Buffalo City Metropolitan Municipality: The catalyst for a thriving economic community

Municipalities across South Africa face a stream of socio-economic challenges, with sustainability high on the list of priorities. In Buffalo City Metropolitan Municipality, a series of shrewd projects is helping to improve the way of life for over 800,000 people.

Buffalo City is a metropolitan municipality situated on the east coast of Eastern Cape Province and encompasses the towns of East London, Bhisho and King William’s Town, as well as the large townships of Mdantsane and Zwelitsha.

The municipality was established as a local municipality in 2000 after South Africa’s reorganisation of municipal areas, and is named after the Buffalo River, at whose mouth lies the only river port in South Africa. On 18 May 2011 it was separated from the Amathole District Municipality and converted into a metropolitan municipality.

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

“The Constitution of 1996 requires 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”,” states Nceba Ncunyane, the Acting City Manager.

Ncunyane accepts that there are a number of socio-economic challenges, not least of which are a low element of basic literacy and high unemployment.

“Part of what we are doing aims to ensure that the community is empowered internally. We are encouraging young people to join our Pulic Works Programme and Government Training Programmes.”

Buffalo City Municipality aims to extend basic services to all. The provision of a free basic amount of water is in place and the municipality has nearly finalised the provision of free basic electricity. Buffalo City Municipality has its basic infrastructure frameworks in place and there is a spatial framework and a functioning land-use management system.

“A number of innovative initiatives in city planning and social housing are under way. The municipality has a five-year low-cost housing plan, which complements the identification of Mdantsane as one of the national urban renewal nodes. This is a key integration project and could potentially have many benefits for the city as a whole,” states Ncunyane.

Buffalo City provides a wide range of services, including: primary health care; certain aspects of housing provision; library services; sports and recreational facilities; facilities for the elderly; environmental health services; and information services.

Buffalo City Municipality is responsible for planning within the municipality and compliance with zoning and other aspects of planning legislation.

The municipality is also responsible for revenue collection for all services provided where a change is made and the management of all aspects of expenditure undertaken by the municipality.

Above and beyond these services, Buffalo City Municipality has certain responsibilities for economic development and training.

“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,” says Ncunyane.

“With the local East London Airport and the major port, 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,” he continues.

The region’s 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 per cent of the large-scale enterprises are exporting more than 25 per cent of their output – and of course the relationship with the Mercedes-Benz assembly plant stretches back more than 20 years.

The East London Industrial Development Zone is a prime industrial site in South Africa. It is geographically designated and positioned for specialised industrial activity.

The zone was specially set up for light industry manufacturers in search of ultimate global competitiveness and new market entry. The zone is renowned for its customised investment and property solutions that help industries streamline their business operations and lower their cost of doing business.

The East London Industrial Development Zone was one of the first IDZs in South Africa to be awarded a provision operator’s licence in September 2002.  The zone has come a long way since that very first milestone.  Not only has it overcome various institutional and programme challenges to be where it is today, but it has, as the first operational IDZ in South Africa, helped to inform the South African government’s Special Economic Zones (SEZ)  programme make up and policy framework.

The municipality provides services such as electricity distribution and management of the electricity infrastructure; water distribution and sewerage management; refuse collection and management of sites for the disposal of waste; property management; development and maintenance of the area’s road system, in conjunction with national and provincial agencies; traffic management, including traffic lights and signage; public space management, including public lighting, parks and other facilities.

In June 2016, news broke that the East London Industrial Development Zone plans to generate and sell electricity sustainably.

The East London Industrial Development Zone (ELIDZ) is working with the Buffalo City Metropolitan Municipality to generate about 40 per cent of its electricity from renewable energy sources.

The ELIDZ, the latest stop of the US government’s green energy tour, plans to generate and sell sustainable electricity.

It has also signed an agreement with the US Agency for International Development to convert the zone into a low carbon emission park.

The ELIDZ has several solar power, wind and biomass power projects in the pipeline. The projects could contribute about a 160-megawatts to the Buffalo City Metropolitan Municipality’s 250-megawatts electricity demand.

The ELIDZ’s energy manager Chris Ettmayr says these have the potential to substantially contribute to economic growth.

“It will bring in investments and increase the tax pace, those are direct jobs and indirect jobs and also massive.”

The following month news came through that East London’s port infrastructure was set for a R2.9 billion upgrade.

Deputy executive mayor of Buffalo City Metropolitan Municipality (BCM), Xola Pakati, who is also the mayoral candidate for the ANC for the August 3 local government elections, said the improvements of the port were key to unlocking the economic potential of the city.

Pakati said Mercedes-Benz, the biggest exporter of goods from East London, and other manufacturers needed a port that was well equipped with the right infrastructure for business and the city to thrive economically.

“We want bigger vessels to be able to dock at the port of East London for purposes of cargo. Exporters in East London are now forced to use the Port of Port Elizabeth and the Port of Ngqura, which results in increased logistics expenses,” Pakati stated.

In his state of the metro speech in June, BCM mayor Alfred Mtsi had revealed that there were plans to position the city as a freight and logistics hub, and that Transnet had set aside R2.9 billion “for the redevelopment of the port infrastructure”.

The development forms part of the metro’s 10-year growth and development strategy, which is championed by Pakati.

Pakati said upgrades to the port would be informed by volumes in trade and that the city was in talks with exporters – who are using ports in Mozambique because of congestion at the Durban harbour – to consider East London as an alternative, once the redevelopments have been implemented.

Pakati said once the port was able to accommodate bigger vessels, exporters would save on logistics costs, which would also bolster the economy of the city and create more jobs.

During his State of the Metro Address, Buffalo City Municipality Executive Mayor, Alfred Mtsi stated:

“As the Metro we had to do more with less as a result we had to find ways of strengthening the economy through partnerships.”

However, the Metro manage its finances well and it was rated the second most financial stable metropolitan municipality in the country by the Rating Africa falling by just two point behind the leader.

“The City has achieved a credit rating of A which signifies a strong cash position in the long term with minimal exposure to long term debt.”

Looking at the 2016/17 new financial year, Mtsi said that 96 percent of the R7.4 billion Capital Budget will be allocated towards service delivery and basic infrastructure to improve service delivery as well as efforts towards Local Economic Development to improve investor appeal to the City.

He added: “We have delivered new low cost houses to vulnerable communities, victims of natural disasters to fight homelessness as well as to communities lying outside the urban edge in the Metro.”

He also mentioned that the City has taken the following number of interventions that aim to redress the inherited socio economic imbalances. These initiatives include:

The Integrated Sustainable Human Settlement Plan which will define what is required to unlock housing delivery in strategic areas across the Metro and identify what other social and infrastructural services would be required to do so in a holistic and integrated way;

The Buffalo City Metro’s Informal Settlement Upgrading Policy and Strategy has been developed, accompanied by upgrading plans for 32 informal settlements, through the National Upgrading Support Programme (NUSP);

The Land Identification Study for Partial or Full Relocation of Informal Settlements in BCMM has been adopted by Council;

The Mdantsane Industrial Township Feasibility Study which identifies and assesses the suitability of land with industrial and warehousing potential adjacent to Mdantsane along the N2; and;

The Newlands Local Spatial Development Framework which has been adopted.

Buffalo City Metropolitan Municipality continues to serve as the catalyst for socio-economic evolution; things will not change overnight, but the shoots of revival and opportunity are there for all to see.