Chang­ing lives of peo­ple for the bet­ter in ru­ral ar­eas

The Star Early Edition - - OPINION & ANALYSIS - Her­bert Theledi Her­bert Theledi is the man­ag­ing di­rec­tor of Nth­wese De­vel­op­ments.

UNDERDEVELOPMENT con­tin­ues to haunt too many ru­ral ar­eas in South Africa, mak­ing it cru­cial that the gov­ern­ment and the pri­vate sec­tor work to­gether to tackle it. Co-oper­a­tion is needed if we aim to ad­dress the is­sues of poverty, job­less­ness, lack of ba­sic ser­vices and other so­cial ills that have be­come syn­ony­mous with ru­ral ar­eas.

For prop­erty devel­op­ment to take place in un­der-ser­viced ar­eas, a key re­quire­ment is ba­sic in­fra­struc­ture. Not only does this in­fra­struc­ture have a pos­i­tive ef­fect on growth and devel­op­ment in ru­ral ar­eas but it is fun­da­men­tal to cre­at­ing an en­abling en­vi­ron­ment for vi­brant and sus­tain­able ru­ral com­mu­ni­ties.

How­ever, one of the great­est chal­lenges for prop­erty de­vel­op­ers, who look be­yond sub­ur­ban bound­aries, is the of­ten com­plete lack of sup­port­ing in­fra­struc­ture. To be vi­able and to suc­ceed, new-build prop­erty needs in­fra­struc­ture such as roads, power, water and san­i­ta­tion.

An­other ob­sta­cle in de­vel­op­ing ru­ral ar­eas is the un­cer­tainty that comes with land claims; this poses a great chal­lenge for both de­vel­op­ers and fun­ders.

In 2016, South Africa’s gov­ern­ment an­nounced plans to in­ject R865.4 bil­lion into in­fra­struc­ture projects such as hous­ing, roads, rail, pub­lic trans­port, water and elec­tric­ity, over three years. This was good news for prop­erty devel­op­ment com­pa­nies work­ing in un­der-ser­viced ar­eas.

Also help­ful has been the De­part­ment of Trade and In­dus­try’s Crit­i­cal In­fra­struc­ture Pro­gramme (CIP), a cost-shar­ing in­cen­tive for ap­proved de­vel­op­ers, which co-funds the build­ing of crit­i­cal in­fra­struc­ture needed be­fore devel­op­ment projects can go ahead.

This sub­sidy goes some way to­wards low­er­ing the cost of do­ing busi­ness for de­vel­op­ers, who would other­wise be un­able to carry the ex­tra cap­i­tal ex­pen­di­ture re­quired for a suc­cess­ful new build to op­er­ate op­ti­mally.

This pro­vi­sion of bulk mu­nic­i­pal in­fra­struc­ture by a de­vel­oper, on be­half of a mu­nic­i­pal­ity, nor­mally takes place when the mu­nic­i­pal­ity has lim­ited fi­nan­cial ca­pac­ity and in­fra­struc­ture up­grades lag be­hind the growth of hu­man set­tle­ments.

Hu­man needs

Nu­mer­ous ru­ral devel­op­ment pro­grammes and strate­gies have been in­tro­duced since the down­fall of apartheid to ad­dress ru­ral chal­lenges based on the im­prove­ment of ru­ral eco­nomic devel­op­ment and meet­ing ba­sic hu­man needs, but they lacked in­te­grated and co-or­di­nated plan­ning.

In 2009, ru­ral devel­op­ment be­came one of the key pri­or­ity pro­grammes in South Africa, through a Com­pre­hen­sive Ru­ral Devel­op­ment Pro­gramme (CRDP), which aimed to be an ef­fec­tive re­sponse against poverty and food in­se­cu­rity by max­imis­ing the use of nat­u­ral re­sources to cre­ate vi­brant, eq­ui­table and sus­tain­able ru­ral com­mu­ni­ties.

Un­der­pin­ning the CRDP is the land ten­ure ques­tion. Ten­ure re­form leg­is­la­tion should be able to cre­ate the ba­sis for an ef­fec­tive and sus­tain­able ru­ral land ad­min­is­tra­tion sys­tem. Leg­is­la­tion such as the In­terim Pro­tec­tion of In­for­mal Land Rights Act, the Up­grade of Land Ten­ure Rights Act and the State Land Dis­posal Act cre­ates a night­mare and is a cum­ber­some process for de­vel­op­ers as a com­pli­ance frame­work. As ru­ral com­mu­nity mem­bers are land rights hold­ers in those ar­eas, ex­ten­sive con­sul­ta­tive pro­cesses with the com­mu­nity must take place. This is not only oner­ous and time-con­sum­ing, but cre­ates ma­jor ob­sta­cles for de­vel­op­ers.

