TIM HARRIS: Cape Town CBD — a compelling blueprint for cities in decline

Cape Town’s city centre shows little sign of the economic slump that lingers in many SA CBDs and others around the world. The inner city economy has delivered a strong recovery in recent years, and today cranes abound. 

But this wasn’t always the case. In the 1980s, the city started slipping into a grimy, crime-ridden state, losing businesses and retailers to new office hubs and shopping centres that were springing up in the suburbs.

The most important response was the partnership between the government and business that developed from the early 2000s via the Cape Town Partnership, and then the Cape Town Central City Improvement District (CCID).

This crowded effort and funding  averted the urban decline that took hold in other cities in SA and on the continent. Over the past decade, billions in foreign direct investment flowed into the Cape Town CBD. 

Public-private partnerships such as the CCID are rare in SA, but its success has seeded the creation of more than 50 other central improvement districts in greater Cape Town.

Cape Town’s fortunes also benefited from the transfer of political power in the city in 2006, and in the Western Cape in 2009. Regardless of who you support politically, it’s easy to understand how these changes advanced Cape Town — first, the prospect of losing power tends to improve government accountability and delivery and second new administrations, surrounded by political competitors, have a strong incentive to outperform.

But it wasn’t all government. The CCID was as much about securing the support of landlords and business owners to invest in the cleaning, security and social work that kept the CBD functional and viable as a base for business.

Incubator for business

Repositioning Cape Town relative to Johannesburg was also a turning point. A decade ago the former was perceived as a tourist destination, while serious business took place in the latter. Working on behalf of the city and the province, trade and investment promotion agency Wesgro repositioned the region as an incubator for businesses of the future in the green economy and business services sector, and the logical home for talent-driven tech companies such as Amazon and Naspers, which were looking to power their growth in Africa.

During my time at Wesgro we knew the big four banks would probably remain headquartered in Johannesburg, but we nurtured the fintech ventures that were inventing new banking models in the Western Cape. While power stations were up north, we promoted Cape Town as the top choice for renewable energy companies. And even though Johannesburg has more corporate head offices, we ensured that their business process outsourcing (BPO) service centres were in Cape Town.

So, while we were traditionally home to asset management, insurance and agriculture companies, today Cape Town also has sizeable renewable energy, BPO and tech sectors. The Cape Town-Stellenbosch corridor has more tech companies than the next two largest hubs in Africa — Lagos and Nairobi — put together. 

Perhaps counter-intuitively, this “corporate shift” was also driven by an increase in the destination appeal of Cape Town. The CBD’s transformation, along with the extraordinary performance of the V&A Waterfront, helped to attract entrepreneurs and younger generations wanting to study and work in the city, as well as digital nomads seeking a way to invest and reside in the Cape. This in turn drove the growth of business tourism, making Cape Town the leader on the continent in this sector.  

The Cape Town CBD gets a nonstop flow of local and international tourists year round, with the 2024 festive season being the busiest yet. The many international accolades received by the Mother City last year are a testament to its popularity.

Struggling SA city centres could learn lessons from the work the CCID has done over decades to maintain the viability of the Cape Town CBD. They could also take inspiration from new place-making programmes such as Jozi My Jozi and Cape Town’s new public-private partnership The Mission for the Inner City, which are working to update place branding and street-level experiences to revitalise urban centres. 

Thriving inner city 

These initiatives recognise that a thriving CBD requires a mix of large corporates, smaller companies running offices or production, retailers and restaurants catering for locals and foreigners, and tourist attractions.

Central city precincts often have an advantage attracting this investment over newer shopping malls or private developments: they can accommodate these companies at price-points that cater to start-ups and locate many of them in interesting and irreplaceable heritage buildings and about public spaces that capture the history of our cities. 

Landlords, corporates and government must lead the charge in this collective effort, fostering environments that protect the integrity of our urban spaces while ensuring they remain open, vibrant and accessible to new and emerging businesses. By working together we create not only jobs but the infrastructure for future generations to succeed. 

All CBDs in SA will need strategies to entice large corporates back, urgent interventions to rehabilitate historical buildings and public spaces, and major efforts to rebuild tourist and high-value consumer footfall. Once they have restored these advantages over their more-privatised competitors, such as Sandton, Rosebank and Umhlanga Ridge, they will be able to build on them with demand-generating “place-making” efforts, as well as supply-side interventions such as security, cleaning and social work. 

In this way we can create uniquely South African and African cities that are welcoming, nurturing, creative and vibrant, and that provide opportunities for locals and visitors from all walks of life: young entrepreneurs should see the CBD as the obvious place to start a business, while listed corporates ought to see it as the ideal place for global headquarters; shoppers from informal settlements should find great deals in the city centre, while wealthy tourists support high-end African design.

The challenge is doing all of this while navigating the issues facing urban centres around the world, such as the decline of retail high streets, homelessness, climate-change-driven weather events, the ongoing phenomenon of work-from-home and congestion. Urban renewal in a reality of high structural employment, poverty and the in-migration of desperate people, is especially challenging.

But we should not forget that Africa is the world’s last great untapped market. Our inner cities should be bases from which to tackle this market, producing and attracting global talent keen to live in dynamic and naturally beautiful cities, with reliable service delivery.

In this regard, Cape Town’s success in doubling the number of nonstop air connections over the past decade via the public-private project Cape Town Air Access is a key factor in the city’s success. It makes it easier to visit or run an international company from Cape Town and use it as a base to tap into markets up north.   

The Cape Town story is one where the CBD’s preservation provided a solid base for increasing global competitiveness and can provide an inspiration to other cities to follow a similar path.   

• Harris, a former DA MP and Wesgro CEO, is a CCID board member and runs a public sector advisory firm.