A REGIONAL OVERVIEW OF KWAZULU-NATAL

Infrastructure projects will help the province build back better.

By John Young

“Business events to be hosted in 2020/21 are expected to inject an estimated R1.2-billion thousands of families in urban and rural areas. The closing of borders brought real hardship to many into the local economy.”

When the Premier areas in the province of KwaZulu-Natal, Sihle Zikalala, spoke these words on 4 March 2020 at the Royal Show Grounds in Pietermaritzburg, business tourism and tourism in general were projected to be significant earners for the province. A day later, on Thursday 5 March, the National Institute for Communicable Diseases confirmed that a suspected case of Covid-19, a person recently returned from a trip to Italy, had tested positive. And that was the end of tourism for the foreseeable – or unforeseeable – future.

The first half of 2019 brought in a total of R14.4-billion in tourist spending and the year as a whole delivered an increase of 8% in international visitor numbers. The newly created Cruise Ship Terminal at the Port of Durban was ready to welcome guests, but it would be at least a year before cruises could resume. Tourism is a key sector in the KwaZulu-Natal economy and provides livelihoods to many.

Infrastructure

The other good news in the Premier’s State of the Province address was not subject to the spread of deadly viruses. This related to infrastructure spending plans which give hope for the province’s ability to “build back better”. Some of the infrastructure plans include:

• A housing project in Msunduzi comprising 25 000 units. The R2.5-billion Vulindlela project provided employment for 1 713 people and is in the final phase of construction.

• New bridges to enable scholars to get to school safely. There are many rivers in the province so the 2020/21 budget makes provision for seven vehicular bridges and 12 Bailey bridges to be built in rural areas in partnership with the South African National Defence Force (SANDF).

• Upgrade of the N3/N2. The South African A wetland conservation project run by Mondi, the packaging and paper company. National Roads Agency will spend R35-bllllon on this multi-phase project.

A wetland conservation project run by Mondi, the packaging and paper company.

• The launch of the Durban Aerotropolis Master Plan. The plan is to develop an airport city centred on King Shaka International Airport.

• The Department of Economic Development, Tourism and Environmental Affairs (DEDTEA) has allocated R30-million towards the construction of a terminal building at Mkhuze airport following its runway upgrade. The department is also working with Ray Nkonyeni Local Municipality to upgrade the terminal building at Margate airport.

• Creation of an automotive supplier park. DEDTEA, Dube TradePort and eThekwini Municipality have signed a memorandum of understanding.

• The provincial government intends contracting Broadband lnfraco to provide network services to be used by Dube TradePort to roll out more than 810 WiFi hotspots at 405 sites across the province.

• The Isandlwana Heritage Project. It may seem ironic to be building tourism infrastructure at this time, but the future will include tourism. The Department of Transport and SANRAL are consulting local communities about further developing this historic site.

Investment

Between May 2019 and February 2020, inward investment commitments to the value of more than R15-billion were made. These included amounts pledged in most of the priority sectors identified by the provincial government, namely agro-processing, healthcare, manufacturing, renewable energy and tourism and property development.

Other priority sectors include aloe processing, bio-ethanol fuel, fish processing and, more broadly, the Oceans Economy.

The Special Economic Zones (SEZs) at Richards Bay and King Shaka International Airport (the Dube TradePort) are key components of the strategy of attracting investors to the province. Dube TradePort attracted R7-billion between 2012 and 2019 and the same amount is expected to accompany the development of Phase 1A and Phase 1F of the Richards Bay Industrial Development Zone (RBIDZ). Two investors in 2019 were edible oils manufacturer Wilmar Processing SA, which is investing more than R1-billion in a plant, and Elegant Afro Line, which will spend about R900-million on its chemicals plant.

There are plans to establish a clothing and textiles SEZ in the province to build on the province’s established strength in the sector and an automotive supplier park will soon be in operation. Toyota and Bell Equipment play a big role in the automotive sector while the Engen Oil Refinery is a strategic asset.

The province’s existing infrastructure, good soils and fine weather provide a solid base for future growth.

KwaZulu-Natal already has significant capacity in heavy and light manufacturing, agri-processing and mineral beneficiation, all of which is supported by South Africa’s two busiest ports (Richards Bay and Durban), the country’s most active highway (the N3), a modern international airport and pipelines that carry liquids of all types to and from the economic powerhouse of the country around Johannesburg in the interior.

