16 minute read
Regional overview
A REGIONAL OVERVIEW OF GAUTENG
Inner-city regeneration and Special Economic Zones are bolstering growth in Gauteng.
By John Young
Gauteng is South Africa’s smallest province in terms of landmass but in every other respect it is a giant. The province is the nation’s key economic growth engine.
At 18 176km², the province makes up just 1.5% of South Africa’s territory, but even that aspect showed growth in 2018 when the territory of Ekangala was formally transferred from Mpumalanga Province to Gauteng Province. The land had previously been part of the KwaNdebele homeland.
The 14.3-million people living in Gauteng in 2017 generated a gross domestic product of R1.59-trillion, about a third of South Africa’s GDP (StatsSA).
Urban regeneration is a strong theme across Gauteng. Provincial and municipal programmes aim to stimulate township economies and integrate them into the broader economy. All of the metropolitan municipalities are engaged in reviving their inner cities. Johannesburg’s efforts are the subject of an article elsewhere in this publication. One of the City of Tshwane’s projects involves the Salvokop Precinct which lies between the city centre and Freedom Park.
The City of Tshwane is collaborating with the Danish city of Aarhus. The Danes bring expertise in sustainable urban planning and issues such as safe non-motorised green transport, effective water and storm-water management, and high-quality public spaces are being introduced in conjunction with planning for new buildings. The plan is to create a mixed-use precinct comprising offices, residences, retail outlets and restaurants. Heritage buildings are also part of the project as national monuments and the Freedom Park are nearby.
A study has shown that the area’s water reservoir has potential for green hydro energy and a plan is being developed to tackle water supplies and management. The University of Pretoria is another partner in the project.
Another strategy to increase economic growth and attract investment is through Special
Economic Zones (SEZs). The OR Tambo SEZ, aligned to the country’s busiest airport, is one of several sites allocated by the South African government to stimulate investment in targeted sectors. The SEZ supports the development of businesses that work in the beneficiation of precious metals and minerals sector, with a focus on light, high-margin, manufacturing of South African precious and semiprecious metals. Export is encouraged. The site has specific precincts in which various sectors are given priority.
The National Department of Trade and Industry (dti) is the lead agent in the creation of Special Economic Zones, which are part of the national Industrial Policy Action Plan (IPAP). SEZs are designed to attract investment, create jobs and boost exports.
Development corridors have been identified to channel investment into areas where it will make a big impact and where returns on investment will be good. The Albertina Sisulu Corridor is one such initiative. Linked to the idea of creating an “aerotropolis” around OR Tambo International Airport (ORTIA), the corridor connects the airport (in Ekurhuleni Metropolitan Municipality) with innercity Johannesburg.
Various hubs along the route are being developed with particular focus areas. These include S&J Industrial Hub in Germiston, Bredell Precinct (agriculture), Dries Niemand Precinct (transport) and Kempton Park CBD Precinct (economic).
The concept of a Gauteng City Region has been embraced by planners in the province. Individually, the biggest Gauteng cities contribute to the national GDP as follows: Johannesburg (15%), Tshwane (9%) and Ekurhuleni (7%).
The following development corridors of the City Region have been identified, each with its own industries and comparative advantages: City of Johannesburg, Central Development Corridor: provincial capital, finance, services, ICT and pharmaceutical industries, green and blue economy City of Ekurhuleni, Eastern Development Corridor: manufacturing, logistics and transport hub City of Tshwane, Northern Development Corridor: national administrative capital, automotive sector, research, development, innovation and knowledge-based economy, tourism, agriprocessing
Freedom Park in Pretoria commemorates South Africans who lost their lives in the struggle for freedom.
West Rand District, Western Development Corridor: transitioning mining economy. A new diverse economy to be created around tourism (Maropeng World Heritage Site), agriculture and agri-processing, Lanseria Airport City, renewable energy industries Sedibeng District, Southern Development Corridor: steel industry in decline. A new economy to be based on entertainment and tourism (Vaal River City), logistics, agri-processing and urban agriculture.
At a meeting attended by all the mayors of the region and the National Minister of Finance. Gauteng Premier David Makhura gave notice of “how we can unlock, jump-start and reignite a sustainable and inclusive growth trajectory for key sectors of our provincial economy”. Opportunities for the private sector were mentioned in connection with several aspects of the City Region indaba, including the necessity for infrastructure investment.
