‘The Cape is proudly African’
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.”
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.”
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.