The demise of a South African growth point, Butterworth in the Eastern Cape: a community development model as an alternative strategy for development

Abstract

Butterworth was chosen for this research as one of the growth points in the former Transkei under apartheid. Prospective and existing entrepreneurs in mostly manufacturing enterprises were entitled to various incentives, all of which were phased out by the mid-1990s, and factory closures ensued. Since then the economy of Butterworth has atrophied, leaving thousands unemployed. This paper suggests a community development model as an alternative strategy for resuscitating an ailing local economy, emphasising the imperatives of community participation at all levels of the developmental process. Kenya and Ghana are cited as examples of community development. With this international backdrop, three community-inspired projects in the Eastern Cape were used to test the model: the Umngazi Farming Scheme, the Philani Ncambedlana Farmers' Cooperative and the Tanga Village Masakhane. The paper shows that community development can provide an alternative livelihood in local economies.

1. Introduction

This paper analyses the demise of one of the growth points which was created in South Africa in the apartheid era, Butterworth in the Eastern Cape, and proposes community development as a strategy for rejuvenating an ailing local economic node such as Butterworth. It explores recent efforts to articulate the vital role communities can play in improving the quality of people's lives. The investigation is based on the premise that local economic development stands to benefit in a sustainable manner when community becomes the principal engine for development. Three objectives underpin the paper:

•	to investigate the status of industry in Butterworth
•	to explore the role of the Eastern Cape Development Corporation (ECDC) and other development agencies have played in Butterworth and its environs (ECDC has replaced the development agencies of the former Ciskei and Transkei and the border region)
•	to analyse current and future economic activities in the context of the strategy of community development.

It can be hypothesised that there is a relationship between successful economic performance and community articulation and commitment. The data to test this hypothesis comes from three community development projects situated in the former Transkei region of the Eastern Cape. As a backdrop to the study a brief account is first given of industrial decentralisation as applied in South Africa.

2. Background to the policy

Industrial decentralisation as an engine for development in South Africa has been a subject of debate for a long time (McCrystal, 1969; Kotzenburg, 1973; Rogerson, 1982, 1986a, b; Dewar et al., 1982, 1984; Tomlinson, 1983; Wilkins, 1983; Addleson et al., 1985; Pretorius et al., 1986; Wellings & Black, 1986a, b; Black & Roux, 1991). Common strands running in the literature include:

•	selection of a growth centre possessing certain attributes such as proximity to a higher order central place (East London for Butterworth, for example)
•	formation and assurance of a package of incentives to expedite smoother enterprise start-up and to ensure sustainability.

Whether or not these objectives were fulfilled is a moot point. However, one thing is clear: the programme of industrial decentralisation has run into serious problems and this is certainly the case for Butterworth. In reference to the closures of industrial establishments, former president Nelson Mandela said that there exists a dire need for concessions to be adhered to in order to retain existing industries and continue attracting new investments to peripheral areas (Daily Dispatch, 1 March 1994). At the time that the former president made this pronouncement, most of the incentives had been phased out, and none exist today. These incentives included the following:

•	transport rebate
•	rental and housing subsidy
•	electricity subsidy
•	training rebate
•	incentives pertaining to labour (calculated as a percentage of the total wage bill)
•	reimbursement of relocation costs.

All these incentives had been discontinued by the end of 1992 and factory closures, which had started earlier, escalated.

3. Manufacturing industry and Butterworth

Butterworth lies 110 km on the N2 from the well-established international seaport of East London and the former capital of the Transkei, Mthatha (formerly Umtata), lies 120 km on the N2 northeast of Butterworth. This centrality means, inter alia, cheaper ways of procuring material inputs, especially those coming from overseas through the docks of East London, and of distributing products to the markets within the Transkei. To kickstart the process of industrialisation in the region, the Transkei government created a statutory body called the Transkei Development Corporation (TDC) to oversee and supervise this process. Under the tutelage of the TDC, 80 manufacturing enterprises were established to make consumables and semi-processed products destined for other manufacturing processes. All the enterprises under this arrangement were entitled to the incentives listed above, now elapsed, which were designed to keep them in the region (Sarpong, 1990).

