
Department of the Premier
The budget of this department is R 92 million to enable the Premier to fulfill her constitutional obligations and other functions.
Free State Legislature
The budget of the Legislature is R 74 million to provide funding for the legislative and institutional support services required by the Legislature
Free State Provincial Treasury
The department's allocation is R 120 million to promote prudent financial management of provincial resources and its core functions
HOW DO WE SPEND THE PROVINCIAL BUDGET BY ECONOMIC CLASSIFICATION?
What is economic classification?
"Current Payments" - means any payments made by a provincial department in respect of the operational requirements of a department, and includes, amongst others, compensation of employees, goods and services, interest, rental of immovable properties.
"Transfers and subsidies" - means any payments made by a provincial department to another organ of state or any other person in respect of which that department does not receive anything of similar value directly in return.
"Payments for capital assets" - means any payments made by a provincial department for assets that can be used continuously or repeatedly in production for more than one year.
Breakdown of the R11, 626 billion by economic classification
Current Payments = R9, 682 billion or 83 % of the
provincial budget
Transfers & Subsidies
= R1, 363 billion or 12% of the
provincial budget
Payment for capital assets
= R582 million or 5% of the
provincial budget
Major spending items within economic classification
Compensation of Employees = R7, 380 Billion or 63% of the Provincial Budget
Goods & Services = R2, 302 billion or 20% of the Provincial Budget
Transfers & Subsidies = R1, 363 billion or 12% of the Provincial Budget
Payment for Capital Assets = R582 million or 5% of the Provincial Budget
INFRASTRUCTURE BUDGET R1, 184 BILLION
INFRASTRUCTURE BUDGET BY CATEGORY
New Constructions Health (R16, 771 Million), Education (R130, 849 Million), Public Works, Roads & Transport (R103, 400 Million), Agriculture (R25, 306 Million), Sport, Arts, Culture, Science & Technology (R18, 196 Million), Tourism, Environmental & Economic Affairs (R10, 300 Million) TOTAL = R304, 822 Million
REHABILITATION
Health (R128, 046 Million), Education (R39, 562 Million), Public Works, Roads & Transport (R113, 000 Million), Sport, Arts, Culture, Science & Technology (R5, 779 Million) TOTAL = R286, 387 Million
RECURRENT MAINTENANCE
Education (R8, 500 Million), Public Works, Roads & Transport (R577, 707 Million), Sport, Arts, Culture, Science & Technology (R2, 025 Million), Tourism, Environmental & Economic Affairs (R2, 900 Million) TOTAL = R591, 132 Million
OTHER CAPITAL PROJECT
Education (R2, 400 Million) TOTAL = R2, 400 Million
Ms. Diane Abrahams, General Manager Economic Development of MLM noted that "the partnership between MLM and seda will insure that SMME's in Mangaung and indeed in the province will receive quality business development support".
For more information contact:
• MEC's Office Tel: 051 4054141
• HOD's Office Tel: 051 4033065
• Budgeting Tel: 051 4055094
• Fax 051 4054152/ 448 1758/051 4033475
• E-mail: kas@treasury.fs.gov.za
• Or visit www.dot.fs.gov.za
Provincial Government Building
55 Elizabeth Street
Bloemfontein
Private Bag X20537
Bloemfontein
9300
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