Municipality: Lukhanji Local Municipality

Description

Lukhanji Local Municipality falls under the jurisdiction of the Chris Hani District Municipality, Eastern Cape Province. The municipality has a population of 203,317 and a municipal area of 3,812.87 km². 

Apart from the urban areas of Queenstown and Whittlesea, the municipality is predominantly rural and agricultural (96%), and other development is concentrated around main routes, road intersections and railway stations and sidings.  

The economic growth rate for Lukhanji experienced fluctuations in the economy from 1996 to mid-2006 with an average 2.1% per annum, which is lower than the national average of 4.5%.

The largest sector contributor of GVA in Lukhanji in 2006 is the General Government Services sector, which contributes 30.5% of the GVA in Lukhanji. This is followed by the Finance and Business sector, which contributes 20.3% of the GVA in Lukhanji. The Wholesale, Retail and Catering sector contributes 19.4% of the GVA in Lukhanji. The local economy in the Lukhanji district is experiencing a growth in most sectors. 
 
The top five sectors contributing to the local economy significantly are as follows:
  • General Government Services
  • Finance and Business
  • Wholesale, Retail and Trade
  • Community and Social Services
  • Manufacturing
The main employment sectors that have increased in formal employment included the following:
  • General Government Services
  • Wholesale, Retail trade and Catering Services
  • Construction
  • Finance and Business services
  • Mining

Critical infrastructure

Lukhanji has a central geo-graphical position and is well connected to the N6 highway. Queenstown is furthermore connected to railway and domestic air transport. 

With 180 educational institutions, including the Ikhala Public FET College and the Walter Sisulu University of Technology & Science, Queenstown is an important educational centre, attracting pupils and students from other areas.

Strengths

Queenstown is the administrative, commercial and service centre of the Chris Hani District. Skills level are higher than in the sourrounding municipalities, partly because many departments have regional offices in Lukhanji which import skilled people from outside the area, and also because there are tertiary educational insitutions in the municipal area.

Although  Tourism is a comparatively small sector in terms of GVA and jobs, it is an integral part of the municipality's LED strategy.  Tourism is seen a major contributor towards capital investment into the municipality in the future. In recent years, Lukhanji has therefore tried to strengthen the tourism sector not only in order to unlock its economic potential, but also to diversify the local economy. 

 
 
In order to effectively realise Lukhanji's LED vision and to exploit the job creation potential of other economic sectors, the further promotion and development of tourism has been defined as a key task. As a core activity, a Local Tourism Organisation (LTO) was planned, and in cooperation with the DM and the private sector  finally launched in early 2009.

Weaknesses

Unemployment is a huge challenge in the Lukhanji Municipal area. In 2007, the formal unemployment rate for the economically active population was slightly above 41.1% (2,606) in the Lukhanji area, which is similar to the districts rate at 40.6%. 

Key observations in within the Lukhanji Municipal area with regards to access to municipal infrastructure provision are as follows:
  • 88.7% of households in the area has access to electricity,
  • 59% of households living in the Lukhanji Municipal area has access to a flush toilet connected to a sewerage system,
  • 70% of households in Lukhanji Municipal area is serviced by a weekly municipal refuse removal,
  • 81.1% of households in the area have yard connections (Lukhanji IDP 2008)
The Lukhanji municipal area has some backlogs and they are as follows:
  • Electricity backlog 12%
  • Sanitation backlog 13%
  • Water backlog 7%
  • Refuse backlog 8%
  • Housing backlog 8%