This was the sentiment expressed by the Deputy Governor of the South African Reserve Bank, Kuben Naidoo, and echoed by Wesgro’s Economist, Janine Botha, at Wesgro’s annual Global Economic Priorities event this morning.
Delivering the keynote address, Deputy Governor Naidoo painted a candid picture of the current economic landscape of South Africa. Pointing out how between 1996 to about 2010 South Africa’s economic growth broadly tracked global growth, there was significant de-coupling shown from 2011 to 2019 where the local economy slowed down to half the pace of the global rate.
Acknowledging that the international economic environment contributed to this slow down, Naidoo pointed out that reasons were largely domestic.
“Trust is a critical part of the economic investment process and we’ve had a significant breakdown in trust from partners however, we’ve begun a slow and steady ride back up. There are no quick wins and easy solutions, it will take years to rebuilt trust but, we are moving in the right direction,” added Naidoo.
Delving into a broader overview of the global economic landscape, Botha provided an in-depth analysis of the global economy and the ramifications these will have for the province. Challenges listed included: rising US protectionism; tightening of global financial conditions and financial market instability; the impact of Brexit; rising risk of economic growth recessions; escalating geopolitical tensions; and climate change.
In spite of the weakening global expansion, Botha pointed out that emerging markets and developing economies are expected to outperform advanced economies, with some of the fastest growing economies located on the African continent.
"With Cape Town and the Western Cape being a gateway to the rest of Africa, the province is strategically positioned to tap into the opportunities forecast for the continent, in particular Sub-Saharan Africa," noted Botha.
Other opportunities cited included:
- Deepening trade, investment and tourism ties with Asia & ASEAN-5 regions (Indonesia, Malaysia, Philippines, Singapore and Thailand);
- Africa Growth and Opportunity Act (AGOA) continues to present significant opportunities for Western Cape goods;
- Despite the pending outcome of Brexit, the UK will remain a key trade partner and important tourism source market for the province;
- Opportunities will begin to emerge with the "Next Eleven (N-11)", comprising of: South Korea, Mexico, Indonesia, Turkey, Iran, Egypt, Nigeria, the Philippines, Pakistan, Bangladesh, and Vietnam; and
- Halal market for products & services continues to attract significant & rising attention, with Halal tourism projected to increase in importance.
Set against the backdrop of the economic forecast for the upcoming year, Wesgro’s Heads’ of Department briefly outlined their plans to boost the local economy and facilitate job creation through tourism, trade, investment and film and media promotion. Details of these plans can be viewed here, https://bit.ly/2UDDpKY.
Some highlights noted included:
- Tourism: The Cape Coalition - a strategic collaboration between government, academia, scientific institutions and the private sector to help convert more bids for the province through innovative funding mechanisms and support programs - will be introduced in the upcoming year. In addition, the Cradle of Human Culture tourism routes - a partnership between the Cradle of Humankind, DEDAT, DECAS and Wesgro - will be launched in April 2019
- Trade: With the support of the Western Cape Government, a key focus for 2019 will be the establishment of a District Unit that will look to drive even more investment and film productions, as well as boost exports and tourism across the districts of the province, with halal export promotion and trade-in-services remaining key priorities.
- Investment Promotion: The team will work with the World Bank to ensure the Western Cape's investment promotion meets world standards, and is equipped to best assist investment into the region. The team will also ramp up investment missions in the coming year, increasing from 20 to over 30 over this period.
- Film: with additional funding from the Western Cape Government, the film and media team is looking to grow the unit and therefore provide more capacity to land productions in the region. Monica Rorvik, the Head of the unit, indicated that the Creative Locations publication is the most downloaded industry document in the country.
Minister for Economic Opportunities, Beverly Schafer, reflected the general sentiment by stating: “We have built partnerships between public and private sector that work. Our focus should be on growing the future economy now, embracing the 4th Industrial Revolution & further positioning Cape Town & the Western Cape as the tech hub in Africa. Investments from global tech giants such as Amazon already shows confidence in this sector.”
“Our main aim is to be the go-to city in Africa for business, investment, film, trade and tourism,” said Mayoral Committee Member for Economic Opportunities and Asset Management, Alderman James Vos.
Executive Mayor, Dan Plato, added: "We have emerged from a tough year, but we've show how we can bounce back. Cape Town has much to offer to investors and visitors and it’s important that we continue to plot our way forward."
Wesgro CEO, Tim Harris, concluded: “Although we are faced with many risks and global headwinds in the upcoming year, Cape Town and the Western Cape has the correct ingredients to move forward and turn risk into opportunity. Through the support of the Western Cape Government, the City of Cape Town and our private sector partners, we will proactively work to land even more investment and film productions, as well as boost exports and tourism across the districts of the province and Cape Town- ensuring economic growth benefits all.”
Wesgro is Cape Town and the Western Cape's official Tourism, Trade and Investment Promotion Agency, and receives its mandate and funding from the Western Cape Government's Department of Economic Development and Tourism and the City of Cape Town.