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KwaZulu-Natal gears up to fast-track economic growth

Article - May 29, 2015

The South African province of KwaZulu-Natal welcomes foreign investment and invites international tourists to experience the province’s wonders

Famously the home of the Zulu nation, the province of KwaZulu-Natal (KZN) in southeastern South Africa is also known for its subtropical climate, golden beaches, lush pastures, and the Drakensberg mountain range. There is, however, another side to the province – one of economic development and huge investment potential. Fueled by the growing globalism of its largest city, Durban, and led by motivated and passionate leadership, KZN is emerging as an economically successful region with opportunities for growth and investment.

Worth over R565 billion ($46 billion), KZN is South Africa’s second-largest economy. Its ports at Durban and Richards Bay are two of Africa’s busiest maritime gateways, and KZN also enjoys the second-highest level of industrialization in the country. Furthermore, with an estimated growth rate of 2.4% in 2015, the province is also likely to outstrip and outperform national expansion levels.

The KZN government has worked hard to provide a conducive business environment in the region. A number of finance, advice and training schemes aimed at supporting small businesses have been launched at city and regional levels. Government officials have also focused on transforming service provision by combating corruption and advocating collective accountability and transparency. As KZN’s Premier Senzo Mchunu explains, “We attach a lot of importance to good financial management, the development of human resources and practices, and anticorruption and higher efficiency in the administration.”

Extensive infrastructural investment and the completion of a number of key development projects are also likely to fuel further economic growth. The KZN government plans to spend just over R36 billion on key infrastructure projects between 2015 and 2018. The majority of the investment (R20.6 billion) will be allocated to transport projects, which include the proposed Durban-Johannesburg high-speed train link, road and rail improvements to support the Durban dig-out port, and ‘Go Durban!’ – a new integrated public transport network.

“The goal is to have the best transport infrastructure and create opportunities for our people, attracting investment into the city, making it one of the most beautiful cities in the world,” says James Nxumalo, Mayor of the eThekwini Municipality, which has Durban as its capital. 

Investment in a number of key state-of-the-art development projects has also strengthened economic development in the KZN region. The R7.9 billion King Shaka International Airport was completed in 2010, and Phase 1 of Dube TradePort – Durban’s special development zone – was launched last year.

A number of high-profile development projects are also planned or presently in progress, including the Durban-
Free State-Johannesburg logistics and industrial corridor, and the Durban dig-out port at Durban International Airport.

The KZN region also boasts an impressive number of growth sectors, with real potential for private sector investment. Culture and tourism for example, is a key growth area for the region. With golden beaches, stunning mountains and two World Heritage Sites in the province, Durban attracts the most domestic tourists in the whole of South Africa. It has also been a very successful host of international sports and cultural events, but the city has yet to crack the international tourist market. However, with an improved marketing strategy and more direct international flights into Durban, reaching this market will see this sector expand.

The second-busiest boat-building center in the country, the maritime sector is an important industry for Durban. Moreover, the true potential of this sector has emerged as extremely significant since the results of the South African government’s first large-scale effort to exploit the country’s vast but largely untapped ocean resources. President Jacob Zuma officially launched Operation Phakisa last year and it focuses on four key areas: marine transport and manufacturing, offshore oil and gas exploration, aquaculture and marine protection services, and ocean governance. The aim is to harness the estimated R177-billion economic potential of South Africa’s coastline.

As Mr. Mchunu says, “We had never realized the sea’s potential for economic development and the Phakisa project showed gas and coal and the potential for aquaculture and manufacturing in the port. There is also the need for governing the waters to regulate economic activity.” With over 360 miles of coastline, the opportunities in the ocean for KZN are substantial.

Agriculture and alternative energy are two other important growth sectors for KZN. The mainstay of the agricultural sector in the region is sugar, with other foodstuffs like maize and sub-tropical fruit also grown. Ethanol-based bio-fuel is the main source of alternative energy nationally and regionally. The Provincial Agricultural Policy Action Plan aims to expand the economic contribution of agriculture in KZN from R18 billion to R23 billion by 2020, by facilitating collaborations between private-sector enterprises and new sector entrants. The local government also aims to produce at least 5,000MW of renewable energy by 2030, with 2,400MW to be online by 2020.

With such plans set in motion, future growth, opportunity and investment potential are clearly available amidst the beaches, mountains and history of the beautiful province of KZN today.