/ 28 June 2024

MBDA programmes inject growth in production, GDP, jobs, positive sentiment in the Bay

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Since its establishment in 2003, the Mandela Bay Development Agency (MBDA), an entity of the Nelson Mandela Bay Municipality (NMBM), has sought, through its development programmes, to act as the primary institution behind the revitalisation of key precincts within the greater Nelson Mandela Bay (NMB). This precinct approach has entailed the MBDA undertaking several capital investment projects in dedicated and strategic geographic precincts of the Nelson Mandela Bay.

To quantify the impact of these projects, the MBDA engaged the services of Urban-Econ, an independent specialist’s agency to co-develop an economic barometer that measures the socio-economic impact of the MBDA. The purpose of this economic barometer was twofold. Firstly, it sought to quantify the economic impact that the agency’s various capital projects had, directly or indirectly, on local business activity, GDP and employment. Secondly, it sought to, via means of a survey administered to businesses and residents, determine what impact the MBDA’s activities had on citizens and business perceptions of the areas where these projects are under way or have occurred.

Outlining the process, Senior Economist Thomas Parsons says: “A process was undertaken for three of the MBDA’s focus areas, namely: Gqeberha CBD, Schauderville-Korsten and South End-St Peters. Based on this approach, a total of 75 responses were targeted across the three areas. This comprised 30 respondents in Gqeberha CBD split equally between businesses and residents, 20 residential respondents in South End-St Peters, and a further 25 residential respondents in Schauderville-Korsten. The 2023 dipstick survey was designed to provide a snapshot of the view of the MBDA’s activities in the respective areas through targeted inputs with businesses and residents.

“Based on the survey results, between 23% (Schauderville-Korsten) and 33% (South End-St Peters) of surveyed residents had made some form of improvements to their properties over the last five years, with the average value of these improvements varying between R25 000 and R87 000.

“Extrapolating the survey results to the broader areas suggests that total investment by residents in the Schauderville-Korsten and South End-St Peters areas over the last five years could be in the region of R104.2 million.”

In comparison, 29% of surveyed businesses in Gqeberha CBD indicated that they had made improvements to their properties, with an average value of R56 000. None of the businesses or residents surveyed, however, indicated that the MBDA’s activities in the area had influenced their decisions to invest.

Survey respondents across all three areas were also asked about their perceptions of the MBDA’s activities in the various areas. In Gqeberha CBD, both businesses and residents were somewhat positive about the MBDA’s permanent cleaners, with between 14% and 21% of respondents viewing their impact as positive. These same respondents, however, were less positive about the permanent security in the area, with 21% of surveyed businesses, 78% of surveyed residents perceiving their activities in a negative light.

Schauderville-Korsten residents expressed equally negative sentiment around the area’s multi-purpose recreational park developed by the MBDA. Over three-quarters of respondents viewed the development negatively, owing mainly to the fact that the park was inadequately maintained and unsafe.

South End-St Peters respondents, meanwhile, where very positive about both the MBDA’s upgrading of St Peters and the Baakens River Valley functional improvements. Approximately 33% of surveyed respondents were extremely positive about the St Peters upgrades, while 19% were extremely positive about the Baakens River Valley upgrades. The remaining respondents expressed positive sentiment, with no respondents expressing negative feelings about either of the upgrades.

Using a mix of results from the three surveyed areas and census data published by Stats SA, it was possible to estimate the potential contribution that the residential properties in these respective areas contributed to the NMB’s total annual rates revenue. Based on this exercise, it was estimated that that these three areas as defined, collectively contributed R299.0 million to municipal income in 2022. This includes both property rates income as well as revenue derived by the NMB from the sale of services (ie, water and electricity).

Parsons adds: “To date, the MBDA has invested approximately R24.8 million across the three areas, comprising a mix of capital investment (eg, upgrading of St Peters) and operational expenditure (eg, Gqeberha CBD cleaning programme).” Based on this investment by the MBDA, total production has increased by R66.2 million, increasing GDP by R19.2 million. The investment has also helped to create 80 jobs across the economy through the direct, indirect and induced effects of this investment. These jobs have helped to boost overall household income by R8.2 million.

Welcoming the Economic Impact Report, MBDA Chief Executive Officer, Anele Qaba, says: “The report provides the entity with a clear line of sight in terms of its economic activity impact. It is critical for us to be able to measure the impact of our activities, not only on economic terms, but to see visible impact across the spectrum.

“The MBDA will in the month of July and August go back to stakeholders to engage on this report and to discuss ways to maximise the impact of the MBDA in these precincts. In addition, and after Council approving the city’s budget, the MBDA will now finalise its Annual Business Plan for the period 1 July 2024 to 30 June 2025.”

Download MBDA Economic Impact Study 2.0 (June 2024).