Buffalo City Municipality: Enterprising tales from the riverbank

Situated on the east coast of Eastern Cape Province, Buffalo City has quickly established itself as a flourishing municipality in the decade or so since it was created.

Buffalo6The name is derived from the local Buffalo River, whose mouth supports the only river port in South Africa, one of the big industries in the area.

In 2000 the country reorganised its municipality areas and in May 2011 Buffalo City was officially separated from the Amathole District Municipality and became a metropolitan municipality.

The jurisdiction covers the towns of East London, Bhisho and King William’s Town and the large townships of Mdantsane

and Zwelitsha, and serves a population in excess of 700,000 people. East London forms the centre of the municipality and has been identified by the Government as a prime area for its Industrial Development Zone programme, which aims to encourage both business and investment to the area and to enhance overseas interest.

Given its location, Buffalo City can reasonably claim to be well-positioned for international trade both with the rest of Africa and further afield. The municipality also boasts excellent infrastructure, that includes the airport (which The SA-Mag featured earlier this year) and a deep water port. With good rail and road connections and major cities such as Johannesburg, Durban and Cape Town all of similar distance from Buffalo City, the municipality is rightly promoting itself as a centre of trade.

As reported in our September issue, East London Airport attracts an unusually high demographic of business travellers to the region and has a thriving hinterland attracting international business. Almost half of the 120 large-scale manufacturing operations in the Eastern Cape are part of international corporations and export accounts for a significant percentage of productivity.

One of the biggest success stories for the area has been its links to the international automotive industry. East London plays host to Mercedes-Benz SA, who affirmed their commitment to the region in 1998, with a R1.4 billion investment.

Buffalo4It has also 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 SA already manufactures the world’s right-hand C-Class Mercedes Benz vehicles.

Other major manufacturers already ensconced in the Eastern Cape are nestle, Johnson & Johnson and Marley Flooring. However, despite the presence and kudos of global players, the municipality is acutely aware of the ongoing challenge of unemployment and the need for regeneration.

The East London Industrial Development Zone has been purpose-built with links to the nearby airport and has been 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.

In April 2003, East London became South Africa’s first operational IDZ and it had already attracted investments. Construction work had begun on site works for Wesiengold, the German brewery, and the German condom maker, condomi-africa. Together, these investments had a value of more than R400 million. Seven to eight other projects were currently under negotiation, worth about R4,5 billion.

The East London IDZ offers prime sites in industrial areas close to the port. The East London Development Zone Corporation has been given a licence by the government to operate on the west bank of the Buffalo River in the Buffalo City metropole.

Overall there is scope for the use of 1,500 hectares of land situated conveniently close to the port, the N2 motorway and the airport. The ELIDZ projected that the zone would generate in excess of R 1.834 billion by 2010 and that 38,000 jobs would be created in the first decade of initiative.

Buffalo3There are many reasons for businesses to locate in IDZs; the zones offer direct cost savings like tax breaks and assistance with the set-up of a business, while investors also benefit from duty-free imports of capital goods and inputs, plus VAT suspension for supplies procured within South Africa.

As further incentive, ELIDZ also awarded a R 80 million deal for the improved infrastructure, including the construction of arterial roads, electricity and potable and industrial water supplies to the area.

Further work has taken place to improve rail links from East London to Gauteng while the Port of East London has undergone extensive development to dredge and deepen the west quay.

Central Government has over the past decade initiated a drive on urban renewal, identifying this as a key strategy to alleviate poverty, build economic growth and create environmental sustainability across South Africa.

Closer to home, Mdantsane was identified as one of the nodes for this policy. The township, the second largest in the country (behind Soweto), had a chequered history, with residents originally relocated in the 1950s with a view to creating a flourishing town. However the envisaged growth into a city never materialised. In its place there was instead a growth in unemployment and poverty, along with violence and crime.

Therefore the township was earmarked for urban regeneration with the aim of delivering a safer place to live and invest, to increase incomes and economic benefits, to improve the social and physical environments and to make Mdantsane a place that the local community could be truly proud of.

By April of last year work was well underway at Mdantsane, bankrolled by a R 128 million budget: “The municipality’s engineering department has already identified infrastructure capacity constraints, particularly the sanitation services, which need to be upgraded. We have also started with the land acquisition process to purchase privately-owned land for identified projects,” said municipal spokesperson Samkelo Ngwenya.

He added that the R128 million would be spent over the next five to 10 years in an effort to boost the area economically.

This project is in keeping with the city’s aims of building infrastructure that will boost economic and social development, and create sustainable development within the area,” added Ngwenya.

Buffalo2Mdantsane Urban Renewal Programme operations manager, Mamoeketsi Khetsi, said the revamp project will include a night economy, increased commerce, business, work and residential opportunities, better use of public spaces and recreational and social entertainment facilities.

Plans also include the introduction of a Bus Rapid Transit (BRT) public transport system, the opening of a boxing museum and a number of construction projects such as a private clinic, social housing facility and student residence.

The Municipality has also sought international partnership, which can bring investment and business to the region. The Executive Council of the Eastern Cape has signed a twinning relationship with Saxony, a province in Germany, which encourages funding and assistance for various executive and political projects. After new demarcation of local government, the US county of Milwaukee reaffirmed their twinning partnership that it had previously agreed on with the King William’s Town local council.

In 2000, a twinning relationship was signed between East London and the city of Leiden in the Netherlands, which supports integrated rural development in the Eastern Cape. The development plan agreed on by the two cities includes future links in tourism, business, education, sport and culture, policing and health. A staff and student exchange agreement programme was also signed.

A recent agreement pledges stronger relations between Buffalo City and the Chinese city of Jinhua, which already has a relationship with King William’s Town. The idea is to extend this relationship to include the whole of Buffalo City. Jinhua is a city specialising in machinery, electronics and chemicals.

Tourism is another big draw to the area and one which can generate enormous revenues and in turn create employment. Of course the regeneration of previously disadvantaged areas will play well into the hands of tourism business and it is fair to say that Buffalo City boasts extraordinary tourist attractions and is rich in natural resources. The 68 kilometres of coastline includes 10 estuaries, conservancies, natural heritage sites, rocky shores and 14 sandy beaches.

The Eastern Cape has played a prominent role in South African history. It was here where, in the latter half of the

18th century, black and white met for the first time. Nearly 200 years later Buffalo City is becoming a fully integrated, multi-racial melting pot of unity, with its footprints in the past but very much with an eye to the future.