The number of 80 enterprises was established by a survey conducted between June and November 1991 by the author and two colleagues, K Acheampong and K Sarpong. Some of these enterprises were the following:

• Food, beverages and tobacco ISIC 31 (International Standard Industrial Classification)

• Ohlssons Cape Breweries Ltd

• Tanda Milling Company Ltd

• West's Dog Biscuits

• Leopard Breweries

• (All the above establishments produced for final consumption.)

• Textiles and leather ISIC 32

• Agricultural Produce Brokers (treatment of skins and hides for further processing into footwear, handbags, purses)

• Tannery Protea (Pty) Ltd

• Paramount Fashions

• PEP Textile industries

• Suntex (Pty) Ltd

• Tally Company (Pty) Ltd

• Tramatex (Pty) Ltd

• Beier Industries (Pty) Ltd

• Metal products, machinery and equipment ISIC 38

• Nu-Metal Industries

• Rhodius (Pty) Ltd.

• Universal Metal Manufacturers (Pty) Ltd

• Crisburd (Pty) Ltd.

For an exhaustive list of industrial establishments created under the policy of industrial decentralisation see Sarpong, 1990. All the enterprises under this arrangement were entitled to the array of incentives described above, which were designed to keep them in the region and have since elapsed – Sarpong, 1990.

It is necessary to investigate the economy of Butterworth yet again because only 12 of the 80 enterprises surveyed in November 1991 (15 per cent) are currently operational. The majority of the ‘dead’ firms have relocated to the environs of East London (e.g. Wilsonia, Fort Jackson and Berlin). In addition to this industrial decline, the socio-economic infrastructure in the former Transkei is very poor and in some cases, such as Butterworth, the situation has deteriorated further. A high proportion of roads are heavily potholed and electricity, water and telephone services are usually not functional. Stories of crime in the former Transkei, whether real or not, do not help the matter either, because assessment of risk by potential investors is sometimes based on information distilled from the mass media. Aside from the millions of rands of incentives, the Transkei government spent millions on physical structures such as factories, and equipment and machinery. We now need to ask, as a matter of urgency: ‘After the government has expended so much energy and resources, what is the current situation in the former Transkei in general and in Butterworth in particular?’

In order to alleviate the unemployment and poverty which have resulted from the factory closures, the ECDC has initiated the following programmes (ECDC, 1996):

•	student venture programme
•	young adult programme
•	women's venture programme
•	new venture programme
•	conventional loans and guarantee programme
•	builders' finance programme.

These programmes have focused on venture capitalisation through cash loans. Unlike the policy of industrial decentralisation, these programmes under the auspices of the ECDC have a people focus rather than a spatial focus. This implies that towns per se do not necessarily qualify for special dispensations under the new arrangement. Nel points out that ‘the rationalisation of the regional Industrial Development Programme in 1991 has reduced financial support for many of the peripheral areas of the country’ (1994: 363) and, further, that local initiatives may provide solutions for small towns in peripheral areas to use existing local skills and resources because, among other things, they involve a bottom-up rather than top-down strategy. They give the potential recipients of development a chance to apply their knowledge of the conditions prevailing in their areas to the development process. As the programmes listed above indicate, the ECDC's emphasis seems to be on financing certain categories of people, such as students, young adults and women, without any articulation of what the funding is aimed at achieving as far as people's aspirations and expectations are concerned (ECDC, 1996).

It is possible that the groups targeted for aid will find abandoned factories appropriate, especially in the case of the former Transkei where start-up capital is a constraining factor. (Most pieces of equipment have been stripped, but the buildings remain and can be converted to a variety of uses at low expenditure.) Existing and prospective entrepreneurs willing to use the physical infrastructure should be encouraged to do so in order to use local skills and resources. There are structures already in place and others can be created to expedite capital accumulation and local investments for sustainable development.

