Shoppers queue at a grocery store during the nationwide 21-day lockdown. The writer says if there is one lesson we can learn from the experience of the Covid-19 Virus, and its impact on the economy, especially of our country, it is that the state of our economy forces us to find more creative and innovative ways to lift our economy from the doldrums into economic buoyancy. Photo: Reuters
Shoppers queue at a grocery store during the nationwide 21-day lockdown. The writer says if there is one lesson we can learn from the experience of the Covid-19 Virus, and its impact on the economy, especially of our country, it is that the state of our economy forces us to find more creative and innovative ways to lift our economy from the doldrums into economic buoyancy. Photo: Reuters

SA needs to establish business villages in municipalities on one-household, one-hectare model

By Wallace Mgoqi Time of article published Apr 7, 2020

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CAPE TOWN – If there is one lesson we can learn from the experience of the Covid-19 Virus, and its impact on the economy, especially of our country, it is that the state of our economy forces us to find more creative and innovative ways to lift our economy from the doldrums into economic buoyancy.

One of the ways to do so lies in looking at what we already have, and put strategies in place to maximise the potential of what we already have. Our Constitution is not silent about some of the things we need to do, especially the poor in our midst, who happen to be the most affected by the ravages of the Covid-19.

The Constitution in Section 153 on Developmental Duties of Municipalities, states that a municipality must structure and manage its administration and budgeting and planning processes to give priority to the basic needs of the community and to promote the social and economic development of the community, and participate in national and provincial development programmes.

The question to ask is how much have municipalities done by way of using economic resources such as land and other economic resources, to meet the needs of communities, in the past 25 years?

Instead, anecdotes abound, telling the tragic stories of neglect of even existing infrastructure, that was there in years gone by, but were allowed over the years, to deteriorate into dysfunction.

Recently, a friend from the far-flung town of Zastron, from the southern parts of the Free State, was lamenting, how a town, bordering Lesotho and the Eastern Cape, that used to be a vibrant economic hub, with good road infrastructure, and even a railway line running to Bloemfontein, has, over the years, been allowed to be something of the past.

There is a dam that used to be a hive of tourism activity, which has been vandalised and today is something of the past. Arable land with potential to produce agricultural products lies fallow and unproductive.

He was reminiscing about his childhood days on how vibrant the town and surrounding areas were, including the breeding of goats, from whose milk, cheese was produced.

Their resources are still there but need to be structured, managed and administered in a way that would make them productive,  profitable and sustainable, so as to support the local communities.

There are thousands of small entrepreneurs in our country, across municipalities, who are irking an existence, with little or no support, by way of infrastructure and economic resources, to make it happen.

An initiative was started a few years ago in the Commission For Gender Equality, known as One Woman, One Hectare of Land, aimed at empowering women economically. The concept was taken to the Department of Rural Development and Land Reform, which took the idea and made it One Household, One hectare, and importantly, developed it in such a way that the rights created would be registrable in the Deeds Office.

The proposal, in essence, is for each municipality to use the land in its commonage for purposes of establishing a business village, put in infrastructures such as streets, lighting, water and sanitation and other health facilities. Then a facilitating agent with business acumen, organisational and administrative skills, identifies entrepreneurs, who are already on the ground, and these are selected to take their initiatives into this business village. People who are already involved in some economic activity are easy to support than those who have not yet started.

On the one hectare, the business activity is going to be the priority. Whereas in the past the focus of state interventions in lifting up the poor has been on other priorities such as housing, jobs etc. This has definitely not worked, on the whole, whereas prioritising economic activity stands a better chance of enabling people, once they are successful economically. They will be able to secure and meet their other needs, such as housing, education, transport, and other household needs.

In Phillippi, Cape Town, there is a business village built by a businessman, who bought public land and bought containers, which got converted into units for entrepreneurs to lease and run their businesses, paying monthly rentals to the landlord.

This model, however, proposes that the use rights: on the one-hectare land be allocated and registered the DRDLR in the name of the household. Such registered rights would serve as security and collateral against loans raised for the business. Initially, the business owner will run the business from the lockable container from where they reside and later when they can afford to build a house on the land, at the back, on plans approved by the municipality, taking into account the infrastructure below the surface, to ensure planned development.

The municipality will use its administrative capacity and authority collect tariffs for the amenities like water, sanitation, electricity, etc and thus derive some revenue, and of course, taxes would also flow from this.

There is a phenomenal role to be played by the private sector. They would be prudent to invest in this venture in every municipality for the sake of the economy to turn around. This will benefit everyone, the struggling entrepreneurs, the people who will have economic services brought to their doorstep, and all concerned.

Business bodies such as Business Leadership SA, Business Unity SA, and other business associations will have a pivotal role to play in mobilising the necessary financial resources to make it happen.

If the municipalities were to buy into this vision and find ways to implement it, it would be a great turnaround for the economy and for the country.

We have no choice but to find new ways of doing things, and this one of them. No need to pass laws to get down to it, public land, in the form of commonage land is available in every municipality. The DRDLR has already worked the model in one household, one hectare that can be implemented as is, for economic purposes that will extend to meeting social needs.

Recently, we learn that the National Treasury has allocated 9 percent of the national budget to municipalities. The question to be asked is whether or not it is not time for the allocation to include a percentage ring-fenced for funding of development projects, such as this one, in municipalities. These funds could be syndicated with private-sector funds for specific projects that would generate economic development, create and revitalise existing infrastructure and create jobs for large numbers of people.

Some of us have been advocating for a better, more strategic use of municipal lands, like commonage land, which needs no capital outlay for securing the land. Most of this land has over the decades been made available to white residents in the past, at nominal rates. Now it can be used for the benefit of all, especially the poorest and marginalised.

The government does not have to be the sole source of this funding, but syndicated funding with the private sector and donor-funding community. The private sector expertise in drawing up business plans would go a long way towards making these projects to take off from the ground and lift large numbers of people. 

Dr Wallace Mgoqi is the non-executive chairperson of Ayo Technology Solutions and a former acting Judge at the Land Claims Court. He writes in his personal capacity.

BUSINESS REPORT

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