Sappi’s dissolving pulp mill at Umkomaas south of Durban is one of the province’s most significant industrial sites as it produces huge quantities of a material that is used in viscose staple fibre, which in turn is used in clothing and textiles. Together with production volumes from Sappi’s mill in neighbouring Mpumalanga province, the company is the world’s largest manufacturer of dissolving pulp. Mondi is the province’s other global giant in forestry, paper and packaging.

Durban Container Terminal. Credit: TPT

Oceans Economy

KwaZulu-Natal province has a long coastline that stretches from the Mtamvuna River in the south to the Isimangaliso Wetland Park in the north. The province’s contact with the sea has brought obvious benefits: fishing, fine beaches enjoyed by millions of tourists and two great ports. These ports export vast quantities of minerals (mostly through Richards Bay) and manufactured goods (Durban) and serve as an important conduit for imports of all sorts.

The Richards Bay Coal Terminal exports massive quantities of coal while the Port of Durban is the busiest port in Africa.

However, planners want to expand the economic benefits that the ocean can bring. An Oceans Economy Review Workshop has come up with a range of sub-sectors that can help grow the provincial economy and invite foreign direct investment:

• Marine transport and manufacturing.

• Offshore oil and gas exploration.

• Aquaculture.

• Marine protection and ocean governance.

• Small harbours.

• Coastal and marine tourism.

Strategies to grow the Oceans Economy dovetail with ongoing projects to boost the capacity of the province’s ports and to explore for gas and oil in the Indian Ocean. If oil rigs were to start visiting the KZN coastline on a regular basis, the ship-repair industry would grow exponentially.

The Oceans Economy is one of the focus areas that has been chosen by national government to be part of Operation Phakisa, a focused, goal-driven attempt to jump-start a specific economic sector. Overall, Phakisa intends creating a million jobs by 2033 and injecting R177-billion into national GDP.

The decision to build a cruise-ship terminal at the Port of Durban is a good example of the kind of decision that is in line with an “Oceans Economy” approach.

Geography

The mixed topography of the province allows for varied agriculture, animal husbandry and horticulture. The lowland area along the Indian Ocean coastline is made up of subtropical thickets and Afromontane Forest. High humidity is experienced, especially in the far north and this is a summer rainfall area. The centrally-located Midlands is on a grassland plateau among rolling hills. Temperatures generally get colder in the far west and northern reaches of the province.

The mountainous area in the west – the Drakensberg – comprises solid walls of basalt and is the source of the region’s many strongly running rivers. Regular and heavy winter snowfalls support tourist enterprises. The Lubombo mountains in the north are granite formations that run in parallel.

Regions

KwaZulu-Natal has 10 district municipalities and a metropolitan municipality, the most of any province in South Africa. In economic terms, the province offers diverse opportunities.

Southern region

This area is the province’s most populous. The city of Durban has experienced booms in sectors such as automotive, ICT, film and call centres. The promenade now reaches all the way to the harbour and the Point development will benefit. Major investments are taking place at the Port of Durban with the current centre piece being the Durban Cruise Terminal. The Container Terminal is also undergoing an extensive overhaul.

Durban’s conference facilities are well utilised, but many opportunities still exist in chemicals and industrial chemicals, food and beverages, infrastructure development and tourism. Further south, Margate’s airport and Port Shepstone’s beachfront are assets.

Western region

Also known as the Midlands, this is a fertile agricultural region which hosts the popular annual Royal Show. It produces sugarcane, fruit, animal products, forestry and dairy products. Pietermaritzburg is the provincial capital and home to a major aluminium producer along with several manufacturing concerns, including textiles, furniture, leather goods and food. The city has good transport links along the N3 national highway, excellent schools and a lively arts scene. The Midlands Meander is a popular tourist destination.

Eastern region

Although most of this area is rural, Richards Bay is one of the country’s industrial hot spots because of its coal terminal, port and aluminium smelters. The Richards Bay Industrial Development Zone (RBIDZ) is a major economic node and with the possibility of a power plant being built, the RBIDZ could become an energy hub. Mining is an important sector in this region. The other major urban centre is Empangeni which has several educational institutions. The King Shaka International Airport is adjacent to the Dube TradePort, a Special Economic Zone (SEZ) which is attracting investors.

Northern region

The economic powerhouse is Newcastle in the north-west: coal-mining, steel processing and manufacturing are major activities. Some old coal mines are being reopened by new coal companies to cater for the country’s power stations’ demand for the fuel. Game farms, trout fishing and hiking are part of an attractive package for tourists, and Zululand is a popular destination for cultural experiences. The region is rich in Anglo-Boer War history which includes battle sites such as Isandlwana and Rorke’s Drift.

Credit: Isandlwana Battlefields Route