Municipality: Ba-Phalaborwa Local Municipality

Address

Phalaborwa
Cnr Nelson Mandela Drive and Selati Road Private Bag X01020
Phalaborwa, Limpopo 1390
South Africa
Phone: 015 780 6401
Fax: 015 781 0726

Description

Ba-Phalaborwa Municipality is a Category B municipality established in terms of Section 155 of the Constitution and strives to achieve the following objects of local government (as enshrined in Section 152 of the Constitution):

  • To provide democratic and accountable government for local communities;
  • To ensure the provision of services to communities in a sustainable manner;
  • To promote social and economic development;
  • To promote a safe and healthy environment; and
  • To encourage the involvement of communities and community organisations in the matters of local government.

It is one of the five local municipalities in the Mopani District. The Municipality has a geographical area of 3004.88 km2 and that constitutes 27% of the total Mopani District area. The Municipality serves as a convenient gateway to the Kruger National Park and the Transfrontier Park through the Mozambique Channel.

Organogramm Ba-Phalaborwa LM

Ba-Phalaborwa Municipality is a predominantly rural medium capacity local Municipality. It consists of 23  villages and three towns (namely Gravelotte, Namakgale Lulekani and Phalaborwa).

Figures from the 2007 CS indicate a population decrease from the situation in 2001. The population has decreased by 2.89% (about 3 794 people). This implies a household decrease of 2.9% (i.e. 973 households) based on the 3.9 average per household. However, the 2007 CS presents a 0.78% increase in the number of households (about 263 new households). The majority (36.3%) of the population is aged between 15 and 34, which suggests that the municipality is dominated by people who are both socially and economically active.

Key Challenges & Opportunities

The Municipality has a developmental mandate to fulfill, but is currently threatened by the downscaling of the mining sector (the main contributor to the local GDP). The mining sector is expected to shed jobs in the near future as a result of Palabora Mining Company (PMC) stopping copper mining and the resultant closure of other related operations in the area. The Municipality’s main challenge is to stimulate the local economy and attract sustainable investment into the area. There is an abundance of a variety of minerals within the Phalaborwa area and the Gravelotte Greenstone Belt and that further presents an opportunity for small scale mining. The close proximity of the Municipality to the Kruger National Park Gate also presents an opportunity to grow the tourism industry.

Local Economic Development (LED)

Global economic trends indicate fluctuations in interest rates, fuel prices, inflation, and cost of energy. These factors are expected to negatively affect underdeveloped and developing countries the most. Resultantly, layoffs and high unemployment rates may soon hit the local economy. The unstable value of the rand against foreign currencies will affect, amongst other sectors the mining industry and tourism. The economy of Ba-Phalaborwa Municipality is highly dependent on mining and there are moves to grow the tourism sector as an alternative to mining.

LED in Ba-Phalaborwa Municipality has to be founded on and guided by the principles and objectives of the National Spatial Development Perspective (NSDP), the Provincial Spatial Development Strategy (PGDS), the District Local Economic Development (LED) Strategy, recommendations of the District Growth and Development Summit, and the local Spatial Development Framework (SDF). The local SDF should be able to define the space economy of the Municipality. 

In order for economic development to be coordinated it is suggested that development be primarily focused on areas of high population concentration.  A growth point is a high population concentration point and an economic hub in the area. The implication to the Municipality is that infrastructure in the growth points be strengthened in order to support economic development.

The following anchor programmes and projects were identified by the district summit to accelerate economic development and job creation:

  • District Fresh Produce Market
  • Greater Giyani Natural Resource Programme
  • Tunnel dried Tomato Project
  • Small-scale mining projects across the District.
  • Tiles from Clay,
  • Moshupatsela Programme
  • Sapekoe Tea Estates
  • Modjadji Nature Reserve Initiative
  • Shangoni gate Transfrontier park development
  • 2010 Soccer World Cup infrastructure development

The District LED Strategy identifies the following key economic Sectors for Ba-Phalaborwa:

Mining Sector
Ba-Phalaborwa has the highest concentration of minerals in the Mopani District hence mining is the largest economic sector in the Municipality and is also the largest employer. The Municipality’s mining sector contributes 92.5% to the District’s mining sector GDP. This contribution translates to 59.6% of the total district GDP. Mining gives Ba-Phalaborwa a competitive edge over other municipalities in the District. Unfortunately, copper mining (which constitutes the backbone of the mining sector in the municipal area) is destined to stop before 2020. The most mined resources in the Municipal area are copper and phosphate in the Phalaborwa area, with gold and antimony in the Murchison Greenstone Belt.
 
Agriculture
A wide variety of agricultural products are currently grown in the area. Fruit and vegetables are mostly destined for fresh consumption by the local and export markets. Farmers and private companies are responsible for some value addition. Value addition includes: manufacture of fruit juices, drying of fruit and vegetables, manufacture of atchaar.
 
Manufacturing
Manufacturing focuses on beneficiation of and value addition to products from the primary sector of the economy, namely mining and agriculture. It is, therefore, classified as the secondary sector of the economy. The manufacturing activities in the Municipality are mainly focused on the mining sector. There is, however, a potential for the processing and packaging of agricultural related products such as Cattle, poultry, vegetables, eggs, etc.
 
