Investments inject R3.7 billion into the economy in Cape Town and the Western Cape

Image Title
Investments inject R3.7 billion into the economy in Cape Town and the Western Cape
Get In Touch
Investments inject R3.7 billion into the economy in Cape Town and the Western Cape
Get In Touch
04 November 2020

During the first six months of the financial year, Wesgro, the official tourism, trade and investment promotion agency for Cape Town and the Western Cape, facilitated 12 projects across key sectors such as Tech, the Green Economy and Business Services. These investments are expected to inject more than R3.7 billion into the regional economy over the next 5 years, supporting the creation of approximately 400 new direct jobs and an estimated 3,500+ indirect jobs.

These investments were confirmed a midpoint review of Wesgro’s Investment Promotion results for the financial year, and points to the resilience of Cape Town and the Western Cape as an investment destination, even when faced with the onset of the global COVID-19 pandemic.

“To many, the positive investment numbers achieved will contrast dramatically with the state of the current economic climate. What is important to remember is that the fixed investment cycle is long – often between 2 to 5 years. Many of the projects that have broken ground in the first half of this financial year are conversations we began with investors in 2015. What is critical looking forward is to ensure that we don’t lose momentum, and continue to position the region as a destination of choice on the continent for investors that are seeking a resilient, organised business location that is planning for sectors of the future,” said Head of Investment Promotion at Wesgro, James Milne.

The COVID-19 pandemic presented a significant challenge for investment promotion, as the lockdown and restrictions on international travel halted opportunities to travel to engage international investors, or meet with local companies seeking to expand. However, Wesgro’s Investment Promotion unit was able to seamlessly transition to a virtual structure, undertaking more than 600 virtual meetings with clients during the period under review.

These engagements are additional to the work executed by the unit to assist businesses during the lockdown, where they pioneered the development of the COVID19 Fund Navigator Tool: To date, more than 6 500 businesses have utilized the tool, while more than 500 queries relating to funding or UIF/TERS support have been attended to. In addition, direct lobbying relating to UIF/TERS supported the retention of more than 160 jobs.

Although travel restrictions prevented the team from travelling to international locations, Wesgro also managed to host a number of webinars alongside industry experts in key markets across the globe, which enabled the addition of 51 new projects to the investment pipeline. The unit was also extremely active in terms of inter-governmental interventions – holding more than 60 meetings with National Government entities to enhance unlocking projects that had encountered specific challenges. At a regional level, more than 150 meetings were held with provincial or municipal stakeholders to promote the acceleration of projects.

Importantly, in response to the COVID-19 pandemic the team has bolstered the Investment Promotion unit’s Business Growth Services (BGS) sub-unit. The BGS team is ideally positioned to provide tailored expert support to local businesses that are seeking to grow and expand, through interventions such as facilitating access to finance; policy advocacy; accelerating red tape blockages and general advisory services. During the period under review, the team referred more than 90 businesses to the public sector financiers for funding support and 34 businesses for private sector funding support.

The Business Growth Services unit works closely with the InvestSA One Stop Shop – a DTIC led initiative (managed by Wesgro) that clusters 14 key governmental entities such as SARS, the CIPC, InvestSA and others under one roof to accelerate the investor experience. During the period under review, the InvestSA One Stop team resolved more than 18 regulatory challenges on behalf of government, which helped to unlock R1.59 billion in investments.

Welcoming the announcement, Western Cape Minister of Finance and Economic Opportunities, David Maynier, said, “Today’s announcement is a much-needed confidence boost to the economy in the province which has been hard-hit by the COVID-19 pandemic, but which will recover thanks to the efforts of organisations such as Wesgro to attract investment in the Western Cape. There are many great opportunities for growth and investment in sectors such as agriculture and agri-processing, business process outsourcing and the green economy in the Western Cape. And so, we will continue to work hard to create an enabling environment for businesses in the Western Cape so that we can attract private sector investment that will create jobs and grow the economy in the Western Cape.”

During the second half of the financial year, the Investment Promotion unit will continue to support Economic Recovery activities led by governmental stakeholders, with a strong emphasis being placed on unlocking ‘catalytic’ projects to enable large scale direct and indirect job creation. The team will also be leveraging the region’s new “Open for Business” investment campaign to strengthen the pipeline in terms of new local and international investments.

Mayoral Member for Economic Opportunities, Tourism & Asset Management in the City of Cape Town, Alderman James Vos commented: “Together with the City’s Enterprise and Investment Department, we work with key catalytic sectors to implement proven strategies so they reach their full potential and create jobs, especially as we plot the road to recovery in a post-Covid world. We also provide funding to Strategic Business Partners, such as Wesgro, to address developmental challenges but also, to actively seek out opportunities to grow our economy by attracting investment and create jobs. What has become abundantly clear is that if you fail to plan, you plan to fail. That is why I established to key task teams at the outset of the pandemic, firstly to respond and now to plot our recovery. My Economic Task Team’s Economic Action Plan is in full swing and has delivered impressive support to SMMEs and helped our SBPs pivot, respond to and recover from the effects of the lockdown. My Tourism Task Team, including the City’s official Destination Marketing Organisation, Cape Town Tourism, is rolling out impressive campaigns to entice visitors back to the Mother City. I am certain that by collaborating and implementing key strategies we will bounce back.”

“COVID-19 presented a unique challenge to Investment Promotion Agencies (IPA) across the world. Wesgro was able to quickly adapt - by leveraging the support of our funders in the City of Cape Town and the Western Cape’s Department of Economic Development and Tourism, as well as other key intermediaries such as GreenCape - to ensure that investor support continued and the investment pipeline remained strong. Wesgro’s efforts in the COVID-19 response were recognised by the World Bank and profiled as the only regional IPA globally in a report on ‘COVID response best-practices’,” concluded Wesgro CEO, Tim Harris.