In ru­ral ar­eas, chiefs are cus­to­di­ans of ru­ral land and when de­vel­op­ers seek for­mal pro­tec­tion of their land rights by way of lease­holds, this cre­ates ten­sion be­tween the ru­ral com­mu­nity, the chiefs and the de­vel­op­ers.

Once long-term leases are ap­proved by the state, the chief ’s au­thor­ity to ad­min­is­ter the land ceases to ex­ist. Be­cause “in­for­mal” and cus­tom­ary prop­erty sys­tems of­ten pro­vide sub­stan­tial ten­ure se­cu­rity for ru­ral in­hab­i­tants, but lack of­fi­cial recog­ni­tion and sup­port from lo­cal mu­nic­i­pal­i­ties, this makes them dif­fi­cult to ser­vice.

The cur­rent eco­nomic cli­mate does not make things any eas­ier. De­vel­op­ers are aware that re­tail clients, in par­tic­u­lar, are tak­ing strain, lead­ing them to move to smaller out­lets and cur­tail plans for growth, which usu­ally re­sults in a loss of ten­ants.

On the plus side, Sho­prite, Spar, Boxer Su­per­stores and Pick n Pay re­main key an­chor ten­ants, ea­ger to set up shop in new ru­ral and town­ship com­mer­cial de­vel­op­ments. One suc­cess­ful com­mer­cial project is Eluk­wa­tini Cross­ing in Mpumalanga. It’s Eluk­wa­tini’s re­gional shop­ping cen­tre, a 26 000m² devel­op­ment com­pris­ing three an­chors: Spar, Sho­prite and Boxer. This is the kind of devel­op­ment that changes an area and trans­forms peo­ple’s lives.

Be­fore it was built, peo­ple in the re­gion had to travel up to 150km to reach proper shop­ping fa­cil­i­ties.

Be­cause there was no mu­nic­i­pal bulk in­fra­struc­ture in place, ev­ery­thing had to be built from scratch to make the project sus­tain­able. Sim­i­lar types of de­vel­op­ments are also tak­ing place in run­down CBDs across the coun­try, where lack of in­vest­ment led to the dere­lic­tion of some build­ings and a gen­eral de­cline in shop­ping.

These projects pro­vide em­ploy­ment for the work­ers who work on them and, sub­se­quently, for those em­ployed in the stores that op­er­ate from the cen­tre. Thou­sands of ru­ral devel­op­ment jobs have come about through ini­tia­tives such as build­ing shop­ping cen­tres and con­struc­tion of roads and other in­fra­struc­ture-re­lated ac­tiv­i­ties.

Mod­ern shop­ping malls, lo­cated where peo­ple live and work, are im­por­tant cen­tres of so­cial life, serv­ing com­mer­cial, en­ter­tain­ment, recre­ational, cul­tural, ed­u­ca­tional and so­cial pur­poses.

Their com­pre­hen­sive trade of­fer makes it pos­si­ble to shop, to ac­cess bank and fi­nan­cial ser­vices, to col­lect so­cial grant pay-outs in a se­cure en­vi­ron­ment, to meet friends, and to en­joy en­ter­tain­ment.

More and more of­ten, mu­nic­i­pal of­fices, health ser­vices and even places of wor­ship are lo­cated close to malls. They pro­vide a sense of com­mu­nity, as well as a pleas­ant, safe, con­ve­nient place for peo­ple to shop. They have be­come a cen­tre where fam­i­lies spend their free time.

But, more than that, in­te­grated de­vel­op­ments help change the lives of peo­ple in ru­ral ar­eas, giv­ing then more choice, bet­ter qual­ity, lower prices, and sav­ing them time and travel ex­penses. They also add to a greater cir­cu­la­tion of money in these ar­eas, which al­le­vi­ates poverty.

Our ex­pe­ri­ence has shown that col­lab­o­ra­tive ef­forts be­tween the gov­ern­ment and the pri­vate sec­tor are the most likely to be suc­cess­ful. Work­ing with lo­cal mu­nic­i­pal­i­ties can be most help­ful when deal­ing with land ten­ure is­sues, as they are able to clear bu­reau­cratic road­blocks.

Prop­erty de­vel­op­ers, by na­ture, take a medium- to long-term view of devel­op­ment. And, though we need to be cau­tious given the chal­lenges, there are many solid so­cio-eco­nomic rea­sons for mov­ing into un­der-ser­viced ar­eas. If you are pre­pared to do the re­search and to forge part­ner­ships with spheres of gov­ern­ment, and tra­di­tional au­thor­i­ties, the re­sults can be most re­ward­ing for all the stake­hold­ers.

PHOTO: SUP­PLIED

Twin City in Bush­buck­ridge, Mpumalanga, of­fers con­sumers more than 50 shops.

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