4. A priori considerations and the community development model for Butterworth

Figure 1 illustrates the postulated structures and the relationships between them. Although informal representation appears as a separate segment in the diagram it will be discussed under ‘community’ because such representation is essentially community leadership.

Figure 1: A proposed development model for Butterworth

Before the above model and its derivation are explained, it is necessary to sketch some theoretical underpinnings of development. Two theoretical positions are interrogated here: the top-down and the bottom-up.

In their work with local government in Africa, Blunt & Warren discovered that, in the initial stages, ‘the development paradigm tended to be influenced by the top-down transfer-of-technology approach’ (1991: xii). The prevailing notion, then, was that development planning and management were Euro-American-centred and needed to be transferred (wholesale) to other groups across the globe. According to Stohr (1981), experts conceive and formulate development plans and take them to the target groups for implementation, but do not involve them in all these activities. The felt needs and aspirations of the communities are rarely articulated and, when they are, the projects may be founded on inaccurate or incomplete information collected by strangers unfamiliar with prevailing local conditions. As de Beer & Swanepoel (1998) point out, success and sustainability may ultimately depend on active community participation.

The bottom-up approach has a better chance of success for a variety of reasons. First, community participation will engender commitment on the part of members of the community because they will regard the project as their own. Secondly, such commitment will make project sustainability possible through local capacity creation. Thirdly, the success of a project will restore self-confidence and a common purpose among participants. And, fourthly, demonstration effects are possible in a situation where those who have succeeded in their development efforts will be regarded as peers by surrounding communities. The bottom-up approach starts with the community and can therefore subsume community development principles in its formulation.

The community development model shown in Figure 1 was developed by the present author from various sources in the literature (Stohr, 1981; Jeppe, 1985; de Clercq, 1994; Nel, 1994; Blunt & Warren, 1996; de Beer & Swanepoel, 1998). The following sections explain various aspects of the model.

4.1 Community

Quoting the United Nations Department of Economic and Social Affairs of 1963, Jeppe defines community development as ‘the process by which the efforts of the people themselves are united with those of governmental authorities to improve economic, social and cultural conditions of communities’ and says that ‘this complex of processes is, therefore, made up of two essential elements: (1) the participation by the people themselves … with as much reliance as possible on their own initiative; and (2) the provision of technical and other services in ways which encourage initiative self-help and mutual help and make these more effective’ (1985: 27).

The emphasis of community development is clearly on active community involvement and self-help and mutual help, upon which can be based forms of assistance from without. This means that the community has to be brought on board not only at implementation stage but from conception through plan formulation, project articulation, implementation and monitoring. These sentiments are echoed by Nel (1994) and de Clercq (1994), who investigated ‘local development initiatives’ in Stutterheim (Eastern Cape) and ‘community participation in Winterveld’ (North West Province) respectively.

One of the reasons for emphasising community involvement in development is that a community is conversant with the multitude of variables that impinge on the livelihoods of its people. A second reason is that placing the responsibility for mobilising resources in its hands generates confidence and a spirit of commitment, because the efforts expended and the benefits thereof are regarded as the community's own. As mentioned above, this is important for sustainability. In the case of Butterworth and its environs, cognisance has to be taken of the community's skills, entrepreneurship, leadership qualities and market potential for whatever marketable yields come from the projects. Leaders presiding over organisations such as Masakhane, ‘Keep Butterworth Clean’, and so on, can be used to liaise informally with other structures in the formal sector, such as the ECDC and municipal agencies.

4.2 Formal representation

Jeppe (1985) talks about community development workers in probably the same vein that one would talk about agricultural extension workers. Community development workers could be located in the Department of Agriculture or the municipality in Butterworth or as an independent unit seconded to Butterworth from Bisho. Whatever the arrangements, these workers would form the link between the community and the formal structures, in order to make digestible to the former all the ingredients of the intended projects, as well as provide information about the needs of the community to the relevant service providers and funders. These would work with the community on a regular basis to provide on-the-spot training on various aspects of project management and generally monitor the progress of the project.

