Tourism and transport promise for KZN growth

DURBAN and KwaZulu-Natal are leading in attractive social environment and infrastructure, but there’s room for improvement if the region is to tap its potential as a destination of choice for investors.

That’s the key finding of a Durban and KwaZulu-Natal investment location survey by Deloitte.

The study was compiled with help from Durban Investment Promotion and Trade and Investment KwaZulu-Natal. It surveyed board members, chief executives and managing directors.

Investors generally look for robust economic growth, attractive infrastructure, sound public finances and good administration, a developed financial market, good innovative capacity, a highly skilled work force and an attractive social environment.

The study found Durban and KZN’s most attractive characteristics were its social environment, competitive transport, utilities, property and technology infrastructure.

The tourism industry and Durban’s location as a transport and logistics hubs were seen as the main investment opportunities. Construction and manufacturing were identified as additional investment drivers.

Ruwayda Redfearn, office managing partner of Deloitte in KZN, said: “Overall, our survey panel rates Durban less attractive than Cape Town and Joburg, on par with Pretoria and more attractive than Richards Bay, Port Elizabeth, East London or Pietermaritzburg.”

The study found Durban/KZN lags Joburg/Gauteng in factors such as robust economic growth, a developed financial market and the availability of a highly skilled work force.

The region also lags Cape Town and the Western Cape in innovation capacity and to an extent sound public finances and good administration.

Durban performs strongly for financial soundness, municipal compliance and selected service delivery areas. However, other municipalities in KZN needed to improve.

Durban/KZN also leads other locations as a destination of choice for certain investors. The overall picture is encouraging, with more than 56 percent of respondents planning to invest in Durban and 60 percent looking to invest in KZN.

Most of these investments will be to expand operations or establishing new operations, for acquisitions and joint ventures.

Only 28 percent of respondents plan to move some operations out of Durban and 25 percent out of KZN. Reasons for such relocations included better growth opportunities, the need to be closer to customers.

According to the study, to retain and attract new investors, the region will need to tackle deterrents such as areas of poor municipal management and service delivery.

Other stumbling blocks flagged were a lack of political stability and clear leadership, a deteriorating and incomplete infrastructure in parts of KZN, unnecessary red tape and a high level of corruption.

Almost three quarters of respondents said the focus should be on improving city management and service delivery, while 70 percent wanted improved administration and for red tape to be minimised.

The majority of respondents (81 percent) flagged tourism as one of Durban/KZN’s greatest investment assets.

Many said Durban’s beauty and beachfront could compete with Cape Town and other top spots if promoted properly.