ALAN WINDE: Cape uses innovation to tackle two crises, and small wins are already evident
It is government’s role to create the fertile environment in which the private sector thrives and job creation can grow
Throughout the Western Cape’s response to Covid-19, I have referred to two pandemics. On the one hand we face the Covid-19 health pandemic, on the other we have an employment crisis — millions of South Africans have lost their jobs over the past year. Both require us as a government to act urgently and innovatively and to lead from the front.
We have had to walk a fine line to balance these two pandemics — ensuring we are able to offer appropriate healthcare to those who need it, while also addressing the humanitarian crisis that has stemmed from thousands of people losing their jobs, and with it their ability to put food on the table for themselves and their families.
In the Western Cape, we took the decision to focus our recovery interventions around three key pillars. These were dignity and wellbeing, safety and jobs. All three of these are closely interlinked, and delivering on one will have a knock-on effect on the others. Jobs help fight crime, they ensure people do not go hungry, that children stay in school.
The Western Cape still has the lowest expanded unemployment rate in SA by some margin but still more than 270,000 people have lost their jobs in our province over the last year. We saw some bounce back last quarter, with 37,000 new jobs created, but we have a lot of work to do to win back what we have lost.
Key focus areas for us in ensuring economic growth are infrastructure investment, energy security, innovating in leading job creation sectors such as tourism and agriculture, growing exports and attracting new investors to our region. We have always been clear that job creation must be led by the private sector. As government, our role is to create the fertile environment in which the private sector thrives, and job creation can grow.
In October we detailed our recovery plan and we have started to see the positive shoots, with 7,493 job opportunities created in the private sector as at December 2020. In the past financial year we have secured over R4bn in private sector investment as well.
One of the most effective tools for job creation is investment in infrastructure. Infrastructure development will allow us to create new jobs and support economic growth, but we are not currently investing enough in infrastructure. And unless more money is allocated to provinces by national government to stimulate infrastructure-led growth we simply can’t afford it currently.
That is why the Western Cape has taken the bold step to build up a portfolio of investment projects that can attract private finance where appropriate. Borrowing for infrastructure makes sense as money is used to create assets like hospitals, schools and roads that can be used by future generations. It also allows us to spread the burden of repayment over time.
This will require high-quality project preparation and projects will be identified and undergo the necessary technical work as well as feasibility studies. It is our plan for this process to work hand-in-hand with a dedicated infrastructure agency that can contract and borrow money as a 3D entity under the Public Finance Management Act.
We will shortly be appointing a panel of infrastructure finance experts who will take the technical work forward in establishing this infrastructure financing entity. This is not a quick process — the creation of this entity will require approvals and legislative change, but our objective is to get it done in this current term of office.
If we are going to build infrastructure and attract investment we need energy. Despite years of promises at a national level we are still no closer to a solution to this problem. Eskom load-shedding cost the Western Cape about R75m per stage per day in 2020. At a time when we need to be doing everything we can to save jobs, we cannot allow this to go on. That is why the Western Cape has chosen to lead from the front to make this province more energy resilient.
At the end of 2020 we launched our Municipal Energy Resilience Project, which will assist municipalities in taking the necessary steps to generate, procure and sell their own power. We have also committed R20m per year over a two-year period to roll out this project.
As part of the first phase we have already undertaken an assessment process with municipalities to determine their readiness for and to select those that can be the initial drivers of new energy opportunities. We have also procured technical expertise that will help our municipalities become energy resilient. I have said it before and I will say it again: the Western Cape will become the first province to beat load-shedding.
We are also focusing our attention on two of the leading job-creating industries in the Western Cape: agriculture and tourism. Over what has been a truly difficult year for almost all sectors, our agriculture sector has really been a shining light, recording record crops and excellent exports. This sector is also a leading job creator in the Western Cape and we are harnessing technology, from drones to climate change technology, to leverage this sector for growth.
The researchers in the provincial department of agriculture’s fourth Industrial Revolution (4IR) programme are also working to fast-track new technology development within their respective portfolios and pursue new technology available outside of the department.
In tourism, we know that international tourism will not recover to pre-Covid-19 levels in the year ahead, but we are starting the important work of gaining back routes in our air network that have been lost over the past year. The Air Access Project, a partnership between private industry, government and Wesgro, has over the years made significant progress in connecting Cape Town with the rest of the world through direct flights.
Even in the current climate they have been able to secure a direct route from Cape Town to Atlanta on Delta Air Lines, TAP Portugal with a direct flight to Lisbon, and we are very pleased that Airlink has added connections between Cape Town and Harare and Cape Town to Walvis Bay. Last week we also received the good news that Qatar airlines will increase its flights to Cape Town.
We will also be lobbying the president and home affairs minister to introduce a remote working visa. This year Cape Town made the list of the 50 best cities for remote working in 2021 and I believe we have something special to offer “digital nomads”. Many other countries already have dedicated remote working visas, and SA should too.
On the domestic tourism front, Wesgro will continue its highly successful domestic tourism campaign to encourage visitors from other provinces to travel to the Western Cape. Already this campaign’s microsite has secured 21,000 seat bookings.
Over the past year, agriculture’s bumper crops have led to excellent export growth and we intend to leverage this growth going forward. We will continue to host virtual trade missions with the rest of Africa and other key export markets, targeting R4.25bn in trade deals for the province.
We have also worked closely with the Port of Cape Town, which has made good strides in improving efficiency and turnaround times. This strategic co-operation will continue to ensure maximum efficiency.
Our Air Access programme has also helped us to grow exports — transporting goods in the bellies of aircraft flying out of Cape Town International. The project has now also signed another private-sector partner, DHL, which will further promote the movement of cargo in our province.
Finally, we must attract foreign direct investment to the Western Cape if we want to create new jobs. Unfortunately, SA’s ability to attract these investors is hindered by the national government’s failing policies, corruption, load-shedding and divided leadership.
The Western Cape therefore remains a clear example of what is possible when you cut the red tape, have strong, well-managed institutions and support the private sector to grow jobs and the economy. Our three economic growth agencies, Wesgro, the Saldanha Industrial Development Zone and the Atlantis Special Economic Zone (SEZ) for green technology have the right expertise to do just this.
Wesgro, through its investment facilitation services, collaborative partnerships and the Invest SA One Stop Shop, will continue to attract investors, with the objective of securing up to R2.85bn of investment over the next year.
The Atlantis SEZ company has now been established and has secured investments totalling R680m, covering 25ha of the 120ha economic zone. We will also look to cement our position as the leading green economy in Africa by building on the billions of rand worth of investments secured for the Western Cape last year as a result of Wesgro and GreenCape’s collaboration.
We believe our work to build infrastructure, develop skills, connect Cape Town to the rest of the world, address energy shortages and cut red tape is what sets us apart as an investment destination.
The past year has been a difficult one and we will face many more challenges in the year ahead. But the Western Cape government will continue to lead, advocate for private sector led growth, and innovate in our response to ensure we save lives and jobs.
• Winde is Western Cape premier.
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