Seed capital: rural development financier issues 140 loans
11 December 2019 | Web Article Number: ME201917516
THE Eastern Cape Rural Development Agency (ECRDA) has issued 140 agricultural and non-agricultural loans worth R4,7 million to rural entrepreneurs across six Eastern Cape regions in the 2018/19 financial year.
Announcing the agency’s 2018/19 annual results, ECRDA chief executive officer Nhlanganiso Dladla said the bulk of the disbursements went to agricultural loans which accounted for R3,9 million and the balance of R786,659.07 went to non-agricultural loans.
A total of R1,071 million was disbursed to the Amathole District Municipality, R2,370 million went to the Alfred Nzo District Municipality, R321,040.28 went to the Chris Hani District Municipality, R609,233.42 was disbursed to entrepreneurs in the OR Tambo District Municipality, R127,000.00 went to Sarah Baartman District Municipality and R198,230.41 went to the Karoo region.
“The ECRDA is also pleased that it received yet another unqualified audit opinion. This indicates that government and the ECRDA’s various partners should rest assured that public funds are in safe hands.”
Dladla said the agency’s R195,3-million budget allocation from government in the 2018/19 financial year was used “to effect meaningful economic development” in rural areas.
“This allocation allowed the ECRDA consolidate the work of its core business, focused on the implementation of agro-processing, livestock development, forestry development, renewable energy and rural finance initiatives which impact rural communities throughout the Eastern Cape.”
In the agro-processing programme, the ECRDA placed a significant focus on the strengthening of its value addition capacity at its Rural Enterprise Development Hubs (RED Hubs) which are focussed on the milling and processing of maize and grain sorghum. These are turned into market-ready products such as super maize meal and samp. These value addition activities are aimed at improving rural income generation and to support viable rural businesses.
“As such, the organisation committed its R11,8-million agro-processing budget toward improving the viability of the RED Hubs through strengthening their technical capabilities and competitiveness. These efforts helped support the creation and retention of 92 permanent jobs at the Ncora, Mqanduli, Mbizana and at the Emalahleni RED Hubs.
“During the period under review, the organisation also implemented the innovative Tshabo RED Hub. At the Tshabo RED Hub two sites were fenced in the period under review. The RED Hub is earmarked for flora, snail and vegetable production through hydroponics. At this stage, the focus is on flora production; expansion into the other commodities will depend on the availability of a budget to support such development.”
Dladla said that in 2018/19 the ECRDA focussed on alternative complimentary projects to the forestry business to bridge the gap of the nine-year growth cycle for timber. At two of the six community forestry projects in Izinini and Sinawo, the ECRDA made available R3 million for the establishment of vegetable gardens of 10 hectares, split evenly between the sites which have already been fenced.
In 2018/19, there was a total budget of R1.5 million set aside for project implementation. This budget was utilised for technical support to the forestry projects and for labour costs. There are altogether 4,412 hectares planted in all six projects at different ages.
“During the period under review, 192 hectares of eucalyptus dunnii were planted in Izinini and Sinawo, with no planting at Gqunkunqa, Mkhambathi, Sixhotyeni and at Lusikisiki. It is significant to note that the 192 hectares planted in Izinini and Sinawo were paid for by the Communal Property Associations (CPAs) with no financial injection from the ECRDA or any other donor. This is an exciting development which demonstrates that these projects are moving toward self-sufficiency with minimal government support required in the long-term,” Dladla said.
In the livestock development programme, the ECRDA allocated a total of R3,5 million for value addition activities such as feedlot development, and a further R350 000 for the establishment of livestock marketing infrastructure in the form of loading ramps and auction pens. In 2018/19 three livestock auctions were held which generated R3,3 million in sales of about 510 cattle.
In 2018/19, the ECRDA built three loading ramps and one auction pen to drive livestock marketing. The loading ramps were built in Peddie and at the Raymond Mhlaba and Intsika Yethu local municipalities while the auction pen was erected at the Enoch Mgijima Local Municipality.
There were three auctions held at the auction pen in Enoch Mgijima which were facilitated by the ECRDA and Sheard Auctioneers. About 510 cattle, 170 per auction, were sold at the three auctions. A total of R3,3 million was raised through the auctions with each livestock unit sold at an average of R6,500. The livestock which were in a reasonable condition was sourced within the Whittlesea area.
“In the renewable energy programme, a service provider was appointed by the end of 2018/19 for the establishment of a R2,8-million grid tied battery back-up system at the Mbizana Red Hub. The system is designed to reduce the cost of power to the hub and reliance on power supplied by Eskom. The ultimate objective is to expand the system with additional batteries and solar panels so as to make the Hub able to meet all its own power requirements independent of the national grid.”
He said the agency provided high value financial and technical support to its subsidiaries and associated entities. They include the Magwa-Majola Tea Estate, Amajingqi Macadamia Farming as well as the Kangela Citrus Farm. The ECRDA’s interventions are meant to improve the general financial health of these supported entities as well their productivity and competitiveness.
Tea estate rescue
He added that the agency expects the Magwa-Majola Tea Estate business rescue process to be finalised in June of the 2019/20 financial year. During the review period, a total of R33,9 million was allocated to the business rescue programme which resulted in 1,312ha being planted in Magwa and 170ha at Majola.
Support was also extended to the Kangela Citrus Farm and to Amajingqi Macadamia Farming. A total of R32,6 million was allocated to Amajingqi which had 267ha of macadamia nuts under production in 2018/19. At Kangela, the ECRDA’S intervention came to an end following a court challenge that restricted the agency’s support to the citrus farm. ECRDA is working with other stakeholders to resolve issues affecting the Kangela beneficiaries.