Large, job-creating metros such as Cape Town are the growth engines of South Africa, but we can only enable opportunities if the National Government changes its current course drastically.
According to the latest City of Cape Town Economic Performance Indicators for Cape Town (Epic) report for the third quarter of last year, between January and June 2014, Cape Town attracted 15 investment projects - exceeding the investments received in the same period in 2013. Should this trend continue, it is expected that the number of projects in 2014 will exceed the number received in 2013.
An investor survey done in August of the same year by Wesgro, the Destination Marketing, Investment and Trade Promotion Agency for the Western Cape, found that while the large majority of investors are confident in Cape Town as an investment destination, more than one-third of the investors surveyed viewed national government policies and operations as the biggest hurdle to their operations in Cape Town.
According to the survey, national-level issues include addressing relevant national legislation, labour unrest, the quality of the education system, and visa and work permit problems. At the time of the survey, Eskom's load shedding had not resumed.
From the survey, it was mentioned that Cape Town's specific challenges include increased support to existing investors to access national and African markets, supporting the competitiveness of existing investors through addressing input costs, and business environment productivity issues.
"As a City-government, we are focusing on these issues. Within our legislative powers we've driven major changes to regulations, as opposed to simply treating red-tape issues as a matter of helping with compliance of burdensome laws and policies. Instead we've eliminated burdensome legislation and replaced it with a universally recognisable ease-of-doing-business approach. Our single zoning scheme, for example, replaced and repealed over 270 outdated policies and by-laws," said Councillor Garreth Bloor, Mayoral Committee Member for Tourism, Events and Economic Development.
"We have also established a dedicated investment promotion office."
"Addressing input costs for business, we are focusing on developing the local Information and Communication Technology sector and the City's Information Technology Department has been rolling out the fibre-optic network (broadband project) that will support the telecommunications and service delivery needs of the city in addition to enabling previously disadvantaged residents to gain broader access to the advantages of technology. This technology also enables the private sector to tap into the network for cheaper broadband," Councillor Bloor said.
Furthermore, the uptake of the City's first Investment Incentive Scheme in Atlantis has been just over R10 million - largely comprising electricity subsidies. The majority of incentives have supported business retention but have also led to one new major investment being established.
The City's expansion of its MyCiTi bus service is also key to increasing employee and business productivity and improving business operations.
"Loadshedding is an inconvenience for residents but this is a disaster for business and entrepreneurs. Big business and industry has, over the years, already been urged to use less electricity and therefore decrease production - a concept that goes against any understanding of economics. Sadly, they could do this because our economic growth rate has been nearly non-existent over the last years - lower than many of our sub-Saharan neighbours, for example," Councillor Bloor said.
The impact of load shedding is definitely weakening Cape Town's efforts to attract investment. It is likely that investors will go where there is security of energy supply. What is most concerning is the impact of load shedding on hard-pressed local businesses that now have to invest in new equipment.
The City has already realised an almost 13% reduction in energy consumption through internal efficiencies.
Overall, the City is set to achieve savings of 16 445 megawatt hours per year and 16 281 tonnes in total carbon emissions annually.
"We also have a successful residential savings programme in place. The City has been driving a successful High-Pressure Solar Water Heater Programme in an attempt to reduce electricity demand in the peak times. For those with electric geysers (the largest consumers of residential electricity), switching to a solar water heater is the best way to reduce consumption and cost immediately."
Furthermore, the City is prioritising the establishment of the Atlantis Industrial Park as a green technology hub.
"We have to adapt to a volatile energy market but national government must come to the party. Mortgaging the future of every South African alive, and still to be born, to pay for an expensive nuclear build programme is not the answer either."
Renewable energy and energy efficient technology is already contributing to the energy mix. Greater political will is needed to ensure the large-scale establishment and embedding of the renewable energy sector.
"Together with the Western Cape Government, we are driving efforts to bring natural gas supply into the Western Cape. We reiterate our previously stated interest in entering into a power purchase agreement with a private company that will construct a gas-fired power station within the city to provide Cape Town with a power supply which is not dependent on Eskom's monopoly and which will provide an anchor for the investment required to bring a gas supply into our city."
"This would directly support the growth of larger-scale renewable energy resources in Cape Town and the Western Cape. We need decisions to be taken for the good of the country and not for the good of a handful of individuals."
"We are falling off the tip of the tipping point and the greatest gift that can be bestowed on South Africans when President Jacob Zuma delivers his State of the Nation Address on Thursdayevening is to signal a drastic move away from the current course that our country is on," Councillor Bloor added.
"We need a new direction and we need it now."
- 5 ways government could introduce new ‘local taxes’ in South Africa
- 9 ways business and govt plan to create 275 000 jobs every year
- Government’s economic stimulus package to be made public soon, says presidency
- Afriforum concerned over alleged govt land expropriation list
- Government spends R10.7m fixing crashed cars