J BROOKS SPECTOR south afrioca 13 june 2o013 02:09
On Tuesday, Gauteng Premier Nomvula Mokonyane spoke at the Gordon Institute of Business Science (GIBS), outlining her view of the province’s future prospects and problems; its challenges and chances; highlighting her “Vision 2055” for the province. The premier’s audience was in her corner right from the start – considering that it was a gathering of people committed to the province’s success, urging her on in her optimism. Nonetheless, despite all this good feeling, it is also clear many of Gauteng Province’s biggest, most fundamental challenges may well remain effectively beyond the power of the premier’s government to alter fundamentally – at least in the short to medium term. Instead, national, regional and global circumstances are more likely to dictate the province’s success. By J BROOKS SPECTOR.
Mokonyane stressed that the well-known centrality of the province and its economic heft relative to the rest of the country and the continent as a whole – and most especially its core of Johannesburg’s greater metropolitan area – makes it the natural hub, the gateway into the rest of the country’s economy, that of the SADC region and thereby that of the continent as a whole. As she said that evening, “This province is not only a gateway to Africa, it’s a gateway to our country and to the SADC region. We really believe this case can be made strongly.”
Of course, this is a mantra that has been chanted by many – almost literally since Johannesburg first burst upon the scene during the original gold rush of the late 19th Century. Within a few years of its founding, mining entrepreneurs, politicians and imperial economic and geopolitical strategists were pointing to Johannesburg as Africa’s future.
The late Heidi Holland and Economist writer Adam Roberts, in the introduction to their co-edited book, From Jo’burg to Jozi, could write, “Jozi, the continent’s big apple, should lay claim to be the capital city of Africa, if such an idea makes sense. True, Lagos has more people, but the general area around Jozi, with eight million people, is richer. Africa’s Manhattan is a square mile or so of a city suburb, Sandton.
“Nairobi or Kinshasa are more central in Africa, but greater Johannesburg is the heart of the continent’s economy, employing one in eight of all South Africans with formal jobs. Oil money aside, the largest chunk of foreign investment in Africa comes through South Africa and its businesses, most of them in and around Johannesburg…
“Though without embassies or a presidential palace [although they exist in Johannesburg’s neighbour Pretoria, the other half of Gauteng, of course], great spokes of roads arrive from all directions, train tracks snake here and thousands of taxis and buses whizz to the centre. Crest a hill as you drive south from Pretoria, or stare from one of the city’s large parks, and Jo’burg’s towers rise as proudly as Oz above the poppy fields.”
Or, as the premier had said in her GIBS presentation, “South Africa is part of the SADC region in which 250 million people live, which has the potential to be a market for trade with this zone. Remember South Africa is responsible for two thirds of the intra-SADC region’s trade… We have many multi-nationals and large financial institutions in Gauteng. Standard Bank did R340-billion worth of business in 2012. This gives us hope that we can help to make South Africa’s position in BRICS very meaningful, even though Gauteng only covers 1.4% of the country.”
While her vision of BRICS somehow fuelling this growth may just be a pipe dream, rightly, the premier did understand that population growth was a symbol of potential economic growth rather than a curse. Growing populations usually represent growing demands for goods and services (and therefore more jobs, although which kinds of jobs are a whole other debate). But, as Mokonyane herself had said on Tuesday night, “We are faced with rapid urbanisation in this province. But we don’t see rapid urbanisation as a problem, we see it as an opportunity for growth.”
The challenge of this gateway phenomenon for the future is that, despite the past, it is not inevitable for the future, despite those gleaming towers of the Emerald City. Other developments in other places can yet steal Gauteng’s inevitability as the gateway to Africa’s future economic growth, especially as transportation becomes easier from other entry points or, indeed, as the very nature of future economic growth patterns depends less and less on physical geography and more and more on electronic connectivity. The ongoing information technology revolution in a place like Rwanda – tiny Rwanda for goodness sakes! – is already thrusting that nation an IT generation ahead of South Africa as it plans and then implements its broadband connectivity throughout the country.
In concert with this catechism of “gatewayism”, however, the premier spent substantial time focusing on development nodes, such as the so-called “aerotropolis” in the vicinity of OR Tambo Airport, a so-called “smart city” around the Nasrec complex near Soweto, an expanded automobile manufacturing zone in Rosslyn, northwest of Pretoria/Tshwane.
The challenge is that, to a very considerable degree, the idea behind such zones is that government will be the decisive glue for such themed economic growth, rather than support for ongoing developments. But many economists believe, by contrast, that such growth nodes cannot be administratively determined, but must instead grow organically from larger economic circumstances and the decisions of independent entrepreneurs and investment managers. Otherwise, the moment the government’s commitments to them start to attenuate or become entangled in bureaucratic infighting, the projects wither.
Perhaps recognising this, as the third leg of her tripod, Mokonyane pointed to her government’s growing awareness of the need to nurture real cross-jurisdictional, beyond-the-organisational-table cooperation in managing government programmes, such as her touted Gauteng Development Centre, the first of its kind in the country, that will cut red tape and make business easier. For the premier, the successful development of the Gautrain service between Pretoria, Johannesburg and the airport is a case in point for the pulling together of government elements (and even gathering private sector support), all in the service of making the province more business friendly.
