The South African province that’s showing huge potential

 ·26 Nov 2023

KwaZulu-Natal (KZN) has faced a challenging couple of years – but there is hope among business leaders that the situation will improve.

Over the last few years, the region has had to deal with the Covid-19 lockdowns, the July 2021 unrest, the April 2022 floods, sewage spillages, and ongoing infrastructure issues affecting the key rail and harbour sectors that are crucial for South Africa’s imports and exports.

Although pessimism is a natural default for many over the province, business leaders at a panel discussion organised by Investec were far more positive, with resilience and confidence as two areas highlighted by the speakers.

Resilience and confidence were the two areas highlighted by the speakers. Ward spoke of the impact of the events of the last few years on the people and businesses in the region.

“If I join the events together (of the last few years), what they did was to make us more resilient and bring us together,” said Nigel Ward, executive vice president of Manufacturing and Support at Toyota South Africa.

“The crises have made us stronger because each one has given us a different perspective (for meeting the next challenge).”

“We’ve learned that there’s no ‘white knight’ to rescue us. So we have to be resilient and have strong relationships (with our partners),” Simon Downes, chair and owner of the Shave and Gibson, said.

Although resilience is key, confidence ultimately drives investment and expansion into the region. For that to happen, businesses need to know what work is being done in the region.

Ward noted that the joint initiatives between government and business organisations can tackle three of the nation’s biggest problems – energy, logistics and security.

“They’re doing great work in these three areas, but their work isn’t well-known enough,” Ward stated.

“From what I’ve seen, there’s a lot of reason for hope. I’m positive about what’s happening with the ports and with the tackling of the energy crisis – they will turn around – but not many people know about it.”

“So between the public and private sector, they need to start informing people here in KZN and create that positive energy.”

There has also been a positive development in terms of logistics, with a Filipino-based International Container Terminal Services Inc. (ICTSI_ being awarded the management of the Durban Container Terminal Pier 2.

This should increase the capacity from 1.7 million 20-foot equivalent units (TEUs) to 2.9 million TEUs in two years.

“This development is going to revolutionise Durban and our transport. This is private-public partnerships in play. And it’s just the beginning,” said Downes.

Club Med also announced that it will build a new beach resort on the province’s North Coast by 2026, boosting tourism in the region.

In addition, the improvement in electricity stability was seen as a positive.

“This is attributable to technical expertise having been brought on board to assist Eskom,” Neo Ralefeta from Investec Treasury Sales and Structuring said. Downes agreed, believing that load shedding would end by the end of next year.

“After the floods, we formed small partnerships with businesses to deal with issues like water, power and security, but the circle is now widening. The lesson was to start your own collaborations in your areas of influence. This helps to change the mindset and develops into something bigger,” Ward added.

What next?

The province is an economic powerhouse – accounting for 16% of the nation’s GDP (Gauteng is roughly 34%), and its 1.1% growth is better than the 0.6% nationally.

However, unemployment remains a significant problem, especially youth unemployment and underemployment.

“If I could change one thing, it would be to look at labour policy and regulation, to help businesses deal with the cycle and employ more people,” Ralefeta said.

Ward also cited red tape as a disincentive to setting up business. “We are not a business-friendly province,” Ward added.

Downes also said that policy continuity was essential for success and shouldn’t be constantly revised.

Crime and corruption were also major issues among the panellists, as they affected everyone – from individuals to micro, small and large businesses. Crime is also impacting the province’s ability to attract the best workers.

“Skills are leaving the province, and they are all saying it’s a safety and security issue. We must change the narrative and make it a positive one,” Ward said.

Read: The most common crimes in every province in South Africa

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