Municipality: Buffalo City Metropolitan Municipality

Address

Trust Centre
Cnr North & Oxford Streets PO Box 134
5200 East London , Eastern Cape
South Africa
Phone: 043 705 2000
Fax: 043 743 1688
Eastern Cape ZA

Description

Buffalo City Metropolitan Municipality (BCMM) has undergobe a transition from a category B to a category A municipality, which took effect immediately after the 2011 local government elections. This transition and the end of the term of Council which commenced in 2006 necessitated the development of new five year Integrated Development Plan which will guide development over the period 2011‐2016. 

Buffalo City is situated relatively centrally in the Amathole District, Eastern Cape Province, which is bounded to the south‐east by the long coastline along the Indian Ocean. The administrative structure is being gradually defined, and new functions and roles are being identified and allocated.

The boundaries of the newly established municipality now include a large area characterised by very different features. Two former municipalities (Transistional Local Councils) - that of East London and King William's Town - have merged into one, and also other areas, which previously were not included in either of them, are now part of Buffalo City.

The Eastern Cape Province is the second largest province in land area in South Africa, and covers some 169,580 square kilometres, which is 13,9% of South Africa’s total land area. The province has the third largest population of South Africa’s Provinces, approximately 6,4 million people (Census 2001), which is 14,1% of South Africa’s people. The province is generally seen as one of the two poorest in South Africa.

There are two major urban conurbations within the Province, Nelson Mandela Metropolitan and Buffalo City. Buffalo City is the key urban centre of the eastern part of the Eastern Cape. It consists of a corridor of urban areas, stretching from the port city of East London to the east, through to Mdantsane and reaching Dimbaza in the west.

East London is the primary node, whilst the King Williams Town (KWT) area is the secondary node. It also contains a wide band of rural areas on either side of the urban corridor. Buffalo City’s land area is approximately 2,515 km2, with 68km of coastline.

Both King William’s Town and East London have important functions. KWT functions as a Regional Service Centre and together with Bhisho, is the Provincial Administrative Centre and contains the seat of the Provincial Government of the Eastern Cape Province, whilst East London is the dominant economic centre.  

Buffalo City is broadly characterised by three main identifiable land use patterns. The first has been described above, that is, the dominant urban axis of East London – Mdantsane–KWT–Dimbaza, which dominates the industrial and service sector centres and attracts people from throughout the greater Amathole region in search of work and better access to urban service and facilities.

The second is the area comprising the fringe peri‐urban and rural settlement areas, which, whilst remaining under the influence of the urban axis, is distinct in character and land use patterns. These include the Newlands settlements, those settlements that previously fell within the former Ciskei Bantustans, and the Ncera settlements located west of East London.

Thirdly, the commercial farming areas form a distinctive type of area. These areas are dominant in the north‐eastern and south‐western (coastal) sectors of the Municipality and are characterised by extensive land uses, with certain areas making use of intensive farming (irrigation‐based).

Buffalo City has the 2nd largest economy in the Eastern Cape with a Gross Value Add of R29.7 Billion in the Eastern Cape after the Nelson Mandela Metro (Gross Value Add of R40 Billion) in 2009. The finance sector is the largest sector in Buffalo City Municipality representing 29 percent of the total economy. This is followed closely by Community Services which accounts for 28 percent of Buffalo City’s economy. This is followed by manufacturing (17 percent) and trade (13 percent) and transport 8 percent. The contribution of agriculture (1 percent) and mining (0.4 percent) remains minimal. 

The size of the financial sector at BCMM can be attributed to the regional head offices of the finance institutions which are domiciled in East London. The strength of the community services sector can be attributed to the Provincial Government Head Offices in Bhisho as well as the regional offices of the government departments that are in East London. 

The community services sector employed about 30 percent of the employed in BCMM. This is followed by trade (22 percent) and manufacturing 19 percent. It is interesting to note that the finance sector, the largest sector by size, employs only 8 percent of those employed in BCMM. It is also interesting to note that a new sector emerges when we look at employment figures in the form of the households sector. This sector refers to employment around households and currently accounts for 8 percent of all jobs in BCMM. Construction accounts for about 6 percent of the total jobs, agriculture employs 2 percent of the employed. 