Seguing from those development nodes to the issue of inter-governmental cooperation, at her GIBS presentation she had explained, “The smart city would reposition the province, the country, the region, in the world and we are working with other smart cities on the globe to do this. We have also repositioned the way government functions. That is the putting into place of the Planning Commission, which is not only made up of politicians, but involves everyone in the decision-making process.”
In her earlier budget speech, for example, the premier had explained more thoroughly, “The Gauteng Planning Commission (GPC) is focusing on our long-term future with the development of ‘Gauteng Vision 2055’ to be launched this year. Taking into account the imperatives of the National Development Plan, including the spatial, economic and social reality, ‘Gauteng Vision 2055’ will provide an integrated plan for the future development of the City Region.”
At least at GIBS, the audience could pose questions to the premier, honing in on what they saw as gaps in her presentation. These included comments such as how could the province claim to have the competence to deliver on these very large, very ambitious plans while it still seemed powerless to make significant changes in the actual living conditions in so many of Gauteng’s townships; and how can this Vision 2055 become sustainable as a permanent government ethos, rather than remain dependent on the personalities and ideas of individual officials in their peripatetic deployments?
In reply, the premier insisted, for example, “In a report on the quality of life in South Africa, Gauteng came first. We have agreed on a set of standards and we are leading the country on housing.”
And one of her MECs, Nkosiphendule Kolisile had added, “The problem is that service delivery goals in Gauteng are a moving target because of rapid urbanisation in the province. Relatively speaking, the standard of living is higher here than anywhere else, but we are always fighting with the national government for more resources… In a sense we are the victims of our own successes in our provinces – the more houses you build, the more houses people want.” Moreover, “According to the Institute of Race Relations, 94% of the province’s people are living under better conditions than anywhere else in the country: 87% have access to electricity and 94% have access to water.”
And in response to questions about how effectively Gauteng can assist small and medium entrepreneurs (the backbone of job growth), Kolisile reeled off an alphabet soup of agencies, saying, “The department of Trade and Industry runs SIDA and IDC as well as SIFA. We have the Gauteng Fund for small and micro business, but we don’t just disperse loans. We do mentorship and we do incubation. We understand there are entrepreneurs in the street and they have been there struggling for 20 years, but this year we will help more than 200 of the informal traders and help more than 50 of them to register their businesses and get credit ratings.”
However, a key element missing in the premier’s presentations – whether it was the “State of the Province” speech, her budget speech, or Tuesday’s conversation – was an apparent lack of visible appreciation for the fact the province simply does not operate in isolation. On the one hand, there are all those national government growth policies that increasingly now focus on bringing revenue transfers and growth incentives to more isolated rural areas and the more economically backward provinces. Such approaches can run to the disadvantage of Gauteng – a province that is overwhelmingly urban in nature.
Then, of course, there is the broader national and international economic and financial environment. The rapidly weakening rand; an apparent, growing loss of investor confidence and capital outflows; and increasingly difficult times for national capital and infrastructure procurement budgets all point to a growing competition for scarce investment resources rather than the flush, good times that had seemed in hand or just over the horizon only five years earlier.
But the long commodity boom cycle is over, European demand for South African products remains stagnant and even growth in countries such as China (and therefore a slackening demand for primary exports) is slowing down.
As a result, the likelihood of large new capital investment inflows into South Africa may now be decreasing rather than increasing. South Africa – and Gauteng in particular – will be engaged in increasingly difficult, even desperate, competitions with other countries on the continent for the presumed role of gateway to the region. And there will be sharpening competition with many other nations around the world to attract new investment. In fact, for some of this, Gauteng will even compete with other South African provinces as well.
Consider, for example, the kind of competition that can easily break out for IT investment between that Nasrec Smart Village and Stellenbosch’s version of the same kind of development zone in the Western Cape. Recent studies in the US, for example, show that much new investment in various states can also be poached from each other as states dangle new options, incentives and tax relief measures to snare investors.
Probably the most important elements over the longer term, however, will be to offer a stable, competent, honest, corruption-free government eager to support new investments; a safe and secure living environment with effective public services; and an educational system that effectively trains and educates the workers who are capable of filling the new, technologically demanding jobs the economy of the future will need – or in creating their own opportunities.
Unfortunately for Gauteng province’s leaders’ hopes and desires, virtually all of these challenges are the prerogative or core competencies of the national government, rather than that of the provinces. But, until these can be assured, or at least until an effective National Development Plan is truly implemented and a capable civil service is in place to enforce it and carry it out, the province may well find that its hoped-for Emerald City of a vibrant future-oriented economy continues to recede off to the horizon, despite the most fervent hopes and desires of its premier and her government. DM
Additional reporting by Jessica Eaton.
- Profile of Gauteng Premier Nomvula Mokonyane, the official bio profile of the premier at the government’s website
- 84.3% of our contracts went to HDIs - Nomvula Mokonyane (the premier’s budget speech) at PoliticsWeb
- Political Exchange with Gauteng Premier Nomvula Mokonyane, a video interview on the African Business Network
- COMMENTS BY SONNY