UNATHI SONTI: SA risks missing the boat on its blue economy

With a coastline stretching almost 2,850km, SA’s potential to develop its rich maritime resources for economic gain is vast.

If used correctly the nation’s blue economy — the sustainable development of the ocean’s resources for financial growth — could provide a much-needed boost to multiple sectors from energy to tourism. With the potential to support hundreds of thousands of jobs, the benefits for local communities are extensive and would help tackle one of SA’s most deep-rooted social challenges: poverty.

But without government support to cut the red tape for flagship projects and to provide the right commercial conditions for operators to thrive, these rich resources along SA’s coastline will remain unused, and its deep economic problems won’t be addressed.

Growth potential

The global ocean economy is expected to double in value by 2030 to $3-trillion. In just eight years maritime commerce could be directly responsible for creating 40-million jobs worldwide. Across Africa leaders have recognised the potential and have prioritised blue economy development in the 2050 Africa Integrated Maritime Strategy.

SA, which has the continent’s third-largest coastline, launched Operation Phakisa in 2014, a government strategy intended to harness the economic value of its coastlines. Promoting the country’s blue economy could contribute R177bn ($9.9bn) to the nation’s GDP by 2033 and create as many as 1-million jobs, according to government estimates at the time.

But almost a decade on, the potential hasn’t been realised and SA’s economic growth has stagnated. Domestic poverty rates have reached levels not seen for more than a decade, while inflation has surged to a 13-year high, according to the World Bank.

“The outlook is clouded with risks, and sustained reforms and investments are required to support better growth outcomes and poverty reduction,” the World Bank said in an October 2022 update on the country.

Red tape

Only with targeted government intervention, by cutting red tape and making the commercial conditions work for companies, can SA’s blue economy reach its full potential. With the right framework this could help end SA’s energy crisis, reduce extreme poverty, boost tourism revenue, improve food security and even help gender inequality.

Prominent industry leaders say developing SA’s maritime economy will have huge benefits for the entire country. However, rather than being supported, private-sector companies looking to invest in coastal communities are struggling to get their projects approved.

One such example is from the recent Risk Mitigation IPP procurement programme (RMIPPPP) bid winner, floating power plant producer Karpowership SA. The proposal is to use vessels that would be moored offshore at three different locations; Richards Bay, Saldhana Bay and Coega, which would then add 1.22GW of much-needed power to the SA grid.

The projects would help alleviate SA’s acute electricity shortage, ease load-shedding and support hundreds of local jobs. The vessels would use cleaner fuels to generate electricity compared to what SA runs on right now.

As part of Karpowership’s ongoing commitment to help ease SA’s energy crisis, the company held a public participation event in Coega, which included more than 400 public members to ensure all stakeholders had their say on the proposed projects and fully understood the benefits they could bring.

The public participation events were well received by engaged and enthusiastic members of the public as well as business owners, many of whom are frustrated by the effects of load-shedding on the way in which they lived their lives and the damage to the local economy. But the government hasn’t given the go-ahead for the projects to start operating, a move that makes no sense in the context of the energy crisis.

While SA isn’t taking action to end its power crisis, other regions are already in discussions with Karpowership to deploy their vessels elsewhere. These power ships could hugely improve South Africans’ quality of life and ease the economic damage done by load-shedding.

Given the size of SA’s coastline, conversations about the blue economy should frame most public discourse about the country’s poor economic performance. Kenya and the Seychelles are harnessing the power of maritime resources to boost their economies, creating integrated policy frameworks to support a broad range of sectors. Meanwhile, SA is missing the boat.

The government must either do more to realise the potential of its blue economy or make it easier for private enterprise to bring it to fruition. We can still take this opportunity to use the blue economy to benefit every South African, but we need the government’s support.

• Sonti chairs the Eastern Cape Maritime Business Chamber.