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It’s time to pick up the pieces, cut the red tape and bring in leaders who are dynamic and strong so that the economy can grow to its full potential
Mcebisi Jonas, the Eastern Cape’s provincial investment envoy, says the country needs to use its existing investors to attract more investors to help grow the country’s economy.
Jonas, a former deputy finance minister, was speaking at the Eastern Cape investment conference at the East London International Convention Centre this week.
“We have existing investors in South Africa, East London for instance has Mercedes-Benz, let’s use them and all the other companies that are here. Let’s use them to attract additional investment.
“It’s a mammoth task. It’s not easy. The problems we face are not only for South Africa. All African countries are grappling with the same issue of how to attract more investment.
“The global environment is becoming more difficult, economic nationalism is on the rise and there are threats of trade wars that make the environment difficult,” Jonas said.
Business, government and unions had to get together to ensure the country was conducive for potential investors.
“This conference is about changing the environment in the province. It is about how to ensure that this province is looked at seriously by investors. How do we support existing investment? How do we ensure that government programmes are more effective? That should be the conversation and I would urge black business to look at this as an important dimension of their work. It’s as important as if you are given a contract to build a school, finish it and hand it over,” Jonas said.
But he warned against the danger of looking at the investment environment purely from a provincial perspective because most of the key policy areas were national.
“So I think the whole drive to create a more investor-friendly policy environment should be a national drive, which ensures provinces pick up the pieces and municipalities should look at and cut the red tape.
“In the past years our investment competitiveness has dropped and part of these conferences and these talks with provinces is to raise the competition. There is a project we are doing with municipalities around the ease of doing business, taking them through the necessary variables to make it easy and less costly to do business with municipalities,” he said.
Jonas said manufacturing, including services, would be what would drive future economies, which meant that cities would be central. He noted that urbanisation was happening at a fast pace.
The Eastern Cape has two metros: Buffalo City in East London and Nelson Mandela Bay Metro in Port Elizabeth.
Jonas said if sufficient levels of growth were achieved in the cities or metros there would be growth possibilities because there would be a demand for more agricultural produce and services from other areas in the province.
“Cities are the centrepiece of development whether we like it or not. If you look at the GDP of our cities at the moment, it’s still very small and the economic activities are still very small. But there is also a phenomenon of deindustrialisation happening in our cities.
“In East London we are talking about two companies that probably are threatening to leave or have to leave because the investor environment is no longer conducive. In Nelson Mandela Bay you have the same scenario where companies are trying to move,” he said.
Jonas said cities were not moving forward in industrialisation terms and lacked the dynamism needed to attract new players and participants, which would enlarge the industrial space and grow jobs.
“So, the point is, how do we make them better? And for that I think we need to get the basics right. At least the cities should deliver water and electricity and the cities must be clean.
“But, beyond that, cities must understand that when you talk about local economic development it’s not about chicken projects and piggeries anymore.
“It is about ensuring that the industries grow, manufacturing grows, services grow,” Jonas said, adding that when that happened there would be more employment and more growth.
To grow cities, he said, there was a need for dynamic leadership and robust institutions and great integration between province and city and between city and national.
“It also means we need to think carefully about the leadership of our cities. I genuinely believe that you can have something else weaker but you can’t have a weak mayor, you can’t have a weak municipal manager, because it has serious consequences for a whole range of things,” he said.
Oscar Mabuyane, MEC for economic development, environmental affairs and tourism, used the conference to launch the province’s investment stimulus package booklet.
Mabuyane criticised delays in implementing major projects in the province, such as the multibillion-rand Umzimvubu Dam Project.
“It is only in the Eastern Cape where a project takes more than 20 years to be planned. The Umzimvubu Dam was conceptualised in the early 1960s. Today we are still debating whether the project is going ahead or not. The issue is leadership.”
He warned of disruptions and infighting in communities, which often resulted in major projects being put on ice, such as the R1.6 billion Mtentu mega-bridge in Mbizana where workers terminated the contract to built the bridge because of community unrest.
“We must stop this fighting. I mean the Mtentu bridge was already under way but now we hear it has been stopped as the contract was terminated because of community disruptions.”
Mabuyane said this kind of behaviour would put off international companies. “We very badly need social facilitation and cohesion,” he said.
