ECRDA approved millions in loans for rural entrepreneurs in 2015/16

According to the Eastern Cape Rural Development Agency (ECRDA) it approved a total of R14,8 million in loans to rural entrepreneurs in the 2015/16 financial year. Actual disbursements amounted to R12,5 million with R11,8 million of this amount ECRDA agricultural loans which went to 265 clients. ECRDA collected R13 million in loan repayments in the same period.
ECRDA chief executive Thozamile Gwanya
ECRDA chief executive Thozamile Gwanya
Announcing the agency’s annual results, ECRDA chief executive officer Thozamile Gwanya says the majority of the loans, R5,1 million went to the Amathole, OR Tambo (R2,8 million), Chris Hani (R2,2 million) and Alfred Nzo (R1,5 million) district municipalities. A total of R299,711 went to the Karoo and R96,999 to the Nelson Mandela Bay Municipality.

“The bulk of the loan disbursements relate to agricultural loans and specifically to crop production loans. Besides the loan facility that was made for maize crop production at the Mqanduli and Ncora RED Hubs, there are also informal groups of subsistence farmers who, because of their small pockets of land are encouraged to apply as groups in order to qualify for production loans,” explains Gwanya.

“We are also equally excited with the clean audit report ECRDA received in the period under review. This means the financial statements of ECRDA were found to be without any material misstatements or any material findings on performance information or non-compliance with legislation. We are pleased that ECRDA is one of the entities that received a clean bill of health,” Gwanya says.

RED Hubs

In 2015/16 ECRDAs funding allocation decreased from R210,8 million in the previous year to R151,6 million signaling challenges within the current economic environment. The reduced funding necessitated further streamlining of operations including ECRDAs flagship Rural Enterprise Development (RED) Hubs.

Gwanya says despite this challenge, ECRDA is pleased to report the steady progress being made by the four RED Hubs in Mqanduli, Ncora, Mbizana, and Emalahleni. In 2015/16 the Mqanduli RED Hub delivered to the silos a total of only 399.31 tons of white maize from the 936ha planted in the 2014/15 season due to the drought that affected primary production. Income derived from the maize sold by the six primary cooperatives of Mqanduli RED Hub was R998,275.

The maize was sold to the Mqanduli Maize Secondary Cooperative for milling. In Mqanduli, the existing total storage silo capacity is 1,500 tons. The milling plants have had to order maize feedstock from commercial producers in order to keep samp and maize meal production going so that they can meet their off-take supply commitments to SPAR and Umtiza.

At the Ncora Red Hub, the 10 primary cooperatives organised under the Ncora Irrigation Scheme Producers Assembly Secondary Cooperative delivered 1,935 tons to the silos from the 1,003 ha planted in 2014/15. The new grain storage silo has a 2,000-ton capacity. The income generated from the sale of maize was R5 million. The bulk of the maize which was 1,759 tons was sold to Ncora Dairy because, at the time of harvesting, the mill was not yet operational due to unavailability of power. Some R4.56 million was paid by Ncora Dairy to the Secondary Cooperative. The remaining 176.76 tons of maize was sold to the Secondary Cooperative which in turn paid over R459,576 to the primary cooperatives.

During the review period, the Mbizana Red Hub which has 13 primary cooperatives received 316.7 tons from the 983ha of white maize planted in 2014/15. Of this amount, some 226.5 tons was sold to the Mqanduli RED Hub. A total of R512,216 was generated from the sale of the maize. At the Emalahleni RED Hub, 565 tons of grain sorghum was harvested in 2015/16 from the 829ha planted in the 2014/15. The RED Hub which has six primary cooperatives sold 472.24 tons of grain sorghum to Border Seed, OVK, and PSP. The total income generated was R1.22 million.

Planting and production inputs

He says planting also commenced in the third quarter of the 2015/16 financial year. At the Ncora RED Hub 306 ha of white maize were planted. However, because of the harsh drought conditions that contributed to low soil moisture levels, only 149ha germinated.

At the Mqanduli RED Hub only 165ha of white maize were planted because of the drought which preventing the planting of a larger surface area. In Mqanduli, DRDLR supported the RED Hub with Graduate Intern and production inputs for 1,000ha. These production inputs were not used because of the drought and they will be utilised in the coming season.