4.3 Human and natural endowment

The closure of factories in the early and mid-1990s left a sizable pool of unemployed skilled labour. Witness the reopening of ‘Tally’ as ‘Hong Fu’ in the Ibika industrial estate in Butterworth. (Tally manufactured clothing on a three eight-hour shift basis, but closed shop in 1996 and Mr Hong Fu, a Chinese national, took over.) The factory has re-employed most of the former employees of Tally on two eight-hour shifts. This means that Hong Fu did not have to spend money and time training new personnel, and the physical structures were already in place. Appropriate labour skills are there for the community projects as well as for individual enterprises. In addition, the mere presence of a large unemployed unskilled labour force in Butterworth makes it possible to offer training for such tasks as beadwork, basket making, creation of traditional attire, etc.

As Nkuhlu (1984, 1985) and Southall (1982) point out, the physical and climatic conditions of the former Transkei are propitious for agriculture, especially animal husbandry. Traditionally, the Xhosa have always kept cattle, sheep and goats – even if only for subsistence requirements – and what needs to be done is to educate the local communities about the market economy. The existing facilities at Tannery Protea and Agricultural Produce Brokers (APB) in Butterworth can process skins and hides from local sources instead of importing them from outside Butterworth and its environs, as has been the case in the past (Sarpong et al., 1991). Even if the products were sold outside the Butterworth region, linking back to local sources of inputs would create gainful employment opportunities and generate income in the community. Material inputs for now defunct clothing factories such as Kei Pep and Inglotex could be obtained at low delivery costs from the port of East London some 110 km away. These notwithstanding, the emphasis should be on articulation of local interests in order to mobilise hitherto dormant resources in the region. Getting communities involved in the affairs which affect their livelihood was the main purpose of former Eastern Cape Premier Makhenkesi Stofile's outreach programme (Daily Dispatch, 10 September 2001: 3).

4.4 The Eastern Cape Development Corporation and community development

One of the eight key focus areas identified by the ECDC (1996) Board of Directors was ‘community programmes’. The main role of the ECDC in community development seems to be funding programmes in the segment designated by the corporation as ‘group lending’. It would appear that assistance with identifying and formulating viable community development projects does not feature as a priority objective for assistance, and it may have to be obtained elsewhere. However, no matter who advises on project identification and formulation, given that pay-back rates for loans and grants will depend principally upon the viability of the projects the ECDC has to monitor the progress of the projects to ensure that funds are recoverable, especially where commercial banks are involved. The only precaution put in place by the ECDC is that defaulting parties will not be eligible for further funding. This does not seem to this author a helpful recipe for development.

A more constructive route would be to encourage community development workers and community leaders to work closely with both the community and the ECDC and any other lending institution. In consultation with ECDC, community leaders and community development workers can draw project blueprints as bases for meaningful project implementation and management. It has to be borne in mind that paying back borrowed funds within the scheduled time frame is not necessarily a measure of success, and the ECDC needs rather to forge some links with the recipient communities not only for monitoring purposes but also in order to create a spirit of trust and common purpose for sustainable development.

5. Experiences of community development in other countries

Before some evidence of community development in the former Transkei is presented, it is necessary to sketch some experiences of community development in other countries, especially those in Africa. Two examples (i.e. Kenya and Ghana) will suffice to illustrate how community development has been adopted there.

Linquist & Adolph (1996) discuss community development projects in Kenya which were sponsored by the Intermediate Technology Development Group (ITDG) in partnership with Oxfam. The original arrangement by the ITDG was to work among the Gabra people of the Turkana tribe, offering technical assistance to existing community development projects, and this was later extended to direct project implementation. Indigenous pastoral institutions among the Turkana were identified as organising structures for the purposes of mobilising resources and managing the projects. In this way the existing institutions provided the leadership necessary to drive the development process. The partnership between the ITDG, on one hand, and the Turkana and the Kenyan government officials, on the other hand, led to the registration of a self-help group. The first priority set by the group was animal health, followed by water resource development and later by livestock marketing (Linquist & Adolph, 1996).

