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Western Cape Business 2022

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A REGIONAL OVERVIEW OF THE WESTERN CAPE The Saldanha Bay Industrial Development Zone is targeting the marine and oil and gas sectors. Credit: SBIDZ Cape Town’s new stock exchange is based on smart technology, something the Western Cape is rapidly becoming famous for. Special economic zones at Atlantis and Saldanha aim to tap into growing markets – maritime, oil and gas and renewable technologies. By John Young As a way for the Western Cape to show off its growing reputation as a tech-friendly destination, the launch of the Cape Town Stock Exchange in August 2021 was an ideal event. When several new bourses launched in 2017 most of them put an X in their names and all of them based themselves in Johannesburg. In 2021, 4AX made the move south and rebranded as the Cape Town Stock Exchange. Not only does this give the exchange immediate access to a global brand, but it puts them at the heart of an area which has been home to financial institutions for as long as there have been banks and insurance companies in South Africa. A more recent trend has seen asset managers setting up in the Cape. Of the 20 finalists named for the 2020 Morningstar South Africa Fund Awards, 13 have their headquarters in the Cape. Seven of the top 10 managers in the Plexcrown Ratings of 2019 are based in Newlands (MiPlan), Victoria & Alfred Waterfront (Allan Gray), Claremont (Coronation), Bellville (PSG and Boutique CI), Pinelands (Old Mutual) and Westlake (Prescient). Cape Town also, according to the Global Financial Centres Index (GFCI), ranks second in Africa in 2020 (behind Mauritius) in competitiveness as a financial centre. The ranking is an aggregate of indices covering five things: business environment, financial sector development, human capital, infrastructure and reputation. Neighbouring Stellenbosch is advancing its reputation for technological innovation and the output of the region’s four universities and six TVET colleges ensures that the tech sector has the necessary human capital. WESTERN CAPE BUSINESS 2022 6

Cape Town’s share of national employment in the financial sector is about 20% and the contribution to gross value-added (GVA) is 15%. More recently, the city has become home to several financial technology (fintech) incubators: according to Tracxn there were 173 fintech startups in Cape Town in 2021 and French Tech Labs operates out of Century City. There are 22 active incubators and accelerators in the region which provide networking and marketing opportunities and links to funders and markets. The City of Cape Town has installed 848km of fibre-optic cable and the sector supports more than 40 000 jobs with established brands such as Amazon and Panasonic and startups such as Luno, Yoco, Jumo and SweepSouth. Cape Town hosts more than half of all startups in South Africa. Technology has also been embraced by entities such as the Western Cape Department of Agriculture which graduated its second group of drone pilots in 2021, having trained 13 pilots the year before. Investment The province has a dedicated investment agency, Wesgro. The Investment Promotion Unit of Wesgro has been working with various regions within the Western Cape to attract investment and accelerate exports. Seminars have been held in the Cape Winelands, the West Coast and the Garden Route. In recent years, the biggest investments have been in renewable energy and manufacturing. Other important sectors are agro-processing, aviation, business services, education and training, financial services, real estate, ICT, light manufacturing, oil and gas, timber, tourism, waste beneficiation and clean energy. Encouraging investment in Cape Town has been recognised as something that needs a full-time office and a strategy. Invest Cape Town is an agency of the city that works to create the best possible conditions to attract investors. Areas of focus include broadband access, energy security, the reduction of red tape and improving air access to the city. A Red Tape Reduction Unit has been successful at a provincial level. The plan is to now set up similar units at municipal level. The Provincial Government of the Western Cape has announced that it intends creating a portfolio of investment projects that can attract private finance. In addition, a commitment has been made to invest in infrastructure. Another vehicle for attracting investment is the creation of Special Economic Zones (SEZ) and Industrial Development Zones (IDZ). Large industrial operations already exist at Saldanha and the Port of Saldanha Bay is the portal for the export of South Africa’s iron ore. The Saldanha Bay Industrial Development Zone (SBIDZ) is becoming a hub for a range of maritime repair activities and oil rig maintenance and repair. The National Department of Trade, Industry and Competition (dtic) and the provincial government have collectively invested R500-million in core infrastructure, a lease agreement has been signed with TNPA, and a phased approach to development has begun. The SBIDZ fits neatly into two overarching visions: Operation Phakisa and Project Khulisa, the targeted growth strategy of the Western Cape Provincial Government which includes servicing and repairing of oil rigs as a priority. The Western Cape is lobbying hard for Saldanha Bay to be a site for a gas-to-power plant. If a gas plant is built at Saldanha, then it could be a catalyst for the use of gas in many other sectors such as manufacturing and residential. The Atlantis Special Economic Zone (ASEZ) is attracting investors in the Greentech market. An early investor in the zone was GRI Towers South Africa, a wind turbine tower manufacturer. With new renewable energy projects such as solar parks and wind farms being rolled out every month, this sector is on a steep growth path. The conversion by South Africa’s key markets to electric vehicles will have an effect on the country’s automotive manufacturers; ASEZ is hoping to attract the makers of new components for the new age. Economy SPECIAL FEATURE Finance, business services and real estate combined contribute 28% to the gross domestic product (GDP) of the Western Cape. The financial services and insurance sector are key components of the economy. Although agriculture only accounts for 4.3% of GDP on its own, the sector is responsible for the fruit and vegetables that contribute to agro-processing 7 WESTERN CAPE BUSINESS 2022

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