Provincial economy edging forward

R1.3bn in investment lured, jobless rate declines

THE WESTERN Cape attracted R1.3 billion in investments three months into this year, creating 549 direct jobs, but experts have warned that national volatility could draw back the local economy.

Wesgro, the official tourism, trade and investment promotion agency for Cape Town and the Western Cape, secured nine investment projects, which included undertakings in the tech, financial services, food and beverages, apparel and green economy sectors.

Unemployment decreased slightly while rising in other parts of the country.

Gerhard Papenfus, chief executive of the National Employers Association of SA, said good infrastructure in the Western Cape created an environment conducive for business. “While the neighbouring Eastern Cape has a much higher unemployment rate, they also have severe infrastructure challenges. There is also a problem of corruption in that province, where services that need to be delivered are not delivered because of corruption,” he said.

Papenfus said labour unrest and several issues such as the national minimum wage were discouraging entrepreneurs from opening businesses.

“There is so much red tape and legislation that companies have to abide with. Entrepreneurs don’t want to be at war with their workers, and labour unrest does the country nothing. There are minimum wages on the table, but not all businesses can afford it. Some people say that it is a human rights issue, but our 27% unemployment rate should be a human rights issue,” he said.

According to Statistics SA employment increased in six of the nine provinces in the first quarter of the year compared to the first quarter of 2017, with the Western Cape recording the largest increase of 123 000 jobs, followed by Limpopo at 83 000 and KwaZulu-Natal at 62 000.

During the same period, employment losses were recorded in Gauteng (124 000), the Eastern Cape (45 000) and Mpumalanga (20 000).

Wesgro said the Western Cape’s good quarterly results stemmed from, in part, its officials travelling to nine international markets including Malaysia, the US, the UK, Germany, Hong Kong, China and France to promote investment opportunities. The agency hosted 245 meetings across the province with businesses, financiers and service providers, hosted 25 inward business delegations from across the globe, and expanded the team’s reach across the province.

Wesgro’s head of investment promotion, James Milne, said in spite of potentially deterring factors such as the drought, the provincial economy had grown.

“What is clear is that the Cape continues to maintain a strong position both locally and internationally as a world-class business destination on the African continent,” he said. Economic opportunities MEC Alan Winde said the drought had made it difficult to grow the economy.

“Our number one priority is to grow the economy and create jobs, and these investments, and the 549 jobs that will be created, are proof that the Western Cape is open for business. We hope that the recent official designation of the Atlantis Special Economic Zone will drive further investment in the green sector going forward.”

Dennis George, general secretary of the Federation of Unions of SA, said leadership issues nationally would affect the whole country. “We need to be wary of the leadership crisis. That can be the biggest killer of an economy,” George said.