Two things have emerged from the Kenyan experience. The first is that initiatives have come from the Turkana themselves, to articulate priorities and manage their own development. The second is that ITDG's efforts have been linked to indigenous knowledge and practice, yielding a battery of cures and treatments for a variety of health-related conditions (Linquist & Adolph, 1996). These two elements are important ingredients for sustainable community development.

Cosway & Anankum open their discussion on community development in Ghana by stating that:

Information from community members is needed at all stages of a project: before starting the project; during the formulation of the project; and for the successful implementation and sustainability of the project. Project planners need to ensure that the recipients have information and knowledge that will contribute to the success of all stages of the project. (1996: 89)

In conjunction with the Canadian International Development Agency (CIDA), the Ghanaian government set up the Water Utilisation Project (WUP) in the northern regions of the country. The WUP included health education, pump site development and maintenance and community development. For community development, the Ghana Water and Sewerage Corporation (GWSC) and CIDA realised from the outset that activities in the communities could best be managed by the people themselves. To this end, water users committees (WUC) were set up to supervise community projects. All committee members were selected from the community by the community members themselves. There were only two official guidelines from the authorities: women should be represented on the committee, and the caretaker for the hand pump of the community tap should be a member of the WUC. Also emphasised was local human resource capacitation to monitor and manage projects and training of committee members for leadership roles. Since no technical knowledge about water provision was available among the rural communities, it was imperative to train local people to take care of the project.

Some common strands run through the two case studies cited in this paper. First, community development projects need to be founded on local initiatives. Where the community's felt needs, which should underpin local development initiatives, are not properly articulated by the community, then outside help can be sought, but bearing in mind that ideas must not be forced onto the community. Secondly, local participation must be visible at all stages of the development process; it must not be just token involvement at the implementation stage. Thirdly, viable and effective communication links must be forged among all role players, as shown in the model in Figure 1.

6. Three examples of local non-manufacturing initiatives in the South Eastern Cape (former Transkei)

The introduction of manufacturing activity in Butterworth – especially in the formal sector – was state-driven under the auspices of the TDC as comprehended in the industrial decentralisation policy promulgated under apartheid. Many non-manufacturing activities appear to have emerged through local community initiatives. Project conception and articulation are undertaken by the people themselves, while technical assistance and funding are the responsibility of the state, be it national, regional or local. The next section describes three projects started by the communities of Mthatha (formerly Umtata), Butterworth and Port St Johns to highlight what people can do for themselves.

6.1 Umngazi Farming Scheme

In 1994 this scheme, comprising 12 members and employing 24 people, was started in Port St Johns. The project was conceived by six of the members, who were retrenched mine workers returning home to seek a livelihood. Their hopes were dashed when they arrived back home to find an army of unemployed people, thus the conception of the scheme (Daily Dispatch, 1 December 1999: 11). The scheme members, including their employees, did not have any formal training, but they did have experience gained through childhood participation in family subsistence activities. At the end of 1999 the farm covered 38 ha, of which 32 were under irrigation at a cost of R200 000 to the provincial government in Bisho. The same amount was used for erecting more robust fencing. Below is a list of the yields from crops grown on the farm, as of May 2003:

•	Butternut: 4 tons
•	Cabbage: 40 tons (20 bags to a ton)
•	Mealies: 2 tons
•	Spinach: 4 tons.

(Personal interviews with the farm manager, Mr Qeja, Umngazi Farming Scheme, May 2003).

It was noted at the time that the supply of produce to the market fell short of demand, and therefore plans were under way to acquire a 60-ha piece of land adjacent to the banks of the Umzimvubu River. The scheme has found a market in Mthatha and its environs, and the potential is there for growth if the necessary resources can be mustered. Since the East London branch of the Land Bank was willing to provide R50 000 as start-up capital for land preparation and acquisition of requisites inputs, it does not seem far-fetched to assume that they would provide a loan for the purchase of the land. The market demand and availability of resources will ensure the project's sustainability.