Neither the central government nor provincial and local government has sufficient resources to cover what the provincial government has estimated is needed in terms of infrastructure in the Gauteng province in the years to 2030 – R1.3-trillion. A 15-year Gauteng Infrastructure Master Plan has been adopted but it is hoped that multiple sources of funding will see the plan succeed in areas such as the provision of water, broadband connectivity, public transport, energy and the reshaping of cities to accommodate citizens in a better way than was the case under apartheid.
Two major Gauteng infrastructure projects will benefit from the announcement that national government is creating a R100-billion infrastructure fund. The Gauteng Schools Project aims to build 110 new schools and the Kopanong Precinct project will upgrade all provincial government buildings in the City of Johannesburg. The combined budget of these projects, both of which will be conducted as public-private partnerships, is R14.8-billion. The Gauteng Infrastructure Finance Agency (GIFA) has a pipeline of 20 projects.
A World Bank report has shown that a 10% increase in infrastructure spending results in a 1% growth in GDP.
The network fibre of the province has been extended to 1 500 kilometres with the community given access through clinics, schools, libraries and community centres. The aim is to have 100% broadband connectivity in Gauteng by 2020.
Efforts are being made to improve the regional economy by identifying blockages and shortcomings. Researchers from the universities of Johannesburg and Pretoria (through the Gordon
A APPOINTS NEW GROUP CEO A APPOINTS NEW GROUP CEO GGDA APPOINTS NEW GGDA APPOINTS NEW GROUP CEO GROUP CEO The board of the Gauteng Growth and Development Agency has named Ms Mosa Tshabalala as the Group Chief Executive Officer for one of the country’s key Provincial Investment Promotion Agency. The former Chief Financial Officer for the GGDA Group topped the list of close to a dozen candidates for the post. “The selection process which was carried out by the Board in assessing internal and external candidates was a rigorous one. Ms Tshabalala’s business acumen and effective stewardship in the various roles that she has held in the Group left us with no doubt that she is the right leader to steer the GGDA in the right direction. For this, we are delighted and proud to announce this appointment.” added the Group Chairperson of the Board, Mr Ernest Mahlaule Up until recently as the Group CFO, her focus was on ensuring financial and legislative compliance by the Gauteng Growth and Development Agency announces new CEO Gauteng aims to be a globally competitive city region.
Gauteng Group of holding companies and ensuring that the Group is financially stable and progressive in all respects.
This financial expert's career spans over a number of sectors and has over the years included senior posts in both the public and private sectors. The mandate of the GGDA is to spearhead and coordinate economic The qualified Chartered Accountant has been elbow-deep in the workings of private sector and public finance, development efforts for the entire Gauteng province, with emphasis on both large infrastructural projects, facilitation of foreign direct investments and domestic investments. Shortly after she got her Honours Degree- BCom in Accounting from the now University of Johannesburg she went to work for Deloitte and Touche.local and foreign direct investment. While at Deloitte she also had a stint working at the New York office- Financial Services audit The four subsidiaries tasked with the implementation of the mandate are: • division-where she was assigned to work with the Consulting Business’s premium clients.The Automotive Industry Development Centre (AIDC)
Later she moved on to a CFO position at a Johannesburg based business and entrepreneur incubator
• The Innovation Hub (TIH) organisation-Awethu Project Business Incubator- where she was responsible for strategically steering the company in the right direction. • Tshabalala helped establish an ARC Skills Africa base for the United Arab Emirates training provider and this Gauteng Industrial Development Zone • resulted in the growth of the company to the East and West Africa. Similarly she has an impressive experience in the entrepreneurial space having first worked in the area of business incubation and eventually venturing into the world of financial and business The Constitution Hill Development Company (Conhill)
consulting. Focusing on areas such as risk management, business strategy, capital raising and critical skills
Group Chief Executive Officer.
Having served as the Group Chief Financial Officer for the Gauteng Growth and Development Agency, responsible for ensuring financial and legislative compliance and as a former board member of the Automotive Industry Development Centre (AIDC), Ms Tshabalala was a perfect fit for the role.
Now at the helm of the GGDA, she will drive the mandate to grow the economy by positioning Gauteng as a globally competitive city region.
development.
She has spent the last few years in Gauteng’s public sector working as the Group’s CFO responsible for a Based in Rosslyn in Tshwane, the AIDC owns and manages the Automotive
combined annual budget of over a R1 billion over the years.
