Delays stunt business in Bay POWERLESS

It takes up to 190 days for a new business to be connected to the Nelson Mandela Bay municipality’s power grid – placing the Bay at the bottom compared with all the other metros in South Africa.

Red tape and a lack of adequate internal capacity have hamstrung the municipality’s ability to ensure a quick turnaround time to process applications for new businesses.

A World Bank report looking at the Ease of Doing Business in SA has ranked the Bay among the lowest of all metros in the country when it comes to doing business in the city.

While the city ranked ninth out of the nine metros when it comes to connecting new businesses with electricity, it was a marked improvement compared to the 2015 study which, at the time, showed that the turnaround time was 347 days.

The study by the World Bank with assistance from the National Treasury, looked at the process, cost and number of days it took to get construction permits, register properties, connect to the power grid and enforce contracts.

It was working with information available as of May.

According to the report, the City of Cape Town is the fastest when it comes to providing businesses with a permanent electricity connection, taking up to 91 days.

The ranking is measured by the number of days it takes to secure a permanent electricity connection, the costs, the reliability of supply, transparency on the tariffs and the number of steps businesses take when applying to get a connection.

“The impact of electrification on education, labour and income is well-documented.

“From a business perspective, a country’s electricity supply is one of the elements that has the strongest impact on company productivity.

“Moreover, studies suggest that firms perform better in terms of sales in countries where it is easier and less costly to get an electricity connection,” the report says.

The metro was ranked fifth out of the nine for dealing with construction permits and registering properties, while the Bay was positioned sixth for enforcing contracts.

It takes 96 days to get a construction permit and up to 611 days to enforce commercial contracts that are in dispute.

Efficient courts promote entrepreneurship and business growth, the report says.

“They provide firms and investors [with] the confidence that legal disputes will be resolved within a reasonable time, with judicial systems that are transparent and enforceable.

“Good contract enforcement stimulates companies to invest and establish new business relations,” it says.

Recommendations listed in the report to make it easier to do business in the city include that private sector professionals be involved in the processing of construction permits.

The municipality’s executive director of economic development, tourism and agriculture, Anele Qaba, said the report helped the city to benchmark itself and see where to place a strong focus to improve the way it conducts its business.

“This a crucial matter that needs to be prioritised by any city that is serious about attracting and growing invest- ments and enhancing trade.

“In comparison with other metros, the [Nelson Mandela Bay municipality] still takes long to [connect] electricity, taking into consideration the average of 110 days taken by other cities.

“The NMBM has developed new reform action plans to ensure that the status quo is improved.

“The reform action plans in the three indicators that are measured by the World Bank have assisted in turning the situation around.

“The report also admits that although there are significant improvements, the changes are painstakingly slow due to internal capacity and resource challenges.”

Qaba said a more integrated approach was necessary to make it easier to do business with the city.

“The barrier of silos needs to be broken to have an integrated and systemic approach to economic development,” he said.

“Each directorate needs to collaborate with others to ensure seamless delivery of services across functional lines.

“This matter was tabled in the recent mayoral strategic session to ensure that future

‘What is required is a sense of urgency by all those who provide service’

Nomkhita Mona

BUSINESS CHAMBER CHIEF EXECUTIVE

plans of the city take into account that internal collaboration is key to effective growth of the economy and service delivery.”

Qaba said the work stream dealing with construction permits was already working with the private sector to respond to the needs of the customer.

Nelson Mandela Bay Business Chamber chief executive Nomkhita Mona said it had received a number of reports about investors who were battling with regulatory red tape, which delayed investments.

“This has been the case across a number of the indicators used by the World Bank,” she said.

“For the metro to improve performance in these indicators, the city needs to be more innovative in its approach to ease of doing business.

“One aspect is for the metro to start identifying areas that are likely to be future business precincts and proactively initiate rezoning exercises for such areas, laying down the necessary infrastructure for electricity, roads and water – even before applications are received.

“The business of government is to create an enabling environment for the economy to thrive.

“Those cities where the economies continue to grow have shown levels of innovation and forward thinking in such matters.

“This will go a long way towards boosting investor confidence in the city.”

Mona said the chamber had set up a help desk to assist with reducing red tape.

“This city needs any assistance it can get to drive economic growth, thus creating much-needed jobs,” she said.

“Above all, what is required is a sense of urgency by all those who have a duty to provide service in this city.

“All talk, with no action, has become extremely cheap.”

Starting a business in Nelson Mandela Bay is not easy. A World Bank report titled “Doing Business in South Africa 2018” ranked the Bay among the lowest of all metropolitan municipalities in the country when it comes to doing business in the city. The report reveals that it takes up to 190 days for a new business to be connected to the municipality’s power grid. This ranks the Bay at the bottom of all metros. We report today that other statistics released in the document show that it takes up to 96 days to get a construction permit, 611 days to enforce contracts and 25 days to register a property.

The figures, while alarming, are not all that surprising in the context of a tumultuous political environment in the municipality. The report is a reflection of how instability in government has a direct effect on the municipality’s ability to deliver effectively. A council that cannot sit through a full meeting for months on end means it cannot fill vacancies desperately needed to get the work done in the city’s administration.

It stalls the processing of business applications – from rezoning applications to land sales and leases to potential investors.

When the council is unable to fulfil its role in ensuring there are no bottlenecks, it has a direct effect on whether or not the city is able to attract new investors, with which come jobs and a much-needed boost to the local economy.

The consequence is that it is the most destitute who ultimately bear the brunt because with no new investment comes no new jobs.

Municipal executive director of economic development, tourism and agriculture Anele Qaba highlights that while there have been improvements compared to the 2015 study, the changes are “painstakingly slow due to internal capacity and resource challenges”.

Qaba rightly points out, however, that the mentality of government departments of working in silos needs to change to make a difference.

There needs to be a more collaborative and systematic effort from all roleplayers, including the politicians, to making our city more attractive for business.