Panel 1: Creating a conducive environment and efforts to facilitate investment
Achieving higher rates of economic development requires that governments actively focus on creating and fostering a business environment conducive for the private sector to pursue enterprise. Most emerging markets realise the need to ensure a sound business environment to attract investment and increase trade. According to the latest World Bank annual ratings, South Africa is ranked 82 among 190 economies in the ease of doing business. However, the renewed focus by the government to create a business-friendly environment and reduce the cost of doing business promises to contribute towards increased foreign direct investment (FDI). For example, while in 2018 global FDI flows fell by about 13%, FDI flows to Africa increased by 11%, with South Africa capturing a fair share of the FDI flows, after Egypt. According to the FDI Report 2019, South Africa ranked second for FDI into the Middle East and Africa by number of projects, with a 3% increase to 103 and a 33% increase in capital expenditure. However, much more still needs to be done to ensure the creation of an environment conducive to the attraction of even higher levels of FDI and trade.
What are the existing and future plans by the three tiers of government to improve the environment of doing business and investor sentiments towards the country?
Panel 2: Tshwane’s opportunities for growth and development
Capital cities and tier one cities are increasingly facing competition from smaller or tier two cities in the race to position themselves as attractive destinations for FDI and trade. In the face of this mounting competition, the City of Tshwane has committed to improving its international ranking as an FDI destination. Research has shown that harnessing a city’s potential as a competitive FDI destination requires, amongst others, trustworthy, equitable and sustainable partnerships between local and regional stakeholders, and foreign firms. Cities and/or regions that create such successful partnerships often find that their “integration into the global economic network expectedly booms; resulting in growth as well as the promotion of social, economic and environmental inclusion”.
What policy and practical steps should first tier cities such as Tshwane take to position their locations as favoured FDI and trade destinations?
Session 1: Automotive industry
Opportunities to grow the South African automotive industry from the value chains offered by the industrialisation of the African automotive sector
An increasing number of African countries are adopting industrialisation programmes that will lead to the creation of local assembly industries, especially for the automotive sector. The recently introduced African Continental Free Trade Area (AfCFTA) will be conducive for greater industrialisation of African economies, and improve conditions for regional value chains and integration with global value chains. By creating larger markets, the AfCFTA will potentially attract more FDI into the continent, increase innovation and productivity, and contribute towards diversification of economies.
Given the AfCFTA, what are the implications of these industrialisation policies and programmes for the automotive sector in South Africa?
Session 2: Agro-processing industry
Potential for developing the agro-processing value chain in South Africa
Primary agriculture’s contribution to the South African economy has declined to an estimated 2,43% of the GDP in 2019. In the same context, manufacturing has remained a significant contributor to the GDP and employment. Labour-intensive sectors, such as agriculture and agro-processing, have been identified by the government as among those sectors that will receive greater focus in driving South Africa’s economic development agenda. The South African government is introducing policies aimed at promoting an “agrarian revolution” and driving “agro-industrialisation”. To support investment in the sector, the government is developing a Policy on Comprehensive Producer Development Support, which will serve as the National Framework to, amongst others, support investment in the sector. It is expected that effective implementation of “agro-industrialisation” will contribute towards increased job creation, especially amongst the youth and women.
Does the agro-processing value chain offer opportunities for increased contribution to the country’s economy and employment rate?
Session 3: Tourism industry
Challenges and opportunities in growing Tshwane’s tourism sector
With an expanded contribution of over 9,6% to the South African economy, the tourism sector is one of the key employment creators in the country. The recent pronouncement about easing travel restrictions for tourists is expected to further provide stimulus for this important sector. However, destination development and marketing is about more than just accessibility. Competitive destinations have to offer more than just attractions to entice today’s well-heeled and socially conscious travellers.
Is the City of Tshwane well positioned to benefit from this growth? What are Tshwane’s destination development opportunities and how should Tshwane position its offerings competitively to grow the tourism sector?
Session 4: Energy and renewables industry
Maximising energy potential for the City of Tshwane
The Department of Minerals and Energy recently made pronouncements around the possibility of the deregulation of the power sector, thus reducing barriers for independent power producers. This development, together with the possible unbundling of Eskom SOC, as well as the sustainability goals of the country, is expected to change the landscape of the energy sector in the country. It is also worth noting that, globally, the number of FDI projects in the renewable energy sector hit their highest level since 2008, with 364 projects recorded globally and a cumulative capital investment of $82,4 billion.
The call for greater sustainability and an increased movement away from fossil fuels are creating new opportunities in the renewables sector, while emphasising an even greater need for transforming the country’s energy mix.
What implications do these developments have for a city like Tshwane?
Session 5: Property and construction industry
Unlocking opportunities across the property value chain
The industrial segment of the property industry has maintained reasonable performance while the rest of the sector has struggled over the past few years. According to experts, industrial property’s top performance, in comparison with other sectors, is likely to continue going forward. Since “industrial and warehouse space is linked more to the broad economy and has a strong manufacturing sector link”, developments within the broader economy are very important for this sector. The industrial property sector “can also benefit from growth in exports, and even growth in imports, while a lot of industrial production is driven by construction demand and other forms of fixed investment” (Source: Portfolio Property Investments). Recent government initiatives to scale up industrialisation, increase manufacturing and create an investor-friendly environment will have significant implications for this segment of the property market.
What stimuli are required to grow the sector and what specific opportunities are there in the near future?