Mangaung Metropolitan Municipality Socio-Economic Development Presentation

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The presentation to the Select Committee covers the socio-economic intelligence of Mangaung Metropolitan Municipality, highlighting the challenges faced such as the ailing economy, load-shedding, and COVID-19 impact. It explores risks to the outlook at national and provincial levels, examines drivers of growth, and discusses the GDP and employment contributions of Mangaung to the Free State Province. Additionally, it touches on employment contributions compared to the province and provides insights into the economic landscape of the municipality.

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MANGAUNG METROPOLITAN MUNICIPALITY PRESENTATION TO THE SELECT COMMITTEE ON TRADE AND INDUSTRY, ECONOMIC DEVELOPMENT, SMALL BUSINESS DEVELOPMENT, TOURISM, EMPLOYMENT AND LABOUR SOCIO-ECONOMIC DEVELOPMENT Tuesday 23, November 2021 Sello More Acting City Manager 1

Reminder of the Agreed Programmes 2

Socio-Economic Intelligence Ailing economy, load-shedding, credit-rating downgrades, service delivery protests, low consumer and business confidence, aggravated by COVID-19. Navigating uncertainty through evidence-based planning to inform integrated planning and budgeting; fair, equitable and sustainable distribution of limited financial resources while supporting good governance, financial sustainability. Disaggregates economic data to a district and local government level. Trends also reflect on the impact of implementation of municipal services and programmes. 3

Risk to Outlook National and Provincial The adverse economic climate due to downturn will result in an increase in unemployment and absolute poverty. Global A crisis such as the global COVID-19 pandemic brings uncertainty as full impact is unknown and predictions progresses. Increased inequality due to the digital divide. People engaged in the retail, tourism, hospitality, and entertainment industries are most affected in the short run, due to lockdown measures. a high level of worsen as year Sharp economic downturn expected to have the greatest adverse effect on low- income households, progress in reducing extreme poverty. Unreliable supply and burden of failing SOEs - significant cost to production and the national fiscus. and interrupted electricity eroding world Geopolitical and trade tensions- tensions between the US and China are ever- mounting recently compounded Government debt levels are soaring and credit rating is deteriorating. MMM specific: negative impact of the COVID-19 response on the tourism 4 High debt levels

Drivers of Growth Tertiary sector 83.2% Community services 33% Trade 16.2% Finance 15.1% 5

GDP and Employment Contribution Mangaung s economy is the largest contributor to the GDP of the FS Province R98.1 billion and is also one of the most diversified. Between 2008 and 2017, MMM had an average of 2.3% economic growth rate. This is credited to the performance of the tertiary sector and in particular, the community sector. 6

Employment Contribution Province vs Metro Quarterly Labour Force Survey Q2, 2021 7

Sectoral Contribution (%) to GVA R (2018) Community Services 33% Finance 21% Transport 13% Trade 17% Construction 3% Electricity 3% Manufacturing 6% Mining 1% Agriculture 2% 0% 5% 10% 15% 20% 25% 30% 35% 8

Financial Health Financial Health (Viability and Sustainability) Financial Health: Fragile The city is under section 139 5 (a) and (c) Provincial Intervention since Jan 2020 Mandatory Financial Recovery Plan developed, approved being implemented The City is still not in a position to afford borrowing for CAPEX funding Unqualified audit outcome for 2019/20 financial year The City is up to date with the budget implementation process - the 2021/2022 IDP and 2021/2022 MTREF budget approved by Council on 31st May 2021 The 2019/2020 Annual Report tabled at Council on 04 June 2021. The report was referred to the Municipal Public Accounts Committee (MPAC) 9 9

Financial Health Current Status Outstanding Debt Faced with financial challenges due to high debt book Total debt owed to the City amounts to more than R7,2 billion. Residential debt represents more than 56% of this outstanding debt. Domestic = R4.1 billion Government = R1.9 billion Business = R1.2 billion

Financial Health Audit Outcomes Audit Outcomes (Consolidated) 2016 2017 2018 2019 2020 Unqualified Qualified Qualified Qualified Unqualified Centlec : Audit Opinion (Stand alone) Municipality : Audit Opinion (Stand alone) 2019 2016 2017 2017 2020 2016 2018 2019 2020 2017 Qualified Qualified Qualified Disclaimer Unqualified Unqualified Disclaimer Unqualified Unqualified Unqualified 11

