Local Economic Development and Tourism
What we do
The Foundation has recently played a pivotal role in providing secretarial
and administrative support for the Greater Phalaborwa Trade and Tourism Council.
The
Trade and Tourism Council is working with the Ba-Phalaborwa Municipality on
a number
of initiatives to promote tourism to the region and the town, to shift the
community focus away from a mining town to a town that thrives on tourism.
Phalaborwa is the gateway to the recently proclaimed Greater Limpopo Trans Frontier Park. Local government, the Foundation and the Greater Phalaborwa Trade and Tourism Council are identifying and developing projects and programmes to ensure that the town and the community will be able to cater for larger volumes of tourists in the future.
The Foundation has provided seed funding for the development of a community-based website, a partnership with Open Africa for a tourist Culture to Kruger Route, an interactive DVD and the training of a number community-based tour guides.
Other tasks for the LED and Tourism department include:
- Adding value to the activities of the Ba-Phalaborwa LED Forum and other subsidiary LED fundraising initiatives to promote BEE businesses and to integrate them in the mainstream economy
- Assisting the Foundation and Ba-Phalaborwa Municipality to draft business plans for LED projects to obtain LED funding and Limpopo Province local government funding from the EU
- Managing the research work for Trade and Tourism Council projects such as the Open Africa routes, the Phalaborwa community website and Phalaborwa marketing brochures, and other tourism initiatives to market the town
- Identifying other potential areas for business opportunities and investment from outside the area, and working with the Development Bank of South Africa on the five year Sustainable Communities Project for infrastructure upgrade which will create approximately 500 jobs
- Managing a community based tourism office at the Bollanoto Centre for the tourism and hospitality community
- Assisting the community to draft applications for external donor funding for development projects.
Why we do it
The economy of the larger Ba-Phalaborwa municipal area has become very dependent on the mining industry. It is estimated that 80% of all revenue generated in Phalaborwa relates to the mining industry. The underground mine at Palabora Mining Company is scheduled to close in 2014 when the current ore body will be exhausted. Foskor will be able to continue production for a long period after the closure of the underground mine (because of the large phosphate ore reserves), but Sasol Nitro could also be more directly affected. It is estimated that jobs could be lost with the closure of the underground mine and the loss of contracting jobs in the service industries that are dependent on Palabora. The closure of the underground mine at Palabora will therefore have a significant effect on the Ba-Phalaborwa economy, not only as a result of the loss of direct employment, but also because of the indirect effect due to the numerous up and downstream industries and the loss of disposable income. There could be a major loss in revenue to the Ba-Phalaborwa Municipality when the underground mine closes. However, there are still reserves of vermiculite that will be mined and a very large stockpile of magnetite to be sold, and the smelter could continue to import concentrates.
The Ba-Phalaborwa Municipality and the Foundation need to be creative in identifying alternative strategies to promote an environment which will stimulate growth, employment and other opportunities in the area. It is therefore imperative that proactive steps be taken at this early stage to develop the other local economic sectors, in order to broaden the economic base of Ba-Phalaborwa municipality, thereby absorbing some of the loss in the mining sector. The tourism industry is one such sector that offers much potential, and the Foundation has been a lobbying agent to local government to initiate the concept of drafting of a Tourism Framework and Strategy for the Ba-Phalaborwa municipality.
More about local economic development
Local economic development (LED) is a recently adopted approach to creating more equitable economic growth in South Africa. It is an integrated, multi-disciplinary approach aimed at poverty alleviation through pro-poor economic growth. It involves supporting sustainable economic activities in the municipalities and integrating the second economy into the first economy.
In September 2005 the Trustees approved the creation of an Economic Development Unit at the Foundation. The Palabora Foundation is ideally positioned to add value and create linkages, and develop and manage programmes in partnership with local government which will meet some of the needs and requirements as set out in the:
- Palabora Mining Company Closure Statement – Review of 2005
- Mineral and Petroleum Resources Development Act 2000
- Municipal Systems Act 2000
How the European Union helps
The Limpopo Local Economic Development programme is a 34 million Euro initiative funded by the European Union to support local economic development projects in the province until May 2008. The main objective of this programme is to support pro-poor economic growth and job creation through an integrated approach, which will support five core areas:
- Supporting sustainable community economic development
- Strengthening local competiveness of SMME’s
- Enhancing the LED environment
- Strengthening LED capacity
- Management, monitoring and co-ordination of LED
The Foundation has applied to the European Union for a number of grants for projects to stimulate local economic development in the area and was granted an amount of approximately R940 000 for tourism promotion initiatives in 2006.
Run with assistance from the European Union