Western Cape Business 2020 edition

SPECIAL FEATURE and gas,

SPECIAL FEATURE and gas, timber, tourism, waste beneficiation and clean energy. Being perceived as business-friendly is clearly important to policy planners in the Western Cape. In his first State of the Province Address, new Premier Alan Winde said in 2019 that his administration’s priorities included removing and streamlining barriers for business, developing a provincial “Ease of Doing Business Index” in the Western Cape, supporting informal and township economies and providing incentive schemes for small businesses. Africa was the destination for the largest share of Western Cape exports (.3-billion) in 2017, with SACU and SADC being the second and third largest subregions for Western Cape exports after the European Union (.4-billion). The rest of Africa is also the largest destination for investment by Western Cape companies, accounting for 54% of outward FDI investment from 2008 to September 2018. An estimated 46% of international companies investing in the Western Cape indicated that they intended using the Western Cape as a springboard into Africa (Wesgro). One of the strongest growth areas for exports is in the halal market. The inaugural Africa Halal Week in 2018 had 25 international guests with 700 delegates. Agricultural and agri-processing products have done well in all markets. Key export facts By reporting time at the end of Quarter 3 of the 2018/19 financial year, Wesgro reported: • A total of 16 global export business agreements amounting to an estimated R338-million in export value in Quarter 3. • R4-billion in trade deals secured for Cape Town and the Western Cape to date. • Resulting in 783 jobs over the next five years. Speaking at a conference in 2019, Cape Town City Mayoral Committee Member for Economic Opportunities and Asset Management James Vos said, “Our main aim is to be the go-to city in Africa for business, investment, film, trade and tourism.” Vos outlined how the city was investing in IT infrastructure, with 848km of fibre-optic cable laid and a further R1.9-billion in the pipeline to be spent on fibre infrastructure. The successful Air Access programme has not only boosted tourist numbers to the Western Cape. The new United Airlines flight between Cape Town and New York will lead to an increase in direct and indirect imports into the province, with cargo capacity contributing approximately R94- million in possible additional trade. It could also contribute R286-million to the Gross Geographic Product (GGP) and R144-million in direct Gross Value Add (GVA) to the local economy. WESTERN CAPE BUSINESS 2020 16

SPECIAL FEATURE 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 sectors are key components of the economy. Many of South Africa’s biggest companies have their headquarters in Cape Town. Asset management and venture capital companies have been growing steadily. Although agriculture only accounts for 4.3% of GDP on its own, the sector is responsible for the fruit and vegetables that contribute to agriprocessing which accounts for nearly 40% of the province’s export basket. (Agri-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 very strong but the Chinese market is becoming increasingly important. The province has a diverse manufacturing sector ranging from textiles, clothing, footwear and furniture to coke and refined petroleum products. Excluding agri-processing, other manufacturing makes up 6.9% of GDP. Regions The province is divided into one metropolitan municipality and five district municipalities: Cape Town Metropolitan Municipality Cape Town is a culturally diverse and dynamic metropolis set among beautiful beaches and winelands with the spectacular Table Mountain as a backdrop. The city is the engine of the regional economy, with most of the Western Cape’s heavy and medium industry located within the metropolitan area of Cape Town. The largest sector in the city’s economy is the financial and business services industry. The opening of a branch of the JSE in the city is a sign that this sector continues to grow, as is the decision of more asset managers to move their headquarters to Cape Town. The tourism, retail, construction and property sectors have been doing well for many years. The city has a population of 3.2-million and contributes 76% of the Regional Gross Domestic Product. Cape Town is home to the nation’s parliament and is the site of two World Heritage Sites: the Cape Floral Region (including Table Mountain) and Robben Island. The Cape comprises only half a percent of the landmass of Africa yet the Cape Floral Region accounts for nearly 20% of the flora 17 WESTERN CAPE BUSINESS 2020