Some 488ha of white maize were planted at the Mbizana RED Hub in the last quarter of the year. DRDLR also supported with Graduate Intern and production inputs to the Mbizana RED Hub. At the Emalahleni RED Hub, no planting took place because of the drought.

Forestry and job creation

“In the forestry development space, I am pleased that the Sinawo project in Mbizana is close to commercialisation. It is already selling timber to commercial forestry giant SAPPI. Sinawo is supplying timber to the SAPPI mill for paper milling. In 2015/16 the Sinawo project generated some R7 million from the sale of timber. They bought two tractors and one bakkie. In 2015/16, some 16 additional staff was employed bringing the total employee count to 208. There was also a total of 113 short-term employees.

“In 2015/16 R3,5 million was spent in Izinini where 111ha of gum trees were planted in addition to existing plantations bringing the total amount of land planted to 335ha. Five permanent jobs were created in 2015/16 bringing the total number of full-time staff to 60. In Sixhotyeni a total of R4,4 million was spent in 2015/16 while 214ha of gum were planted. A total of 39 people were permanently employed bringing to 86 the total number of full-time staff.

A total of R8,5 million was spent in Gqukunqa where a total of 384ha of gum were planted bringing the total number of hectares planted to 605ha. In Mkambathi R5 million was spent and a total of 78ha of gum trees were planted bringing the total area planted to 668ha. The Mkambathi project also generated revenues of R803,949 from the sale of timber in 2015/16,” Gwanya adds.

Improved livestock farming

ECRDA is also encouraged with the progress being made in the livestock development programme. For example, the farmers which ECRDA lent 30 heifers now have more than 100 cattle. This project has assisted them to improve their livestock farming practices. The Ikhephu Secondary Cooperative in Elliot in Sakhisizwe Local Municipality has already developed a feedlot. They are linking the feedlot to the abattoir in Queenstown and Cala.

They now understand the livestock development process from primary production to processing and marketing. ECRDA intends to replicate this programme to other areas to assist farmers. Among other highlights, in 2015/16 R100,000 was set aside for the programme. The livestock development programme facilitated the marketing of 1,500 livestock units in the period under review. A total of 1,322 livestock units were sold at formal markets. There were six informal auctions where a total of 146 livestock units were sold which were mainly cattle.

Court ends Sanral toll plans in Cape

A Supreme Court of Appeal ruling on Thursday, 22 September 2016, which invalidated the South African National Roads Agency Limited’s (Sanral’s) plans to toll the N1 and N2 in the Western Cape, has added to the agency’s tolling woes.
Court ends Sanral toll plans in Cape
© ammentorp – 123RF.com
This is the latest blow for the agency, which has struggled to get drivers to comply with its e-tolls in Gauteng.

Sanral, responsible for maintaining the national road network, was one of the parastatals placed on review for downgrade by ratings agency Moody’s, which raised concern about its funding challenges and ongoing cash flow pressure.

Moody’s said Sanral still faced public opposition to the tolling system and had failed to get motorists to take up a 60% discount period on historic debt, raising only R76m a month in the 2015-16 financial year compared with R86m a month the year before. The agency needs to raise R260m a month from etolls for the system to be successful.

Earlier in 2016, Sanral cancelled two bond auctions due to a lack of investor interest.

However, the agency has raised more than it expected to at its bond auctions since it returned in June.

The DA-led city of Cape Town has been vehemently opposed to the agency’s tolling plans in the Western Cape, and after a four-and-a-half-year court battle the metro has succeeded in halting the project.

In 2015, the High Court in Cape Town ruled in the metro’s favour by setting aside the declaration to toll sections of the highways.

The city had approached the court, accusing Sanral of failing to follow due process when it decided to toll the N1 and N2 in the Winelands. The court ruled that if Sanral wanted to proceed with the project, it had to start from scratch and conduct a process supported by proper public participation. Sanral then appealed the judgment.