The new CEO who brings in a wealth of experience and strategic management capabilities has also served on Supplier Park (ASP) and provides services to the automotive sector, inthe Boards of : • Automotive Industry Development Centre as a Non- Executive Director (a subsidiary of GGDA) cluding automotive Original Equipment Manufacturers (OEMs). The AIDC • Member of the Audit and Risk Committee- GGDA She serves as a non-executive Director in other Boards such as Listamaiso (Pty) Limited- the operating company also provides assistance through automotive investment facilitation, skills of the bus rapid transit system- Johannesburg- “Rea Vaya”. development and training, incubation programmes and supply chain deKey to Tshabalala’s focus is ensuring that GGDA’s work and the volumes of investment that get into the province translate to real change in the lives of the people of the Province in terms of creation of jobs and having a velopment. In short, the AIDC assists carmakers to stay in business, create
Mosa Tshabalala, CEO “I am honoured to have been trusted with this mammoth task. Ourmore jobs and enables new players to access the market. work as the GGDA Group has to be done with primarily the mindset of changing the face of Gauteng for better by fighting unemployment, inequality and empowering the people of this region.” The Innovation Hub (TIH), also based in Tshwane, is the first Science and About the GGDA: Technology Park of international standard in South Africa. It was established to Mosa Tshabalala EDUCATION: BCom Accounting Degree, Accounting Honours Degree, Certificate in the Theory of Accounting –University of Johannesburg (Former Rau), Chartered Accountant-CA [SA] The GGDA Group aims to create an enabling environment for growth targeted investment facilitation, strategic infrastructure development and social transformation, thus positioning Gauteng as a leading Global City Region GGDA subsidiaries: Automotive Industry Development Centre, The Innovation Hub, Gauteng Industrial Development Zone, Constitutional Hill Development Company and Invest SA Gauteng. fast-track the development of smart industries – high technology sectors – in Gauteng. As part of its role to be the catalyst for innovation and a knowledge economy driver for the province, it has two key focus areas: • Information and Communications Technology (ICT), biotechnologyM s Mosa Tshabalala was appointed in May 2019 by the board of the Gauteng Growth
OCCUPATION: GGDA Group CEO, Entrepreneur, Business Woman , Non-executive Director, Youth development INDUSTRY: Public Sector Finance and Economic Development • Renewable energies and low carbon economy technologies (a green and Development Agency as its
catalytic impact on the economic activity of the region.
economy). The Industrial Development Zone (IDZ) is conveniently located in close proximity to the OR Tambo Airport, which is the African continent’s busiest international airport. While it was established to support industrial development in Gauteng, its specific focus is on mineral beneficiation and export-oriented industry.
The Invest SA Centre, strategically located in the Sandton business district, provides a seamless service to prospective investors. It offers information and research services and pre- and post-investment support services. It maintains strategic partnerships with the Department of Trade and Industry (the dti), the South African Revenue Service (SARS), Home Affairs and municipalities, among other institutions.
The Constitutional Hill Development Company (Conhill) delivers heritage, education and tourism programmes, and contributes to the revitalising of the Johannesburg inner city.
Institute of Business Science) are examining employment rates, empowerment policies and the export value chain. At the same time, the Gauteng Innovation Hub is leading a process to bring innovation and research to the fore in economic policy making and planning. Partners include the Council for Scientific and Industrial Research (CSIR), the University of the Witwatersrand and the Vaal University of Technology.
The Gauteng Growth and Development Agency (GGDA) has a specialised subsidiary, the Gauteng Investment Centre, which acts as a one-stop shop for potential investors looking for advice and support.
Overview of the province
Gauteng shares borders with four provinces, the Free State, North West, Limpopo and Mpumalanga. The southern border of the province is the Vaal River and most of the province is located on the Highveld. The Witwatersrand, which runs through Johannesburg, marks the continental divide: rivers running to the north drain into the Indian Ocean, rivers running south drain into the Atlantic Ocean via the Vaal and Orange Rivers. Gauteng draws its water from a series of interconnected river transfer systems. A major source of water is the Lesotho Water Highlands Project.
The Witwatersrand was the source of the gold that drew so many thousands of people to the area in the late 19th century and was the origin of the word for South Africa’s currency, the “rand”.
Gauteng is a leader in a wide range of economic sectors: finance, manufacturing, commerce, IT and media among them. The Bureau of Market Research (BMR) has shown that Gauteng accounts for 35% of total household consumption in South Africa.
