Finance and Economic Opportunities

I am informed of the following:

(1)

As part of the development of the draft Western Cape Investment Strategy, a qualitative analysis was done with internal and external investment stakeholders to identify the top investor constraints. Many of these factors are impacted on by National Government. These constraints or threats in no particular order include the following:

• Power supply shortages (load-shedding)
• Policy regulation uncertainties and prevalent levels of corruption in the country
• Limited affordable housing options
• Traffic congestion in the metropolitan area
• Unreliable rail network
• Immigration complexities – the need for scarce and critical skills
• Lack of coordination and synergy between 3 level investment authorities (national, provincial, city/district)
• A slower pace of doing business for global Multinational Enterprises.

A further analysis of strengths and weaknesses of the Western Cape investment offering can be found in the Growth for Jobs Strategy.

(2)

The competitiveness of the Western Cape requires effective investment support ecosystems to assist in providing positive investor experiences. Investors in the Western Cape already have a facilitation ecosystem that provides a range of direct and indirect services and regulatory functions. It is well positioned to serve existing economic actors and new investors.

Direct services available within the province include:

• Information and research to evaluate the Western Cape as an investment destination;
• Location assessment and support to select and secure a specific site;
• Support with registration and regulatory set-up involving local, provincial and national government entities;
• Access to infrastructure and utilities; and
• Support for economic networking and value-chain linkages, including finding suppliers, financial service providers, workforce/skills, partners, and markets.

DEDAT, along with the Western Cape’s official tourism, trade and investment promotion agency, Wesgro, focus efforts on enabling investment into the province.

This includes:

1. Investment facilitation: Part of facilitating an investment friendly destination is the service offering by DEDAT and its three public entities, namely Wesgro as the Provincial Investment Promotion Agency (IPA), Atlantis Special Economic Zone for Green Technology (ASEZ) and Freeport Saldanha all play a role in responding to investor queries, facilitating investor site visits and informational sessions, and providing a range of investment facilitation support. This is part of creating a transparent and responsive investment eco-system for both foreign and domestic investors into the Western Cape. For more details, please visit https://www.wesgro.co.za/invest/service/facilitation .

Red Tape Reduction: The amount of red tape and bureaucracy faced by business when dealing with government is considered a key constraint to economic development and growth. Which is why DEDAT has a dedicated Red Tape Reduction Unit (RTRU) whose purpose is to improve the business environment by reducing the regulatory burden on businesses through improved legislation, processes, and communication. The goal of the RTRU is the creation and promotion of an enabling environment for business to thrive in a competitive and vibrant economy. The RTRU collaborates with municipalities and provincial departments to (1) increase efficiencies of business-facing services, for example, development of permits for land use applications, (2) build institutional capacity and capability to implement red tape reduction interventions, and (3) embark on a programme of regulatory reform. For more information on the red tape unit please visit the website https://www.westerncape.gov.za/red-tape-reduction/

Wesgro has a well-functioning red tape reduction and investment facilitation capacity, both through the InvestSA One-Stop-Shop (OSS) and through the Investment Promotion team. The OSS connects investors with national government departments and entities escalating issues where appropriate, including tax issues (SARS), immigration issues (the Department of Home Affairs), business registration (CIPC) and worker regulation compliance (workman’s compensation and unemployment insurance fund through the Department of Labour). Wesgro’s Investment Promotion team works to unblock issues with national government through the OSS, while working the provincial government entities on issues such as Environmental Impact Assessment approvals, or with local government on issues such as construction permit approvals or electricity connections. Ultimately, Wesgro works in collaboration with partners across local, provincial and local government to ensure a responsive, business friendly and collaborative investment support ecosystem in the province.

Logistics:

Air Connectivity: Because increased air connectivity improves competition for the destination and has a downward impact on cost over time, Wesgro’s Air Access Unit works to expand air logistics capacity for businesses and individuals in the Western Cape, both passenger and cargo transport. They do this by securing new routes and direct flights to Cape Town International Airport from around the world and by working to expand those routes to increase the existing direct flights.

Western Cape Ports: An efficient port is a key enabler for a more friendly investment and export ecosystem in the Western Cape. DEDAT therefore dedicates resources to work with the Port of Cape Town, to unblock any logistic challenges and to ensure efficient transport of goods to and from the Western Cape Province.

3. Energy: The lack of a stable supply of electricity is a key binding constraint but also presents an opportunity to crowd in private sector investment in the green energy sector. The Western Cape Government, the City of Cape Town and other municipalities, including entities Wesgro, ASEZ and Free Port Saldanha are providing a range of strategic support to investors in terms of red tape reduction, policy and regulatory support, access to financing as well as broader sector intelligence to assist investors in decision making. Wesgro also disseminates information from the Western Cape Government, the City of Cape Town and other municipalities to businesses to help equip them with the necessary information to mitigate energy risks. Wesgro is also currently working with GreenCape on a ‘Guide to going solar’ for businesses in the Western Cape to equip business leaders with the necessary information with respect to solar installations.

Skills and education: The Western Cape Government recognises that skills and education are key to sustained future global competitiveness of the province. As the world shifts to a knowledge economy and skills become increasing mobile, the skills pipeline in a destination becomes increasingly critical to attracting investment, as

DEDAT’s dedicated Skills Directorate coordinates, lobbies and works with various role players such as Basic Education, post-school training providers, three (3) spheres of government and industry to refine training modalities to create synergies between academia and industry. This will improve the quality, relevance, and access of skills offerings to best address industry skills requirements that will lead to more employment opportunities. DEDAT also works with Wesgro to identify and determine skills gaps in certain sectors, particularly in the Tech sector so that the City of Cape Town can continue to position itself as Africa’s Tech Capital.

5. Investor confidence events: Wesgro works with DEDAT and other entities at provincial and local government level to bring businesses together with government stakeholders to resolve investor issues, provide key updates and information, and build confidence in the province as a great place to do business.

Africa FDI: Wesgro’s export promotion team has a dedicated Africa outward foreign direct investment focus, supporting Western Cape-based business (SA or foreign owned) to expand operations into Africa – positioning Cape Town and the Western Cape as a gateway to Africa to international investors thereby continuing to drive the competitiveness narrative of the Western Cape globally.