After a period of decline from 2005, the unemployment rate at Buffalo City started to trend upwards especially during the period 2008 and 2009. This can be attributed to the recession which led to the loss of 5400 jobs as alluded to earlier. The number of unemployed people also increased accordingly to 82 000 during the period under discussion. With the expected recovery that is expected during 2010, the figures are expected to look much better. The unemployment rate of 24 percent at BCMM is much better than the 31 percent that was experienced across the province in 2009. The national unemployment rate averaged 23.8 percent in 2009

Source: Buffalo City Metro IDP 2011-2016

LED Activities
Key Projects
: Contact Mr Mbata on 043 705 1167/2 or email him on vuyanim@buffalocity.gov.za

Critical infrastructure

A large percentage of Buffalo City’s road infrastructure is old, rapidly deteriorating and in some cases past its functional life.  

Exorbitant costs are involved in order to upgrade the rural road networks from gravel to bitumen surface In Mdantsane where road infrastructure has had little or no maintenance for the past 25 years, an estimated amount of R600 million is required  to upgrade gravel roads to surfaced standard (surfacing of 250 km).  

Capital allocations are insufficient and only a small percentage of the road network is adequately maintained or upgraded on an annual basis. BCMM faces resource constraints for both the extension and maintenance of the road infrastructure. The annual increase in the maintenance budget has not kept pace with the escalation rates associated with this activity. Funding Backlog for maintenance of BCMM roads is estimated at R500 million. R100 million must be spent annually over a period of five years in order to eliminate this backlog. For the next two financial years R300 million is required for rehabilitation of surfaced roads so as to extend their life.

Strengths

East London is the centre of the Buffalo City Municipality and home to one of the areas identified by the government for its Industrial Development Zone programme, which is aimed at providing platforms for business and investors to improve global competitiveness.

Buffalo City is an attractive centre for import-export business and its strategic location makes it an important investment destination. It is well placed for trade with the rest of Africa as well as with the markets of America, Europe and the Pacific Rim. It is also equidistant from South Africa's major market centres, Johannesburg, Durban and Cape Town. The attraction of East London lies in its low input costs and its excellent infrastructure, including an airport and a port. It is also well connected to the rest of the country by rail and road. It has a deep-water port, which has spare capacity to deal with future growth.

East London is in the Eastern Cape, South Africa's second largest province. Its manufacturing sector is already quite well integrated into the world economy. For example, nearly half of the 120 large-scale manufacturing enterprises in the Eastern Cape are part of international corporations. More than 50% of the large-scale enterprises are exporting more than 25% of their output. 

The motor industry is evidence of how investor confidence is growing in this area. Mercedes-Benz SA, which is based in East London, is one of the largest foreign investors in South Africa. In 1998, it made a R1,4-billion investment in South Africa. It has recently bid for the contract to manufacture the new generation C-Class Mercedes Benz. According to the Border-Kei Chamber of Business, Mercedes-Benz SA won the C-Class contract, more jobs will be created and R10-billion will flow into the province from spin-offs and investments. Mercedes-Benz SAcurrently manufactures the world's right-hand C-Class Mercedes Benz vehicles.

The Eastern Cape has a large pool of skilled and trainable labour. With high rates of unemployment, people in the area are keen to work. In general, costs are lower in Buffalo City than in other industrial areas and there are a number of regional and municipal incentives available to interested investors. 

Apart from everything else, Buffalo City has an excellent, temperate climate and exceptional scenic beauty. These all add up to offer residents a high quality of life.

The Eastern Cape: the provincial picture

According to Statistics South Africa, the Eastern Cape has shown growth of 13,5% between 1998 and 2001, the highest in the country. The national average was 8,6%. The national government is spending substantial amounts on the development and growth of the region's infrastructure.

