Current settlement patterns and development

The FTM’s spatial profile has an immediate and devastating bearing on the economic potential of the area. It is unquestionable that land ownership is the single biggest constraint to economic growth in Fetakgomo. The land issue affects everything in this very small economy. It undermines growth in all areas and could almost be deemed one of the main root causes of poverty.

Land claims, as well as the availability and ownership of property in traditional authority areas and state owned land, permeates as a constraint through all sectors - from constraining commercial

level investment to undermining the scale and viability of emerging farmers. It also undermines capital appreciation of property values for everyone living in the area.

The current situation creates investment uncertainty. Potential investors will not come to Fetakgomo if they are unable to own land. Unfortunately, there is very little that a local municipality can do, as most of the influential regulatory powers within the land sector are located at national government level. There was no land use planning policy prior the adoption of LUMS (2008) in Fetakgomo.

Land use allocations and control have been predominantly driven by traditional authorities until recently whereby a significant number of residents have started to apply for Permission To Occupy (PTO) through the Municipality. The land use applications are processed along the LUMS and SDF guidelines and applications are forwarded to the COGHSTA for the issuance of PTOs.

Traditional Authorities’ involvement in this regard is in relation to recommendation of the application to the Municipality while the Municipality verifies that the earmarked land use is line with the LUMS and SDF guidelines.

As an expansion of the above, below is a map that depits the space economic activites. This highlights the link between space and economy (space economy).

Source: Fetakgomo SDF 2013.

Economic Potential.

The spatial distribution of cluster of economic activities (i.e. nodes etc. not individual spaza shops) is indicated on Map above. There are a number of risks associated with the Fetakgomo economy. First, it is apparent that the Fetakgomo economy depends mainly on mining and public sector funding (Issue 4). In addition, multi-jurisdictional land ownership (Issue 2), infrastructure

availability and education levels (issue 3) are the main constraints to growth. The dispersed and unstructured settlement pattern (Issue 1) also limits the number of economic opportunities created by scale benefits. In addition, low income levels decreases the local population’s consumer spending.

This situation is worsened by the fact that significant levels of local money (an already small resource pool as mentioned above) flows out of the Fetakgomo economy because local residents make their purchases outside municipal boundaries. Certain local sectors earn revenue from external markets, but the scale of this is limited. These and other important features of the Fetakgomo economy are discussed below:

Possible extension of mines:

Fetakgomo is rich in high grade platinum ore close to the surface, which is also located closer to the smelter than other mines. This comparative advantage is competitively utilised at Atok platinum mine. The LED strategy (2011) mentioned planned expansions of the existing platinum mine in the area and related growth in employment provision in this sector. It also referred to the possible establishment of two chrome mines. The establishment of the chrome mines have not realised at the time of writing, and it is also not clear whether significant future extensions are still on the cards for the platinum mine (owned by Anglo American Platinum Ltd.). At the time of writing (July 2012), Anglo American Platinum Limited reported a 78% decrease year-on-year in headline earnings per share due to lower sales volumes and weaker average realised rhodium and nickel prices. This situation illustrated the risks associated with the local economy’s heavy reliance on mining.

External purchases by locals.

Local Fetakgomo residents purchase many items, particularly furniture, food and consumables, community services, clothing, vehicles, construction, construction materials and medical services, from external towns and cities. However, the established retail shopping complex has to some limited extend changed this situation and created several opportunities for the Fetakgomo economy by supplying these goods locally.

Sectors earning revenue from external markets.

There are very few sectors that earn revenue from external markets. These include platinum mining, transport (taxis), the informal trade of agricultural produce and the supply of goats to Gauteng and other nearby provinces for traditional rituals. The transport sector relies mainly on proximity to local customers for competitive advantage. Lead enterprises in these sectors have proven their competitiveness by trading profitably in external markets. Beyond these industries, however, mining far outstrips every other sector in this regard. Mining’s competitive advantage is more robust due to the rich platinum deposits close to surface, the fact that there is a smelter close by as well as linkages to international value chains.

Demand conditions.

As may be expected in a rural area with a small population, markets and sophisticated demand are limited. However, Fetakgomo is fortunate to have a mine which is linked to the international platinum market and which plans to grow aggressively. The only other significant markets are retail and the public sector which plans to increase investment in basic infrastructure and presents construction opportunities. A limitation to external demand is however the area’s isolated and inaccessible location.

Quality of life.

Quality of life factors are important to higher level income persons deciding to live in a particular location. Fetakgomo has an attractive landscape, crime levels are low, living conditions are pleasant and with quality education and recreational facilities available within 1 hour’s drive away in Polokwane. The town of Atok is much closer to Bokone Platinum Mine than Polokwane or Burgersfort. Mine employees living here would save 45 minutes travelling to work twice a day.

The established Fetakgomo Shopping Mall has resulted in fewer locals travelling to Polokwane and Lebowakgomo regularly to shop and for entertainment. Four quality of life factors offer possible advantage and should be promoted: (1) proximity to work at Bokone Platinum Mine located in Atok; (2)an attractive setting for homes; (3) -low house prices (assuming property rights / land ownership are resolved); and low levels of crime.

In recent years, the efficiency of social grant delivery has increased significantly. However, the ability of the Fetakgomo economy to retain this fiscal inflow, through the provision of local goods and services, has not developed commensurately. In addition, a significant part of the economy is dominated by large mining companies with their headquarters and procurement bases outside the Sekhukhune District. This has implications for economic development in the area.

Tourism opportunities

Areas of heritage significance can be found in the FTM:

•Miracle Stones: miracle stones referred to as Mamkuru are found in the Phahlamanoge Village;

the cultural belief is that if the stones are disturbed a great storm will be trigged.

•Lenao la Modimo: an ancient footprint is found at Ga-Maisela (fossilised footprints).

•Mphanama Cave: the cave is found in the village of Mphanama, which was used as a hiding place during ancient wars.

•Potlake Game Reserve: the reserve is situated next to the Legobje mountain / hills.

•Lepellane Dam: the dam is located in the Lepellane River near the southern border of the FTM, in an attractive mountainous area.

The positions of these sites are also indicated on Map 11: Economic Activities.

In summary, there are areas of economic potential, closely linked to the natural resources available in the area (Issue 5), but also limitations and risks in terms of education profile, spatial isolation, limited water resources, and reliance on the mining sector which in turn is very exposed to downturns in the global economy.

Land Ownership, Availability and Land Reform

Source Fetakgomo SDF 2012

Currently, 70% of land in Fatakgomo is state-owned, awaiting the issues of land claims to be resolved, as indicated on Map 12: Ownership. A further 13% is privately owned and 6% is already formally owned by a traditional authority. In spite of what is reflected in terms of formal land ownership, most of the land in Fetakgomo is however under traditional authority. This situation is not reflected in the official ownership status of land in the area due to land reform processes not having been finalised yet. The diverse land ownership between the traditional authority and government presents a developmental challenge in Fetakgomo, in that the authority to release land for development is still not resolved. There are isolated land parcels that are privately owned including mining areas to the north. Baroka Ba Nkwana traditional authority controls the majority of the land where the Apel and Atok nodes are also located.