A REGIONAL OVERVIEW OF GAUTENG

All of Gauteng’s metropolitan municipalities came under coalition governments after the local elections held in 2021. Voters are indicating they are fed up with corruption. It is at municipal level that citizens and businesses feel the effects of inefficiency and corruption and it is that sphere of government that needs the most work in the short term.

By John Young

The municipal elections held in South Africa in 2021 resulted in councillors in 66 municipalities having to form coalitions to create majorities. Among these were Gauteng’s three metropolitan municipalities, Johannesburg, Tshwane and Ekurhuleni.

These three cities represent, respectively, the economic centre of the national economy, the seat of the executive government and the manufacturing hub of the country. South Africa’s governing party, the African National Congress (ANC), the party of Nelson Mandela and the struggle for freedom from apartheid, recorded a vastly reduced vote count across the country. In the three Gauteng metros, the opposition Democratic Alliance was able to cobble together coalitions with five other parties to take over the mayoralties. These will not be stable coalitions – some of the ideological differences are big – but they have certainly put the ANC on notice that it can’t take things for granted in the run-up to national elections, which are due in 2024.

If this strengthens the hand of the group within the ANC that wants to root out corruption, surely a big reason for the party losing support, then the country and the province will benefit.

The country’s biggest opposition party, the Democratic Alliance, controls both the biggest metropolitan municipality and the provincial government in the Western Cape but the ANC still has a solid majority in the Gauteng provincial legislature. Various levels of government have departments called “Cooperative Governance”: with different parties in power at municipal and provincial level, that concept will be brought into play and the maturity of the political leaders will be tested.

Premier David Makhura has outlined the plans of the provincial government: “The development of single multi-tier Special Economic Zones (SEZ) is the primary anchor of our industrialisation agenda. It is our goal to have to have at least one zone in each district or metro, specialising in distinct sectors and industries in each corridor.”

The National Department of Trade, Industry and Competition (dtic) is the lead agent in the creation of SEZs, which are part of the national Industrial Policy Action Plan (IPAP). SEZs are designed to attract investment, create jobs and boost exports.

About R3-billion has been invested in bulk infrastructure for the Tshwane Automotive SEZ with another R300-million to come on top of R4.3-billion from automotive suppliers and R15.8billion from Ford Motor Company.

The OR Tambo International Airport Industrial Development Zone (IDZ) opened in 2019 is focussed on jewellery manufacturing and agroprocessing. The IDZ’s four zones have attracted R1.5-billion in investments and the zone’s development is ongoing with other schemes such as the midfield cargo terminal and the development of the western commercial precinct.

One of the plans to boost Gauteng, “Growing Gauteng Together” (GGT 2030), prioritises the economy, jobs and infrastructure, with the manufacturing sector earmarked as a key driver.

Manufacturing strength

Gauteng accounts for 45% of South Africa’s manufacturing capacity, so the province is wellplaced to expand an already strong and diverse sector. Manufacturing makes up 14.5% of formal sector output in Gauteng, making it the fourth-largest sector. One in nine jobs in the province are created in the sector. According to the Gauteng Growth Development Agency (GGDA), six out of 10 foreign direct investment (FDI) projects in Gauteng have flowed to the manufacturing sector and its subsectors.

In the five years to 2019, the Gauteng-City-Region attracted 447 FDI projects valued at R264-billion, which created more than 69 000 jobs (FDI Markets).

The GGDA is an implementing agency which aims to facilitate business enablement, develop small, medium and micro enterprises (SMMEs) and to promote investment and job creation. Focussed support for these specific subsectors is intended to spur other investments: automotive sector, mineral beneficiation, capital equipment, agro-processing, pharmaceuticals and tertiary services such as BPO, ITC services, tourism and the knowledge economy.

GGDA subsidiaries include The Innovation Hub (technology), the Automotive Industry Development Centre (AIDC), which manages the Automotive Supplier Park (ASP) and InvestSA Gauteng (red tape remover for investors).

The Johannesburg Development Agency (JDA) plays a similar role as the City of Johannesburg’s development agency. JDA’s focus is on helping create resilient, sustainable and liveable urban areas in identified transit nodes and corridors. In 15 years, 387 projects have been implemented.

The Provincial Government of Gauteng has identified 10 “high-growth” sectors where it intends concentrating its efforts to build infrastructure and attract public and private sector investment:

• Energy: new technologies and a diverse energy mix

• Transportation and logistics

• ICT, media and digital services

• Tourism and hospitality

• Agricultural value chain

• Construction and infrastructure

• Automotive, aerospace and defence

• Financial services

• Cultural and creative industries

• Industrialisation of cannabis

These priorities were announced before the onset of the Covid-19 global pandemic, so obviously there will be some major adjustments, especially with regard to tourism and hospitality which has suffered major setbacks during the local and international lockdowns.

Overview of the province

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. 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. Gauteng recorded the highest provincial growth rate in 2019. The 0.6% rise was mainly driven by finance, real estate and business services, which is the dominant industry (StatsSA).

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 into the Orange River. 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, manufacturing, government services and wholesale, retail, motor trade and accommodation. The creative industries (including advertising and the film sector) contribute significantly to the provincial economy.

In Johannesburg, financial services and 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.

Individually, the biggest Gauteng cities contribute to the national GDP as follows: Johannesburg (15%), Tshwane (9%) and Ekurhuleni (7%).

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 is done. ■