South African Business 2020 edition

SPECIAL FEATURE
showing at micro level as well.
An announcement by
infrastructure development group
Raubex in October 2019 that it
was experiencing strong growth
because of contract work related
to renewable energy was just one
indicator of a massive shift that
is starting to happen. For several
years, South Africa’s construction
and engineering companies
have been stressed, with many
commentators blaming a lack of
infrastructure investment from
central government and stateowned
enterprises for this state
of affairs. Renewable energy
may well offer the route back to
profitability.
Aggeneys is a about 240km
west of Keimoes, and close to
Springbok. It’s always been a
mining town and is the base
for the Black Mountain project
which produces copper, lead and
zinc, with silver as a by-product.
Vedanta Zinc International has
launched a project nearby which
will deliver 600 000 tons of zinc
annually once phase three is
complete. It is the biggest current
mining project in South Africa,
having attracted $400-million
in investment so far. There is a
possibility of a new smelter and
refinery being built to service this
digitally advanced mine.
Agriculture and tourism
Basing economic growth on a
devaluing currency is not always
the best long-term method of
boosting economic growth, but
high-value agricultural exports
and increased numbers of highspending
international tourists hold some promise for helping to get
the South African economy back on a growth path.
Horticulture in particular is seen as holding great potential not only
for increased earnings, but for creating jobs. The same holds true for
tourism. StatsSA reported that the tourism sector created 31 752 net
new jobs in 2017 and Wandile Sihlobo of Agbiz has written about how
every hectare of blueberries planted needs 2.64 workers.
When assessing South Africa’s prospects and suggesting solutions,
the country’s history of economic and social exclusion and current
unemployment figures must be part of the equation.
Another new area that holds great potential for the South African
economy is the Oceans Economy.
South Africa has 3 000km of coastline and the extent of the country’s
territorial waters is greater than its land size. And yet the country does
not have a merchant marine fleet and only scrapes the surface in terms
of the percentage of repair and maintenance of boats and oil rigs which
could potentially bring work to its ports.
What is also called the Blue Economy has enormous potential for
economic growth and concomitant job creation. National government
wants to see the Oceans Economy contribute a R177-billion to gross domestic
product by 2033. This is part of the National Development Plan (NDP).
National strategy on the Oceans Economy is also aligned with
Operation Phakisa, a plan that targets sectors that can best achieve quick
returns in terms of growth and job creation. The four target areas within
the maritime strategy are: aquaculture; offshore oil and gas; marine
protection and governance; marine transport and manufacturing.
Transnet National Ports Authority is spending heavily on upgrading
the nation’s ports.
One statistic illustrates the potential: South Africa does maintenance
on only 5% of the 13 000 vessels that use its ports, and services 4-5% of
the approximately 130 rigs that pass along the coast each year. Large
quantities of oil are transported around the Cape Point every year: 32.2%
of West Africa’s oil and 23.7% of oil emanating from the Middle East.
Traditional strengths
Great mineral wealth has underpinned the South African economy
ever since the first diamond was stumbled upon in 1867. Gold was
found soon after and that industry effectively saw to it that South Africa
became an industrialised nation. Now those gold mines are tapering
off in production volumes, but coal, iron ore and platinum reserves are
impressively large.
The grains of the central regions of the country, together with the
fruits and vegetables of Mpumalanga and Limpopo, the wines and
grapes of the Western Cape and the sheep and mohair of the Eastern
Cape, all contribute to a diverse and vibrant agricultural sector. There
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SOUTH AFRICAN BUSINESS 2020