Municipal Service Delivery Maintenance of Road Infrastructure Total road network is 3831km of which 2200km is unpaved. 90% (1 350km) of road surfacing is in poor condition and 35% (515 km) of the road pavement are in a very poor conditions Approved budget for 2021/2022 = R96.3 million for resealing Budget deficit per annum = R804.4 million for the next 10yr R112 tarred/paved roads for the next 10 years million/annum needed for resealing/resurfacing of R891 million/annum required for upgrading from gravel to tarred roads for the next 10 years. (This exclude informal settlement). Total Required Capital investment/ annum for the next 10yrs = R906.7m

Municipal Service Delivery Maintenance Programmes of Road Infrastructure Budget Required for gravel roads (2244km) = R561 million/annum Budget required for periodic maintenance of tarred roads = R170 million/annum Total required maintenance budget/Annum = R731 million Approved budget for 2021/2022 = R20 million for maintenance Budget deficit per annum = 711 million/annum

Service Delivery Population by water source - Community Survey 2016 4%2%3% 52% 39% Piped water inside yard Piped water inside houses Piped water on community stand Public/community tap Other 14

Municipal Service Delivery Delivery of Quality Potable Water AGGREGATE FIGURES Total backlogs = 54 805 (House Connection) Total required for internal reticulation = R1 370 million Total Required for bulk infrastructure = R 900 million Grand total = R 2 270 million Budget Deficit for One year Horizon Approved budget for 2021/2022 = R114 million Total required for internal reticulation = R1 370 million Total Required for bulk infrastructure = R 900 million Grand Shortfall total = R 2 156 million

Service Delivery Current sanitation backlog 54,698 13,677 1 25,099 15,812 0 10,000 20,000 30,000 40,000 50,000 60,000 Total sanitation backlog Soutpan Thaba Nchu Botshabelo Bloemfontein 16

Municipal Service Delivery Delivery of Decent Sanitation AGGREGATE FIGURES Total backlogs = 54 805 (Water Borne) Total required for internal reticulation = R1 645 million Total Required for bulk infrastructure = R1 097 million Grand total = R 2 637 million Budget Deficit for One year Horizon Approved budget for 2021/2022 = R 114 million Total required for internal reticulation = R1 645 million Total Required for bulk infrastructure = R1 097 million Grand total = R 2 637 million

Municipal Service Delivery Provision of Electrification in Formal and Informal Settlements Connecting 1 500 households in in informal settlements, the city will spend R39 million Undertake feasibility studies for solar generation project to the value of R1.5 million Installation and upgrading of bulk infrastructure to the amount of R236 million 28 highmast lights will be installed to the value of R14.5 million 15 highmast lights at the design stage and together with construction will amount to R7.5 m Almost 5 037 households in informal settlement still require electricity provision and the city need intervention to the value of R131 million 18

Municipal Service Delivery Delivery of Waste Collection Waste collection and management in the city is still an immense challenge The city spends annually more or less R250m on waste collection only, but always over-spends by more or less R50m key being overtime and lack of tools of trade Domestic Waste Collection is regularised in the areas of Botshabelo, Thabanchu Waste is collected once a week in the areas of Van Stadensrus, Wepener, and Dewetsdorp, in line with the law, but not on regular days, but on weekends Waste is collected once a week in Soutpan, as in Naledi due to resource challenges Bloemfontein, our biggest challenge, largely depends on excessive overtime City has just appointed personnel, plans afoot to regularise The collection also covers informal settlements Landfill sites Operations challenging, due to machinery shortage Plans almost complete for DEFF aided improvements at Southern Landfill Site Public Spaces Operations not going well DEFF to assist with illegal heaps removal, COGTA as well, with once off programme The usage of EPWP and Shift system 19

Municipal Service Delivery Delivery Waste Collection Fleet Biggest challenge, but plans are in place for improvements, amidst limited budget Waste Minimization and Recycling 3 buy back centres for the city, 2 currently undergoing repairs, the other one was vandalized by criminals and a case was opened with SAPS DEFF is supporting the repairs and ultimate operationalization of the 2 buy back centres Wastepickers working in the landfill sites, and they are the members of South African Waste Pickers Association. +/- 350 waste pickers working in the landfill sites, 3 cooperatives supported by the city Periodical training workshops are organized for them involving Petco, The Glass Recycling Company and most recently PRASA(paper recycling association of South Africa), Coca Cola in process of joining as well The following tonnage is received by our landfill sites Northern LFS 256,477.62 Southern LFS 242,174.33 Botshabelo LFS 10,635.91 GRAND TOTAL FOR THE YEAR 2019/2020 509,287.86 20

Municipal Service Delivery Waste collection: Intergovernmental Interventions Required Many cities spend on average 20-50% of their budgets on solid waste, Mangaung is no exception, environmental issues are expensive. The city s fleet has aged, and currently the city has 15 operational trucks for waste collection The city require 40 trucks for domestic collection, 4 trucks for public cleansing, 10 trucks for trade waste and various fleet and equipment for landfills Training of law enforcement on the enforcement of by-laws with enforcement of bylaws 21

