‘The Cape is proudly African’

Finweek English Edition - - INSIDE - BY LIESL PEYPER ed­i­to­rial@fin­week.co.za

In­tra­con­ti­nen­tal trade re­ceived a ma­jor boost on 10 June when 26 A frican lead­ers signed a com­pre­hen­sive free-trade agree­ment con­nect­ing three ex­ist­ing trade blocs to form the Tri­par­tite Free Trade Area (TFTA), which will stretch from Cairo to Cape Town.

The deal, which has the po­ten­tial to in­te­grate the con­ti­nent like never be­fore, also comes at a time when the Western Cape is repo­si­tion­ing it­self as the pre­ferred head­quar­ter for ex­ist­ing and prospec­tive in­vestors into Africa.

If there’s one thing he wants to achieve dur­ing his ten­ure as chief ex­ec­u­tive of Wes­gro, the Western Cape’s off icial trade and in­vest­ment pro­mo­tion agency, it is to change the view that Cape Town is not part of Africa, says Tim Harris, who was ap­pointed to the po­si­tion three months ago.

“There’s no iso­la­tion­ist strat­egy when it comes to the province,” he says. “On the con­trary, the only way we can re­ally sell an eco­nomic fu­ture for the Western Cape i s t hrough be­ing i ncred­i­bly in­te­grated with the rest of the coun­try and – as im­por­tantly – the rest of the con­ti­nent.”

In a way, Harris says, the Western Cape and Cape Town are al­ready achiev­ing this. The an­nual Min­ing Ind­aba is a case in point.

“The fact that we’re host­ing one of the big­gest global min­ing con­fer­ences in Cape Town – a re­gion where very lit­tle min­ing ac­tiv­ity is tak­ing place – shows that com­pa­nies around the world are com­ing to Cape Town to think about their Africa min­ing strate­gies. The more we can repli­cate that, the brighter our fu­ture will be.”

IN SYM­BIO­SIS WITH SA

Harris’s counter-iso­la­tion­ist strat­egy for the Western Cape also shines through in his plans for the re­la­tion­ship he would like to foster with the depart­ment of trade and in­dus­try (dti).

“When we’re of­fer­ing a pack­age to South African in­vestors, a sub­stan­tial part of the in­cen­tives come from the dti,” says Harris. “The dti’s in­cen­tives im­pact the bot­tom line of in­vest­ments, so the Western Cape’s re­la­tion­ship with dti is very im­por­tant and I in­tend to strengthen that re­la­tion­ship.”

The Western Cape, i n t urn, i s bring­ing an im­por­tant el­e­ment to the ta­ble in the form of R7bn worth of for­eign di­rect in­vest­ment (FDI). “And it’s not only tourism, wine and as­set man­age­ment,” says Harris, a for­mer DA shadow min­is­ter of fi­nance. “It’s ac­tu­ally in­cred­i­bly diver­si­fied.”

The Cape Penin­sula boasts a num­ber of heav y in­dus­trial man­u­fac­tur­ing fa­cil­i­ties, such as in At­lantis where en­gine blocks for Mercedes-Benz are built and where Hisense puts to­gether TVs and fridges for ex­port to the rest of Africa, while Kim­berly-Clark, which man­u­fac­tures fast-mov­ing con­sumer goods, is based in Ep­ping. “These in­dus­tries show the Western Cape is not only about the ser vice in­dus­try – it’s also pos­si­ble to run heavy and light man­u­fac­tur­ing oper­a­tions.”

UN­CER­TAIN­TIES

Selling Cape Town and the Western Cape some­times has its dif­fi­cul­ties too. “We recog­nise de­ci­sions are some­times made at a na­tional level that don’t make it easy to sell our re­gion,” says Harris.

South Africa’s de­ci­sion to can­cel bi­lat­eral in­vest­ment treaties ( BITs) with the EU and the re­lease of the draft Pro­mo­tion and Pro­tec­tion of In­vest­ment Bill in its place are cause for con­cern among in­vestors.

