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Overview

The case for the JoGEDA development Agency was in a document, entitled Concept Document for the establishment of a District Development Agency for Ukhahlamba District, which was presented to Council and the IDC, and formed basis of the IDC's decision to approve grant funding for Development Agency pre-establishment work. Since then the District has changed its name from Ukhahlamba to that of Joe Gqabi and the name of the Agency reflects this progression in name changes.

In late 2007, Joe Gqabi District began a structured process of addressing its own economic development and investment challenges through investigating the feasibility of establishing its own special purpose vehicle. In accordance with the proposed business focus areas of the Development Agency, this document also lays out information on 8 (eight) initial high-impact and catalytic projects proposed to be driven, facilitated and executed within the framework of the District Development Agency. The projects are as follows: 

1. Aliwal Private Hospital
2. Aliwal Spa & Springs
3. Senqu Plastics Manufacturing
4. Elundini Integrated Middle Income Housing Development
5. Senqu Commercial Property Development
6. Lake Gariep Development
7. Maize Meat Hub
8. Business Incubation Hubs

The above are only initial projects proposed for inclusion in the Business Plan of the Development Agency. On establishment of the Agency, further projects already identified would be scoped and included in the Development Agency's project portfolio. The overall guiding principle for project selection is that the projects be not only catalytic and high impact, but should also have scope for meaningful direct or indirect economic participation by the Development Agency. A further principle is that project selection be holistic, looking at Joe Gqabi District as a whole, and maximising District potential and competitive advantages. It is anticipate that chosen projects should facilitate driving the Development Agency towards financial self-sustainable in the near term.

In the first three years, a majority of the capital and operational funding for the Development Agency would be provided as grant, non-resource funding by the IDC and by the District Municipality, and also with some contributions from the local municipalities of the area. After three years, it is expected that the Development Agency should be in a better position to cover its costs flowing from income generated from its operations. It is not anticipated that this Agency will be a burden on its parent municipality into the future, but there is an understanding by the parent municipality that there is an obligation to ensure there is sufficient funding to ensure that the operational aspects of the agency can be effectively implemented. This is also in line with the parent municipality wishing to ensure that the agency is able to produce a clean audit report into the future.

The budget for the inception year (2010/11 and the outer financial years) of the Development Agency assumes nominal seed funding from all municipalities within the District, on a somewhat pro rata basis linked to their role and expected benefit from the operations of the Development Agency. Given its investment promotion and facilitation role, the Development Agency is likely to deliver unprecedented economic benefits to its shareholders and the stakeholders of the district area.

As the Development Agency is an entity of a local government structure, the political direction of the parent municipality has a direct bearing on the reasoning and support for the establishment of JoGEDA. The Executive Mayor of the District Municipality has indicated strong support for the economic growth of the district area and the unlocking of its untapped potential.