The Municipality employs 14.4% of the total district labour force that is in the manufacturing industry and hence contributes only 0.5% to the overall District GDP. Manufacturing does not give the Municipality a competitive advantage over the other sister municipalities in the District. It then implies that the production of mining raw materials is not equally complemented with local beneficiation and value chain addition. In order to grow the manufacturing industry, the Municipality needs to strengthen support services, such as transport network, electricity and technology. It is also important to unblock land claims disputes to free land for development.
 
Tourism
The decline of the mining industry forces the Municipality to venture into other economic sectors. The geographic position of Ba-Phalaborwa and the abundance of wildlife in the Kruger National Park present an opportunity for diversification into tourism. Tourism is the economic sector with the most potential for development in the Municipality as a result of the Municipality’s ideal location and climate.
 
The Mopani Local Economic Development Strategy indicates the following with regard to Tourism in Ba-Phalaborwa:
 
  • The Municipality has high business tourism flows – especially linked to commerce, industry and the mines.
  • Leisure traffic stops briefly in and around the town usually en route to and from the Kruger National Park (KNP).
  • There is a limited amount of traffic that stays outside the Park to make day visits into the Park.
  • Similarly, very few KNP visitors spend a night in Phalaborwa before or after their visits to the Park.
  • Stay-over leisure traffic is growing as far as the golf estate is concerned.
Tourism operators believe that the opportunity to travel to the Mozambican coast via Ba-Phalaborwa represents a significant tourism advantage. Archeological sites and the history of the arrival of the Malatji clan are also believed to hold tourism potential. The area has a particularly pleasant winter climate. The concept of converting former mine hostels into educational facilities or youth academies is another possibility. The fact that the local labour force comprises a high proportion of single persons reflects a need for leisure facilities that are not sufficiently available.
 
Trade 
Currently, the trade situation in the Ba-Phalaborwa municipal area is segmented between the formal and the Informal sectors. There are currently 189 registered formal businesses in Phalaborwa town; whereas data on businesses in the two townships and the rural areas is still to be collated. The existent gap between the first and the second economies is evident from the operations of the businesses in both the formal and the informal sectors.
 
Formal businesses in rural nodes, such as Makhushane, Maseke, Mashishimale, Majeje and Selwane are not well established. The businesses mainly serve as bread distributors with basic products not well stocked to the benefit of their customers.
 
The Municipality’s concern is to close the gap between the first and the second economies by improving the informal economic sector without devaluing the formal sector. Glen Steyn & Associates’ analysis of the informal sector will assist the Municipality to understand the fundamentals of the informal sector and craft a relevant intervention strategy.

Source: Ba-Phalaborwa LM: IDP 2010 - 2015.

Critical infrastructure

The Municipality is responsible for the rehabilitation and maintenance of 310Km of municipal road. In the past two financial years, 9km of new roads was build. In the 2005/06 and 2006/07 financial years; R800 000, 00 and R1 360 000, 00; respectively was allocated from operational budget to maintain the roads. In the same period, a total of R12 000 000, 00 from capital budget was spent to build municipal roads. Most of the municipal roads are still dirt roads and in bad condition. The municipality is struggling with road maintenance, given that there is no enough earthwork equipment.

There is one airport in the Municipality. The airport only accommodates small air crafts, but proves to be useful to the local mines and other businesses. There is a need to improve the airport and number of flights in order to add value to the tourism sector in the area.
 
Rail infrastructure in Ba-Phalaborwa is under utilised.
 
There are two hospitals in the municipal area, one in Phalaborwa town and another in Namakgale (Maphutha L Malatji Hospital). The Phalaborwa Hospital has been reduced to the status of a health centre. The current arrangement has put more strain on the Maphuta Hospital. There is a need to improve the quality of health facilities in order to accommodate the needs of tourists within the area. The nearest health facility that offers specialists’ services is Letaba Hospital and the Medi-Clinic in
Greater Tzaneen Municipality.

Strengths

Ba-Phalaborwa Municipality has a fully developed mining industry and a high potential of growing the tourism industry into a competitive sector. The Selwane area, along the Groot Letaba River, has a potential of becoming a formidable agricultural cluster with a tourism element in the Eland and Letaba Ranch.

 

Weaknesses

The per person income distribution in the municipal area indicates that about 83.3% of the municipal population earn a monthly income of R1 600 or less. If these figures are to translate to monthly household income, it can be surmised that the majority of household heads are either unemployed or under-employed and qualify to be declared indigents. 

Employment Status: 
  • Employed 19 913 59%
  • Unemployed 3 842 11%
  • Not economically active 7 282 22%
  • Not applicable 2 755 8%
  • Total 33 792 100
The proportion of people without any income increased from 63.8% in 1996 to 69.6% in 2001. Factors that contributed to this picture were principally, the downscaling of mines and the fact that many people join the informal economy and are classified as not having income. The 2007 CS indicates a decrease in the percentage of people without an income from 69.6% in 2001 to 43.2%. Although the decrease is welcome, the figures are still unacceptably high and the situation warrants intervention.
 
There are certain priority roads, especially in high population concentration points (municipal growth
points) that need to be upgraded from gravel to paved roads.