MIREILLE WENGER: Using data to move from recovery to growth in the Western Cape

The recent escalation in SA’s energy crisis brings into focus the famous words of Benjamin Franklin, who said: “By failing to prepare you are preparing to fail.” The truth is that load-shedding is a glaring, daily reminder that we need to plan now for the future we hope to have.

Effective and efficient preparation and, in the government, the formation of policy to address key challenges, must be data-driven and evidence-led, because we can only make the tough decisions if we fully understand what is happening in communities across our province.

This is why the Western Cape government’s Provincial Economic Review & Outlook 2022/2023 is such a critical document, and one that is uniquely positioned to help guide us in making these decisions as we take the pathway from recovery to growth. 

The document is an invaluable source of data not only for us, but also for the business sector. It provides insights on the effect of international and national developments on the provincial economy, as well as a detailed analysis of key trends in the Western Cape, including within our government’s key priorities of jobs, safety and wellbeing. In doing so it informs our budget process, feeding into the Western Cape medium-term budget policy statement, which I will present in November.

So, what does the document tell us? While we face strong headwinds in SA, and by extension the Western Cape, the review makes clear that there are shining stars that can be leveraged so that we continue on our pathway from recovery to growth in the province.

For example, our agricultural sector’s growth has outperformed all others over the past 10 years and is expected to expand by 8.8% this year. Real exports in the Western Cape have expanded by almost 40% between 2012 and 2021, with significant contributions from agriculture.

As a global destination of choice, tourism is expected to rebound this year, exceeding 2019 figures in 2023, and our province is pushing ahead with bold plans to be energy resilient. We are also recording improvements in our safety and wellbeing priorities, with sexual offences, robbery at residential premises, drug-related crime and driving under the influence of alcohol all declining between 2017/2018 and 2021/2022 financial years. New data also shows our Law Enforcement Advancement Plan is starting to work in crime hotspots.

The human development index in the province has improved between 2012, 2016 and 2020, and the Western Cape had a larger portion of dwellings with electricity, including a generator, access to flush or chemical toilets, access to refuse removals at least once a week and piped water inside than the rest of SA in 2021. We have the highest life expectancy for both males and females in SA, our ratio of doctors per 100,000 people has increased and there has been a significant improvement in pupil retention in schools over the past decade.

In addition, the Western Cape is the green economy hub of SA, attracting significant levels of renewable energy investment. In fact, this sector contributed over 12% of all greenfield investments in the province between 2011 and 2021.

The document also focuses our attention on where we need to do more. For example, we need far higher levels of fixed capital investment going forward to drastically increase employment.

Job creation

It is for this reason that we will look to substantially increase fixed investment in the Western Cape, with a specific emphasis on social infrastructure investments, which will be critical in creating construction jobs. This builds on premier Alan Winde’s announcement earlier this year that the Western Cape government is embarking on a major infrastructure drive. The increase in building plans passed in the province, which account for nearly a nearly a third (31.6%) of all building plans passed nationally by value, is a strong leading indicator and good news in this respect.

Renewable energy

It is also increasingly clear that the future of green power generation in SA will be in the three Cape provinces, and we are determined to take full advantage of this opportunity. Our Municipal Energy Resilience initiative is doing pioneering work to develop, support and capacitate renewable energy projects in municipalities, and support municipalities, businesses and households to generate, procure and sell electricity.

A key focus area, for example, has been on supporting uptake in small-scale embedded generation, which will enable households and the private sector to feed back to the grid. So far, 22 Western Cape municipalities have small-scale embedded generation (SSEG) frameworks, representing a third of all municipalities that have such a framework in SA. Twenty-one Western Cape municipalities also now have SSEG feed-in-tariffs, representing nearly two-thirds of all municipalities that have such a tariff in SA.

We are also focusing on enabling wheeling to unlock significant private sector demand from independent power producers. At the end of the day we are determined to decouple our provincial growth rate from that of the country.  We know we are going to need to do more with less, and use the policy levers available to us to effect rapid change.

What is clear is that we cannot do this alone, which is why the Western Cape government is working hard to enable partnerships, especially with the private sector, and to embrace innovation. Ultimately, diving into the data contained in the Provincial Economic Review & Outlook document I see that even in the face of challenging times in SA and across the globe, there is a clear pathway before us — from recovery to growth, a pathway that will create hope and confidence.

• Wenger is Western Cape finance & economic opportunities MEC.