EASTERN CAPE PROVINCE

A new national park could further boost Eastern Cape tourism

By John Young

Tourism is one of the sectors that was hit hardest by Covid-19. Many events were cancelled, foreign visitors were absent from attractions such as the Addo Elephant National Park and the Baviaanskloof World Heritage Site and guest houses and hotels struggled to make ends meet.

Although times were tough for the “Adventure Province”, there was some good news out of a sector that still retains enormous potential for growth and has been identified by the Eastern Cape Development Corporation (ECDC) as a priority sector.

The ECDC invested R2-million in attracting the TV series Survivor South Africa: Immunity Island and that will undoubtedly pay off when the series is aired in great interest from domestic and international travellers in the spectacular Wild Coast region. The immediate economic impact of the filming was estimated at R10-million with 103 jobs created to support the project.

The north-eastern segment of the province is the site of a possible future national park, which would bring to five the number of national parks in the province, joining the Addo Elephant, Camdeboo, Garden Route and Mountain Zebra National Parks. These parks not only look after animals but also protect quite distinct types of vegetation.

If the proposed Grassveld National Park is established high in the mountains above the village of Rhodes and near to the border with Lesotho, it would be South Africa’s 20th. The conservation goal behind the park is to preserve grasslands through agreements with landowners and farmers who would continue to farm the land responsibly. The land of the Batlokoa community (pictured) is near the famous Naude’s Neck Pass.

As a source of clean water, the area is a hugely important resource and worth preserving for that reason too. The falling water shown in the main picture on this page is described by Andrew Weiss of the WWF as “heading towards the Mzimvubu River and the Indian Ocean” while another small stream at the top of the mountain is destined to join the Orange River in the west. Weiss also described rock paintings of eland and reedbuck “with the unusual addition of dogs and a fat-tailed sheep”. The Grassveld National Park project of the South African National Botanical Institute (SANBI) has already recorded 1 131 species of plant life on the iNaturalist app.

In addition to national parks, the Eastern Cape has 15 provincial nature reserves and a multitude of luxury private game reserves.

Shamwari Private Game Reserve reported that its non-paying guests were thriving on all the special attention they received during lockdown.

Shamwari’s Wildlife Rehabilitation Centre took in Milly, an adult meerkat who had been not well looked after as a pet. The centre’s staff kept her mentally and physically stimulated and she has learnt to crack her own raw eggs, to go with a healthy number of blueberries which make up her diet. The events sector was just about to restart before the Omicron variant put a stop to all travel. This is something the Eastern Cape does well, with the National Arts Festival and a variety of sporting events such as Iron Man being hosted by the province. In the week before the Omicron variant shocked some countries into banning travel, St Francis Links successfully hosted the South African PGA Championship and showed how well multiple companies, guest houses and sponsors can work together to create something of international quality. The tournament also brought employment opportunities to the region.

Other than tourism and film, the following sectors have been identified by the ECDC as priority sectors: agriculture and agro-processing, sustainable energy, the Oceans Economy, automotive, light manufacturing. Each of these categories is the subject of an updated economic overview in this journal.

The ECDC’s mandate is to plan, finance, coordinate, market, promote and implement the development of the Eastern Cape in industry, commerce, agriculture, transport and finance, which it does through three core units.

Diversification is an important part of provincial plans. An example of this is the Business Process Outsourcing (BPO) sector. BPO has received a boost with the establishment of an ICT Academy in Mthatha. Enrolment in 2022 increased to 100. The centre is a partnership between the provincial government and Liquid Intelligent Technologies South Africa.

In 2021, more than 7 520 young people benefitted from the R363-million which various Sector Education and Training Authorities (SETAs) put into training programmes in the following sectors in the province: manufacturing, engineering and related services, public sector, mining, banking, chemical, local government, wholesale and retail, education, training and development and insurance.

With three ports and two large airports, the Eastern Cape is well suited to logistics activity. The Cookhouse-Blaney rail branch line is now working. Having this connection operational and linked to the Agriport Terminal at the East London port reduces the costs of logistics and fits into a major national and provincial goal of moving goods from road to rail.

Special Economic Zones

Transnet National Ports Authority (TNPA) has established new national headquarters at the Port of Ngqura within the Coega Special Economic Zone (Coega SEZ).

The value proposition of the Port of Ngqura is that as a deepwater port strategically positioned within an SEZ, it can provide integrated, competitive and efficient port services as a global transhipment hub ideally positioned on the east coast of Africa.

Transnet has agreed that the tank farm and manganese storage facility at the Port of Gqeberha is to be moved to the Port of Ngqura. This will open up prime waterfront space to tourism and hospitality businesses.