The can­cel­la­tion of the BITs, says Harris, was “un­for­tu­nate t i ming”. “In­ter­na­tion­ally there’s a move away

THERE’S NO ISO­LA­TION­IST STRAT­EGY WHEN IT COMES TO THE PROVINCE.

from ad hoc bi­lat­eral treaties to­wards an over­ar­ch­ing treaties frame­work. But the prob­lem is we scrapped the BITs be­fore we’ve had the over­ar­ch­ing in­vest­ment frame­work in place and that cre­ates a lot of un­cer­tainty.”

The In­vest­ment Bill, which was gazetted by the dti in Novem­ber last year for public com­ment, has elicited con­sid­er­able crit­i­cism in the busi­ness com­mu­nity for the way in which it pro­poses gov­ern­ment should screen in­vest­ments and deal with ex­pro­pri­a­tion.

“In­vest­ment de­ci­sions are made mainly on the ba­sis of cer­tainty,” says Harris. “I hope we can reach a so­lu­tion soon. The prob­lem is if you have un­cer­tainty in com­bi­na­tion with state­ments about pri­vate se­cu­rity reg­u­la­tions and for­eign own­er­ship of land, we’re not do­ing our­selves any favours.”

THE AN­GOLA LES­SON

The Western Cape is not im­mune to the eco­nomic re­al­i­ties the rest of SA faces, but the province cer­tainly per­forms bet­ter in all of the ma­jor met­rics, says Harris.

Ac­cord­ing to the latest quar­terly labour force sur­vey, the Western Cape has the low­est ex­panded un­em­ploy­ment rate at 24.5%, fol­lowed by Gaut­eng at 29.6%. “Un­em­ploy­ment is still high, but it is the low­est of all the prov­inces,” says Harris.

The Western Cape’s GDP growth at 2.3% last year, was also higher than the na­tional av­er­age of 1.5%.

“But de­spite this, there are still huge chal­lenges,” says Harris. “I have to stress: we can­not make an in­cred­i­ble eco­nomic of­fer with­out po­si­tion­ing our­selves as part of South Africa and Africa. Our fu­ture is as an African city.”

Wes­gro has es­tabl i shed a unit ded­i­cated to in­crease Cape Town’s con­nec­tiv­ity to the rest of Africa and to build on those links that are there like the three di­rect f lights be­tween Cape Town and the An­golan cap­i­tal Luanda.

This came about t hanks to t he col­lab­o­ra­tion be­tween a team com­pris­ing the City of Cape Town, the Western Cape and the Air­ports Com­pany of South Africa (Acsa). “Three spheres of gov­ern­ment worked to­gether to achieve this and that’s in­cred­i­bly en­cour­ag­ing.”

EM­BRAC­ING COM­PE­TI­TION

As for the fu­ture, he hopes to see more healthy com­pe­ti­tion among the var­i­ous prov­inces in SA, says Harris. “I’m ex­tremely mo­ti­vated by the com­pe­ti­tion the Western Cape gets from KwaZu­luNatal and Gaut­eng, but that is of­ten mis­rep­re­sented. In South Africa we don’t em­brace in­ter­nal com­pe­ti­tion strongly enough. It makes us all bet­ter and if you marry it with in­creased col­lab­o­ra­tion, you have a very pow­er­ful com­bi­na­tion.”

The strong com­pe­ti­tion among the var­i­ous ju­ris­dic­tions in the US is a model to strive to­wards, he says.

“All the dif­fer­ent states are in fierce com­pe­ti­tion with one another. Yet no one doubts that Amer­i­cans are in­cred­i­bly pa­tri­otic and proud to be US cit­i­zens. We need to pro­mote the same at­ti­tude in South Africa and I hope the Western Cape can serve as an ex­am­ple to the other prov­inces.”

Cape Town and the Western Cape are a part of South Africa and the rest of the con­ti­nent, and therein lies the re­gion’s eco­nomic fu­ture, says Tim

Harris, CEO of Wes­gro.

Tim Harris

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