News

17 August 2007
Ngala Private Game Reserve, Mpumalanga

The ASL Program’s support of the Madikwe lodges sought to demonstrate not only that community ownership of high-value ASLs is viable but also to advocate for the spread of the “model” to other locations in Africa.  To this end, the ASL Program engaged several leading lodge operating companies.  Conservation Corporation Africa (CC Africa), one of Africa’s largest and most successful ecotourism companies with an impressive track record of social responsibility, embraced the “Madikwe model” and agreed to pilot a new lodge development in partnership with the Welverdiend community at Ngala on the boundary of the Kruger National Park (where CC Africa already operates two other lodges and a trails camp).  If successful, the Ngala project will open the door for similar partnerships at other locations where CC Africa is expanding its presence.  

Ngala Communities receive a recoverable grant
•    The Ford Foundation have approved a recoverable grant of US$600 000 to fund community equity in the Ngala lodge development.
•    The funds will be provided to the Community via the ASL Foundation on terms acceptable to the IDC and the Ford Foundation.  This will allow the Community to leverage an additional US$1 550 000 in private investment and loans.  (The IDC is likely to require that the community’s investment be subordinated to IDC debt and that the head lease be ceded to the IDC as security for their loans.)
•    To stimulate the replication of the community-owned lodge model pioneered at Madikwe through a partnership with one of Africa’s leading lodge operating companies.   
•    CC Africa is currently expanding its operations in several African countries (including Botswana, Namibia, South Africa, Kenya and Tanzania) and also on the Indian subcontinent where it has entered into a partnership with the Taj hotel group.  The project therefore comes at a strategically opportune time in CC Africa’s business development cycle; it provides an ideal opportunity to develop the partnership model at  a time when the group is in a phase of vigorous expansion.

The beneficiary community is the Welverdiend Community, resident in two villages just south of Ngala Private Game Reserve.  They are located in Ward 15 of the Bushbuckridge Local Municipality, which in turn falls within the Ehlangeni District Municipality.   The villages fall under the traditional jurisdiction of Kgosi Mnisi and are located in Mpumalanga Province.  

The 2001 census estimated the population of Ward 15 at 20,757 persons resident in just over 4,000 households.      
Ward 15 suffers from extreme poverty.  The unemployment rate has been variously estimated at between 70 and 80%.  The 2001 census suggested  that 807 persons out of a total labour force of 3,351 were employed.  This put the unemployment rate at approximately 76%.  Average household income in 2001 was just over R1,000 per month.
Financial and economic modelling, as well as the experience gained at Madikwe with similar developments, indicates that the project will bring substantial direct and indirect benefits to the Community.  This will contribute significantly to the reduction of poverty at Welverdiend.  

Benefits will include:
­    Approximately 90 temporary jobs during the construction phase.
­    39 permanent direct jobs at an average annual remuneration of approximately R40,000 and an annual total payroll of over R1,5 million.
Employment preference will be given to members of the Community.  This will include managerial posts after rigorous training and capacity building. A structured skills training program will be implemented to ensure adequately trained local labour is available.  The typical situation where locals are employed only in low-paid, menial positions will therefore be avoided.
The commitment to minimizing leakage from the rural economy by purchasing goods and services locally within a framework of structured support for local economic development will ensure that a high proportion of the second order job creation will also occur locally.
­    Direct lease income to the Welverdiend Trust of approximately R2,25 million per annum at maturity, a substantial proportion of which will be available for social investment in the village.
­    Procurement of a range goods and services from the Community thereby stimulating small business development at Welverdiend. This will include the acquisition of fresh supplies and the creation of a community-owned workshop positioned at the SA Wildlife College, which is on Ngala land.
­    The Africa Foundation already has a long involvement of rural extension and social investment in the Welverdiend Community and this support will be intensified under the proposed project.
­    The stimulation of institutional capacity, management ability and entrepreneurial skills in the Welverdiend area.  The initiative will equip Community members with skills marketable to the lodges at Ngala but also to the broader tourism industry.  Through its participation in the project, the Trust and individuals from the Community will also build the organizational capacity and entrepreneurial expertise needed for further independent ventures in the future.

CC Africa, with support from the ASL Foundation, is currently assisting the Community to establish a legal entity  to represent them in the proposed venture. This assistance includes the registration of an appropriate legal vehicle (provisionally referred to as the “Welverdiend Development Trust”), the training of its members and office bearers, as well as an extensive aftercare program. The Trust will act as the legal entity representing the interests of the Community, who are the beneficiaries of the Trust.  The process of establishing the Trust draws heavily on the experience gained by the ASL Foundation at Madikwe (but also at other locations such as Makuleke in the north of the Kruger National Park).  The Trust will be structured in a manner that ensures transparency, representativeness (including gender balance) and high governance standards.  It will be subject to oversight by the Master of the High Court under the relevant South African legislation, will be audited annually and will receive ongoing  capacity building, organizational  and administrative support from the Africa Foundation.  The latter will also assist the Trust with the identification and prioritization of social spending by way of a written and formally adopted income distribution plan.  The Africa Foundation  currently supports several projects in the Welverdiend villages and will draw on this experience in assisting the Trust with its planning.  The income distribution plan will also be coordinated and integrated with local government at the local and district municipality levels.

The project will be implemented over a 10-year period starting in June 2007 (when construction of the lodge is due to start).  The Ford Foundation will make the recoverable grant of US$600 000 to the ASL Foundation  who will in turn onlend the money to the Welverdiend Development Trust on terms substantially similar to those received from Ford.  The ASL Foundation will manage the recovery of the loan over time and will be accountable to the Ford Foundation for the recovery of the loan and the fulfilment of whatever conditions are attached to the loan.