The Eastern Cape’s two SEZs are key drivers in the province’s strategy to attract investors. At the Coega SEZ, major current investors include BAIC SA (R11-billion), the Dedisa Power Peaking Plant (R3.5-billion), FAW SA (R600-million) and CEMZA, a cement company (R600-million). Even though Covid-19 had an effect on activity in the SEZ, construction continued during 2020. The following facilities were built: two for logistics companies (DHL Logistics and APLI), a multi-user facility and the new Aquaculture Development Zone, which is being developed at a cost of R259-million. This aligns with the Oceans Economy master plan, which aims to leverage the province’s coastal assets in terms of fishing, bunkering, oil and gas industry development, tourism and marine transport and manufacturing.

The Coega Development Corporation (CDC), which is assisting in the rollout of infrastructure projects in different parts of South Africa, is assisting Eastern Cape provincial departments, public entities and municipalities to package projects to attract funding.

The East London Industrial Development Zone (ELIDZ) has a strong suit in automotive suppliers, anchored around the proximity to the Mercedes-Benz South Africa facility. The ELIDZ has also received recent investments in a diamond cutting and polishing and condom manufacturing.

An established market for Liquefied Natural Gas (LNG) exists within the Coega SEZ. The existing 342MW Dedisa Power Peaking Plant at Coega already has environmental authorisation for a 400kV transmission line between the plant site and the Dedisa substation which reduces costs for future investors. A draft scoping report has been prepared for an integrated LNG terminal and gas-to-power plant.

National government has named the Coega SEZ as the potential site for a 1 000MW Liquefied Natural Gas (LNG) plant. The value to the regional economy of the project is estimated at R25-billion. Imported LNG would be used as feedstock initially, while exploring local sources. Drilling off the southern coast has revealed vast resources in the Brulpadda field in the Southern Outeniqua Basin. If some of this gas could be recovered, the two SEZs on the Eastern Cape coast would become critical to its utilisation.

Activity in the oil and gas sector would in turn stimulate the maritime sector. The potential of the Oceans Economy is receiving attention and Nelson Mandela University’s Ocean Campus is one of the leaders in this new field. The South African International Maritime Institute (SAIMI) has new headquarters in Port Elizabeth.

Economic strengths

The Eastern Cape continues to punch above its weight in terms of export volumes. A separate article elsewhere in this journal digs down into the details of this aspect of the provincial economy, but a glance at the three winners in a particular category in Exporter of the Year run by Exporters Eastern Cape shines a light on the province’s strengths.

Three companies were recognised in Best Exporter, Corporate (export turnover greater than R200-million): Purem Port Elizabeth (Eberspächer SA, automotive) received a merit award for improvement in profitability; San Miguel Fruits South Africa won a merit award for increased export turnover and profitability with the winner being SMA Engineering South Africa (engines and power transmissions).

These companies neatly represent the automotive and fruit sectors, the two biggest earners from exports. The biggest winner on the night was Volkswagen South Africa, but each of the province’s other OEMs are regularly “winners” in the sense that Isuzu, Ford and Mercedes-Benz routinely ship tens of thousands of vehicles and engines to every part of the globe.

Isuzu recently launched the first locally engineered and produced seventh-generation D-MAX bakkie, using for the first time a new body shop at the Struandale manufacturing plant and a new chassis assembly line at the company’s Kempston Road facility.

The initial R10-billion that Mercedes-Benz invested in making its East London factory ready for the production of the latest C-Class was supplemented in 2021, when the first vehicles rolled off the floor, by news that an additional R3-billion was to go into building three new assembly lines, a new body shop and more advanced robots.

Ford Motor Company’s Struandale engine plant in Gqeberha will receive R600-million to prepare the plant to make the 3.0L V6 turbodiesel engine for the company’s Ford Ranger, which is put together in Tshwane. This amount, which includes upgrades to two existing engine lines, is over and above the company’s national commitment of R15.8-billion to be spent on the Silverton assembly plant and various factories that supply the company.

By the start of 2018, Volkswagen South Africa had spent more than R6.1-billion on its plant in Kariega, an investment that enabled the manufacture of more than 400 000 sixth-generation Polos by 2021. More than 80% of these vehicles were exported.

The investment by the joint venture comprising BAIC, one of China’s biggest vehicle manufacturers, and the Industrial Development Corporation was launched in 2016. In September 2020, the first vehicles manufactured and assembled at the Coega SEZ plant were delivered to dealerships. The company claims that two of its models (the D20 hatchback and sedan, and the X25 SUV) have directly created 1 000 jobs and indirectly created 5 000 jobs in South Africa. ■