On Thursday, the Supreme Court of Appeal in Bloemfontein dismissed the appeal with costs. The city successfully argued in court that the minister of transport at the time the tolling decision was made and Sanral had both failed to consider relevant information – such as the effects of tolling, the affordability of the proposed toll fees for low-income earners and the effect on the surrounding road networks.

Further, in terms of the Sanral Act, only the Sanral board could take the decision to declare a toll road. But the city argued that the board never made such a decision and was never given the information to enable it to make such a resolution. The appeal court stated in its ruling that the decision to toll had massive implications for the province and the country, and as such required serious and informed deliberation, which was solely lacking.

In a media briefing on Thursday, Brett Herron, Cape Town’s mayoral committee member responsible for transport, said that the ruling was a victory for Western Cape residents.

He said while the judgment would have little effect on the e-tolls saga in Johannesburg, as the courts had found it to be lawful, it would have a major bearing on how Sanral operated going forward. Sanral would have to consult widely before taking a decision to toll, said Herron.

Sanral spokesman Vusi Mona said the agency respected the ruling.

“We will, however, study the judgment and reasons provided by the court of appeal.”

Cape Town mayor Patricia de Lille said: “I hope that Sanral will refrain from wasting taxpayers’ money on further legal action.

What’s driving the next generation of mobile networks?

The race is on to establish the next generation of mobile networks. Each generational change in wireless networks has been prompted by a different force. New service demand sparked the move from 1G to 2G, regulation and licensing were the triggers for the migration to 3G, while network obsolescence was the underlying cause behind the move to 4G.
“While 5G is still in the early stages of development, we’ve never seen the emphasis on investing in the next generation of communications capabilities come so far in advance of settled standards,” said Will Hahn, principal analyst at Gartner. When it comes to what will trigger the move to 5G, Gartner has identified three scenarios.

What’s driving the next generation of mobile networks?

Scenario 1 – Driven by new services and applications

Three main arguments support the probability of this scenario and will form part of the discussions at the Gartner Symposium/ITxpo in Cape Town in September.

• The proliferation of multiple connected devices.
• The rising expectations of ‘always connected’ consumers.
• The impact of the Internet of Things (IoT).

However, the challenges for 5G services are diverse, especially for communication service providers (CSPs) that will need to invest in the network infrastructure, but may not be the main beneficiaries of the economic value created. Other considerations that could lead to the delay of 5G deployments include challenges from alternative access technologies, such as Wi-Fi networks, a lower than expected demand for the IoT and the weak global economy, which may delay device replacements and upgrades in the near term, resulting in more moderate mobile data consumption.

Three key drivers also exist for this scenario. First, the continuous increase of mobile data traffic will drive 5G emergence and 4G obsolescence. This leads to the second driver – the fact that mobile CSPs simply don’t have significant radio assets to satisfy the projected data traffic demand in the 2020s. It makes far more sense for them to insist on the importance of 5G (over existing 4G) to acquire larger and more continuous bandwidth channels. The third driver is the rising importance of network ‘softwarisation’.

Scenario 2 – Driven by 4G obsolescence

To prove its worth, 5G will need to find appropriate applications, such as ultrareliable and low latency communications that existing cellular extensions do not cover. Advancements in network technologies are also required, while the replacement of existing devices with 5G-capable ones will have to keep pace.

“The gradual replacement of the 4G network is likely to be a prime indicator of these scenarios, whereby 5G will occur along highways, in dense metro city centers and other busy zones. In other more rural and less-travelled places, however, 4G could linger,” said Hahn.

Scenario 3 – Driven by cost disruption

Little has been said about the potential cost benefits of 5G, although this will be a dominant priority for CSPs that are under intense pressure to restore margins. In considering large immediate outlays for 5G capabilities, CSPs will have to realise cost benefits above any other factors. “We can expect discussions of disruptive cost savings to increase going forward,” said Hahn. “However, cost considerations will be of less importance if solutions and services requiring 5G performance mature within the next few years; operators will have to move to them regardless.”

On the other hand, if network requirements allow substantial reuse of 4G spectrum and equipment without as great a need for new purchases or licensing, operators will adopt them more gradually. Finally, if regulators launch expensive auctions for new spectrum (as with some 3G auctions), this will negate the case for a move to 5G based on cost savings.