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Nearly half the area of the municipality consists of commercial farms that are sparsely
populated. A significant number of households in the area are headed by females who are
possibly more disadvantaged in tenus of resources and education. More than half of the
population comprises teenagers, thus placing pressure on the need for social facilities. A
number of children in the area are orphaned through the impact of HIV/AIDS. Due to the
impact ofHIV1AIDS, population growth is expected to decline over the next 20 years. These
challenges ought to be taken into account in planning for services and facilities in the area. At
least 34% ofthe population (113 462 people) is already infected with HIV/AIOS and 25900
people per year could be added to this figure (lOP 2005/2006 for the Ulundi Local
Municipality). These statistical indications are expected to have a negative impact on
productivity ofthe area in future.
According to the Ulundi Local Municipality (200512006), education levels are very low and
an estimated 25% of households have no income. A further 10.5% has an annual income of
below R2400 per annum -less than R200 per month. Poverty has affected most severely the
rural areas. Unemployment levels are very high with only 6.4% of the total population are
fonuallyemployed. Every employed person supports 16 unemployed persons of which nine
are over 15 years. Ofthose employed, 60.6% work in the public sector, indicating the lack of
diversity in the economy. Private households employ the second highest number of people
(9.86%) (IDP Review, 2005/2006 for the Ulundi Local Municipality). According to Van Oer
Merwe (2002) the challenges for Ulundi, in respect ofthe socio-economic situation, relates to
serving a largely rural community of which 44% of the people are currently of school-going
age. Accordingly the socio-economic analysis indicates that the rural communities are more
affected by circumstances of poverty and have lower income levels than the urban
community.
Families living in these areas have mostly women as household heads. The low levels of
education have an impact on the types ofjob opportunities that can be obtained and potential
income generation. This research acknowledges that the current market condition suggests
less private sector activities, however it is envisaged that more private sector economic
activity is a necessity to reduce income leakage in the Ulundi Local Municipality. increase
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