6.2 Philani Ncambedlana Farmers' Cooperative

This another community-inspired project, started in 2001 and involving six of the 31 farms formerly owned by most of the long-gone non-Transkeian farmers. The six leased farms have been capitalised by a R900 000 grant from the local economic development forum under the auspices of the Local Government and Housing Department (Daily Dispatch, 6 November 2001: 4). The department has further assisted the project with fencing and the local municipality (the King Sabata Dalindyebo municipality) has assisted with the construction of six tunnels for hydroponics. The following is a list of crops grown on the farm, the production figures from the farm and the yields, as of June 2003:

•	Tomatoes: 100 boxes (5-kg box per week using two tunnels)
•	Green peppers: 40 boxes per week (using one tunnel)
•	Eggs: 600 per day
•	Also grown are lettuce and spinach.

(Personal interview with Mr Majeke, Philani Ncambedlana Farmers' Cooperative, June 2003)

Long-term objectives are to establish a pigsty, a factory for processing tomatoes, a pottery and a training facility for prospective farmers. One important aspect of the venture is that local farmers' organisations such as the Mthatha Farmers' Support Centre have given the cooperative their full support, in addition to official support by the Regional Agricultural Directorate. Another is that the initiative was ‘people-driven’ (Daily Dispatch, 6 November 2001: 4). In addition, land is potentially available, because the remaining 25 farms can be leased for further development.

6.3 Tanga Village Masakhane

The Tanga Village Masakhane initiative in Butterworth goes back to 1989, when it was limited to provision of basic services such as water, a clinic and community hall. However, with an initial capital outlay of R250 000, the community later decided to include in the project such activities as mealie farming, enhanced by the provision of a reliable supply of water installed with the assistance of Mvula Trust in collaboration with the Department of Water Affairs (Saturday Dispatch, 16 June 2001: 7). The community has been in touch with Bokomo to buy from them. Standing orders from Butterworth's local stores are already in place, and plans are also in the pipeline for a multipurpose centre where baking, sewing and juice-making can take place. Interest in the project has been shown by the Independent Development Trust (working with the Public Works Department) and Micro Project Trust, which has donated R125 000. The Tanga Village project, like the other two, is firmly founded on community participation and is equally people-driven.

7. Lessons learnt from the projects

The following features are common to all the three projects:

•	They were initiated by the members themselves.
•	The members of each project run and manage the various activities.
•	There is collaborative effort with structures from without, such as the Department of Agriculture and funding institutions.
•	The projects have created jobs and provided income for their members.
•	Local stores in Butterworth, Mthatha and Port St Johns, which formerly relied on East London for fresh supplies of farm produce, have benefited as a result of lower delivery costs.

It would be injudicious at this moment, because of the short time the projects have been in existence, to try and gauge the full extent of successes, except maybe for Tanga Village Masakhane. However, it can be said that positive advances have been made in all three projects. What needs to be put in place now is formal representation in the manner shown in Figure 1. This will enhance the quality of the projects and the products emanating from them.

8. Conclusion

Whether industrial decentralisation in South Africa was introduced to render apartheid some credibility is not important here; what is important for Butterworth is that something needs to be done immediately to save the economy of the town and its hinterland. Because incentives have been withdrawn and there is little hope that they will ever be reintroduced, an alternative strategy has to be put in place and this is where community development comes in. The felt needs of the people can be articulated so that available resources are garnered for a new economic dispensation in Butterworth (and in other areas which have suffered a similar fate).

A community-based approach to development does not only possess theoretical appeal, it also seems to appeal to and have the support of a broader spectrum of society. This common spirit of purpose would render sustainability a realisable reality. Formalisation of local structures (existing and anticipated) should take place to access external assistance and ensure that local initiatives on the ground are not frustrated.

Acknowledgments

The author would like to thank Mr Paul Mwamba, who helped with proofreading and preparing the manuscript, and an anonymous referee who made invaluable and incisive comments.