Other positive signs for the province include:

  • Continued export-led growth of the manufacturing sector (eg investment planned by the motor manufacturers).
  • Growth associated with the IDZs at Coega and East London.
  • Growth associated with currently underutilised agricultural assets in the former Transkei and Ciskei through the R350-million Mass Food Production strategy.
  • Growth associated with improved public sector productivity and delivery (increased spending in the province by national departments on the provision of water, electricity and sanitation).

The Industrial Development Corporation has identified a number of growth areas in the Eastern Cape. These include:

  • the motor vehicle industry;
  • the East London Industrial Development Zone;
  • agri-tech and food processing;
  • service sectors that incorporate tourism and call centres; and
  • activities linked to the integrated sustainable rural development strategy and urban renewal programmes of the national government.

Major companies in Buffalo City include:

  • Mercedes-Benz SA
  • Nestle
  • Johnson & Johnson
  • Marley Flooring

The East London Industrial Development Zone

IDZs are purpose-built industrial sites linked to an international port or airport, and are specifically designed to attract new investment in export-driven industries. The intention is to support these industries with world-class infrastructure, services and logistics networks. The East London Industrial Development Zone is one of only two IDZs that have been granted a licence so far.

The Mdantsane Urban Renewal Programme

The underlying objective of the South African government's urban renewal programme is to ensure that the programmes of the South African government on poverty alleviation, economic growth and environmental sustainability are implemented in an integrated way. Mdantsane was identified as one of the nodes for urban renewal by President Thabo Mbeki in his state of the nation address in February 2001.

Buffalo City boasts extraordinary tourist attractions and is rich in natural resources. The 68km of coastline includes 10 estuaries, conservancies, natural heritage sites, rocky shores and 14 sandy beaches.

The area is well suited to local tourism, ecotourism and historical tourism, especially that relating to the anti-apartheid struggle as many of South Africa's past and present political leaders hail from the region. More than 11 000 people visit Buffalo City during the peak holiday season. According to Tourism Buffalo City, 95% of visitors to the city are local, while 5% are international visitors.

The Indian Ocean coastline is the main feature - and attraction - of the Eastern area. The warm sea is good for swimming and fishing.

There are small resort developments at virtually all river mouths in the eastern part of the region.

East London, South Africa's only river port, is set on both the broad Buffalo River and Nahoon River and has the Gonubie River flowing around it. It is known as the gateway to the region's tourist corridors: the Sunshine Coast and the Wild Coast.

The Sunshine Coast is to the south and runs for more than 200km to Port Elizabeth. It includes Beacon Bay and the coastal towns of Gonubie and Kidd's Beach.

The Wild Coast is to the north. Rugged and unspoilt, the coastline is indigenous coastal forest. Resort areas and premier ecotourism destinations include Kwelera, Glen Eden, Cintsa West and Cinsta East, Haga-Haga, Morgan Bay and Kei Mouth.

Rich in history and culture

The Eastern Cape has played a prominent role in South African history. As Tourism Buffalo City points out in their very comprehensive overview of the history of the area, it was here where, in the latter half of the 18th century, black and white met for the first time. For many years this territory was the contact zone between these two groups. The consequences of this delicate and somewhat temperamental relationship made a lasting impression on the history of modern South Africa. Today, almost 200 years later, the Buffalo City community reflects this turbulent past in the kaleidoscope of its rich cultural heritage and proud history. 

Weaknesses

The City acknowledges that low economic growth and a high rate of unemployment are still prevalent and present a major challenge. This further translates to relatively high levels of poverty which is widespread within the City.

High levels of poverty are apparent in the statistics from last Census where approximately 70% of households in the City indicated an income of less than R1500 per month, with 28% of all households indicating no income at all. Unemployment rate with the Metro is estimated to be about 24%.

One of the threats to the future development of Buffalo City Metro is lack of appropriate education and skills levels. A significant portion of the Metro’s potential labour force have not attended school or completed their primary phase. Further, according to the last Census conducted in 2001 only 21% of the City's 20 years and above population, had grade 12, 16% had post–school education and only 17% of 15  ‐  24 year olds were enrolled in post‐school study. The recent 2007 community survey revealed a slight improvement.