WESTERN CAPE

Ashton in the Cape Winelands made big headlines in 2022. A new bridge and an old canning factory were the focus of local and national interest. Investment in infrastructure is a big theme for 2023, with the Western Cape Provincial Government restructuring its departments to prioritise spending on roads, buildings, digital networks and other elements that will boost investment and economic growth.

By John Young

Ashton is a small town in the Robertson Valley, once best-known for being home to two canning factories.

Two became one when the factories were merged some years ago and in 2023, after 70 years of operation, it is possible that the town will have no canning factory. Tiger Brands intended closing the Langeberg and Ashton Foods factory in 2022 but has agreed to complete one more season of canning. If the closure goes ahead, South Africa will have just one fruit-canning factory, the RFG facility in Tulbagh.

Tiger Brands cited significant trade barriers in export destinations and the volatility of exchange rates and crop production volumes, deciding instead to focus on basic foods. Local and provincial government are working with farmers and agricultural bodies to see what can be done to maintain the factory, which is a significant part of the local economy.

The other reason Ashton made headlines in 2022 was because of the completion of a replacement bridge over the Cogmanskloof River. Ashton is located at the western end of the R62, an important route for tourism and the transport of agricultural produce. Some 4 000 vehicles travel through the town towards Montagu on a daily basis.

This was no ordinary bridge. The building of the New Ashton Arch Bridge in the centre of town, one of three built over the flood-prone river in terms of this provincial government project, was the first application of the transverse-launching method for construction of a concrete tied-arch road bridge in South Africa.

The new bridge was used as a detour while the old bridge was demolished and then more than 8 000 tons of concrete and steel was moved over 24m in less than 24 hours.

The 22-metre bridge won the 2022 Fulton Award in the Infrastructure Greater Than R100-million Project Value category and received a commendation in the Innovation and Invention in Concrete category.

AECOM SA was the project manager and structural designer, the client was the Western Cape Department of Transport and Public Works, and the main contractor was Haw & Inglis Civil Engineering. Over the five-year duration of the project, 42% of the contract value was allocated to opportunities for locals.

Infrastructural priorities

The Western Cape Ministry of Finance and Economic Opportunities announced in early 2022 a focus on the construction and maintenance of roads and education, health and general building facilities. This is based on the belief that infrastructure investment is one of the most significant contributors to provincial economic growth.

An additional R2.6-billion was pledged to infrastructure, as part of a R30.3-billion medium-term package. Spending on infrastructure assets is intended to increase by 6.1% every year, and by 54.2% on new infrastructure assets.

A new Department of Infrastructure will be created through the merger of the Human Settlements Department with the parts of the Transport and Public Works Department which deal with property and roads. A Department of Mobility will also be established to work on coordinating transport systems and trying to revive the passenger rail network, among other things.

In his 2022 State of the Province Address, Premier Alan Winde claimed that Cape Town is:

• Africa’s greentech hub

• Africa’s BPO capital

• Africa’s tech capital

In addition, he quoted the Global Startup Ecosystem Report 2021, where Cape Town is listed as the number one performer in Africa for technology ecosystems and is home to almost two-thirds of all start-ups in South Africa.

There are 22 active incubators and accelerators in the region which provide networking and marketing opportunities and links to funders and markets.

Information and communications infrastructure is no less important than physical bridges and it is because the Western Cape has been investing in digital infrastructure that the Premier can persuasively make these claims.

The provincial government’s broadband roll-out project is in Phase 2 and all 1 910 sites are expected to be upgraded to a minimum of 100/Mbps in 2022 with Phase 3 taking minimum speeds to 1Gbps.

The Western Cape Department of Health was the first in the country to go digital, including 265 primary healthcare centres and 181 mobile posts.

The Premier will be pleased to know that Youth Media Movement hosted a first SA Drone Soccer Day in Mitchell’s Plain in 2022 to encourage young people to take up and apply technology.

As a way for the Western Cape to show off its growing reputation as a tech-friendly destination, the launch of the Cape Town Stock Exchange in August 2021 was an ideal event. When several new bourses launched in 2017 most of them put an X in their names and all of them based themselves in Johannesburg. In 2021, 4AX made the move south and rebranded as the Cape Town Stock Exchange.

Cape Town also, according to the Global Financial Centres Index (GFCI), ranked second in Africa in 2020 (behind Mauritius) in competitiveness as a financial centre. Neighbouring Stellenbosch is advancing its reputation for technological innovation and the output of the region’s four universities and six TVET colleges ensures that the tech sector has the necessary human capital.

Cape Town’s share of national employment in the financial sector is about 20% and the contribution to gross value-added (GVA) is 15%.

Air Belgium has added Cape Town to its destination list. In the first six months of 2022, 8 300 passengers and 500 tons of air cargo were flown between the two destinations. A direct flight will follow as passenger and cargo volumes grow. Credit: Air Belgium

Investment

The province has a dedicated investment agency, Wesgro, which also works to promote the region’s tourism. The Investment Promotion Unit of Wesgro is working with various regions within the Western Cape to attract investment and accelerate exports.

In recent years, the biggest investments have been in renewable energy and manufacturing. Other important sectors are agro-processing, aviation, business services, education and training, financial services, real estate, ICT, light manufacturing, oil and gas, timber, tourism, waste beneficiation and clean energy.

Another vehicle for attracting investment are Special Economic Zones (SEZ) and Industrial Development Zones (IDZ). Zones at Atlantis and Saldanha aim to tap into growing markets – maritime, oil and gas and renewable technologies. Large industrial operations already exist at Saldanha and the Port of Saldanha Bay is the portal for the export of South Africa’s iron ore. The Saldanha Bay Industrial Development Zone (SBIDZ) is becoming a hub for a range of maritime repair activities and oil rig maintenance and repair.

The Atlantis Special Economic Zone (ASEZ) is attracting investors in the greentech market. An early investor in the zone was GRI Towers South Africa, a wind turbine tower manufacturer. With new renewable energy projects such as solar parks and wind farms being rolled out every month, this sector is on a steep growth path.

Economy

Finance, business services and real estate combined contribute 28% to the gross domestic product (GDP) of the Western Cape. The financial services and insurance sector are key components of the economy.

Although agriculture accounts for just 4.3% of GDP on its own, the sector is responsible for the fruit and vegetables that contribute to agroprocessing which accounts for nearly 40% of the province’s export basket. (Agro-processing accounts for 8.1% of GDP.) Citrus, wine, apples and pears, grapes, fruit juice, fruit and nuts and tobacco all appear in the top 10 of the province’s exports. Seventy percent of South Africa’s beverage exports come from the Western Cape. Grapes and wine sales to Europe remain strong, but the Chinese market is becoming increasingly important.

The province has a diverse manufacturing sector ranging from textiles, clothing, footwear, boatbuilding and furniture to coke and refined petroleum products. Excluding agro-processing, other manufacturing makes up 6.9% of GDP.

A R2-billion facility is under construction by the Biovac Institute in response to securing contracts with Pfizer and BioNTech to produce vaccines for distribution in Africa. Biovac is a private company in which the state has a 47.5% stake. ■