Service Delivery Libraries - CS, 2016 Community halls - CS, 2016 0 1 1 1 1 7 7 4 4 Bloemfontein Wepener Botshabelo Thaba Nchu Bloemfontein Botshabelo Thaba Nchu Wepener 22

Municipal Service Delivery Recreational Facilities and Parks The city is faced with the challenge of regular maintenance of recreational centres and parks due to limited resources. However, the city developed 2 parks in the current financial year one in Soutpan and one in Wepener to the tune of R2 million The city has allocated R6.5 million to upscale the maintenance and upgrading of recreational centres and parks Intergovernmental Intervention At least 2 additional parks for each town in Dewetsdorp, Soutpan and Wepener with a budget of R1.5 million for each park 3 regional parks are envisaged by the city and cost almost R50 million 23

High Impact Programmes (CLDP) Delivery of Sustainable Human Settlements To highlight mega human settlements projects the city is implementing to deliver sustainable and integrated human settlements: Hillside View Vista Park 2 and 3 Estoire and Raceway Airport Development Node The developments are mixed-use programmes integrating the surrounding areas Multi-year projects (10-15 years) with high social & economic impacts; high employments prospects linked to construction phases and permanent employment during operation Projects creates value, reduce unemployment, inequality, poverty, promotes integration & transform the space in the city 24

Service Delivery Population by electricity access CS, 2016 Population by electricity access - CS, 2016 3% 8% 3%1% 8% 10% 79% 88% Service provider (regularly) In-house prepaid meter In-house conventional meter No access to electricity Other source (not paying for) Own dump Service provider (not regularly) Comunal dump 25

Governance and Management Municipal Capacity Description Employees No Vacancies No Corporate Services 419 185 Economic and Rural Development 27 37 Engineering Services 767 1 094 Finance 285 202 Human Settlements 157 154 Office of the City Manager 389 184 Planning 90 174 Social Services 812 742 Strategic Programmes and Service Delivery Monitoring 64 66 Waste and Fleet 615 479 Municipal Police Services 1 7 26 Total 3 626 3 324

High Impact Programmes (CLDP) Delivery of Sustainable Human Settlements (Socio-economic Investment Opportunities) Estimated Projects Costs . Vista Park 2 (Bloemfontein X251) R 5.7 billion Vista Park 3 (Ext s 256-266) R6.8 billion TOTAL R12.5 billion Both projects developed Financial Plans and Ready for implementation. Private Sector Government DFI

High Impact Programmes (CLDP) Delivery of Sustainable Human Settlements (Expenditure Vista Park 2 and 3 Progress - Realignment of Bulk Water and Sewer Infrastructure) R49m (Incl. VAT): Realignment of the bulk water and sewer pipes: (2018 /2019 FY) Vista Park 2 - R 24m Vista Park 3 - R 25m Construction progress: Vista Park 2 - at 96% on both water and sewer pipes Budget spending to date on Vista Park 2: R 24m Construction progress: Vista 3 is 100% on water pipes. Certificate issued Practical completion is reached on the sewer pipe and completion certificate issued Budget spending to date on Vista Park 3: R 25m Vista Park 3 is allocated R 27.5 m in the current FY (2020/21) for internal service installation Vista Park 2 is allocated R 14m in the current FY (2020/21) for internal services installation 28

High Impact Programmes (CLDP) Delivery of Sustainable Human Settlements (Socio-economic Investment Opportunities) Socio-Economic Benefits (est. per project - construction) . Targeted Outcomes Number Profile Type Outcomes Individuals 3500 Youth, Women & Disabled Construction, sales, admin, entrepreneurs Certificates, skills SMMEs 100 Youth, Women All types Registrations, Institutions Employment Opportunities Job Creation BBB-EE Women Youth Persons with Disabilities Quantity 11 200 8400 8400 80 Total cobs to be created 28 000

High Impact Programmes (CLDP) Delivery of Sustainable Human Settlements (Residential Typology Mixes) PROGRAMME TOTAL EXPECTED COMPLETED 1 200 600 BNG 50 25 Military Veterans 19 19 Land Restitution 402 (phase 1) 240 Social Housing 30

High Impact Programmes (CLDP) Currently Implemented and Further Intergovernmental Intervention Required Industrial Park Revitalization Mixed Human Settlements Steel Agri-Park Manufacturing Plant IPTN Township Economy Revitalization ICT Digital Hub 31