The leading economic sectors are finance, real estate and business (21% of provincial GDP), manufacturing (16.5%), government services (16.3%) and wholesale, retail, motor trade and accommodation (12.8%). The creative industries (including advertising and the film sector) employ upwards of 180 000 people and contribute more than R3.3-billion to the provincial economy. This sector is seen as a driver of future growth.
In Johannesburg, financial services and
The Cradle of Humankind is a UNESCO World Heritage Site.
commerce predominate. The JSE, Africa’s largest stock exchange, is in Sandton and several new stock exchanges have recently received licences.
Tshwane (which includes Pretoria) is home to many government services and is the base of the automotive industry and many research institutions. The Ekurhuleni metropole has the largest concentration of manufacturing concerns, ranging from heavy to light industry, in the country. The western part of the province is concerned mainly with mining and agriculture, while the south has a combination of maize farming, tobacco production and the heavy industrial work associated with steel and iron-ore workings.
Gauteng is not just an important centre of economic activity it is also an important launching pad for local and international businesses to enter the African market. The country’s biggest airport, OR Tambo International Airport, is at the core of the province’s logistical network. Other airports include Rand Airport (Germiston), Wonderboom (Pretoria) Lanseria and Grand Central (Midrand).
The Gauteng Division of the High Court of South Africa (which has seats in Pretoria and Johannesburg) is a superior court with general jurisdiction over the province. Johannesburg is also home to the Constitutional Court, South Africa’s highest court, and to a branch of the Labour Court and the Labour Appeal Court.
The province has several outstanding universities, and the majority of South Africa’s research takes place at well-regarded institutions such as the Council for Scientific and Industrial Research (CSIR), the South African Bureau of Standards (SABS), Mintek, the South African Nuclear Energy Corporation (NECSA), the Human Sciences Research Council (HSRC) and several sites where the work of the Agricultural Research Council (ARC) is done.
Seipati Mangadi, CEO
The Special Economic Zone mobilises industry in Gauteng
INTRODUCTION
Seipati Mangadi has held the position of CEO of the GIDZ (Gauteng Industrial Development Zone) since 2013 and has witnessed the growth her business unit has contributed to the Gauteng province. As one of the GGDA’s four subsidiaries, the GIDZ was created to support industrial development in Gauteng. A key project that fulfils this mandate is the OR Tambo SEZ (Special Economic Zone).
Gauteng IDZ Company Chief Executive Officer Seipati Mangadi reports on the OR Tambo SEZ.
What is the sectoral focus of the SEZ?
Considering the competitive location of being in close proximity to OR Tambo International Airport, the focus is on mineral beneficiation and on additive manufacturing with localisation an important additional element. This is highvalue, low-mass beneficiation. Many value chains are linked to industries that use the airport. Ekurhuleni itself is the manufacturing hub of the country so possible investors are here, infrastructure is in place to support this process.
Do you dovetail your plans with other bodies?
The primary rationale of being located in that area is to be a catalyst for the broader aerotropolis economic strategy that Ekurhuleni has adopted. We work directly with ACSA and the Metro to make sure that we have synergies on the development that we attract. The Gauteng IDZ is a special purpose vehicle of the Gauteng Growth and Development Agency (GGDA), which is implementing economic development in the province.
Is the Jewellery Manufacturing Precinct (JMP) an example?
Absolutely. The Department of Mineral Resources has put forward a beneficiation strategy and we have chosen to implement a part of that. We chose jewellery beneficiation as a starting point.
How is the JMP progressing?
The design stage has been completed, we are just waiting for plans to be approved then the next stage is to put it out to the market for a contractor to come on board and develop. We have over 90% uptake in the pipeline. In May 2020 we should be able to give beneficial occupation to the tenants. By late 2020 there will be buildings for our tenants. The alumni of the existing design studio in Germiston regularly scoop up awards in the industry.
What are your short- and medium-term plans?
Approximately R640-million will be spent on the first phase of OR Tambo precinct which is 7.5 hectares in extent. The JMP (Southern Precinct) will be live in 2020. Parallel to that we have started with the conceptualisation of the second phase of OTR precinct, which is 29 hectares. There is definitely interest to come into the SEZ, which starts with domestic direct investment. Then the foreign direct investment will come. Every day we are fielding enquiries from potential tenants.
