Today, Wesgro, the official Tourism, Trade and Investment Promotion Agency for Cape Town and the Western Cape put a spotlight on global opportunities for business in 2022. The Agency indicated the deepening of the tech and green economy value proposition to capture global share of investment.
The event, attended by businesses stakeholders, and senior representatives of all levels of government, also provided an overview of current trends, risks and opportunities.
The Agency was particularly pleased to welcome Edward Kieswetter, SARS Commissioner and one of the most experienced public sector leaders in democratic South Africa, as keynote speaker. He touched on the digitisation of SARS and the ambition to build a smart, modern SARS that can be trusted and admired. The Commissioner indicated that the journey to being clear of the approach has begun - a strategic intent built on voluntary compliance, by building a system where every citizen feels a moral obligation to make a contribution. Data, machine learning and AI technologies are being drawn on to build a tech ecosystem that allows optimal and maximum connectivity to every economic moving part. An Incubation Centre has been created to build a future organisation that will be disruptive, promising a revenue service that is world-class.
Wesgro’s Chief Economist Janine Botha, highlighted the following global trends impacting business, including the effects felt as result of the ongoing conflict between Russia and the Ukraine:
- The conflict will be of consequence from a trade flow perspective, in particular given Russia’s importance in agriculture
- Agricultural imports will also be affected, from a cost and supply perspective, with Russia a key source market for local fertilizers and wheat products
Closer to home, South Africa’s economic growth was on the upside in 2021. Progress is being made on a number of key and critical fronts, and the South African narrative is more optimistic than in recent years:
- The recent upgrading of one of the sovereign credit rating outlooks is testimony to this. While challenges remain, there are signs of progress and accordingly, opportunity
- Good progress continues to be made in terms of key structural reforms; the electricity sector in particular - with renewable energy an increasing focus as the country strives to attain commitments made at COP 26 and capture significant investment opportunities presenting in the rapidly expanding renewable energy space
Turning to Cape Town and the Western Cape, despite global economic challenges, there are opportunities presenting:
- Exports accelerated by more than 22% in 2021, FDI inflows were particularly strong
- Steady growth was seen in the domestic tourism market, while a good recovery was recorded in the international tourism market, albeit pre-December 2021
- The province’s dominant services sector remains an integral part of the local economy both from an output and employment sector, accounting for more than 70% on both fronts. It also underpins the resilience shown in recent years
- It is this mature services-led economy that strategically positions the province to service future demand
Looking ahead, evolving global trade lines and agreements are of key interest, as are traditional and new trading partners all of which hold opportunities:
- Traditional, mature sectors will continue to offer ongoing value and opportunities and the Agency anticipates that the province will remain an important player on the global agriculture stage
- The tourism sector also remains a key priority and focus area. While recovery has been uneven, tourism numbers continue to grow, and the domestic market was back to 72% of pre-COVID levels and international market at 54% in February 2022
Perhaps the greatest shift and opportunity lies in digitalization, digital transformation and technology, as well as the green economy, all of which are central to future productivity growth
- Global trends indicate that communications, software and IT services are key sectors identified as enablers to grow the digital economy
- The province is well positioned to take advantage of this, with FDI inflows into the province predominantly directed to the renewable energy, business services, communications and software & IT services sectors over the past decade. Inward investment into these four sectors collectively accounted for more than 70% of total investment into the province over the period 2011 – 2021, with the renewable energy sector, at a value of R16.87 billion, the largest recipient of investment (in this period)
Speaking to the enablement of growth in the province, Minister of Finance and Economic Opportunities for the Western Cape, David Maynier, indicated: “We remain absolutely committed to “backing business” by focusing on accelerating the ease of doing business, boosting investments and exports, making it easier to start a small business, or expand an existing small business, increasing infrastructure investment, scaling up skills development, and building economic resilience so that we can drive economic, create jobs, and give hope, to people who do not have jobs, or who have given up looking for jobs, in the Western Cape.”
Wesgro CEO, Wrenelle Stander, said: “The global shift seen post-2019 towards digitalization has entrenched the Western Cape’s position as a world-class pioneer in the tech and green economy sectors. The Western Cape is well-positioned to navigate this fluid and fast-changing global economic environment”.
The Mayor of Cape Town Geordin-Hill Lewis, re-emphasised the City’s ambitions in becoming the most energy secure in the country, “The City of Cape Town is working hard to move closer to end load-shedding over time. We are aggressively pursuing our independent power procurement programme to reach our goal of reliable, clean energy for all Capetonians and bring down the cost of electricity over time. Substantial investments are being made towards energy security in Cape Town to create the country’s most reliable, and most affordable electricity supply”.
To access the 2022 Global Priorities for the Year Ahead research document, go to: https://bit.ly/3x721BB