The biggest growth potential or geographical dispersion of economic activity in the Western Cape lies in the Cape metropolitan area, and the adjacent Cape Winelands district, where 85% of the real value is generated through production, states the Western Cape Provincial Treasury yearly ‘Provincial Economic Review and Outlook (PERO) 2013’ report.
The PERO provides an objective review and analysis of past and estimated future economic growth and socioeconomic development in the Western Cape.
Cape Chamber of Commerce Western Cape president Janine Myburgh says the recent proclamation of the Saldanha area, located 110 km north of Cape Town, as an industrial development zone (IDZ), will be an economic boost for the Western Cape.
“It will attract new industries, such as ship repair, while the servicing of oil rigs should expand rapidly, as this activity has been constrained by the lack of space at Cape Town harbour,” she says.
The Saldanha area holds promise with regard to supporting an active oil and gas industry. “There are extensive plans for further exploration and drilling, while new investors will develop the Ibhubesi gasfield, located in Block 2A in the Orange basin,” says Myburgh, adding that this will involve the building of undersea pipelines.
She says that talks are under way to supply gas for power generation to State-owned power utility Eskom, with Saldanha also focusing on the development of green industries.
Further, Myburgh highlights the booming tourist industry as indicative of the potential for further growth. “Most of the country’s top tourist attractions, such as the Waterfront, Cape Point, Table Mountain, Kirstenbosch, Robben Island, the winelands and the garden route, are in the Western Cape,” she says, adding that there is an increasing number of hotels being built, which is supported by a wide range of guesthouses and other accommodation.
“Cape Town appeals to the top end of industry and the emphasis is on service delivery, which leads to job creation.”
Meanwhile, Myburgh says that business sectors thriving in the Western Cape include finance, insurance and real estate, as well as the business services sector, which is located in the Cape Metro region and contributes 32.4% to the gross domestic product of the region (GDPR). The second-largest sector is the manufacturing industry, contributing 17.1% of the GDPR.
“The agriculture industry is also vital to the Western Cape, as the region is a large exporter of fruit, with food processing also providing numerous jobs,” she notes.
She adds that the Western Cape has a reputation for innovation, which is driven largely by the presence of four major universities and a well-educated population. “Software is a successful industry, while unexpected successful industries include the manufacturing of carbon-fibre parts for airliners and desalination equipment.”
Myburgh highlights that the Western Cape is also one of the largest manufacturers of automated feeding systems for big poultry and pig farms in the world.
The boat and yacht building industry is also experiencing growth in the Western Cape, with two to three catamarans launched each week for the international cruising industry. Myburgh notes that this industry is testimony to the skill and craftsmanship of the Western Cape workforce.
“The economy of the Western Cape is growing at a moderate pace and we foresee that it will continue to increase in 2014. Businesses need to look at better investment avenues to help sustain the province,” says Myburgh.
According to the Provincial Treasury, the predicted growth rate of the finance, real estate and business service sector is between 4.6% and 4.2% a year between 2013 and 2017.
The top contributors to economic growth in the province in 2011 were real estate, retail, finance, business services, wholesale, catering, accommodation, general government services, manufacturing, transport and communication. “These industries are gradually expanding,” Myburgh highlights.
She says the slow pace of employment growth, recent developments in the agriculture sector relating to strikes, insufficient housing and access to basic services, as well as the recent denial of permits in the fishing industry could affect the growth of the Western Cape economy.
During the 2013 Budget speech, Finance, Economic Development and Tourism Minister Alan Winde mentioned that his department planned to enhance strategic infrastructure, with R78.8-million allocated to the broadband initiative and the establishment of the Saldanha IDZ for growth and international investment purposes.
Meanwhile, Myburgh notes that last year the expansion of the Cape Town International Convention Centre should contribute to more business investment, which will contribute to the province’s economy. “Investment and trade promotion agency Wesgro will also provide support for emerging and existing exporters by assisting them in accessing new markets, mainly focusing on doing business in Africa.”
She adds that readers of The Daily Telegraph, in Britain, and the New York Times recently voted Cape Town the best city in the world to visit in 2014. “Clearly, the Western Cape is doing something right, and long may it continue,” adds Myburgh.
Cape Town has also been voted as the World Design Capital for 2014.
The Cape Chamber of Commerce
The Cape Chamber of Commerce has 3 000 members and has been in existence for 210 years. Most members are in the small-business sector and collectively employ more than 300 000 people.
Membership represents a wide cross-section of business – from small and medium-sized ventures to corporate companies – in the Western Cape.
Large corporate members include bus service provider Golden Arrow, petroleum giant Shell and telecommunications provider Vodacom, as well as electronic commerce company Amazon, which employs more than 1 000 people at its Western Cape call centre at peak times.
The chamber’s work is carried out by volunteer members, who are supported by 34 professional staff.