Eastern Cape

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Eastern Cape - a land of opportunity

ecregions manager topEastern Cape Regional Manager Kingsley Dell-Robertson 

The Eastern Cape Province is a good place to start a new business venture. The challenges within the province provide space for opportunities to be seized. The newly established renewable energy projects, together with the strong automotive sector, provide the competitiveness of industry for advanced manufacturing.

Kingsley Dell-Robertson sees the Eastern Cape as a “land of opportunity”. This is substantiated by good infrastructure in its two major cities, Port Elizabeth and East London. It is the only province in the country with three ports, and it has large tracts of unutilised arable land accompanied by high rainfall in the east of the province. The opportunities are not being sufficiently capitalised on and therefore the province is not reaching its full potential.

Yet, with all these resources, the province remains one of the poorest in South Africa. Its poverty rate of 70% is the second highest in the country, behind Limpopo together with its 30% unemployment rate.

The IDC’s Eastern Cape regional office is certainly trying its best to boost the province’s economy. In 2012, its net approvals amounted to R861-million. In the renewable energy sector, the IDC has funded a number of wind farms within the province as well as the R300-million DCD wind turbine tower factory in the Coega Industrial Development Zone.

When considering a project, Dell-Robertson ensures that the projects are in line with the greater economic development scheme of the Eastern Cape. Government plans such as the Industrial Policy Action Plan, the New Growth Path and National Development Plan are key drivers of the projects IDC considers. "We have good ties with the provincial Department of Economic Development. The projects we undertake are similar to what their objectives are."

Automotive sector

The IDC’s involvement in assisting with financing the province’s automotive industry has made a significant impact in job creation and bringing new technology into the province. The Department of Trade and Industry (the dti) with its Automotive Production Development Plan, which aims to increase local production of light motor vehicles to 1.2 million a year by 2020 has assisted the automotive sector to remain a significant contributor to the South African GDP.

Eastern Cape’s major car manufacturers, such as Mercedes-Benz, General Motors and Volkswagen, are situated close to the province’s major ports for the export of vehicles, prompting Dell-Robertson to suggest that original equipment manufacturers (OEMs) which are inland should consider the move to a port which has excess capacity. "We should actually market and promote expansion of the current OEMs and see how we can source new OEMs in our province such as FAW in the Coega Development Zone."

Challenges

One of the major constraints for the province is its lack of development within the rural areas. Because of the opportunities in Eastern Cape, he says more entrepreneurs should be heading to the province. There are a number of support structures that will ensure the success of any business operating in the region. The dti and Rural Development Department provide grants, and development finance institutions like the IDC, its sister company the Small Enterprise Finance Agency, National Empowerment Fund and the Eastern Cape Development Corporation are there to assist with funding.

The lack of entrepreneurship is tied to the skills shortage. Dell-Robertson says this issue is particularly hampering development in rural areas. "If you do not have the necessary skills in the rural areas, it is difficult to attract skilled talent to operate projects optimally."

In addition, the number of steps one has to take to start an enterprise in Eastern Cape may be deterring entrepreneurs from the region. Dell-Robertson points out that the number of these processes needs to be reduced so that projects can be up and running sooner and more projects can be developed.

Future plans

Dell-Robertson certainly believes Eastern Cape is filled with opportunities, which is evident in the kinds of projects his office intends on funding, which could open up new sectors. The key sectors the IDC Eastern Cape office will focus on are agro-processing, forestry, textiles and advanced manufacturing.

It is looking to support the existing irrigation schemes which are underutilized. For Dell-Robertson, this exercise will not only revive the irrigation schemes which will create jobs in these rural areas but will also help discover other products that can be produced. The challenge he explains is that farmers in some of these schemes have only between one and five hectares of land to farm. As a result, the IDC and the farmers have to consider high value products, so out of these small bits of land sustainable farms can be established.

His office will also be assisting in the expansion plan of the forestry industry within the east of the province. Still in its development phase, the off-takers of the forestry projects, which includes Sappi and PG Bison, will assist with the development of these projects.

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