LOCAL GOVERNMENT In recent years, the tourism industry has shown a steady growth and has contributed to job creation. Is the municipality assisting the sector to ensure it is sustainable and continues to create jobs? The municipality’s economic development framework seeks to improve the Metro’s global competitiveness and simultaneously eradicate poverty. Effectively, this framework recognises that Nelson Mandela Bay is part of the global economy and needs to ensure that it creates a safety net for the poor. The global economic recession experienced over the past three years has led to job-shedding in the city, with a number of firms forced to close or reduce operations significantly. In response, the city’s political leadership through the Economic Summit held in May 2010 brought together all socio-economic partners to re-imagine the economy, culminating in the adoption of a local development strategy. The Nelson Mandela Bay is a popular tourist destination, with unique attractions such as a 40 km expanse of pristine golden beaches. It needs to maximise its enormous potential for tourism and property development. The municipality recently reviewed its Tourism Master Plan to ensure that it builds on the legacy of the 2010 World Cup. Nelson Mandela Bay is a booming city that is already home to a number of prestigious and internationally acclaimed events. As tourism is the fastest growing sector in the local economy and because it yields more job creation opportunities and economic diversification, it is a key focus area of the metro. The metro has been successfully running a range of initiatives and programmes aimed at developing and honing the skills of local entrepreneurs, especially from the previously disadvantaged, in tourism and hospitality. One such initiative is the Community Tourism Forum, in terms of which the metro trains and equips local entrepreneurs in a broad range of skills, such as business skills, financial skills, ambassadors training and SMME tourism products. In addition, every year, 3 or 4 local entrepreneurs are selected for attending the annual South African Tourism Indaba to expose them to the broad range of tourism products on offer there. Continuous training is provided to product owners and their staff, thereby ensuring the quality of service delivery is always of high standards. Tourism
trends are regularly circulated to the industry, through the NMBT Membership Programme and assistance is provided to various tourism accommodation establishments throughout the Metro in terms of meeting the criteria of the South African Grading Council. For example, the Rainbow Guest House (Uiternhage/Dispatch) - black female owned accommodation establishment – began with 3 rooms and can now accommodate 22 guests, and in 2010 it opened Rainbow Restaurant in Kwanobuhle. This is a clear indication of growth, sustainability and job creation. The metro has had a cash flow problem since last September. How will the municipality address this problem this year and beyond? Since the cash flow problem emerged in September 2010, the Nelson Mandela Bay Municipality has developed and is successfully implementing a Financial Recovery Plan, which has seen a marked improvement in its financial performance. The implementation of the plan has already delivered real results, placing the municipality in a better and more sustainable financial position and ensuring its ability to meet its obligations in terms of service delivery and the Integrated Development Plan, as well as its financial obligations. Root causes of the cash-flow situation stem from a number of reasons including lack of credible and fully cash-backed budget, inadequate cashflow management, forecasting and monitoring, inadequate management of the Housing Revolving Fund, inadequate financial administration relating to operating and capital expenditure, limited effectiveness of credit control and debt collection measures and limitations in revenue growth or generation. The short-term interventions that formed part of the immediate solutions to the cash challenges included: • The full implementation by the various municipal directorates of the Operational Efficiency Work Plan as an essential part of the short-term solutions. • A successful application was made to National Treasury to receive the November 2010 allocation of Equitable Share in September 2010 – this allowed the backlog of payments to service providers to be reduced. • National Treasury approval was provided to consider the Adjustments Budget earlier than the regulated time-frame. The Adjustments Budget was approved on 29 October 2010. • The collection of government arrears was actively pursued by the Municipality.
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